Crafting the Brand Positioning and Competing Effectively

Creating a compelling, well-differentiated brand position requires a keen understanding of consumer needs and wants, customer capabilities, and competitive actions.

Developing and Establishing a Brand Positioning

All marketing strategy is built on segmentation, targeting, and positioning. A company discovers different needs and groups in the marketplace, target those it can satisfy in a superior way, and then positions its offerings so the target market recognizes the company's distinctive offerings and images.

Positioning is the act of designing a company's offering and image to occupy a distinctive place in the minds of the target market. The goal is to locate the brand in the minds of consumers to maximize the potential benefit to the firm.

Competitive Frame of Reference

The competitive frame of reference defines which other brands a brand compete with and therefore which brands should be the focus of competitive analysis. A good starting point is to determine category membership - the products or sets of products with which a brand competes and which function as close substitutes.

Points-of-Difference and Points-of-Parity

Once marketers have fixed the competitive frame of reference, they can define the appropriate point-of-difference and points-of-parity associations. Points-of-difference (PODs) are attributes or benefits that consumers strongly associate with a brand, positively evaluate, and believe they could not find to the same extent with a competitive brand. Strong brands may have multiple points-of-difference.

Three criteria determine whether a brand association can function as points-of-difference.

1. Desirable to consumer - Consumers must see the brand association as personally relevant to them.
2. Deliverable by the company - The company must have the resources and commitment to feasibly and profitably create and maintain the brand association in the minds of consumers. The ideal brand association is preemptive, defensible, and difficult to attack.
3. Differentiating from competitors - Consumers must see the brand association as distinctive and superior to competitors.

Points-of-parity (POPs) are attributes or benefit associations that are not necessarily unique to the brand but may be shared with other brands. Category points-of-parity are associations come in two forms: category and competitive. Category points-of-parity may change over time due to technological advances, legal developments, or consumer trends.

Choosing POPs and PODs

For choosing specific benefits as POPs and PODs to position a brand, marketers may use perceptual maps, visual representations of consumer perceptions and preferences. These provide quantitative portrayals of market situations and consumer perceptions along various dimensions, revealing "openings" that suggest unmet consumer needs and marketing opportunities.

Brand Mantras

A brand mantra is an articulation of the brand essence and promise, economically communicating what the brand is and what it is not in short, three- to five-word phrases. For brands seeking growth, it is helpful to define the product or benefit space in which the brand would like to compete, as Nike did with "athletic performance." This helps employees and marketing partners understand the brand so they can act accordingly. A good brand mantra should communicate the category and clarify the brand's uniqueness; be vivid and memorable; and stake out ground that is meaningful and relevant.

Establishing Brand Positioning

Establishing the brand positioning requires that consumers understand what the brand offers and what makes it a superior competitive choice. Three ways to convey a brand's category membership are:

1. Announcing category benefits - To ensure consumers that a brand will deliver on the fundamental reason for using a category, marketers frequently use benefits to announce category membership. Thus, industrial tools might claim to have durability.
2. Comparing to exemplars - Well-known, noteworthy brands in a category can help a brand specify its category memebership.
3. Relying on the product descriptor - The product descriptor that follows the brand name is a concise means of conveying category origin. Amazon.com calls its Kindle a "wireless reading device" to communicate category membership.

Differentiation Strategies
Dimensions of Differentiation

The obvious means of differentiation, and often the most compelling to consumers, related to aspects of the product and service.

• Employee differentiation - Companies can have better-trained employees who provide superior customer service. 
• Channel differentiation - Companies can design their channels' coverage, expertise, and performance to make buying easier, more enjoyable, and more rewarding for customers.
• Image differentiation - Companies can craft powerful, compelling images that appeal to consumers' social and psychological needs.
• Services differentiation - A service firm can differentiate itself by delivering more effective and efficient solutions to consumers.

Rational and Emotional Components of Differentiation

Many marketing experts believe a brand positioning should have both rational and emotional components, with points-of-difference and points-of-partiy that appeal to the head and the heart. Therefore, the firm should analyze potential competitive threats by monitoring:

• Share of market - The competitor's share of the target market.
• Share of mind - The percentage of customers who named the competitor in responding to the statement, "Name the first company that comes to mind in this industry."
• Share of heart - The percentage of customers who named the competitor in responding to the statement, "Name the company from which you would prefer to buy the product."

Competitive Strategies for Market Leaders

The market leader holds 40 percent; another 30 percent belongs to a market challenger; and 20 percent is claimed by a market follower willing to maintain its share and not rock the boat. Market nichers, serving  small segments larger firms don't reach, hold the remaining 10 percent.

To stay number one, the market leader must find ways to expand total market demand, protect its current share through good defensive and offensive actions, and increase market share, even if market size remains constant.

Expanding the Total Market

When the total market expands, the dominant firm usually gains the most. A company can search for new users among three groups: those who might use it but do not (market-penetration strategy), those who have never used it (new-market segment strategy), or those who live elsewhere (geographical-expansion strategy).

Protecting Market Share

While trying to expand total market size, the dominant firm must actively defend its current business. The most constructive response to protecting market share is continuous innovation. Even when it does not launch offensives, the market leader must leave no major flanks exposed. Defensive strategy reduces the probability of attack, diverts attacks to less-threatened areas, and lessens their intensity. A leading firm can use six defense strategies.

• Position Defense - This means occupying the most desirable market space in consumers' minds, making the brand almost impregnable.
• Flank Defense - The market leader should erect outposts to protect a weak front or support a possible counterattack.
• Preemptive Defense - A more aggressive maneuver is to attack first, perhaps with guerrilla action - hitting one competitor here, another there - and keeping everyone off balance. Another is to achieve broad market development that signals competitors not to attack.
• Counteroffensive Defense - The market leader can meet an attacker frontally so the rival will have to defend itself or exercise economic or political clout.
• Mobile Defense - Here, the leader stretches into new territories through market broadening and market diversification
• Contraction Defense - Sometimes large companies can no longer defend all their territory.

Increasing Market Share

In many markets, one share point can be worth tens of millions of dollars, which means that much depends on the company's strategy for expanding share. Because the cost of buying higher market share may far exceed its revenue value, firms should consider four factors first:

1. The possibility of provoking antitrust action - frustrated competitors are likely to cry "monopoly" and seek legal action if a dominant firm makes further inroads.
2. Economic cost - after a certain point, profitability might fall, not rise, with market share gains.
3. Pursuing the wrong marketing activities - firms that gain share typically outperform competitors in three areas: new-product activity, relative product quality, and marketing expenditures.
4. The effects of increased market share on actual and perceived quality - too many customers can strain the firm's resources, hurting product value and service delivery.

Other Competitive Strategies
Market-Challenger Strategies

Many market challengers have gained ground or even overtaken the leader. Given clear opponents and objectives, five attack strategies for challengers are:

1. Frontal attack - the attacker matches its opponent's product, advertising, price, and distribution.
2. Flank attack - a flanking strategy is another name for identifying shifts that are causing gaps to develop, then filling the gaps. Flanking is particularly attractive to a challenge with fewer resources and more likely to succeed than frontal attacks.
3. Encirclement attack - Encirclement attempts to capture a wide slice of territory by launching a grand offensive on several fronts; this makes sense when the challenger has superior resources.
4. Bypass attack - Bypassing the enemy to attack easier markets offers three lines of approach: diversifying into unrelated products; diversifying into new geographical markets; and leapfrogging into new technologies, shifting the battleground to an advance where the challenger has an advantage.
5. Guerilla attack - guerrilla attacks are small, intermittent attacks, both conventional and unconventional, including selective price cuts, intense promotional blitzes, and occassional legal action, to harass the opponent and secure footholds.

Market-Follower Strategies

The innovator bears the expense of developing the new product, getting it into distribution, and informing the market. The reward for all this work and is normally market leadership. Many companies prefer to follow rather than challenge the market leader, but some followers use a counterfeiter strategy, duplicating the leader's product and packages and selling on the black market or through disreputable dealers. Normally, a follower earns less than the leader. Therefore, followership is often not a rewarding path.

Market-Nicher Strategies

An alternative to being a follower in a large market is to be a leader in a small market or niche. Smaller firms normally avoid competing with larger firms by targeting small markets of little or no interest to larger rivals. A niche might dry up or be attacked, however, so nichers must seek to create niches, expand existing niches, and protect their niches.

Personal Point of View

After reading this chapter, I see clearly how Cox and AT&T has been codepending on each other market share and playing with price range. I see how Pepsi openly attack Coca-Cola in commercials. I also see how Apple and Microsoft mock each other on TV. It is really interesting how these marketers put the terms on those defenses and attacks when we just see it as plain old common sense. Nonetheless it is indeed very interesting chapter to read.