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Dr. Saleh Alqahtani
Chapter 11 Chapter 11 Positioning and Differentiating Positioning and Differentiating the Market Offering Through the Market Offering Through the Product Life Cyclethe Product Life Cyclebyby
Chapter 11 Chapter 11 Positioning and Differentiating Positioning and Differentiating the Market Offering Through the Market Offering Through the Product Life Cyclethe Product Life Cyclebyby
Dr. Saleh Alqahtani
Watch the Watch the product life product life cycle; but more cycle; but more important, important, watch the watch the market life market life cycle.cycle.
Kotler on Kotler on MarketingMarketingKotler on Kotler on MarketingMarketing
Dr. Saleh Alqahtani
Developing and Communicating Developing and Communicating a Positioning Strategya Positioning Strategy
Developing and Communicating Developing and Communicating a Positioning Strategya Positioning Strategy
PositioningPositioningValue positionValue position
Dr. Saleh Alqahtani
is the act of designing is the act of designing the company’s offering the company’s offering and image to occupy a and image to occupy a distinctive place in the distinctive place in the
the target market’s the target market’s mind.mind.
PositioningPositioning
Dr. Saleh Alqahtani
Table 11.1: Examples of Value PropositionsTable 11.1: Examples of Value PropositionsDemand States and Marketing TasksDemand States and Marketing Tasks
Table 11.1: Examples of Value PropositionsTable 11.1: Examples of Value PropositionsDemand States and Marketing TasksDemand States and Marketing Tasks
Company and Product
Target Customers Benefits Price Value Proposition
Perdue (chicken)
Quality-conscious consumers of chicken
Tenderness 10% premium
More tender golden chicken at a moderate premium price
Volvo
(station wagon)
Safety-conscious “upscale” families
Durability and safety
20% premium
The safest, most durable wagon in which your family can ride
Domino’s (pizza)
Convenience-minded pizza lovers
Delivery speed and good quality
15% premium
A good hot pizza, delivered to your door door within 30 minutes of ordering, at a moderate price
Dr. Saleh Alqahtani
PositioningPositioning: : How many ideas to promoteHow many ideas to promote?? Unique selling propositionUnique selling proposition
Four major positioning errorsFour major positioning errors
1.1. UnderpositioningUnderpositioning
2.2. OverpositioningOverpositioning
3.3. Confused positioningConfused positioning
4.4. Doubtful positioningDoubtful positioning
Developing and Communicating Developing and Communicating a Positioning Strategya Positioning Strategy
Developing and Communicating Developing and Communicating a Positioning Strategya Positioning Strategy
Dr. Saleh Alqahtani
Developing and Communicating Developing and Communicating a Positioning Strategya Positioning Strategy
Developing and Communicating Developing and Communicating a Positioning Strategya Positioning Strategy
Theme park’s positioning possibilitiesTheme park’s positioning possibilities:: Attribute positioningAttribute positioning Benefit positioningBenefit positioning Use or application positioningUse or application positioning User positioningUser positioning Competitor positioningCompetitor positioning Product category positioningProduct category positioning Quality or price positioningQuality or price positioning
Which Positioning to PromoteWhich Positioning to Promote??
Dr. Saleh Alqahtani
Differentiation criteriaDifferentiation criteriaDifferentiation criteriaDifferentiation criteria
ImportantImportantDistinctiveDistinctiveSuperiorSuperiorPreemptivePreemptiveAffordableAffordableProfitableProfitable
Dr. Saleh Alqahtani
Table 11.3: Differentiation VariablesTable 11.3: Differentiation VariablesTable 11.3: Differentiation VariablesTable 11.3: Differentiation Variables
Product Services Personnel Channel Image
Form Ordering ease Competence Coverage Symbols
Features Delivery Courtesy Expertise Media
Performance Installation Credibility Performance Atmosphere
Conformance Customer training
Reliability Events
Durability Customer consulting
Responsiveness
See text for complete table
Dr. Saleh Alqahtani
Product DifferentiationProduct DifferentiationProduct DifferentiationProduct Differentiation
FormFea-tures
Perfor-mance
QualityConform-
anceQuality
Dura-bility
Relia-bility
Repair-ability
Style Design
Dr. Saleh Alqahtani
DeliveryDelivery
Services DifferentiationServices DifferentiationServices DifferentiationServices Differentiation
OrderingEase
OrderingEase
Maintenance& Repair
Maintenance& Repair
CustomerTraining
CustomerTraining
InstallationInstallation CustomerConsulting
CustomerConsulting
MiscellaneousS
ervices
Dr. Saleh Alqahtani
Differentiation ToolsDifferentiation ToolsDifferentiation ToolsDifferentiation Tools
Performance QualityPerformance QualityConformance QualityConformance QualityDurabilityDurabilityReliabilityReliabilityReparabilityReparabilityStyleStyleDesign: The Integrating ForceDesign: The Integrating Force
Services DifferentiationServices DifferentiationOrdering EaseOrdering Ease
Dr. Saleh Alqahtani
product has a life cycle assertsproduct has a life cycle asserts product has a life cycle assertsproduct has a life cycle asserts
1.1. Products have a limited life.Products have a limited life.
2.2. Product sales pass through distance Product sales pass through distance stages, each posing different challenges, stages, each posing different challenges, opportunities, and problems to the seller.opportunities, and problems to the seller.
3.3. Profits rise and fall at different stages of the Profits rise and fall at different stages of the product life cycle.product life cycle.
4.4. Products require different marketing, Products require different marketing, financial, manufacturing, purchasing, and financial, manufacturing, purchasing, and human resource strategies in each life-cycle human resource strategies in each life-cycle stage.stage.
Dr. Saleh Alqahtani
Sales & Profit Life CyclesSales & Profit Life CyclesSales & Profit Life CyclesSales & Profit Life Cycles
IntroductionIntroduction GrowthGrowth MaturityMaturity DeclineDecline
TimeTimeSal
esS
ales
&
& p
rofi
tsp
rofi
ts (
$) (
$)
Dr. Saleh Alqahtani
Marketing Strategies: Marketing Strategies: Introduction StageIntroduction Stage The Pioneer AdvantageThe Pioneer Advantage
InventorInventorProduct pioneerProduct pioneerMarket pioneerMarket pioneer
Product Life-Cycle
Figure 11.6: Figure 11.6: Long-Range Long-Range Product Product Market Expansion Market Expansion Strategy Strategy (P = Product; (P = Product; M = Market)M = Market)
Figure 11.6: Figure 11.6: Long-Range Long-Range Product Product Market Expansion Market Expansion Strategy Strategy (P = Product; (P = Product; M = Market)M = Market)
Dr. Saleh Alqahtani
Four IntroductoryFour IntroductoryMarketing StrategiesMarketing Strategies
Four IntroductoryFour IntroductoryMarketing StrategiesMarketing Strategies
Rapid-skimmingstrategy
Rapid-skimmingstrategy
Rapid-penetration
strategy
Rapid-penetration
strategy
Slow-penetration
strategy
Slow-penetration
strategy
Slow-skimmingstrategy
Slow-skimmingstrategy
PricePrice
LowLow
HighHigh
PromotionPromotionHighHigh LowLow
Dr. Saleh Alqahtani
Marketing StrategiesMarketing Strategies:: Improve product quality and add new Improve product quality and add new
product features and improved stylingproduct features and improved styling Add new models and flanker productsAdd new models and flanker products Enter new market segmentsEnter new market segments Increase distribution coverage and enter Increase distribution coverage and enter
new distribution channelsnew distribution channels Shift from product-awareness advertising Shift from product-awareness advertising
to product-preference advertisingto product-preference advertising Lower prices to attract next layer of price-Lower prices to attract next layer of price-
sensitive buyerssensitive buyers
Growth StageGrowth Stage
Dr. Saleh Alqahtani
Market ModificationMarket Modification Expand number of brand users Expand number of brand users
by:by:
1.1. Converting nonusersConverting nonusers
2.2. Entering new market Entering new market segmentssegments
3.3. Winning competitors’ Winning competitors’ customerscustomers
Maturity StageMaturity Stage
Dr. Saleh Alqahtani
Convince current users to Convince current users to increase usage by:increase usage by:
1.1. Using the product on more Using the product on more occasionsoccasions
2.2. Using more of the product on Using more of the product on each occasioneach occasion
3.3. Using the product in new Using the product in new waysways
Maturity StageMaturity Stage
Dr. Saleh Alqahtani
1.1. Increase firm’s investmentIncrease firm’s investment (to dominate the market and (to dominate the market and strengthen its competitive strengthen its competitive position)position)
2.2. Maintain the firm’sMaintain the firm’s investment level until the investment level until the uncertainties about the uncertainties about the industry are resolved.industry are resolved.
Decline StageDecline Stage
Dr. Saleh Alqahtani
1.1. Decrease the firm’s investment levelDecrease the firm’s investment level selectively by dropping unprofitable selectively by dropping unprofitable customer groups, while customer groups, while simultaneously strengthening the simultaneously strengthening the firm’s investment in lucrative nichesfirm’s investment in lucrative niches
2.2. Harvesting (“Harvesting (“milkingmilking”) the firm’s ”) the firm’s investment to recover cash quicklyinvestment to recover cash quickly
3.3. Divesting the business quicklyDivesting the business quickly by by disposing of its assets as disposing of its assets as advantageously as possible.advantageously as possible.
Decline StageDecline Stage
Dr. Saleh Alqahtani
Table 11.5: Summary of Product Life-Cycle Table 11.5: Summary of Product Life-Cycle Characteristics, Objectives, and StrategiesCharacteristics, Objectives, and StrategiesTable 11.5: Summary of Product Life-Cycle Table 11.5: Summary of Product Life-Cycle Characteristics, Objectives, and StrategiesCharacteristics, Objectives, and Strategies
Introduction Growth Maturity
Characteristics
Sales Low sales Rapidly rising sales
Peak sales
Costs High cost per customer
Average cost per customer
Low cost per customer
Profits Negative Rising profits High profits
Customers Few Growing Number Stable number beginning to decline
