Where We Have Been

Quetzal : Define your business.Quetzal : Define your business. Jones Blair: Market TargetingJones Blair: Market Targeting

MARKSTRAT

Familiarization of Familiarization of systems/environmentsystems/environment

Basic research needs evaluationBasic research needs evaluation Initiation of R&D projectsInitiation of R&D projects Marketing projections (Plan)Marketing projections (Plan) Moving from Moving from tactical tactical to to strategic strategic

planningplanning

Positioning

“Once a mind is made up, it’s almost impossible to change it.”

- Al Trout & Jack Ries, the “fathers”

of positioning

Inputs to the positioning decision?

Target MarketTarget Market Firm’s SCAsFirm’s SCAs CompetitionCompetition

Mkt Analysis Segmentation

CompetitiveAnalysis Differentiation

PositionInternal

CorporateAnalysis

TM Selection

Package ofBenefitsSelection

Implications forMktg Strat

* Product* Price* Channels* Promo

Quelch, John R. (1982) “Frank Homer LTD - Teaching Note,” inCases in Advertising and Promotion Management, 2d ed., Business Publications, Inc.

THE PROCESS OF POSITIONING

THE PROCESS OF POSITIONING

“Positioning Audit,”Trout & Ries

What is our position?What is our position?

Important Dimensions?Important Dimensions?

BMW

Luxury

Performance

“Positioning Audit”

What is our position?What is our position? What position do we want?What position do we want?

BMWZ3

“Positioning Audit”

What is our position?What is our position? What position do we want?What position do we want? Where is our competition relative to Where is our competition relative to

our desired position?our desired position?

PorscheExotic, Expensive & Italian

JapaneseSwedes

BMW

Jaguar

Mercedes

General Motors

Subaru

Yugo

Lincoln

“Positioning Audit”

What is our position?What is our position? What position do we want?What position do we want? Where is our competition relative to Where is our competition relative to

our desired position?our desired position? Can we defend our position?Can we defend our position?

Exotic, Expensive & Italian

Porsche

JapaneseSwedes

BMW

Jaguar

General Motors

Subaru

Yugo

Mercedes

Lincoln

“Positioning Audit”

What is our position?What is our position? What position do we want?What position do we want? Where is our competition relative to Where is our competition relative to

our desired position?our desired position? Can we defend our position?Can we defend our position? Is our position long-term?Is our position long-term?

“Positioning Audit”

What is our position?What is our position? What position do we want?What position do we want? Where is our competition relative to Where is our competition relative to

our desired position?our desired position? Can we defend our position?Can we defend our position? Is our position long-term?Is our position long-term? Does our promotion reflect our Does our promotion reflect our

position?position?

Sample Markstrat Process for Positioning

Step 1: Where are we?Step 1: Where are we? Step 2: Where do we want to be?Step 2: Where do we want to be? Step 3: Where do we expect the market to Step 3: Where do we expect the market to

be in be in X X time period?time period? Step 4: How much will our move cost us? Step 4: How much will our move cost us?

(R&D costs, Push/Pull costs)(R&D costs, Push/Pull costs) Step 5: What attribute changes brings us Step 5: What attribute changes brings us

to our desired position?to our desired position?

Step 1:Where are we?

Examine perceptual mapExamine perceptual map– Too close = cannibalizationToo close = cannibalization

Semantic vs. Perceptual mapSemantic vs. Perceptual map– Matter of cost vs. accuracyMatter of cost vs. accuracy

Step 2:Where do we want to be?

Optimal Brand positionOptimal Brand position

Prediction of ideal pointsPrediction of ideal points

– Evolution of ideal points over timeEvolution of ideal points over time

Step 3:Where is the market?

Forecast Market ShareForecast Market Share– Examine Consumer survey research for Examine Consumer survey research for

purchase intentions datapurchase intentions data• Brand awareness/brand positioningBrand awareness/brand positioning

Expected Brand DemandExpected Brand Demand– ESS X EPI = EBSESS X EPI = EBS

• Analyze Per segment and then totalAnalyze Per segment and then total

Step 4:How much cost?

Must factor in R&D, Advertising, and Must factor in R&D, Advertising, and sales force expenditures.sales force expenditures.

Impact of production on transfer costImpact of production on transfer cost– Experience curve (productivity gains)Experience curve (productivity gains)– Intro new products (experience effect)Intro new products (experience effect)

• Unit transfer costs decrease as a function of Unit transfer costs decrease as a function of new product designnew product design

• See Brand Contribution: Marketing Plan See Brand Contribution: Marketing Plan

Step 5:What attribute changes?

Pull in data from MDS or Semantic Pull in data from MDS or Semantic scales indicating desired physical scales indicating desired physical characteristics.characteristics.

Examine actual vs. perceived Examine actual vs. perceived attributes (Product Design)attributes (Product Design)– Estimate brand perceptionsEstimate brand perceptions– Estimate physical characteristics for Estimate physical characteristics for

positioningpositioning

Repositioning:What to do after product has been on the market.

Specify Target Segment(s)Specify Target Segment(s) Specify perceptual objectives for the Specify perceptual objectives for the

brand. (pick 2)brand. (pick 2)– Economy, performance, convenienceEconomy, performance, convenience

Allocate advertising budget.Allocate advertising budget. Allocate ad research budget.Allocate ad research budget.