Chapter 7
1. T-Mobile’s Strategic Positioning: The "Un-Carrier" Example
• Key differentiators:
o No long-term contracts.
o No global roaming fees.
o Emphasis on innovation and customer service.
o Focus on a cool, modern image that appeals to millennials.
o Differentiation through a customer-centric approach and low pricing.
o Merger with Sprint to become the second-largest U.S. wireless carrier.
2. Developing a Value Proposition and Positioning
• Key components of a value proposition:
o Functional value: The product’s practical benefits (e.g., performance, durability).
o Psychological value: Emotional or self-expressive benefits (e.g., luxury goods).
o Monetary value: Financial benefits (e.g., discounts, rebates).
• The total customer benefit = functional + psychological + monetary benefits.
3. Developing a Positioning Strategy
• Key components of effective positioning:
o Distinctive offering: Highlight what makes the product unique.
o Rational and emotional appeal: Offer both practical benefits and emotional connections
(e.g., Kate Spade’s functional handbags combined with an emotional, colorful brand
image).
• Positioning strategy steps:
1. Choose a frame of reference: Identify the target market and competition.
2. Identify points of parity and difference: Determine how the brand is similar to or different from
competitors.
4. Choosing a Frame of Reference
• The frame of reference defines the product category or competitors with which the company’s
offerings are compared.
• Category membership: Helps define the competition (e.g., Aquafina vs. Dasani in bottled water).
• Strategic use: Brands can choose a frame of reference to highlight their strengths (e.g., The
Automobile Association in the UK positioning itself as the fourth “emergency service”).
5. Identifying Points of Difference (POD) and Points of Parity (POP)
• Points of Difference (POD):
o Unique attributes that differentiate the brand.
o Example: Apple’s POD includes design, ease of use, and innovative brand image.
• Points of Parity (POP):
o Shared attributes with competitors.
o Example: Nike and Adidas both offer performance shoes but differ in brand personality
and specific innovations.
6. Three Criteria for Successful POD
• Desirability to consumer: The attribute must be relevant to the consumer (e.g., Mountain Dew’s
higher caffeine content for energy).
• Deliverability by the company: The company must be capable of consistently providing the
attribute (e.g., Cadillac’s bold designs).
• Differentiation from competitors: The POD must be perceived as superior (e.g., Splenda
differentiating from Equal by emphasizing natural origins).
7. Types of Points of Parity (POP)
• Category POP: Essential attributes required to be part of a product category (e.g., a travel
agency must offer hotel reservations).
• Correlational POP: Negative associations that arise from positive attributes (e.g., a low-price
brand may struggle to be seen as high-quality).
• Competitive POP: Neutralizing competitors' advantages by addressing their points of difference
(e.g., Miller Lite’s focus on taste to combat light beer’s reputation for lacking flavor).
8. Creating a Sustainable Competitive Advantage
• Performance-related benefits: Brands like GEICO and Swatch differentiate based on reliable and
fashionable offerings.
• Emotional and psychological differentiation: Marlboro’s “macho cowboy” image or Hyatt’s
stylish atrium lobbies.
• Strategies for differentiation:
o Enhance existing attributes (e.g., Volvo on safety, BMW on driving experience).
o Introduce new attributes (e.g., TOMS’ “Buy one, give one” social responsibility, Dollar
Shave Club’s subscription model).
o Build a strong brand identity (e.g., Harley-Davidson for lifestyle, Coca-Cola for global
brand awareness).
9. Communicating the Offering’s Positioning
• Positioning statements clearly define the target customer and value proposition.
o Example: Domino’s offers a fast, hot pizza delivery experience for convenience-minded
customers.
• Category benefits: Brands communicate their core benefits to assure consumers of quality (e.g.,
brownie mix advertising great taste).
10. Communicating Conflicting Benefits
• Points of parity and difference often create conflicting benefits (e.g., low price vs. high quality).
• Strategies to resolve conflicts:
o Develop solutions addressing both benefits (e.g., GORE-TEX being breathable and
waterproof).
o Use multiple marketing campaigns to appeal to different customer needs.
11. Positioning as Storytelling
• Brand story: The words and metaphors that shape the brand.
• Consumer journey: The key interaction points between the customer and the brand.
• Visual language: How the brand is visually communicated.
• Experiential expression: The sensory engagement that consumers experience with the brand.
12. Positioning for Start-Ups
• Focus on a compelling performance advantage.
• Encourage product trials and build a cohesive brand image.
• Leverage digital strategies to create buzz and build a loyal community.