Product Positioning and Product Repositioning

Product Positioning and Product Repositioning

This refers to a place a product offering occupies in consumers’ minds on important attributes, relative to competing offerings.

How new and current items in the product mix are perceived, in the minds of the consumer, therefore reemphasizing the importance of perception!!

New Product–need to communicate benefits
Established Products–need to reinforce benefits

Ideal Characteristics

Need to introduce products that possess characteristics that the target market most desires, ideal. Product positioning is crucial.

Consumers desires refer to the attributes consumers would like the products to possess–IDEAL POINTS.
Whenever a group of consumers has a distinctive “ideal” for a product category, they represent a potential target market segment.
A firm does well if its attributes (of the product) are perceived by consumers as being close to their ideal. The objective is to be “more ideal” than the competitors.

Each product must provide some unique combination of new features desired by the target market.

Instead of allowing the customer to position products independently, marketers try to influence and shape consumers concepts and perceptions.

Marketers can use perception maps.

Existing Products

Sun Tan Lotion Example:

^                              |                              |     Old Position             |         New Position                              |                              |                              |Glamour————————————————–Health                              |                              |                              |                              |                              |                              |                              |

Traditional sun tan lotion positioned as aiding in getting a very glamorous deep tan etc.
Dermatologist reports…skin cancer etc.
Lifestyle needs change, move to more health conscious society
Need to reposition sun tan lotion as a healthy way to be exposed to the sun.
Target market has shifted from the left quartile to the right quartile as far as needs are concerned.
Sun tan marketers need to do same as far as changing consumers perception for the product.

  • Change Promotion: “Tan don’t Burn” The St. Tropez Tan vs. Ultra Sweat Proof Serious tan for…Be Sun Smart
  • Change Product: Sunscreen and sunless tanning agent.

BMW positions on affordability

^                         Very Safe                              |         Lexus/infiniti                              |                   Mercedes                              |                      BMW                              |                              |                              |Cheap————————————————–Expensive                              |                              |                              |                              |                              |                              |                              |                         Very Unsafe

BMW, to reposition up to the left
Due to the exchange rate, Lexus moves to the right

Why did they reposition?
Competitors include Infiniti, Lexus, Mercedes Benz and Aurora

If you already have a brand in the market, must be sure to avoid cannibalization. Attributes and brand image should give a product distinct appeal.

New Product Positioning

When developing a new product, a company should identify all the features that are offered by all its major competitors.

Second, identify important features/benefits used in making purchase decisions.

Determine the overall ranking of features by importance and relate the importance of each feature to its “uniqueness”: what are the unique selling points (USPs).

For example, you wouldn’t buy a spreadsheet program that if it didn’t perform basic math, so basic math is very important.
However since every spreadsheet has that it’s an “important fundamental feature”, instead of an “important differentiating feature”.

The other side would be a spreadsheet that displays all numbers in binary (0-1) instead of “normal” numbers (0-9). This is unique but not important.

The evaluation becomes a 2 x 2 matrix with uniqueness on the X-axis and importance on the Y-axis.

^X                        Important to TM (Stockbroker)           XMath functions                |                        Import Data                              |                              |                                            |                              |                              |———————————————————-Unique                              |                              |                              |                              |                              |                              |                              |                           X                                                       Binary Data

If the feature is in the upper right hand corner then you probably have a winning feature (USP).

This is known as feature positioning, as opposed to product positioning. One can then see what type of customer needs the important (and perhaps unique) features.

If your spreadsheet accepts continuous data in real-time (such as stock market data) while Excel doesn’t, you’d position your spreadsheet as a “real-time spreadsheet with all calculations needed by Wall Street.”

Its a claim that tells something unique about your product, who it’s for, and by implication, that Excel can’t do it.

Marketing Mathematics, seg. sizing, data collection- Sweden

Marketing Mathematics

The basic marketing math that is needed to help make marketing decisions are below. These are critical to understand when performing case analysis.

They include:

  • Break Even Analysis
  • Lifetime Value of the Customer
  • Market Segment Sizing

Market Segment Sizing

Estimate the number of customers by starting with the most general population, and then reducing according to the characteristics of the actual segment being sought.
Segment value = Number of Customers x Value per Customer
Number of Customers = Population x Segment Size (%) x Segment Penetration (%)
Customer Value = Customer Usage Rate x Unit Price ($) x Unit Contribution (%)

Improving Decision Making With Simple Break-Even Analysis
Attacking Business Decision Problems With Break-even Analysis
Formula for Incremental Break-Even Analysis
Lifetime Value in Relationship Marketing
Determining Customer Lifetime Value for your Internet Marketing Plan
The Lifetime Value of a Customer

**Discussion Topic: Any issues with respect to the above marketing mathematics?

Marketing Information Collection

Marketing Information System:

  1. Internal records
  2. marketing intelligence system
  3. marketing research
    1. defining problem and research objectives
    2. developing the research plan
    3. collecting information
    4. analyzing information
    5. presenting findings
  4. marketing decision support system

**Discussion Topic: Assess the impact of the web on the area of data gathering.

Primary research: Data gathering.
Example surveys:
Stanford Web-site Survey
Wharton Matric Survey

**Discussion Topic: After reviewing the Wharton and Stanford surveys, discuss the goals of the surveys, in terms of what each school is trying to learn. Comment on the effectiveness of each survey.

Note: Zoomerang is a great resource for designing online surveys.

Balance between data gathering and the need for privacy. A great site to explore your privacy rights/issues.

Some useful secondary resource sites on the web:
Business Information, CommerceNet, American Marketing Association, A Business Researchers Interests, Bloomberg, C/Net, EDGAR, Hoover’s, National Trade Data Bank, Public Register’s Annual Report Service
Census Bureau, FedWorld, Thomas
The Electronic Embassy, I-Trade, The United Nations
Non Profit, Internet Non Profit Center, Nonprofit Resource Center

Making Customer Relationship Management Work- Sweden

Internal marketing needs
Making Customer Relationship Management Work

Customer Service

Customer service comments:
MBA Site
E-mail Autoresponder Wharton, HBS Response, Kellog Response
Wharton Adcomm. taking questions
the least applicant-friendly B-school: Listed Reasons for Wharton
What is Up w/ Kellogg Guy?

Shanghai interview —students helping students, serving better than we could.

Discussion Topic: Provide your own examples of excellent / poor customer service that have material impact on retaining / losing customers (use examples from a business and or customer perspective).

Discussion Topic: How does your company use its web-site for customer service and / or customer relationship building?

Marketing Stimuli Environmental Stimuli Buyer’s Characteristics Buyer’s Decision Process Buyer’s Decisions
Product Economic Cultural Problem Recognition Prudct Choice
Price Technology Social Information Search Brand Choice
Promotion Political Personal Evaluation Dealer Choice
Place Cultural Psychological Purchase Decision Purchase Timing
      Post Purchase Behavior Purchase Amount

Intro: CBB … Not just about changing promotions, but entire marketing mixes.

Cultural Characteristics: Values, Perceptions, preferences and behaviors (learned from family), fundamental to persons wants.

Buyer behavior influenced by four factors:

  • cultural (culture, sub culture and social class (ethnocentrism and patriotism))
  • social (reference groups, family, and roles and statuses)
  • personal (age and life cycle state, occupation, economic circumstance, life style, personality and self concept)
  • psychological (motivation (freud, maslow, hertzberg), perception, learning, and beliefs and attitudes)

Do Mixed Emotions and Advertising Mix?

How Store Location and Pricing Structure Affect Shopping Behavior

Decision influencers (initiator, influencer, decider, buyer and user) … not as complex as B2B buying decision influencers.

Types of Buying Situations:

  • Complex Buying Behavior
  • Dissonance Reducing Buying Behavior
  • Habitual Buying Behavior
  • Variety Seeking Buying Behavior

Consumer decision-making process:

  1. Need Recognition
  2. Information Search
  3. Evaluation of Alternatives
  4. Purchase Decision
  5. Post Purchase Behavior

got milk? Change consumer attitudes about milk.


MBA Purchase Process

SRI Business Intelligence: VALS, Psychology of Markets

Discussion Topic: Why use iVALS and psychographic segmentation? Which marketers would benefit most from iVals segmentation and why?

Privacy versus Understanding the customer, on the net.


viral marketing programs give away valuable products or services to attract attention

Word-of-mouth is a type of a viral marketing since it encourages the audience to pass on a marketing message to others, creating the potential for exponential growth in the message’s exposure and influence. The name “viral” marketing was coined because it utilizes people as the “hosts” to carry the advertising message in a similar way as virus operates. The idea is to make your message “contagious” so it infects others that your company may not yet have come in direct contact with through the use of “hosts”. Advertising costs are kept to a minimum since they are usually indirect costs such as time and materials used in the effort to engage its customers in recommending its products. This expense is usually miniscule compared to the cost of acquiring customers though any other advertising medium. While the initial exposure is slim, when spread effectively, the area of influence rapidly expands by exponential growth.


Elements of an Effective Viral Marketing Strategy:

  1. Gives away products or services
  2. Provides for effortless transfer to others
  3. Scales easily from small to very large
  4. Exploits common motivations and behaviors
  5. Utilizes existing communication networks
  6. Takes advantage of others’ resources


“Free” is the most powerful word in a marketer’s vocabulary. Most viral marketing programs give away valuable products or services to attract attention. The following successes show the effectiveness of WOM over glossy magazine or flashy TV ads in certain cases.


  • HotMail. Instead of marketing their product, they gave away free email accounts to anyone who wished to sign up. The only catch was each email message they sent from their Hotmail account was accompanied with a little notice in the footer telling people how they could get their own free Hotmail account with a clickable hyperlink. This led their user base to explode as people who used this email system continued to spread the word whenever they emailed friends or associates.


  • MP3s. This popular music format was an overnight success. WOM first passed through a network of college students. Within 6 months, the phenomenon spread to all campuses across the US and now has become a common household acronym. All this without a single penny spent in advertising funds.


  • has a “share the love” program in which you can send friends a 10 percent discount on any book you have bought. If your friends bought the book, you would receive credit toward future purchases. The credit consists of the actual dollar amount of the 10% discount I saved my friend. Using viral and word-of-mouth techniques, “Share the Love” employs standard refer-a-friend techniques but with an added kicker: You share goodwill of letting your friends know about a great book, and you get paid for doing it.


  • Krispy Kreme Doughnuts does not spend any money on advertising. Instead, it relies on strong word-of-mouth that is generated by the thousands of free donuts it gives away in the neighborhoods of its new locations. Since its debut on the NYSE in April 2000, Krispy Kreme Doughnuts Corp. has gone through two stock splits and continues to exceed all financial expectations.


The success of WOM led to the establishment of new companies specializing in creating WOM, such as NewGate:

“Our Core Word-of-Mouth Campaign proactively generates buzz about your offerings by seamlessly integrating your product’s key selling points into ongoing discussions relevant to your industry. NewGate has a full-time staff dedicated to monitoring these discussions, looking for opportunities to begin conversations and answer questions about your company while disseminating compelling information about your offerings. Once group members start talking about your brand and products, word-of-mouth gains momentum. The end result: increased sales and improved online and offline awareness.”
Not only do they try to duplicate the extremely personal effect of WOM, they even have sneakier techniques for creating positive buzz surrounding your products by such methods as their whisper campaign:

“Our Whisper Campaign is designed to piggyback on the publicity surrounding your competitors. We begin by closely monitoring the Internet to locate conversations about products or services competing for your audience’s attention. Wherever we locate these mentions, we incorporate praise of your offerings into the discussion. We never denigrate or criticize the competition, but rather add to the conversation by “whispering” useful reminders about the advantages of your offerings.”