Creating Positioning and Dealing with Competition
Strategic Alternatives and Competitive Forces
The Art of Positioning
Process that influences potential customers overall perception of a brand, product line, or organization. Determines place in target consumers mind firm wants to occupy relative to the competition. Specifies:
Who is target market Needs that the product fulfills Why product is best option to satisfy those needs
Its all in your head
Differentiation takes place in the mind Minds are limited and cant cope with a lot of information Minds hate confusion and love simplicity Minds can be insecure and often buy what others buy Minds can lose focus easily
Customer Focused Value Proposition
Each firm must make a proposition to the consumer. Not just words, or product puffery. For example, Buy this product and you will get this specific benefit The proposition must be one that the competition cannot copy The proposition should be so strong that it can move millions
How to Do it
Make Sense in the Context Find the Differentiating Idea Have the Credentials Communicate your Difference Potential Errors:
Under positioning Over positioning Confused Positioning Doubtful Positioning
What are the Possibilities?
POSITION ON Attribute Benefit Use or Application Competitor Quality Price
Positioning examples
Perceptual Mapping
A means of displaying or graphing, in two or more dimensions, the location of products, brands, or groups of products in the customers minds.
Perceptual Map
Repositioning
Changing customers perception of a brand in relation to competing brands. Why do it?
Changing demographics Declining sales Changes in social environment
Strategic Alternatives
Market Penetration
Existing Customers Existing Product
Market Development
New Customers Existing Product
Product Development
Existing Customers New Product
Diversification
New Customers New Product
Market Penetration
Seeks a larger market share in a market in which the organization already has an offering Increase buyers usage or consumption rates Attract the competitions buyers Stimulating product trial
Market Development
Introducing its existing offerings to markets other than those that the organization is currently serving Consider competitor strengths/weaknesses and retaliation potential Modification of basic offer Different distribution outlets Exporting, licensing, joint venture, alliances and direct investments are options
Product Development
Creating new offerings for existing markets Product innovation Product augmentation Product line extension
Diversification
Development or acquisition of offerings new to the organization and introducing those offerings to publics not previously served by the organization
Porters Five Forces
determine market attractiveness
Potential Entrants (Threat of Mobility)
Suppliers (Supplier power)
Industry Competitors (Segment rivalry)
Buyers (Buyer power)
Substitutes (Threats of substitutes)
The Industry Concept
Number of sellers and degree of differentiation
Pure monopoly, oligopoly, monopolistic competition, pure competition
Entry, mobility, and exist barriers Cost structure Degree of vertical integration Degree of globalization
Analyzing Competitors: Things to consider
Strategies the strategic group Objectives Strengths and Weaknesses
Dominant, strong, favorable, tenable, weak, nonviable
Reaction Patterns
If you are a market leader
Expand the total market
New users, new uses, more usage
Defend market share the art of war Defense strategies
Position defense, flank defense, preemptive defense, mobile defense (diversification), contraction defense
Expand market share
If you are a market challenger
Who are you targeting and what do you want to accomplish? Strategies
Frontal attack, flank attack, encirclement attack, bypass attack, guerrilla attack
Specific strategies
Price discount, cheaper goods, prestige goods, product proliferation, product innovation, improved service, distribution innovation, cost reductions, promotion
If you are the market follower
Strategies
Counterfeiter Cloner (generic product) Imitator Adapter
If you are the market niche
Specific customer specialist Geographic specialist Product specialist Quality-price specialist (high or low end) Service specialist