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Brand Management

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Brand Management (MKT624)
VU
Lesson 18
POSITIONING
Introduction
This lecture continues to discuss the components of definition of positioning. The first
component of "clarity about business and category" having been discussed in the previous
lecture, the discussion now moves on to "clarity about target market" and "clarity about point
of difference". An effort is also made to discuss why does the need arise to reposition the brand
for considerations of growth and expansion.
Clarity about target market
·  Does the market we are trying to reach fall within the target range? The product has to
have complete compatibility with the likes and preferences of the target market. Creating
taste profile and visual aspects of cold sandwiches by company XYZ in dissonance with
the taste of professionals wanting to have sandwiches at lunch time will keep the product
out of the range of the target market. The product must look like the one created for the
target. It must taste like the one preferred by the target. And, it must be priced within a
range acceptable to the target.
·  Do they consider themselves as part of the target market? Offering cold sandwiches that
basically have western taste and looks may not appeal to a working class that does not
prefer any side of western culture. Such customers may not look upon themselves as the
target for the product being offered to them.
·  Are they reachable? The target market must be reachable through the channels that a
company may use as chain of supply. Not having effective distribution in a geographical
area will deprive many potential customers of using your product and hence undermine
brand's value.
·  Will the target market be interested in the point of difference? The question of "a product
for whom" is applicable here. Fabricating a driver's cabin on an agricultural tractor may
not attract many customers as another feature, for the agriculturists may be looking for
something with better application to tilling of land. You have to have complete clarity
about the point of difference the prospects are interested in. The positioning of the brand
otherwise will not be very effective.
·  Why have they not been approached before? In case the target market has not been
approached for features that you may find attractive for them, think about any constraints
that may impede your efforts. Do your homework properly and then decide to take the
strategic action. Working on product features requiring exorbitant investment may not be
worth the effort. The objective is to offer value to customer and also create value for the
company to improve profitability. You have to maintain balance between the two.
Clarity about point of difference
·  Is the key benefit important to customers? Very much in line with the preceding
discussion, you have to determine that the key benefit is relevant for the customers. The
target market of a small-sized family car may not be interested in benefits offered by
sports models. Such benefits may be very attractive, but they are not important to the
target customers.
·  Can we really deliver it? Has it have any elements of wishes? If the company does not
have the capability, due to any given reasons, then the point of difference remains just a
wish devoid of reality. Brand managers should not tax their energies on such wishful
ventures.
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Brand Management (MKT624)
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·
Can we sustain this point of difference over time? A very important question, it must be
asked and answered a lot of times before positioning a brand. Company XYZ has to make
it absolutely sure that it can deliver the sandwiches as it promises to its customers.
Sustainable ability and effort are more important than the initial enthusiasm to undertake
the project. The company must be able to always deliver the way it envisages while
defining the position of its brand.
·
Can we further fortify it? The beauty of creating a position for the brand lies in further
fortifying it. Fortification of positioning comes through factors like having technology
edge, quality human resource, and financial resource to name a few. At the same time, the
market must offer you the opportunity to involve your resources in fortifying the position
of your brand. Entering with a quality product and all the resources in a market that is
shrinking may not offer you the opportunity to fortify your brand's position.
·
Where can it place us on the brand value pyramid? Clarity about which stage of the value
pyramid the product belongs is important. It enables you to formulate compatible strategic
moves to work on the position of the brand.
Ramifications caused by a change in positioning
Subtle (not very obvious) changes are caused to positioning of your brand as and when you
grow and expand. The very factor of staying current and contemporary brings such slight
changes. You are getting into innovations and raising your standards to keep occupying the
brand pinnacle position.
A change in features and attributes will and should cause a change in price. An upward change
in price is taken for granted. A downward change can also occur due to changing market
conditions. You must stay sensitive to any ramifications in terms of segmental changes. If such
changes occur, then you must be ready to make adjustments to your communication tactics.
Sheer reinforcement of the delivery concept at company XYZ may necessitate new equipment
and better logistics. Growth potential will necessitate (part of the vision) putting up of small
utility restaurants. It will cause a change in the positioning of the brand, which before the
introduction of restaurants is all about delivering free to customers. The company with the
induction of restaurants is now attracting customers to its points of sale. This shift may call for
a change in positioning, which in turn means adjusting your communication strategies.
Adjusting and then strengthening your brand's position becomes an objective, because that
brings the brand more and more credibility. This becomes a case of meeting growth with
credibility. That is why it is said that positioning is the determinant of key operational
strategies.
The factors that we have discussed definitely have a bearing on pricing, distribution, and
investment strategies as primary strategies and also on a few other associated strategies like
location of restaurants and the decision to go or not go for franchising etc.
Ramifications of a shift in positioning must be considered very carefully. Credibility must
never be lost, for the established position in the mind of the customer has to be not only
maintained but fortified, whenever possible.
A real life example of a shift in positioning by a major European car manufacturer Volvo
explains the phenomenon with authenticity1. This maker of cars is known for safety standards.
Communication about those features has always been the hallmark of Volvo's advertising and
brand contract to maintain that particular position of safety.
The maker decided to change the position to high-performance cars instead of maintaining the
position of intelligent design with focus on safety features. It was such a departure from the
original position that prospects could not accept that information on high performance. Their
over-simplified mind had safety features as the established position occupied by Volvo. A
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Brand Management (MKT624)
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sudden departure from the original position to the one adopted made the prospects think the
company probably had compromised the safety features. The shift in positioning was not
managed with credibility. Sales dropped!
Bibliography:
1.
Scot M. Davis: "Brand Asset Management ­ Driving Profitable Growth through
Your Brands"; Jossey-Bass, A Wiley Imprint (115)
Suggested reading:
1.
Scot M. Davis: "Brand Asset Management ­ Driving Profitable Growth through
Your Brands"; Jossey-Bass, A Wiley Imprint (109-127)
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Table of Contents:
  1. UNDERSTANDING BRANDS – INTRODUCTION:Functions of Brand Management, Sales forecast, Brand plan
  2. INTRODUCTION:Brand Value and Power, Generate Profits and Build Brand Equity
  3. BRAND MANIFESTATIONS/ FUNDAMENTALS:Brand identity, Communication, Differentiation
  4. BRAND MANIFESTATIONS/ FUNDAMENTALS:Layers/levels of brands, Commitment of top management
  5. BRAND CHALLENGES:Consumer Revolt, Media Cost and Fragmentation, Vision
  6. STRATEGIC BRAND MANAGEMENT:Setting Objectives, Crafting a Strategy, The Brand Mission
  7. BRAND VISION:Consensus among management, Vision Statement of a Fast Food Company, Glossary of terms
  8. BUILDING BRAND VISION:Seek senior management’s input, Determine the financial contribution gap
  9. BUILDING BRAND VISION:Collect industry data and create a brand vision starter, BRAND PICTURE,
  10. BRAND PICTURE:Brand Value Pyramid, Importance of being at pinnacle, From pinnacle to bottom
  11. BRAND PERSONA:Need-based segmentation research, Personality traits through research
  12. BRAND CONTRACT:The need to stay contemporary, Summary
  13. BRAND CONTRACT:How to create a brand contract?, Brand contract principles, Understand customers’ perspective
  14. BRAND CONTRACT:Translate into standards, Fulfill Good Promises, Uncover Bad Promises
  15. BRAND BASED CUSTOMER MODEL:Identify your competitors, Compare your brand with competition
  16. BRAND BASED CUSTOMER MODEL:POSITIONING, Product era, Image Era, An important factor
  17. POSITIONING:Strong Positioning, Understanding of components through an example
  18. POSITIONING:Clarity about target market, Clarity about point of difference
  19. POSITIONING – GUIDING PRINCIPLES:Uniqueness, Credibility, Fit
  20. POSITIONING – GUIDING PRINCIPLES:Communicating the actual positioning, Evaluation criteria, Coining the message
  21. BRAND EXTENSION:Leveraging, Leveraging, Line Extension in detail, Positive side of line extension
  22. LINE EXTENSION:Reaction to negative side of extensions, Immediate actions for better managing line extensions
  23. BRAND EXTENSION/ DIVERSIFICATION:Why extend/diversify the brand,
  24. POSITIONING – THE BASE OF EXTENSION:Extending your target market, Consistency with brand vision
  25. DEVELOPING THE MODEL OF BRAND EXTENSION:Limitations, Multi-brand portfolio, The question of portfolio size
  26. BRAND PORTFOLIO:Segment variance, Constraints, Developing the model – multi-brand portfolio
  27. BRAND ARCHITECTURE:Branding strategies, Drawbacks of the product brand strategy, The umbrella brand strategy
  28. BRAND ARCHITECTURE:Source brand strategy, Endorsing brand strategy, What strategy to choose?
  29. CHANNELS OF DISTRIBUTION:Components of channel performance, Value thru product benefits
  30. CREATING VALUE:Value thru cost-efficiency, Members’ relationship with brand, Power defined
  31. CO BRANDING:Bundling, Forms of communications, Advertising and Promotions
  32. CUSTOMER RESPONSE HIERARCHY:Brand-based strategy, Methods of appropriations
  33. ADVERTISING:Developing advertising, Major responsibilities
  34. ADVERTISING:Message Frequency and Customer Awareness, Message Reinforcement
  35. SALES PROMOTIONS:Involvement of sales staff, Effects of promotions, Duration should be short
  36. OTHER COMMUNICATION TOOLS:Public relations, Event marketing, Foundations of one-to-one relationship
  37. PRICING:Strong umbrella lets you charge premium, Factors that drive loyalty
  38. PRICING:Market-based pricing, Cost-based pricing
  39. RETURN ON BRAND INVESTMENT – ROBI:Brand dynamics, On the relevance dimension
  40. BRAND DYNAMICS:On the dimension of knowledge, The importance of measures
  41. BRAND – BASED ORGANIZATION:Benefits, Not just marketing but whole culture, Tools to effective communication
  42. SERVICE BRANDS:The difference, Hard side of service selling, Solutions
  43. BRAND PLANNING:Corporate strategy and brands, Brand chartering, Brand planning process
  44. BRAND PLANNING PROCESS:Driver for change (continued), Brand analysis
  45. BRAND PLAN:Objectives, Need, Source of volume, Media strategy, Management strategy