posish2004

Bases of Differentiation: 

Bases of Differentiation Features: characteristics that supplement a product’s basic function - “bare bones” model - optional features Continuously introduce new features - Japanese electronics manufacturers - Contact recent buyers - Survey - Value to customer vs. cost to firm tradeoff

Quality: 

Quality Strategic Planning Institute (SPI) found a positive correlation between Quality and ROI. In a study of 525 units, ROI Low Quality 17% Medium Quality 20% High Quality 27% Benefits of Quality - Premium price - Repeat purchase - Loyalty - Positive word of mouth

Types of Quality: 

Types of Quality Performance quality Conformance quality Reliability – Maytag Durability – Volvo has highest mean life Repairability - Caterpillar

Design and style: 

Design and style Style - How well the product looks and feels to the buyer. - Packaging of cosmetics - Jaguar - GM hired Pinifarina, an Italian designer, to design the Allante’ - Herman Miller - office furniture - Olivette - office machines - Swatch - watches Design - Integration - Italian design - apparel and furniture - Scandianvian design - functionality aesthetic - German design - austerity and robustness - Braun - design, engineering, and manufacturing - Bang and Olufsen - stereo and television

Services: 

Services Delivery - speed, accuracy, care - Deluxe Check Printers - shipped in one day after order Installation - IBM delivers all equipment to the site at same time. - IBM moves competitors equipment as well. Customer training – General Electric - McDonalds employees attend Hamburger University Consulting - McKesson Corporation - 12,000 independent pharmacists. Helps set up accounting and inventory systems

Personnel: 

Personnel Competence - skill and knowledge Courtesy - friendly, respectful, and considerate Reliability - consistency and accuracy Credibility - trustworthy Responsiveness - quick response Communication - make effort to understand and communicate McDonald’s - courteous Singapore - beauty and grace IBM - professional Disney - upbeat

Brand and Image: 

Brand and Image e.g., Marlboro Man Identity versus image. Identity - how companies aim to identify itself to its customers. Image - how an individual perceives the company

TIDE: 

TIDE Is so powerful; it cleans down to the fiber All purpose family detergent for extra-tough laundry jobs. “Tide’s in, dirt’s out” Great stain fighting qualities

CHEER: 

CHEER Color Guard gives “outstanding cleaning and color protection. Clothes look clean, bright, and more like new.

OXYDOL: 

OXYDOL Contains bleach. Makes your white clothes really white and your colored clothes really bright. “So don’t reach for the bleach -- grab a box of Ox!”

GAIN: 

GAIN Originally P&G’s “enzyme” detergent Repositioned as the detergent that gives you clean, fresh smelling clothes “Freshens like sunshine”

BOLD: 

BOLD Detergent with fabric softener “Cleans, softens, and controls static with fabric softener scent”

IVORY SNOW: 

IVORY SNOW Ninety-nine percent and forty-four one hundredths percent pure “Mild, gentle soap for diapers and baby clothes”

DREFT: 

DREFT Formulated for baby’s diapers and clothes. Contains borax - nature’s natural sweetener “A clean you can trust.”

DASH: 

DASH P&G’s value entry Attacks tough dirt “Dash does it for a great low price.”

ERA PLUS: 

ERA PLUS Built-in stain removers “Gets tough stains out and does a great job on your whole wash too.”

Positioning – Why?: 

Positioning – Why? 1. Over-communicated society - 30,000 books published - 10 million tons of news, 94 pounds/year/person NY Times (Sunday) - 4.5 lbs.; 5 million words - Television - 13 hours/day 2. Product explosion 25,000 SKUs UPC - 10 digits 3. Advertising explosion Advertising spending in US is $376.62/year/person versus $17 for the rest of world

Developing a positioning: 

Developing a positioning What are the points of differentiation? Good points of differentiation should have the following characteristics: Important Distinctive Superior Communicable Preemptive Affordable Profitable Product needs a USP ( Unique Selling Proposition )

PositioningAl Ries and Jack Trout: 

Positioning Al Ries and Jack Trout 1. Be the first - pioneering advantage 2. Strengthen current position - give a reason - Avis – We’re No. 2, we try harder - 7-Up – The Uncola 3. Look for the hole: Milky Way candy - lasts longer United Jersey Bank - fast moving bank 4. Deposition/reposition the competition Lenox/Royal Doulton - both from England Lenox made in New Jersey

Perceptual Maps: 

Perceptual Maps How similar are each of the following brands? A-B 1 2 3 4 5 B-C 1 2 3 4 5 C-A 1 2 3 4 5

Mapping Methods in Marketing: 

Mapping Methods in Marketing Perceptual Maps Preference Maps Joint Space Maps Similarity-based methods Attribute-based methods Ideal-point model (unfolding model) Vector model External analysis using PREFMAP-3 Simple “joint space maps” using modified perceptual mapping methods Positioning–8

Attributes of Laptops on a Perceptual Map: 

· IBM 701 C “Butterfly” Slow Looks Performance Easy setup Light Value Common Elegant Attributes of Laptops on a Perceptual Map The six attributes were measured on semantic differential scales: 1) Slow–Fast operation, 2) Plain–Elegant, 3) Easy–Difficult setup, 4) Poor–Excellent value, 5) Light–Heavy, and 6) Common–Distinctive. · Toshiba 1960CT

Interpreting Perceptual Maps: 

Interpreting Perceptual Maps The arrow indicates the direction in which that attribute is increasing (The attribute is decreasing in the direction opposite to the arrow). The length of the line from the origin to the arrow is an indicator of the variance of that attribute explained by the 2D map. The longer this line, the greater is the importance of that attribute.

Attributes of Laptops on a Perceptual Map: 

· IBM 701 C “Butterfly” Slow Easy setup Light Common Elegant (Plain) Attributes of Laptops on a Perceptual Map Looks Performance Good Value · Toshiba 1960CT

Interpreting Perceptual Maps: 

Interpreting Perceptual Maps Attributes that are both relatively important and close to the horizontal (vertical) axis help interpret the meaning of the axis. To position a laptop on each attribute, draw an imaginary perpendicular line from the location of the laptop onto that attribute. (These are shown by dashed lines on the map).

Perceptual Map of Beer Market (only Brands): 

Perceptual Map of Beer Market (only Brands) Meister Brau Stroh’s Beck’s Heineken Old Milwaukee Miller Coors Michelob Miller Lite Coors Light Old Milwaukee Light Budweiser

Perceptual Map of Beer Market (Only attributes): 

Perceptual Map of Beer Market (Only attributes) Popular with Men Heavy Special Occasions Dining Out Premium Popular with Women Light Pale Color On a Budget Good Value Blue Collar Full Bodied Premium Budget Light Heavy Less Filling

Perceptual Map of Beer Market (both products & attributes): 

Perceptual Map of Beer Market (both products & attributes) Popular with Men Heavy Special Occasions Dining Out Premium Popular with Women Light Pale Color On a Budget Good Value Blue Collar Full Bodied Premium Budget Light Heavy Meister Brau Stroh’s Beck’s Heineken Old Milwaukee Miller Coors Michelob Miller Lite Coors Light Old Milwaukee Light Budweiser Less Filling

Two Preference Models: 

Two Preference Models Attribute Attribute Preference Preference Ideal-Point Preference Model Vector Preference Model Ideal Point Increasing Preference Decreasing Preference (eg, sweetness) (eg, service speed)

Limitations of Preference Mapping: 

Limitations of Preference Mapping Provides a static model—ignores dynamics of customer perceptions. Interpretation is sometimes difficult. Does not incorporate cost or likelihood of being able to achieve a desired positioning. Does not incorporate a “probability model” to indicate goodness of a map. Generally, need about 6 to 8 products to make the technique useful.