PRODUCT POSITIONING

15.823 Internet Marketing

Prof. Glen L. Urban
Spring 2001
Understanding Customers
Consumer Behavior
B2C vs B2B

Strategy Formulation
Trust vs. Push
Product Design
Segmentation
Positioning

Customer Acquisition
Advertising / PR/Selling
Pricing & Promotion

Distribution
Channel
Logistics

Relationship Building
Fulfillment
Service
 OUTLINE
• Positioning Versus Segmentation
• Positioning Example
• Analytic support for Mapping
• Does it Pay to be First? -- Order of Entry
Theory
• Implications for Internet
A
A• E
• • •B
•C

• D
•B
 POSITIONING
GIVEN SEGMENTATION
CBP
DIMENSIONS
COORDINATES
FULFILLMENT
UNIQUE POSITION
SHARE/PROFIT
 MAPPING STEPS

Define category/segment
Identify products that compete
Attributes and features that differentiate
Group attributes - perceptual dimensions
Draw map
Implications
 CLASS EXAMPLE
• On Line Trading
• evoke -- dimensions --triad comparisions
• judgement for position
• preference vectors
• implications
 POSITIONING ANALYSIS
LEVEL I
focus group
customer contact
inspect competition
perceptual map -- judgment
LEVEL II
factor analysis
preference vectors
conjoint analysis
LEVEL III
simulation models
 MAPPING INPUTS

BILL -- M.B. 500 6 5 5 4 5 3 4 3 6

BILL -- HONDA 5 7 7 4 6 6 7 5 6
BILL -- BUICK
5 6 5 4 4 4 5 3 5
ELECTRA
 DATA COLLECTION
• Email lists
– Zoomerang
• On Line Panels
– NFO
– Burke
– Greenfield
 FACTOR LOADINGS

Dimensions
Attribute
Luxury 0.88 0.10
Style 0.72 0.08
Reliable 0.45 0.63
M.P.G. 0.24 0.64
Safe 0.52 0.31
Maintain 0.10 0.67
Quality 0.48 0.64
Durability & Resale 0.38 0.60
Performance 0.67 0.35
 •Honda
Rational

•Olds

•Lincoln Town Car •Buick Riviera

•Chrysler New Yorker •Cadillac Eldorado

Emotional
 •Honda

Rational
•MB

•BMW

•Olds

•Lincoln Town Car •Buick Riviera

•Jaguar
•Chrysler New Yorker •Cadillac Eldorado

Emotional
 •Honda

Rational
•MB

•BMW

•Olds

•Lincoln Town Car •Buick Riviera

•Jaguar
•Chrysler New Yorker •Cadillac Eldorado

Emotional
ENGINEERING PERCEPTION

FEATURES

PREFERENCE
SURUGA EXAMPLE
 Aim of eBusiness@Suruga

Keyword for Success What shall Suruga do?

• Buyer Centric • Construct business model
of eCRM.

• Idea Base • Construct new services

and products of eBusiness.

• Trust for Customer • Construct secure business

with internet customers.
 INTERNET STUDY?
• Talk to Customers -- Listen
• Study Competitors -- judgmental Map
• Focus Groups
• Budget study if VC -- Crowded Out There
• Active Role in Study
 Internet Study
STEPS MANAGER’S ROLE
BUDGET $50k to $250K

DEFINE TARGET MARKET Be Sure Correct Segment Definition is Used

DESIGN SURVEY Specify Decision Requirements

ATTRIBUTE GENERATION Assure Completeness

STATISTICAL MAPPING
Name Dimensions Input Judgment

Number of Dimensions Examine Additional

Dimension for Relevance

Coordinates of Brands Review for Reasonableness

Importance Vectors Decide on Number of Sub-group

 Internet Study - Cont’d
STEPS MANAGER’S ROLE
FEATURES Select Features and Levels,
Link to preference and/or Perception

SIMULATE IMPROVED POSITIONING Be Sure Shift Can Be Achieved, Confirm with

Concept/Product Tests
DOES IT PAY TO BE FIRST?
 THEORY
• Determinants -- +/-
– Memory -- Accessibility
– Switching costs - risk and satisfaction
– Learning about Market
– Market Power - Share & Channel
– Scale -- Production and Funds
– Continuing Innovation
– Standard Setting
– Broader Product Line
– Technology/Market window
– Best Positioning?
• Empirical
ORDER OF ENTRY AND MARKET SHARE IN CONSUMER GOODS BUSINESS

Average
Market Share

Pioneer 29
Early Follower 17
Late Entrant 12
(371 SBU’s)
Frequency Distribution
for Market Share

Less than 10 10-19 20-29 30 & up Total

Pioneer 16% 20% 23% 41% 100%

Early Follower 41% 24% 19% 16% 100%
Late Entrant 56% 25% 12% 7% 100%
 DATA
131 Brands
36 Categories

Share - Last Purchases

Order
Advertising
Preference
 ORDER OF ENTRY
1ST 2ND 3RD 4TH 5TH 6TH 7TH
100
57 43
42 32 26
Market
Share 34 26 22 18
29 22 18 16 15
25 19 16 15 13 12
23 17 15 13 12 11 9
 Strategic Implications
Market Share Reward for Innovation
If First:
Position Well-Preempt
Support - Advertising & Promotion
If Second or Third:
Premium Position
Support - Advertising & Promotion
Faster But Lower
Innovate for Market
Leadership -- But Risk
 IMPLICATIONS FOR
INTERNET
• Mapping -- Do It!
– Listen /Focus Groups
– Budget for Study in VC
• Segmentation and Positioning Strategy vs. Potential Competition --
Preempt
• Core Benefit Proposition -- Not Technology
• Establish with Features and Keep Innovating
• First In has Value
– But Catch window
– Have Best Position
– Spend behind It