Lecture 4 chapter 5 introduction to marketing

BE501
Introduction to Marketing
Dr Polly Sokolova
Lecture 4 – 9/02/2024

LECTURE 4
POSITIONING & BRANDING

Today
1. Quick Recap
2. Positioning
3. Branding
4. Homework

STP
 Market segmentation refers to dividing the markets
into segments of customers.
 Target marketing refers to which segments to go
after.
 Positioning - the company must decide how it will
differentiate and position itself in the marketplace.
S
T
P

Segmenting Consumer Markets
 based on certain key customer-related, product-
related or situation-related criteria .
 These are classified as segmentation
bases/criteria:
1. Profile Criteria – who are my customers and
where are they?
2. Behavioural Criteria – where, when and how do
my customers behave?
3. Psychological Criteria – why do my customers
behave that way?

Segmentation Bases
Consumer Criteria Chart

Targeting
According to Kotler (1984), for market segmentation to
be effective, all targeted segments must be:
1. Distinct – is each segment clearly different from
other segments?
2. Accessible – can buyers be reached through
appropriate promotional programmes and
distribution channels?
3. Measurable – is the segment easy to identify and
measure?
4. Profitable – is the segment sufficiently large to
provide a stream of constant future revenues and
profits?

Benefits of STP
1. Enhancing a company’s competitive position
2. Identifying market growth opportunities
3. Efficient matching of company resources to target
market segments

Segmentation Challenges
 The needs of segment members may change over
time.
 Consequently, members may switch to different
segments.
 Market segmentation programmes must always use
current customer data.
 Marketing Managers need to make sure that
everyone is working towards the same customer
segment.
 Labels can mean different things to different
people.

Segmentation Limitations
The market segmentation process is often
problematic because an offering can have
multiple applications.
(Griffith and Pol, 1994)
 Product Differentiation and Positioning need to
be taken into account (next week).

Positioning
 The act of designing the company’s offering and image so that
they occupy a meaningful and distinct competitive position in
the target customers’ minds.
 Positioning is about differentiating an offering from its competitors to
give consumers a reason to buy it.
 It’s about identifying a unique selling proposition (USP), such as
the fastest delivery service, the freshest ingredients or the best
customer service.
 “What you have that competitors don't.”
 It’s about identifying a sustainable competitive advantage.

Positioning
 Positioning incorporates three processes:
• Step 1: Identifying an attractive position in the
market different from/superior to where
competitors are positioned.
• Step 2: Defining this position.

Perceptual Mapping
• Perceptual Maps- key tool for positioning.
• They are visual representations of a market.
• They are used to determine how you and your competitors are perceived,
according to the key attributes that the target segment values.
• Perceptual maps therefore make explicit the link between the Customer
Analysis and the Competitor Analysis.
• Customer values determine the labels of the axes (these need to be a
continuum).
• Competitors are positioned accordingly.
• AIM: To find or to create a gap in the market.

Perceptual Mapping
 The aim is to find a gap in the market

Positioning
 Step 3: Communicate this unique position
• The aim is to position the brand within the mind of the
target audience. It is ‘not what you do to a product, it is
what you do to the mind of a prospect’ (Ries and Trout,
1972) that determines how a brand is really positioned in a
market.
• This is why marketing communications and advertising are
so important.
• They can convey particular information about a brand and
frame the brand in a particular way to adjust the
perceptions that customers have.

Positioning
 ‘Market Positionings’ are often defined by the
functional attributes and benefits of brands.
 ‘Mind Positionings’ are usually defined by symbolic
values and emotions communicated through branding
and advertising.
 A positioning can be defined functionally and
emotionally.

Functional Benefit
Unique Taste
Refreshing

Repositioning Strategies
1. Change the tangible attributes and then communicate the new
proposition to the same market.
“New and Improved”

2: Change the way a product is communicated to the
original market.

3: Change the target market and deliver the same
product.

4: Change both the product (attributes) and the target
market.

Brand
“a brand is represented by a name, symbol, words or
mark that identifies and distinguishes it.”

Branding
• Branding adds value.
• It is a process that helps customers to differentiate between various
market offerings. If this differentiation can be achieved and sustained,
then a brand is considered to have a competitive advantage.
• It enables customers to make associations between certain ideas or
feelings and a particular brand.
 Although marketers have to create, sustain, protect and develop
brands, it is the customer’s perception that is important.
 Customers form images and give meaning and value to brands.
 Co-creation.

Branding
• Brands are constructed of two main types of attribute: Intrinsic and
Extrinsic
• Intrinsic Attributes
 The functional characteristics of a product (shape, performance, physical
capacity, etc.)
 Changing an intrinsic attribute directly alters the product.

Branding
• Extrinsic Attributes
 External devices such as brand name, marketing communications,
packaging, price, place, etc. If changed, does not alter the material
functioning and performance of the product itself.
https://www.youtube.com/watch?v=CRiv2lgaX_U
https://www.youtube.com/watch?v=z2T-Rh838GA

Brand Associations
Brand associations are memory nodes linked to a brand in the long term
memory.
A brand image is the total set of associations linked to a brand.

Brand Associations
Intrinsic attributes
Functional / rational benefits
Extrinsic attributes
• Emotional / symbolic benefits
• Non-product related attributes (Price, place,
packaging)
• Situations

Primary and Secondary Associations
Primary
assosiations
Mercedes Audi
High quality Prestige
BMW
Prestige
High quality Prestige High quality

Primary and Secondary Associations
Primary
associations
Mercedes Audi
High quality Prestige
BMW
Prestige
High quality Prestige High quality
Secondary
assosiations
Silent/no noice
Large cars
Royal / offical
Formal
Competent
Respected
Intelligent
Driving
experience
Efficient
Design
Driving
experience
Large engine Quattro
Well equiped
Self-
confidence
Sporty
Winter
”Family-sporty”
Joy of driving

Brand Personality
 Many brands are deliberately imbued with human
characteristics.
 friendly
 approachable
 distant
 calculating
 honest
 fun
 robust
 caring
 Marketing Communications play an important role in
communicating the essence of a brand’s personality.

Brand Personality
 Aaker (1997) developed the Brand Personality Scale, which
consists of five psycho-social meaning

Brand Personality
 Consumers search for brands that compliment their self-
concept (McCracken, 1986).
 Brands offer consumers a means of self-expression (Belk, 1988).
 Actual self
 Ideal self
 Brands provide means for individuals to indicate to others their
personality.
 Self-congruence theory posits that consumers respond more
positively to brands that are in line with their self-concept (Sirgy,
1997), thus predicting consumers' attitudes and purchase intention
(Aaker, 1999).

Brand Portfolio
 Collection of smaller brands that fall under a
larger 'brand umbrella' set by a company.

Brand extension
 High failure rates of new products: 72-88%. Brand extension better
performance but no guarantee of success.
 Brand extension “use of established brand names to enter new
product categories or classes” (Keller & Aaker, 1992, p.35).
 Number of empirical studies on success factors affecting brand
extensions. Learn lessons of best practice.
 Consumers evaluate brand extensions based on their attitude to
the parent brand and the extension category (Czellar, 2003).

Brand extension: Fit Perception
 Perceived fit is characterised by the number of
shared associations between the extension
product category and the brand.
 2 dimensions of fit construct:
 a) product category fit, refers to the perceived
similarity between the extension category and the
existing product categories of the parent brand.
 b) brand level fit, match between the specific
image of the brand and the extension product
category.

Brand Equity
Brand equity is the set of assets (and liabilities) linked to a brand’s name and
symbol that adds (or subtracts from) the value provided by a product or service to
a firm and /or that firm’s customers (Aaker, 1992).
Brand equity is the added value endowed by the brand to the product. It is the
simple difference between the value of a branded product, and the value of that
product without that brand name attached to it (Rosenbaum-Elliott, 2015)

What are the benefits of strong
brands?
 High consumer loyalty (less price sensitive;
more forgiving)
 Higher market share, profit & ROI
 Bargaining power and trade leverage
 Barrier to entry for competitors
 Enable brand extensions
 Reduce promotional costs

Homework
Week 4 quiz - in My MarketingLab
Read chapter 7 & 10 of Marketing
Management

Lecture 4 chapter 5 introduction to marketing

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