Study Material on Consumer Analysis and Retailing: Strategic Marketing Applications- Unit-10, Compiled by Sinmoy Goswami, Lecturer, GCMS

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CONSUMER ANALYSIS AND RETAILING

STRATEGIC MARKETING APPLICATIONS

Implementing Segmentation Strategies (Schiffman and Kanuk, 2008):

i. Micro- and behavioral targeting: It involves aggregating individual customers into relatively
small groups based on the data available about them from many different databases and targeting
them with tailor made messages.
a. Personalized advertising messages: It consists of using various forms of advertising to
deliver personalized messages to individuals.
b. Narrowcasting: It consists of using e-mails, mobile devices and even door-to-door
presentations on small screens to deliver personalized messages to individuals.
ii. Concentrated Marketing: Companies may choose a single target market segment using a unique
marketing mix for its offerings.
iii. Differentiated Marketing: Companies may choose several target segments with individual
marketing mixes for its offerings.
iv. Countersegmentation: It involves combination of two or more target market segments through a
more generic need and targeting them with a redesigned marketing mix.
v. Use of many data sources

Positioning:
Positioning is the act of designing the firm’s offer and image so that the target market understands
and appreciates what the firm stands for in relation to its competitors. “The entire combination of
marketing mix elements attempts to communicate the brand’s “position” to consumers. Product
positioning is a decision reached by a marketer to try to achieve a defined brand image relative to
competition within a market segment” (Batra and Kazmi, 2010; Kazmi, 2010).
Positioning is the perception of a brand or product it brings about in the mind of a target consumer
and reflects the essence of that brand or product in terms of its functional and non-functional benefits as
judged by the consumer.
Study Material on Consumer Analysis and Retailing: Strategic Marketing Applications- Unit-10, Compiled by Sinmoy Goswami, Lecturer, GCMS
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A hypothetical perceptual map for four cars (Source: Batra and Kazmi, 2010; Kazmi, 2010)

Determining the Positioning Strategy:

Managers should ponder into six basic issues to create a position for a product or service (Batra and
Kazmi, 2010; Kazmi, 2010):
i. Position, if any, already present in the prospect’s mind
ii. Position company wants to own
iii. Competitors that must be outgunned if company wishes to establish that position
iv. Existence of enough marketing money to occupy and hold the position
v. Availability of the guts to stick with one consistent positioning strategy
vi. Ability of the current creative approach match our positioning strategy

The following six steps need to be taken to reach a decision about positioning (Batra and Kazmi,
2010; Kazmi, 2010):
i. Identifying competitors
ii. Assessment of consumers’ perceptions of competition
iii. Determining competitor’s position
iv. Analyzing the consumers’ preferences
v. Making the positioning decision
vi. Monitoring the position
Study Material on Consumer Analysis and Retailing: Strategic Marketing Applications- Unit-10, Compiled by Sinmoy Goswami, Lecturer, GCMS
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Important aspects of positioning:
After market segments have been selected and targeted, the firm must position its products and
services, in the minds of its customers. Here the firm must carefully select the ways in which it will
distinguish itself from competitors through the following aspects:
i. Important: It implies that the difference delivers a highly valued benefit to a sufficient number of
buyers.
ii. Distinctive: It implies that the difference either isn’t offered by others or is offered in a more
distinctive way by the company.
iii. Superior: It implies that the difference is superior to other ways to obtain the same benefit.
iv. Communicable: It implies that the difference is communicable and visible to buyers.
v. Preemptive: It implies that the difference cannot be easily copied by competitors.
vi. Affordable: It implies that the buyer can afford to pay for the difference.
vii. Profitable: It implies that the company will find it profitable to introduce the difference.

Some Popular Positioning Approaches: These are as follows (Batra and Kazmi, 2010; Kazmi, 2010):
i. Positioning by Corporate Identity: It involves positioning with the help of the identity
or brand name of the company.
ii. Positioning by Brand Endorsement: It involves positioning with the help of brand
endorsers of the offerings of the company.
iii. Positioning by Product Attributes and/or Benefits: It involves positioning with the help
of the product attributes and associated benefits of products/ services of the company.
iv. Positioning by Use Occasion and Time: It involves positioning with the aid of the
occasion and timing of use of products/ services of the company.
v. Positioning by Price-quality: It involves positioning on the basis of the consumer’s
quality perception of the products/ services of the company depending on their socio-economic
status.
vi. Positioning by Product Category: It involves positioning on the basis of the category to
which the products/ services of the company belong.
vii. Positioning by Product User: It involves positioning on the basis of the users of the
product to which the products/ services of the company belong.
viii. Positioning by Competitor: It involves positioning of products/ services of the company
belong on the basis of the competitors who are having similar products/ services.
ix. Repositioning: It is normally considered when there are attractive opportunities or the
brand’s sales are on decline.
Study Material on Consumer Analysis and Retailing: Strategic Marketing Applications- Unit-10, Compiled by Sinmoy Goswami, Lecturer, GCMS
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Process of Product positioning process: Product positioning process involves the following steps
(Adapted from Batra and Kazmi, 2010; Kazmi, 2010):
i. Defining the target market in which the product and/or service or brand will compete
ii. Identifying the attributes / dimensions that define the product and/or service space
iii. Collecting information from a sample of customers about their perceptions of each product
and/or service on the relevant attributes
iv. Determining each product’s and/or service’s share of mind
v. Determining each product’s and/or service’s current location in the product space
vi. Determining the target market’s preferred combination of attributes of the product and/or
service
vii. Examining the fit between:
a. The position of the product and/or service
b. The position of the preferred combination of attributes of the product and/or service
viii. Making the final positioning.

Positioning Errors:
i. Underpositioning: “This refers to a state of buyers having only a vague idea of the brand and
consider it just another me too brand in a crowded product category. The brand is not seen to have
any distinctive association” (Batra and Kazmi, 2010; Kazmi, 2010).
ii. Overpositioning: “In this situation, buyers have too narrow an image of the brand. Thus, buyers
might think that Apple makes only very expensive computers when in fact Apple offers several
models at affordable prices” (Batra and Kazmi, 2010; Kazmi, 2010).
iii. Confused positioning: “Sometimes, in an attempt to create too many associations or
repositioning, the brand very frequently results in confusing the buyers” (Batra and Kazmi, 2010;
Kazmi, 2010).
iv. Doubtful positioning: “This situation may arise when customers find brand claims unbelievable
keeping in view the product features, price, or the manufacturer” (Batra and Kazmi, 2010; Kazmi,
2010).

Product Strategies (Kazmi, 2008; Rao and Krishna, 2003): A product is anything that can be offered
to a market for attention, acquisition, use or consumption that might satisfy a want or need. A firm has to
look into the following important issues while deciding an appropriate product policy such as what
products to make, where to offer these products, to which segment in the market, what type of brand
policy, etc.
i. Product line decisions: A product line is a group of products that are related in function,
customer-purchase needs, or distribution channels.
Study Material on Consumer Analysis and Retailing: Strategic Marketing Applications- Unit-10, Compiled by Sinmoy Goswami, Lecturer, GCMS
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ii. Product mix decisions: The product mix consists of all the different product lines that a firm
offers. Decisions here usually deal with four aspects: width, length, depth and consistency.
iii. New product development decisions: Rapid changes in consumer tasks, technology and
competition compel firms to develop a steady stream of new products and services.

Intensification Growth/ Expansion Strategies (Kazmi, 2008; Rao and Krishna, 2003):
Intensification strategies aim at meeting objectives of an organization by simply expanding within
their existing product-market. These can be described by the Igor Ansoff’s Product/ Market Expansion
Grid.
Current Markets

Current Products New Products

Market Penetration Strategy: Product Development Strategy:

It consists of the following activities:
It consists of marketing new products in
New Markets

Increasing sales to current customers in the current market

existing markets.
Gaining competitor’s customers in the same market
Converting non-users to users of the product in the same market

Diversification Strategy:
Market Development Strategy: It aims at meeting objectives of an
It consists of marketing existing products in new markets. organization by simply expanding with
their new products in new markets.

Fig: Igor Ansoff’s Product/ Market Expansion Grid (Rao and Krishna, 2003)

Diversification Growth/ Expansion Strategies (Rao and Krishna, 2003):

Diversification strategies aim at meeting objectives of an organization by expanding with their new
products in new market. These can be classified as follows:
i. Horizontal Diversification: These take place when organizations expand by acquiring firms within
the same line of business. These can be classified as follows:
a. Concentric Diversification: It takes place when an organization diversifies into
related but distinct line of business.
b. Conglomerate Diversification: It takes place when an organization diversifies
into totally unrelated and distinct line of business.
ii. Vertical Diversification: These take place when organizations enlarge the scope of their operations
within the same overall industry. It takes place when a firm acquires another entity that is involved
either in an earlier stage or later stage of the production/ service delivery process. These can be
classified as follows:
a. Forward Diversification: It takes place when a firm acquires another entity that
is involved either in a later stage of the production/ service delivery process.
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b. Backward Diversification: It takes place when a firm acquires another entity
that is involved either in an earlier stage of the production/ service delivery process.

Repositioning:
Re-positioning involves changing the identity of a product, relative to the identity of competing
products, in the collective minds of the target market (Batra and Kazmi, 2010; Kazmi, 2010). Product
positioning is not limited to new products alone. It is relevant for occasional face lifting of the existing
products. This is evidenced by so called “new and improved products” of almost all kinds such as toilet
soaps, shampoos, cosmetics, tooth pastes, etc.

Repositioning a company:
In volatile markets, it can be important and indispensable to reposition an entire company, rather than
just a product line or brand. This is especially applicable for small and medium-sized firms, many of
which often lack strong brands for individual product lines. In a prolonged recession, business
approaches that were effective during healthy economies often become ineffective and it becomes
necessary to change a firm's positioning. Upscale restaurants, for example, which previously flourished
on expense account dinners and corporate events, may for the first time need to stress value as a sale tool
(Batra and Kazmi, 2010; Kazmi, 2010).
Repositioning a company involves the following:
i. It requires more than a marketing challenge. It involves making hard decisions about how a
market is shifting and how a firm’s competitors will react (Batra and Kazmi, 2010; Kazmi, 2010).
ii. Often these decisions must be made without the benefit of sufficient information, simply because
of volatility (wherein change that occurs becomes difficult or impossible to predict) (Batra and
Kazmi, 2010; Kazmi, 2010).
iii. “Repositioning does not mean total change. It sometimes entails strengthening and clarifying an
existing identity. Products are like plants. If neglected and not repositioned they will die. A
famous garment firm was having a tough time with the sales of its men’s shirts. Instead of
involving into a futile competition with its competitor, it’s newly appointed chairman shifted the
weight from men’s shirts to women’s blouses and sports wear. The result was an amazing
increase in its profits” (Source: http://www.dawn.com/2003/12/01/ebr12.htm).
iv. “It is not only the product itself which is involved in positioning or repositioning. Several factors
combined together make up for the success including change of name and technique of
advertising” (Source: http://www.dawn.com/2003/12/01/ebr12.htm).
v. “Repositioning does not always hold the key to success. In case a product has got into a very bad
shape due to prolonged neglect, repositioning effort may turn out to be an exercise in futility. In
Study Material on Consumer Analysis and Retailing: Strategic Marketing Applications- Unit-10, Compiled by Sinmoy Goswami, Lecturer, GCMS
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such cases it would always be better to drop the product” (Source: http://www.dawn.com/2003/
12/ 01/ebr12.htm).

References:
Batra, S.K. & Kazmi, S.H.H. (2010). Consumer Behavior: Text and Cases (2nd Edition). New Delhi:
Excel Books.
Kazmi, S.H.H. (2010). Consumer Behavior and Marketing Communication (1st Edition). New Delhi:
Excel Books.
Schiffman, L.G. & Kanuk, L.L. (2008). Consumer Behavior (9th Edition). Singapore: Pearson Education
Private Limited.
Singh, H. (2009). Retail Management: A Global Perspective (1st Edition). New Delhi: S. Chand and
Company Limited.
Sivakumar, A. (2007). Retail Marketing (1st Edition). New Delhi: Excel Books.

Other references:
Kazmi, A (2008). Strategic Management and Business Policy (3rd Edition). New Delhi: Tata McGraw-
Hill Publishing Company Limited.
Rao, V S P and Krishna, V H (2010). Strategic Management: Text and Cases (1st Edition). New Delhi:
Excel Books.