Page 240 - DMGT308_CUSTOMER_RELATIONSHIP_MANAGEMENT

Unit 9: Segmentation, Targeting and Positioning

decide upon a competitive position which enables them to distinguish their own products from Notes
the offerings of their competition (hence the term positioning strategy).
The marketer would draw out the map and decide upon a label for each axis. They could be price
(variable one) and quality (variable two), or Comfort (variable one) and price (variable two).
The individual products are then mapped out next to each other. Any gaps could be regarded as
possible areas for new products.

Positioning Strategy

Jack Trout and Al Ries suggest that managers should ask themselves six basic questions to create
a position for a product or service:

1. What position, if any, do we already have in the prospect’s mind? (This information must
come from the market place, not the managers’ perceptions.)
2. What position do we want to own?

3. What companies must be outgunned if we are to establish that position?
4. Do we have enough marketing money to occupy and hold the position?
5. Do we have the guts to stick with one consistent positioning strategy?
6. Does our creative approach match our positioning strategy?

The brand or product manager must determine which strategy is best suited in a given situation
to position the brand or the firm, as the case may be. The exercise to determine the positioning
strategy is not easy and could prove to be difficult and quite complex. Six steps need to be taken
to reach a decision about positioning.
1. Identify competitors: It may appear simple but it is not. This requires broad thinking. The
competing products may not be only those, which come from the same product category
with which the brand competes directly.

Example: Maggi competes not only with Top Ramon and other noodles, but also with
all other products, which are used as snacks. The marketer must consider all likely competitors,
various use situations and usage effects on the consumer.
2. Assessment of consumers’ perceptions of competition: After defining the competition, it is
important to determine how consumers perceive the competing products. To do this, a set
of product attributes, such as product characteristics, consumer benefits, product uses or
product users are chosen for comparison. The task is to identify relevant attributes to
avoid any which would be superfluous.

3. Determining competitor’s position: This exercise is undertaken to reveal how all the
competing brands, including the company’s own are positioned and what is their relative
position in the consumer’s perceptual map. Which are the competing brands that consumers
consider as similar and which are the ones considered dissimilar?
4. Analysing the consumers’ preferences: The analysis so far discussed would determine where
in the perceptual map the product should be positioned. The next step requires the
identification of segments or clusters of customers who prefer this product location in the
perceptual maps. Customers who value a certain set of attributes or benefits would form
a segment. An ideal product would be the one that is preferred over all others.

5. Making the positioning decision: Up to this point, it may become reasonably clear to
make some subjective decision as to which position can be appropriate. In many situations,

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