POSITIONING MAPS
Positioning Maps – A graphical tool that provides a picture of how
consumers perceive the different products in a given industry
MULTI-DIMENSIONAL SCALE (MDS) – A statistical tool that is the
foundation behind the positioning map
Next After the Positioning Maps Have Been Drawn -Market strategists
will strive to stake out a position of distinction for their products.
Position Map Tell Us -It can show market gaps empty spaces on the map
that can be considered as opportunities for new product propositions.
NEW PRODUCT STRATEGY
Business Model -Refers to the mode by which the product concept seeks to
make money so that it can have a sustainable operation
Advertising – One gets to consume the product with no cash outlay and
with the costs of providing the product being covered for by a number of
third party advertisers.
Sponsorship -Alternately, instead of constantly finding a number of small
advertisers to support ad-based businesses, one may opt to focus on a few
big sponsors instead.
Donations -This is often the business model of choice for non-profit
organizations but also the model that fuels a number of online and mobile
products such as games and productivity apps.
Rent or Lease -For expensive assets, such as machinery or vehicles, they
sometimes become more attractive for the market to consider through
renting rather than outright ownership.
Subscription -Certain products and services lend well to a subscription
model, wherein, rather than consumers buying the product at stores, a
subscription business sends the products regularly to their door in exchange
for a fixed monthly fee.
Statement of Opportunity -This refers to the identified market opportunity
that the proposed business seeks to address, which may be in the form of an
untapped market, growing demand for an existing product category, or even
a potential market for an untried product offering.
Environmental Analysis -Key issues and trends in the environment, both
macro and micro, should be noted when assessing the business proposal.
Market Estimates and Market Segments -This refers to the estimated
size of the total potential market along with descriptions of the different
possible market segments and their estimated sizes.
Competitive Analysis -This pertains to a roundup of the existing
competition along with existing substitutes and potential substitutes
together with their strengths and weaknesses.
Business Strategy -This refers to the details of the proposed business
including the product concept, the logistics required for its mobilization, the
organization structure needed, and the methods for product distribution
among other things.
Risk Analysis -Informally speaking, this is a list of things that could go
wrong along with a corresponding list of safeguards and contingency actions
to address these.
Financial Forecasts -This refers to the estimates of financing required for
initial capitalization, asset acquisition, working capital, overhead, and
inventory.
Least Cost -This strategy involves producing goods or services at the least
possible cost, and then passing these to consumers through low-priced,
affordable products.
Differentiation -This strategy involves a lot of brand-building, with an effort
to get the market to associate the brand with particular benefits that,
hopefully, will be distinctly associated with the brand.
Niche -A niche strategist is one that focuses on the needs of a very specific
target market, usually a market that is small enough or specialized enough
that it requires particular expertise.
SERVICE STRATEGY
Goods- refer to tangible products that consumers can actually observe with
their senses; they are objects with physical manifestations and attributes
that can be detected by the senses.
Services- refer to intangible offerings that are abstract in nature and cannot
be observed with the senses; in fact, a key characteristic of services is that
the act of delivery itself is the product.
Personnel Selection and Training -For services that are delivered through
personnel, great attention should be given to the selection and training of
sales and front-liners as they serve as the primary conduits between the
business and the clients.
User Interface -For services that are delivered through automated means,
such as ATMs and online services, the quality of the service will be assessed
based on the ease of use of the service.
Points of Contact -All points of contact or avenues for interacting with
customers should be managed and controlled including the atmosphere of
the service venue, the quality of the seating in waiting areas, the type of
music played, and perhaps even the scent in the air.
Tangible Mementos -Can be in the form of tickets, souvenir programs,
thank you cards, small giveaways, gift bags with the branding of the service,
or even complementary low-cost items, that can help to stimulate
recollection among consumers and better yet, remind them about coming
back for more
BRANDING
Trade Name -The trademarked name by which the product is to be known
as
Generic Category -The category in which the brand would fall under, such
as beverage, search engine, or quick service restaurant
Logo -The visual symbol or image that will identify the product
Tagline -An optional catchphrase
Visual Cues -Distinctive visual identifiers other than the actual logo
Shapes -The actual shape or form of the product or packaging
Colors, Sounds, Scents, Tastes
Keep It Simple. Simplicity gives the logo design versatility, allowing it to be
used in a wide range of media—from business cards to billboards.
Make It Relevant. The design should be appropriate to the business it is
identifying—to the industry, to the market, and to the audience it is
addressing.
Incorporate Tradition. Logos should not strive to be trendy but rather
contain the symbolic elements that are timeless as far as the nature of the
business is concerned.
Aim for Distinction. The logo should easily stand out versus the
competition.
Commit to Memory. Great logos should be memorable even after just one
quick glance.
Think Small. Logos may look great on a billboard but they should also be
recognizable in small executions, which will be useful when placing the logo
on small items such as zippers and coffee stirrers.
Focus on One Thing. The most iconic logos have just one feature that
helps them to stand out, simply because incorporating more than one key
element will only clutter the mark and make it less memorable.
AttributesCharacteristics of the product itself, such as softness, engine
power, physical size, friendliness (for services), locations, design, and colors
Benefits What consumers stand to gain from patronizing the brand, such as
shinier hair, peace of mind, comfort, time savings, and happiness
Values The core values that the brand is identified with, such as family ties,
independence, creativity, innovation, and risk-taking.
CultureThe culture or sub-culture that a brand is Identified with
Personality. If the brand was a person, it could have a personality such as
being adventurous, youthful, energetic, formal and proper, brutally candid, or
fun.
Use The specific target market or aspirational group that the brand becomes
associated
DEVELOPING THE BRAND
STEP 1: DEVELOP THE BRAND STRATEGY.
STEP 2: DEVELOP THE CREATIVE THEME.
STEP 3: CREATE THE NAME.
Eponyms, or names of people such as the founders or even historical
people.
Descriptive, connoting something about the product itself or its benefits.
Abbreviations or portmanteaus, the latter referring to the combination of
words to make a new word; the former are no longer advisable as these are
difficult to recall and have no inherent personality on their own.
Symbolic or image-driven
Synthetic, which means that the brand name is not a dictionary word but is
instead an invented one.
BUILDING PRODUCTS PORTFOLIOS
Length – the length of the product line;
Width – the number of different product lines carried; and
Depth – the number of variants per product in a line.
LINE IMAGING -Having a flagship product among the products in a line
LINE FEATURING -Aggressively promotion of a product that offers great
value
Price Elasticity and Inelasticity
Elasticity refers to the degree of sensitivity of a market to changes in a
product’s price.
Inelasticity refers to a market’s reluctance to let go of a product even if its
price goes up or, contrariwise, inertia against buying more of a product just
because its price goes down.
Veblen Goods -Goods that become more sought after the higher their
prices become, often in the case of high-end luxury goods
Giffen Goods -Goods that end up being preferred despite their price
increase because substitute goods’ prices are also rising as well, to the point
that the former becomes more attractive than the substitutes
Pricing Strategies and Applications
Market Skimming -Involves setting the price high in order to milk the
segments with higher disposable incomes, with the price gradually being
reduced over time to milk the next income tiers, and so on.
Market Penetration -Involves setting the price even lower than planned, if
only to attract as much of the market into trying it and hopefully becoming
loyal to it before increasing the price.
Odd Number Pricing -Prices that end in non-rounded odd numbers, such as
9.95 or 99.50, are said to give the consumers the perception that the prices
are not as expensive as they actually are.
Free Pricing -It is a way of bundling product—especially complementary
items—and passing off one of the two (or more) items as “free”.
Image Pricing -Upscale products practically demand higher prices,
otherwise their credibility may be ruined.
Location Pricing -Many Metro Manila-based manufacturers have a Metro
Manila price and a provincial price, which is a form of discrimination that is
based on the physical location of the buyers.
Product Line Pricing -If you have a line of products, chances are that many
of these try to target distinct markets by being placed at different price
points.
Optional Feature Pricing -Since it is difficult to sell complete packages to
consumers, it may be easier to sell them a basic stripped-down model first,
then everything else becoming optional add-ons.
Captive Product Pricing -Companies that are in the business of selling
supplies are willing to sell a certain product at a loss because they end up
having the customer as a captive market for the consumables on which they
really make their money.
Product Bundle Pricing -Bundling the slower moving products together
with star performers can be a strategic option.
By-product Pricing -In case the production of your product generates by-
products and you manage to find a way to make money out of these by-
products, then this becomes an opportunity for realigning the price of your
primary product.
Trade Discounts -Incentives that you offer to resellers or participants in
your selling process
VAT or value-added tax -A form of input tax where the tax is earmarked
onto the added value that your firm produces
Senior Citizen Discount -If your products are subject to senior citizen
discounts, then note that (a) seniors are exempted from VAT and (b) 20
percent of your net-of-VAT price is removed as their discount.
PLACE DISTRIBUTION DESIGN
Distribution Channels -Are the set of interdependent organizations that
are involved in the process of making a product or service available for use
or for consumption by the consumer or individual user
Price Policies -a firm will want to have control over how its products are
priced down the line, all the way to the retail level.
Conditions of Sale -Involves key transactional details between the firm and
the distributor pertaining to the transfer of goods, such as terms of payment
for goods received, credit terms, and guarantees for matters such as
defective products
Services and Responsibilities -Specifies the duties and responsibilities of
both the firm and its distributor
Consignment –
Variety Addresses the question: Is your target market expecting to shop
through a wide variety of different products before choosing an item, or are
they expected to come to the store already committed to buying a particular
brand?
Add-on Services -Addresses the question: Do you plan to offer on-site
services to your buyers, such as customization, alteration, or
personalization?
Product size If you are selling a large object, then you will need distributors
that are capable of handling and even showing it to your clients.
Perishability If you are selling perishable goods, then you will need
distributors that have cold storage facilities possibly throughout multiple
points along the distribution network.
Technical Complexity If you are selling a product that requires special
knowledge (special skills or special training in order to be properly presented
or explained to customers), then you will need distributors that have
competent people on board who have the time and the willingness to be
trained
Types of distribution channels
Online Resellers -Companies that exist to serve as Internet-based
distribution points for a number of manufacturers and dealers
Wholesalers -Companies that buy your products in bulk, typically taking
ownership and therefore transferring the risks involved with ownership into
their hands.
Company Sales Force -In-house sales team
Value-added Resellers (VARs) -Firms that put together products from
different suppliers in order to come up with systems or solutions that appeal
to markets with specific needs
Professional Sales Agencies -Sales teams that are for hire
Specialty Dealers -Distributors that specialize in either particular product
categories or in the specialized needs of very distinct target markets
Exclusive gGiving exclusivity to appointed distributors
Intensive -The supplier will push its products to as many different points of
distribution as possible
Intensive -A mix of exclusive and intensive distribution systems, often
involving the assignment of exclusivity to distributors in limited areas
Specialty Stores -Stores that have very narrow width in terms of product
mix but each of the product lines that they offer have extensive length and
depth
Department Stores -Stores that are typically large because they offer a
broad width of product categories, such as shoes, clothes, fashion
accessories, home furnishings, snacks, etc.
Supermarkets -Stores that have an extensive variety of low margin, high
volume goods that mostly consist of food staples
Convenience Stores -Stores that can be sari-sari stores or store chains
Discount Stores -Stores that that offer big discounts for everyday items
Super Stores -Stores that are characterized by gigantic selling spaces as
well as bulk selling
Showrooms -For high-markup durable goods, such as automobiles or even
condominium units, that command premium prices due to prestige
Distribution Strategies
Vertical conflicts -Refer to issues that may arise between different levels
along the distribution system
Horizontal conflicts -Refer to issues that may arise between distributors
along the same distribution level.
Facings -The number of instances or the number of a product along a shelf
Forwarding -The act of taking advantage of promotions of suppliers by
stocking up on lower-priced products, hoarding and storing the items, and
selling them at regular price once the promo period ends
Diverting -A practice where nationwide retailers would buy heavily in
regions where products go on sale, only to ship these products to regions
where the product is not on sale
Gray Market Goods -Refer to products that somehow make it to the market
without going through official distribution channels.
Sales force management
Delivery of the product. This includes delivery service personnel and
installation crew.
Order-taking. This includes waiters at restaurants and reception personnel.
Building up of goodwill for the product. This includes spokespersons,
product endorsers, and potentially even bloggers who write about the
product.
Education of buyers and potential buyers. This includes product
demonstrators and trade exhibitors.
Provision of technical knowledge. This includes account engineers,
customer assistance hotlines, and warranty repair crew.
Creative selling. This includes sales people with ready-made spiels,
telemarketers, and door-to-door salespeople.
Salesforce Size -Should answer the question: How many sales people
would you need to cover your markets or territories?
The promotion mix
Promotions Mix -The portfolio of media that may be employed to deliver
messages to the market in order to achieve business objectives
Above-the-line communications‒ refer to the traditional mass media
vehicles of print, radio and television
Below-the-line communications‒ refer to more targeted, smaller scale
executions including the use of social media
Through-the-line communications‒ often involve the use of mass media
to encourage consumers to visit below-the-line channels
Awareness. The realization that your product exists.
Knowledge. Comprehension about your product’s features and benefits.
Liking. Gaining positive feelings toward your product.
Preference. Deciding that your product is better than others.
Conviction. The belief that your product is worth buying.
Purchase. Actually buying your product.
Personal Communications -Refer to person-to-person communications
Non-Personal Communications -Refer to one-is-to-many communication
media
The Affordability Method‒ the budget is simply dictated by what the
organization can afford to shell out for promotions
Percentage of Sales‒ the promotions budget is derived as a percentage of
revenues
