Positioning

1
Positioning

• Positioning Concepts
• Perceptual Map
• Preference Map

2
Positioning Concepts

• Differentiation (What you do to a product)
  creating tangible or intangible differences on
  attributes/preferences of competitive offerings.
• Positioning (What you do to the minds of
  customers) strategies to differentiate a firms
  offering in the minds of target customers
  distinct, important, sustainable image.
• Mapping techniques to develop differentiation
  and positioning strategies by visualizing the
  competitive market structure as perceived by
  customers.
• Based on customers attribute perceptions, and/or
  preferences of existing (and/or new) products
• At the individual, segment, or market level

3
Objectives of Using Maps

• 1. Check how customer perceptions of your
  products compare to those of your competitors.
• 2. Find (inadequately) unmet customer needs and
  wants.
• 3. Identify market segments to which a particular
  product or new concept would be appealing.
• 4. Identify product strengths and weaknesses, and
  determine the direction of change on key product
  attributes to improve your products.
• 5. Visually determine the impacts of
  re-positioning on market performance
  (before-after study).

4
Some Successful Examples
1000 songs Safety Authentic, real,
original Family entertainment Improves the
quality of life Accepted everywhere Quality of
life

• iPod
• Volvo
• Coke
• Disney
• GE
• Visa
• Viagra

5
Why Mapping?
An chemist reads diagrams like this
An Electrical Engineer reads diagrams like this
Positioning 5
6
Why Mapping? (contd)
Ratings of nine brands of notebook computers on
several attributes B1 B2 B3 B3 B4 B5 B6 B7 B8 New
Attractive 5.1 3.6 3.5 5.4 3.9 4.8 5.2 4.0 5.2 4.
0Light 6.0 3.5 5.0 3.9 3.3 5.3 5.0 2.5 5.5 2.5Un
reliable 3.4 4.1 4.5 2.1 4.5 2.7 4.5 3.7 2.5 3.8P
lain 1.5 4.1 2.9 2.3 4.5 2.7 3.5 4.3 2.2 5.2Batte
ry life 3.3 4.9 4.3 4.1 3.9 3.0 3.5 6.2 3.5 4.0Sc
reen 3.5 5.3 3.4 6.4 5.4 5.2 3.3 6.0 3.3 4.8Keybo
ard 2.6 3.5 2.5 3.4 3.8 3.3 2.8 5.0 4.3 4.7Roomy
5.5 4.3 5.4 3.1 3.4 3.3 4.7 3.5 4.3 4.2Easy
service 4.5 4.9 3.3 5.0 4.4 4.5 3.3 4.7 3.8 4.5Ex
pandability 5.5 4.3 5.4 3.1 3.4 3.3 4.7 3.5 4.3 4.
2Setup 5.6 3.5 5.6 5.4 2.5 4.2 5.2 3.3 5.8 2.5Co
mmon 4.1 3.5 3.3 2.9 4.0 4.3 2.2 4.2 3.3 4.2Value
3.5 4.8 4.4 3.6 3.6 2.7 3.2 4.7 3.5 4.0Preferenc
e 7.4 3.4 4.8 6.6 4.4 7.4 7.1 3.8 6.9 3.3
7
Conventional Mapping Snake Charts
Does notDescribes it describecompletely
it at all 0 1 2 3 4 5

• 2 Products, 20 Attributes
• 1. Company provides adequate insurance coverage
  for my car.
• 2. Company will not cancel policy because of
  age, accident experience, or health problems.
• 3. Friendly and considerate.
• 4. Settles claims fairly.
• 5. Inefficient, hard to deal with.
• 6. Provides good advice about types and amounts
  of coverage to buy.
• 7. Too big to care about individual customers.
• 8. Explains things clearly.
• 9. Premium rates are lower than most companies.
• 10. Has personnel available for questions all
  over the country.
• 11. Will raise premiums because of age.
• 12. Takes a long time to settle a claim.
• 13. Very professional/modern.
• 14. Specialists in serving my local area.
• 15. Quick, reliable service, easily accessible.
• 16. A good citizen in community.
• 17. Has complete line of insurance products
  available.

8
Read Perceptual Maps!
9
Mapping Methods Overview

• 1. Mapping perceptions
• Attribute-ratings methods (particularly useful
  for functional products)
• Overall-similarity methods (particularly useful
  for image-oriented products)
• 2. Mapping preferences
• Ideal brand as a brand
• Preference as a special attribute

10
1. Perceptual Maps
Example Positioning of Beers

• Select Beers of interest to the target customers.
• Identify key attributes on which these Beers are
  evaluated by the target group (e.g., focus
  groups).
• e.g., Light-Heavy Cheap-Expensive Drink
  alone-Share with friends
• Ensure that customers are familiar with the
  products.
• Have customers evaluate the products on the
  chosen set of attributes.
• If desired, include Preference for the Beers as
  one of the attributes.

11
Perceptual Map of Beer Market (Show Only
Attributes)
Heavy
Popular with Men
Heavy
Full Bodied
Special Occasions
Blue Collar
Dining Out
Premium
Good Value
Premium
Budget
Popular with Women
Pale Color
On a Budget
Light
Less Filling
Light
12
Interpreting Perceptual Maps

• Arrows
• Indicate the direction in which an attribute is
  increasing (decreasing in the direction opposite
  to the arrow).
• Thus, a beer positioned farther and farther in
  the North East direction are popular with men,
  whereas a beer positioned in the South West is
  less popular with men.
• Length of the Arrows
• From the origin to the arrow, is an indicator of
  the extent to which these beers are different on
  that attribute.
• Thus, Good value and Less filling are
  relatively more important than Pale color and
  Blue collar in explaining how these customers
  discriminate between the different beers.

13
Interpreting Perceptual Maps

• Underlying dimensions
• Attributes that are both relatively important and
  close to the horizontal (vertical) axis help
  articulate the meaning of that axis.
• Budget-Premium for the horizontal axis and
  Light-Heavy for the vertical axis.
• Horizontal axis premium, good value, special
  occasions, blue collar, budget, etc.
• Vertical axis heavy, light, pale color

14
Perceptual Map of Beer Market (Show Only
Products)

Old Milwaukee
Budweiser

Becks

Meister Brau
Heineken

Miller

Coors
Strohs

Michelob

Coors Light

Miller Lite

OldMilwaukee Light
15
Perceptual Map of Beer Market (Include Both
Attributes And Products)
Heavy
Popular with Men
Heavy

Full Bodied
Old Milwaukee
Budweiser

Becks

Meister Brau
Heineken
Special Occasions

Miller
Blue Collar

Dining Out
Premium
Good Value

Coors
Premium
Budget
Strohs

Michelob

Popular with Women
Coors Light

Miller Lite
Pale Color

On a Budget
OldMilwaukee Light
Light
Less Filling
Light
Interesting web site to visit www.ratebeer.com
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Interpreting Perceptual Maps

• Product attribute perceptions
• To position a beer on an attribute, draw an
  imaginary perpendicular line from the location of
  that beer onto that attribute (the dashed lines).
• For example, Budweiser is perceived to be more
  popular with men than Coors.

17
2. Mapping Preferences

• Objective include preferences into perceptual
  maps
• Ideal point method introduce an ideal brand as
  an additional brand evaluated on all attributes.
• Combine attribute ratings of ideal brand with the
  other brands.
• Compare how different the brands are from the
  ideal brand.
• Vector method introduce preferences as an
  additional attribute for all brands.
• Analyze preference simultaneously with other
  attributes.
• Identify which attributes influence preference
  the most
• Identify which brands are most preferred.

18
Preference Maps
Vector Map
Preference Vector
A
dAC
dAB
C
B
(b)A is preferred to B and B is preferred to
C.With reference to A, C is preferred half as
much as B.(dAC 2dAB)
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Vector Method

• Data matrix of inputs
• A1 A2 A3 A4 ............... A15, PREF
• Dell 4 3 4 1 2 2
• C1 IBM 6 3 7 2 8 8
• Toshiba 3 6 2 7 6 6
• Dell
• C2 IBM
• Toshiba
• Note higher number on PREF indicates higher
  preference.
• Compute average ratings of each brand on each
  attribute, including the preference attribute,
  across all customers.
• All the interpretations are the same as
  perceptual maps

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Vector Method (contd)
Low battery life
Keyboard
Expandability

• Toshiba

Elegant
Distinct
Unsuccessful
Avant-Garde
Heavy
Fast operation

• IBM
• Compaq

Reliable

• Sanyo

• Good design

• TI

• AST Exec

Difficult to use

• Dell

• NEC

Value Graphics

• New Concept

Poor setup

• Samsung

Screen quality
Preference
21
Evaluating Maps

• Technical adequacy
• What percentage of variance of each attribute is
  captured?
• What percentage of the total variance in the raw
  data is captured?
• Managerial interpretation (example questions)
• What underlying dimensions summarize the
  perceptions?
• What are the competitors for a particular product
  ?
• What is the overall preference for each brand?
• Which attributes influence customer preferences?
• What attribute improvements will enhance the
  preference of a product?
• Which customers/segments have positive
  perceptions and high preference for a product?

22
Limitations

• Generally, need about 6 to 8 products in a
  category to make the technique useful.
• Interpretation is sometimes difficult.
• Does not incorporate cost or likelihood/capability
  of achieving a desired positioning.
• A static model - ignores dynamics of customer
  perceptions.
• No choice do not explain antecedents of
  perceptions or preference