Marketing Management
Chapter 7
Crafting a Customer
Value Proposition and
Positioning
Learning Objectives
7.1 Explain how a company should develop a value
proposition and a positioning strategy.
7.2 Describe how a company chooses a frame of reference.
7.3 Discuss how a company identifies points of parity and
points of difference.
7.4 Define the key strategies for creating a sustainable
competitive advantage.
7.5 Identify alternative strategies to communicate the
positioning of a company’s offerings.
Developing a Value Proposition (1 of 5)
• Create value across three domains:
– Functional value
– Psychological value
– Monetary value
Developing a Value Proposition (2 of 5)
• Total customer benefit
– The perceived value of the bundle of functional,
psychological, and monetary benefits customers
expect from a given market offering because of the
product, service, and image
Developing a Value Proposition (3 of 5)
• Total customer cost
– The perceived bundle of functional, psychological,
and monetary costs customers will incur in evaluating,
obtaining, using, and disposing of the given market
offering
Developing a Value Proposition (4 of 5)
• Customer value proposition
– Based on the difference between benefits the
customer gets and the costs he or she assumes for
different choices
Developing a Value Proposition (5 of 5)
• Customer value analysis
– Reveals the company’s strengths and weaknesses
relative to those of various competitors
Customer Value Analysis
• Identify the relevant attributes and benefits that
customers value
• Assess the relative importance of these attributes and
benefits
• Assess the company’s and competitors’ performance on
the key attributes/benefits
• Monitor customer value over time
Developing a Positioning Strategy
• Positioning
– The act of designing a company’s offering and image
to occupy a distinctive place in the minds of the target
market
Choosing a Frame of Reference
• Frame of reference
– Serves as a benchmark against which customers can
evaluate the benefits of a company’s offering
Points of Difference and Points of
Parity (1 of 5)
• Points of difference (PODs)
– Attributes/benefits that consumers strongly associate
with a brand, positively evaluate, and believe they
could not find to the same extent with a competitive
brand
Points of Difference and Points of
Parity (2 of 5)
• POD criteria
– Desirable
– Deliverable
– Differentiating
Points of Difference and Points of
Parity (3 of 5)
• Points of parity (POPs)
– Attribute/benefit associations that are not necessarily
unique to the brand but may in fact be shared with
other brands
Points of Difference and Points of
Parity (4 of 5)
• POP forms
– Category
– Correlational
– Competitive
POP v s P OD
ersu
• Multiple Frames of Reference
• Straddle Positioning
Points of Difference and Points of
Parity (5 of 5)
• Perceptual maps
– Visual representations of consumer perceptions and
preferences
Creating a Sustainable Advantage (1 of 2)
• Competitive advantage
– The ability to perform
in one or more ways
that competitors
cannot or will not
match
▪ Leverageable
advantage
Creating a Sustainable Advantage (2 of 2)
• Three core strategies:
– Differentiate on an existing attribute
– Introduce a new attribute
– Build a strong brand
Communicating the Positioning (1 of 5)
• Positioning statement
– Communicating an offering’s category membership
along with points of parity and points of difference,
and developing a narrative to convey the offering’s
positioning
Communicating the Positioning (2 of 5)
• Crafting a positioning statement
– Attributes that describe the offering v s benefits
ersu
delivered by the attributes
Communicating the Positioning (3 of 5)
• Communicating category membership
– Announce category benefits
– Compare to exemplars
– Rely on the product descriptor
Communicating the Positioning (4 of 5)
• Communicating conflicting benefits
– Challenge: consumers want to maximize both of the
negatively correlated attributes or benefits
▪ Develop a product or service that performs well on
both dimensions
▪ Launch two different marketing campaigns
Communicating the Positioning (5 of 5)
• Positioning as storytelling
– Narrative brandling
▪ Setting
▪ Cast
▪ Narrative arc
▪ Language
– Primal branding