CHETAN CHOPRA | 91920084 | Chetan_chopra_pgppro2020@isb.

edu

Positioning: The Essence of Marketing Strategy

A Positioning Statement serves as the bible of the product/brand that you want to be in the
mind of the consumer relative to competitors. This statement is widely communicated
across an organization with the purpose of aligning the entire organization with respect to
the product and service that is expected to be delivered to the customer.

It is important to cultivate a positioning in the mind of the consumer, in order to ensure that
that you control the narrative rather than allowing the consumer to make judgements
regarding your product/service.

A strong positioning statement clearly and succinctly communicates the following

1) The Target Market – It is important to identify a set of consumers in whose

opinion/judgement you would like to influence.
2) Frame of Reference – The frame of r00eference helps you define the broad product
market/category and who you are competing with in that market.
3) Point of Difference – This helps clearly identify what differentiates you from the
competitors in the frame of reference.
4) Reason to Believe – This provides the supporting tangible and intangible evidence to
convince your target market of your differentiation.

If you are looking to target multiple consumer sets, the positioning must evolve accordingly
by either
1) Creating separate positioning statements per target while ensuring one positioning
statement does not undermine the other.
2) Broadening the existing positioning statement to include the various target markets
while ensuring it does not dilute the positioning heavily

A great tool to understand what your consumer thinks of your brand is the usage of
perceptual maps.

Forecasting the Adoption of a New Product

When a company is launching a new product, there are multiple decisions to be made to
ensure the success of the product. Example,
1) Pre-empting and forecasting the demand for the new product in order to ensure
supply
2) Devising pricing and promotion mechanisms to fuel the growth of the product
3) Forecasting the adoption of the product while understanding the role that
advertising will play in the initial uptake
In 1969, Frank Bass developed a model to help companies visualize how their products
would be adopted in the market. The Bass Model provides an insight into how a product is
passed between individuals in a market and the time it will take for the product to be
adopted at large.

Bass postulated that a market has 2 kinds of consumers:

1) Innovators – These consumers try out new products independent of the opinions
and judgements of others
2) Imitators – These consumers adopt new products once they have seen it tried and
tested in the ownership of others

To develop a visualization for adoption, Bass gave the following equation to define the
number of new adopters in a given time period.

S(t) = [p + (q/m) N(t – 1)] [m – N(t – 1)]

(S(t) = number of new adopters during time t; p = coefficient of innovation; q = coefficient of imitation; m
= total market size; N(t-1) = number of adopters for the new product through the previous time period)

In this equation, [p + (q/m) N(t – 1)] gives us the the likelihood of purchase by a new
adopter in the time period and [m – N(t – 1)] number of consumers who have not previously
adopted.

A product with high p and low q will have a quick adoption in the beginning of its lifecycle
and then the curve will flatten out due to saturation of market.

However, a product with low p and high q will have slow adoption in the beginning,
exponential growth in the middle and then flatten out due to saturation of market. Thus,
giving rise to the S curve.

While it may be easy to arrive at the value for m basis the target market, the value for p and
q is usually estimated on the basis of the performance of analogous products.

Conjoint Analysis: A Manager’s Guide

Conjoint Analysis is a great tool for new product development as it involves the breakdown
of a product into various attributes and then understanding the value the customer derives
from each of the attributes. This helps predict the performance of the product in the market
in relation to competitor products.

Conjoint Analysis involves a 5 step process

1) Determining Relevant Variables – The first step involves the breakdown of the
product into multiple attributes that may affect the decision making process of a
consumer and inferring the importance and desired level of any attribute.
2) Stimulus Representation – The choice to be made in this step is between a full profile
or a partial profile. In Full Profile, the respondent is presented with all the attributes
of a product whereas in a partial profile, the respondent is presented with a subset
 of attributes. While the full profile allows for a more realistic representation of the
decision making process it can be cumbersome for respondents thereby making
partial profile more feasible.
3) Response Type – The third step involves picking between ranking or rating methods
to capture the respondents preferences.
4) Criterion – The next decision to be made is to identify the standard to be used for
the paired comparison i.e. Preference between products vs likelihood of purchase
5) Method of Data Analysis – If rating scores are collected, then a regression analysis
must be used to derive the value system. However, if the respondent has shared
probability of purchase then we may use logit model.

There are 3 major types of analysis that can be done on the data collected through the
above study
1) Aggregate Analysis – Aggregate the importance of each attribute across respondents
to get a picture of what are the most crucial attributes and what is the desired level
2) Segmentation Analysis – Utilising the data shared by the respondents to create
multiple target segments basis their value system and what they reveal as important
attributes.
3) Scenario Simulations – Basis the value systems developed from the analysis we can
gauge the likelihood of a consumer picking a competing product.

Understanding Consumer Needs

In order to develop products that satisfy customer needs, it is important to first understand
the customers needs.

Before conducting research to identify customer needs, it is important to understand the

context of the project i.e. the degree of newness of the product to the firm and the degree
of newness of the product to the market.

Basis the context, there are mainly 3 methods that can be used to collect data regarding
consumer needs:

1) Gathering Typical Customer Needs Data through questionnaires, focus groups,

interviews to understand the role of product in the lives of the consumer and the
satisfaction associated with it.
2) Gathering data from Lead Users, a special group of customers in scenarios where
consumers find it difficult to envision the future of a product
3) Capturing data for other stakeholders using a product value matrix which captures
stakeholder reactions to a product in a matrix on the basis of 4 values – Purpose,
Physical, Cognitive and Aesthetics

Once the customer data is collected, we need to organize the data before we can utilize the
data to affect change in our product attributes.
 1) Interpretation of Customer Needs – Customer statements need to be made
consistent, vague statements clarified, and redundancies removed.
2) Forming the Critical List of Needs – Grouping similar needs into a summary need and
forming a critical list of needs
3) Prioritising Customer Needs – Prioritising needs basis their relative importance and
the degree of importance in the success of the product.

Once the needs are organized, we need to convert these needs into Product Requirements

1) Identifying various product attributes that can be altered to satisfy customer needs
2) Matching the product attributes above to the list of customer needs that are
identified

How do you know when the price is right?

The price of your product can have massive implications on your business and can affect
your competitiveness in the market, as well as your profitability. This is the reason that
utmost care and a methodical approach needs to be taken to setting the price for your
product.

There are 8 steps to find the right price for your product:

1) Value of your Product in the mind of the consumer – Conducting market research to
determine the value a consumer places on your product in their mind.
2) Variation in the way customers value the product – Identify different segments of
customers on the basis of price. Identify the motivation behind the difference in
perceived value by figuring out the variation in usage, intensity of usage and
expected product performance.
3) Price Sensitivity – Assess price sensitivity of the consumer keeping 3 factors in mind –
Customers Economics, Customer search and usage as well as Competition.
4) Identify Optimal Pricing Structure – Finding the right pricing structure to maximise
profitability and competitiveness. The pricing structure could include pricing a
bundle or individual components.
5) Competitors Reaction – Consider the competitors reaction to your change in price.
This will help you pre-empt the future market ramifications.
6) Monitor Prices Realised at the transaction level – The real price may be different
from the list price and this should be considered and the impact measured on the
bottom line
7) Assess Customers’ Emotional Response – A price change may have an effect on the
customer perception of your product/company and this should be factored into the
pricing decision
8) Cost of the product obviously plays a huge role in the pricing decision, and it is
imperative that we analyse whether the returns from the pricing decision and worth
the cost of providing the added benefit to the customer.