PRODUCT/BRAND POSITIONING 1

Introduction
The marketers determine desired brand knowledge structures, that is, what they would like
consumers to know about the brand as opposed to what they might already currently know (existing
brand knowledge structures). Determining the desired brand knowledge structures involves
positioning a brand. Brand positioning has been defined as the "act of designing the company's
offer and image so that it occupies a distinct and valued place in the target customer's minds".
Thus, positioning, as the name implies, involves finding the proper location in the minds of a certain
market segment so that they think about the product in the "right" or desired way. According to the
customer-based brand equity model, deciding on a positioning requires determining a frame of
reference - by identifying the target market and the nature of competition - and the ideal point-of-
parity and point-of-difference brand associations. In other words, it is necessary to decide:
(1) who the target consumer is ?
(2) who the main competitors are?
(3) how the brand is similar to these competitors? and
(4) how the brand is different from these competitors?.

Positioning analysis reviews information to determine the desired brand awareness and brand
image. The first of the above two considerations help to define the frame of reference for the brand.
The latter two considerations help to create the exact location of the brand in consumer minds.

The essence of brand positioning is that the brand has some sustainable competitive advantage or
"unique selling proposition" (USP) that gives consumers a compelling reason why they should
buy that particular brand. Thus, one critical success factor for a brand is that it has some strongly
held, favourably evaluated associations that function as points of difference and are unique to the
brand and imply superiority over other competing brands. These potential differences should be
judged on the basis of desirability (from a consumer perspective) and deliverability (from a firm
perspective).
At the same time, it is also the case that some strongly held, favourably evaluated associations only
need to function as points of parity and be seen as about the same as the competing brands. Shared

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Prepared by Prof. L.K. Vaswani from various sources for classroom discussion only.

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associations can help to establish category membership and define the nature of competition with
other products and services. Most importantly, shared associations can also prevent other brands
from establishing competitive advantages and points of difference.

Point-of-difference and point-of-parity associations will depend on the particular frame of reference
that is chosen. In other words, the uniqueness and shared nature of associations can only be
assessed by considering the perceptions towards the brand by a certain group of consumers with
respect to a defined set of competitors.

Target Market
Identifying the consumer target is important because different consumers may have different brand
knowledge structures and thus perceptions and preferences for the brand. Without this
understanding, it may be difficult to state, which brand associations are strongly held and are
favourable, and unique. There are number of important considerations in defining and segmenting a
market and choosing target market segments.

Nature of Competition
It is difficult to disentangle target market decisions from decisions concerning the nature of
competition for the brand because they are often so closely related. In other words, deciding to
target a certain type of consumer often, at least implicitly, defines the nature of competition. It is
because that certain firms have decided to also target that segment in the past (or plan to do so in the
future) or consumers in that segment already may look to certain brands in their purchase decisions.

Other issues can be raised in defining the nature of competition and deciding which products and
brands are most likely to be seen as close substitutes. For example, the nature of competition may
depend on the channels of distribution chosen. Competitive analysis will consider a host of factors -
including the resources, capabilities, and likely intentions of various other firms - to choose markets
where consumers can be profitably serviced.

One lesson stressed by many marketing strategists is not to be too narrow in defining competition.
Often, competition may occur at the benefit level rather than the attribute level. Thus, a luxury
good with a strong hedonic benefit (e.g., stereo equipment) may compete as much with a vacation

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(holidaying) as with other durable goods (e.g., furniture). As noted above, products are often
organised in consumer's minds in a hierarchical fashion such that competition can be defined at a
number of different levels. The target and competitive frame of reference chosen will dictate the
breadth of brand awareness and the situations and types of cues that should become closely related
to the brand. Recognising the nature of different levels of competition also has important
implications for the desired brand associations.

Points of Parity and Points of Difference

Once the appropriate frame of reference for positioning has been fixed by defining the customer
target market and nature of competition, the basis of the positioning itself can be defined. Arriving
at the proper positioning requires establishing the correct point-of-difference and point-of-parity
associations.

Points-of-Difference Associations
Points of difference are those associations that are unique to the brand that are also strongly held
and favourably evaluated by consumers. These points of difference may be based on any type of
association - attribute, benefit, or attitude - although the more abstract and the higher the level of the
association, the more likely it is to be a sustained source of brand equity.

The concept of points of difference has much in common with several other well-known marketing
concepts. For example, it is similar to the notion of "unique selling proposition" (USP), a concept
pioneered by Rosser Reeves and the Ted Bates advertising agency in the 1950s. The original idea
behind USP was that advertising should give consumers a compelling reason to buy a product that
competitors could not match. With this approach, the emphasis in designing ads was placed on
communicating a distinctive, unique product benefit (i.e., the ad message or claims) and not on the
creative (i.e., the ad creative or execution). In other words, USP emphasised what was said in an ad
as opposed to how it was said. As a result, ads single-mindedly, and sometimes literally, hammered
home the key consumer benefit.

Another related concept is "sustainable competitive advantage" (SCA). Sustainable competitive

advantage relates, in part, to a firm's ability to achieve an advantage in delivering superior value in
the marketplace for a prolonged period of time. Although the SCA concept is somewhat broader -

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SCA could be based on business practices such as human resource policies - it also emphasises the
importance of differentiating products in some fashion. Thus, the concept of point of difference is
closely related to unique selling proposition and sustainable competitive advantage and maintains
that a brand must have some strong, favourable, and unique associations to differentiate itself from
other brands.

Consumers' actual brand choices often will depend on the perceived uniqueness of brand
associations. These points of difference may involve product-related attributes benefits or even
attitudes. In other cases, points-of-difference associations involve non-product-related attributes.
Many top brands attempt to create a point of difference on "overall superior quality," whereas a
positioning strategy adopted by a number of other firms is to create a point of difference for their
brands as the "low-cost provider" of a product or service. Thus, a host of different types of points
of difference are possible.

Points-of-Parity Associations
Points of parity, on the other hand, are those associations that are not necessarily unique to the
brand but may in fact be shared with other brands. These types of associations come in two basic
forms. First, category point-of-parity associations are those associations that consumers view as
being necessary to be a legitimate and credible product offering within a certain category. They
represent necessary, but not sufficient conditions for brand choice. These attribute associations are
minimally at the generic product level and most likely at the expected product level.

Second, competitive point-of-parity associations are those associations designed to negate

competitors' points of difference. In other words, if a brand can "break even" in those areas where
its competitors are trying to find an advantage and can achieve advantages in some other areas, the
brand should be in a strong - and perhaps unbeatable - competitive position. Often, the key to
positioning is not so much in achieving a point of difference as in achieving necessary or
competitive points of parity.

Hyundai initially established a strong point of difference on low cost and economy for its cars but
later attempted to create more favourable user imagery to establish a point of parity with better
admired and more glamorous competitors.

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Competitive Frame of Reference
The competitive frame of reference will dictate the points of parity and points of difference.
Choosing to compete in different categories often results in different competitive frames of
reference and thus different points of parity and points of difference.

Desirability and Deliverability

As with any association, for points of difference to be favourable, they must be desirable and
deliverable. In 1992, a number of brands in different product categories (colas, dish washing soaps,
beer, deodorant, gasoline, etc.) introduced clear versions of their products to better differentiate
themselves. Although "clear" perhaps signaled natural, pure, and lightness to consumers initially, a
proliferation of clear versions of products that did not reinforce these other associations blurred its
meaning. The "clear" association does not seem to be of enduring value or sustainable as a point of
difference.

Screening Potential Positionings

Due to lack of definitional consensus, it is not surprising that there has not been a generally
accepted, systematic, research-based procedure for selecting an effective positioning from
competitive alternatives. With this purpose in mind, an effective position can be defined as one that
enables a brand or service to occupy a preferred and unique niche in a customer’s mind that is also
consistent with the overall marketing strategy (Lautman, 1993)2. Given this definition, it is
reasonable to regard the perception of product/service “parity” as the antithesis of an effective
position and the process of developing an effective position and the process of developing an
effective position as one of rejecting less optimal choices. The author went on to suggest a
Multiple Promises/Claims (MP/C) approach was designed for established brands as a
straightforward screening system for reducing a relatively large number of promises or claims to
those with the greatest potential. Once those promises or claims are selected, it is up to the creative
director to identify and execute the “big idea” that will forge a memorable and persuasive link
between a strong promise or claim (or fully-developed concept) and the product/service being
advertised.

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Lautman Martin R (1993) “The ABCs of Positioning” , Marketing Research, Winter 1993, pp12-18.

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Summary
The concepts of points of difference and points of parity are powerful tools to guide positioning. A
number of considerations come into play in conducting positioning analysis and deciding on the
desired brand image. Determining the proper competitive frame of reference depends on
understanding consumer behaviour and the consideration sets consumers adopt in making brand
choices. Determining points-of-difference associations that are strong, favourable, and unique are
based on desirability and deliverability considerations, which are combined to determine the
resulting anticipated levels of sales and costs that might be expected with the positioning.

In general, it is a research truism that the more directly and completely a promise or claim reflects
an unfulfilled consumer want or need, the more effective it will be. However, it is difficult to create
more than one or perhaps two major points of difference, at least at the benefit level. Once the
brand positioning strategy has been determined, the actual marketing programme to create,
strengthen, or maintain brand associations can be put into place.