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Brand Management

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Brand Management (MKT624)
VU
Lesson 19
POSITIONING ­ GUIDING PRINCIPLES
Introduction
This lecture is devoted to the guiding principles, as Scot Davis puts them, relating how to
reposition and maintain an established position1. Five principles are discussed hereunder:
1. Update your position as necessary
Before updating positioning, one must take a look at the present position to see if it is still
relevant to the target audience, fulfills needs, customer shifts, market dynamics, and company
goals. Generally speaking, the moment you realize that there are unmet needs, you must start
thinking about re-positioning the brand.
According to Davis, it takes about three to five years to change the position. There are five
different criteria to judge if there is need for updating2. The criteria are illustrated graphically
with the help of figure 23 on the next page.
Value
Does the target market value our positioning? If it does, then there is no need to change the
positioning. If it does not, then there should be a cause for concern about changing the
positioning of our brand. To realistically assess the situation, we need to ask ourselves the
following questions:
·  Do customers feel motivated to buy? Any drop in the level of sales should indicate a
corresponding drop in motivation. However, before waiting for that eventuality, we
should conduct research from time to time to assess the level of customers' motivation to
buy.
·  Do they really prefer over competition? Continued preference of our brand is an
indication that we do not change the positioning. Our research about how our brand stacks
up against competition is a fair guide to gauge if a shift in positioning is required.
·  Do they really feel getting benefits? Should there be a change in customers' perception
about getting the expected benefits; the time is then ripe for studying the evolving
changes and acting on keeping the brand current and contemporary.
·  Do they feel their needs are being met? This is an extension of the preceding question and
requires finding out any unmet needs that may have arisen due to evolving changes. Does
the market allow us to charge a premium? If our brand is enjoying the pinnacle, then it
should enjoy price premium with indication of not causing a shift in positioning.
However, continual research should send us signals about the need to cause desired shifts
in a way that we maintain product credibility and the pinnacle.
·  Does the positioning cut across segments? A strong position should take us into a multi-
segmental situation. If it does not, then we may look into the reasons for weak positioning
and the need to cause a shift.
Uniqueness
Does the position make our brand unique and exclude competition? The moment customers
stop considering our brand as unique, we should have a cause for managing a shift in
positioning. We should consider the following questions:
·  Do customers consider our brand positioning as something really unique, different from
others?
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Brand Management (MKT624)
VU
Figure 23
Five Criteria
To
Update Brand Position
Fit
Does it fit
our organizational
goals?
Value
Focus on the benefits
customers value
Sustainability
How long can we
sustain the
position?
Uniqueness
Competitors
absent
Credibility
Is the position
credible?
Source: Scot M. Davis, "Brand Asset Management"
·
Does our brand really offer a unique value proposition? We should not leave anything to
our judgment. Research should be carried out to determine if customers still perceive our
offering carrying the USP we created.
·
Do customers immediately recall our brand when we tell them the position? If they do
not, then our brand has lost uniqueness and desires a shift in positioning.
Credibility
Is our brand positioning credible in the marketplace? Credibility comes with keeping the brand
contract while we go through innovations to stay current. A consistent customer perception that
our brand is credible is one factor that sustains our brand's position. If the case is otherwise,
then we must ask ourselves the following questions:
·  What must be done to make our positioning credible? An analysis of promises made and
delivered, that is, brand contract must be carried out to determine how we can make our
position credible.
·  Are there competitive brands that are as much credible? If others also are as much
credible as our brand, then it calls for an effort to offer customers even higher value not
necessarily through the physical aspects of the product, but through other variables of the
marketing mix.
·  Is the positioning credible enough to let management commit financial resources? An
exceptionally strong positioning should allow management to commit more resources. If
company XYZ is successful in achieving the target volumes by delivering free, then it
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Brand Management (MKT624)
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should have the confidence to start investing into restaurants to expand its business and
determine the shift in positioning expansion and growth will cause.
Sustainability
Can we sustain the position for a long time? Uniqueness of the selling proposition brings
sustainability to positioning. A famous tea brand may have the confidence to sustain its
position on the ground that its exceptionally attractive color, aroma, and taste owe to a special
variety of tea crop along with blending expertise of the company. Also knowing that it is hard
for others to follow them may double their confidence that position can be sustained. Should
there be questions about sustainability, may those look like the following:
·  Is it that we can no longer sustain the position? Knowing that others are catching up with
us, we should consider introducing newer features and a shift in position with credibility.
·  Is it that the needs and wants will remain the same for quite sometime? Knowledge of a
change of needs and wants should make us work on improvements and management of
shifts in positioning. Japanese cars that were mostly positioned on their fuel efficiency
and provision of services have gone past such positions and successfully managed shifts
to positions of newer environment friendly technologies. Hybrid models (that run on
gasoline and battery generated power) by Toyota and Honda are excellent examples of
sustaining positions with credibility while they address to changing needs of customers ­
needs to have cars that are innovated and yet fuel efficient.
·  Is it that the position might be copied quickly by the competition? The shift in positioning
should be caused either by increasing value to the customer or repositioning the
competition by communicating what your product is not, virtually meaning what
competition is. The ice cream clash between Yummy and Wall's centered on Yummy's
advertising claim that its ice cream was not a non-dairy ice cream, meaning that Wall's
was.
·  Why do we need to sustain the position internally and externally? A company must be
clear about the level of internal mobilization of resources ­ human and material ­ and be
sensitive to the need for effective customer-driven marketing. One without the other may
disturb sustainability.
Fit
Does it have a perfect fit with the organization? No matter how attractive and logical a
positioning may be, it is not worthy of creating and maintaining if it does not have a fit with the
organization. We must consider the following questions to ensure that there is fit of positioning
with the organization.
·  Does it promise fulfilling our goals? If the position cannot help the company fulfill its
goals, it needs to be changed. Positioning stems out of the understanding of the category
followed by segmentation and differentiation. It therefore has to flow out of the strategic
vision for the business, meaning it must be able to create a level of business that fulfills
goals.
·  Does it have the potential to fill the growth gap? An extension of the above explanation,
god positioning must contribute toward filling the growth gap.
·  Will it really enhance value and profitability of the company? Good positioning must
offer value to the company and add to profitability. If it does not, then it requires changes.
All the variables of the above-discussed criteria will guide us to decide whether or not we
should change our positioning.
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Brand Management (MKT624)
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2. Brand positioning should drive all brand strategies
Our discussion early with regard to changing goals for the fast food restaurant was clear
enough to suggest how strategies are driven by positioning. As long as the company has thrust
on free delivery, its strategy will be to have a credible delivery system in place.
The moment growth starts necessitating branching out into restaurants the strategy will be
different. The strategy will be to highlight presence through utility restaurants for attracting
customers there while simultaneously supplement the existing delivery system. A changed
position in response to growth and expansion causes changes in strategies. The job of managers
is to ensure that change takes place with credibility and no disturbances at all.
3. Senior management must lead the charge
Total commitment on part of the management is essential. They have to prove that their support
is based on sincerity to the brand; it is going to set an example for the rest of the company. In
other words, their support to strategies will mark their commitment to those strategies and
goals. Others will follow.
4. Employees bring positioning to life
Despite being externally driven, positioning has to be internally sold to all employees. Internal
and interactive marketing is required to bring everyone on the same wavelength. All employees
have to become brand ambassadors and work for bringing the positioning to life internally first
and externally later.
Scot Davis puts the requisite internal marketing in an effective and easy-to-understand way by
coining the acronym AUDIENCE. It stands for awareness, understanding, direction,
inspiration, engagement, naturalness, criteria, and education. The following has to be achieved
through AUDIENCE for maximizing positioning:
AUDIENCE
·  A:
Awareness: All in the company should be able to clearly state brand positioning.
·  U:
Understanding: Thy must understand why the particular brand positioning was
chosen and how that affects their daily operational routines. If positioning is about
consumer-friendly pricing, the all must be sensitive to achieving cost efficiencies. If
positioning is about high quality, then all must pay attention to creating it eight from
purchasing to production to logistics, and inventory management.
·  D:
Direction: Provides a sense of direction in standardizing the operations and
service standards. The standards make it easy to deliver the promise and also lay
foundation for quality management.
Bibliography:
1. Scot M. Davis: "Brand Asset Management ­ Driving Profitable Growth through
Your Brands"; Jossey-Bass, A Wiley Imprint (115-127)
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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