Chapter 5

Chapter 5
Segmentation, Target
markets and Positioning
(STP)
 PRODUCT POSITIONING

Product positioning is the place a product occupies

in consumers’ minds based on important attributes
relative to competitive products.
 Product Repositioning

Product repositioning involves

changing the place a product occupies
in a consumer’s mind relative to
competitive products.
 PRODUCT POSITIONING
Two Approaches to Product Positioning
 
 Head-to-head positioning involves competing
directly with competitors on similar product
attributes in the same target market.
 
 Differentiation positioning involves seeking a less
competitive, smaller market niche in which to locate
a brand.
 PRODUCT POSITIONING
Writing a Positioning Statement
 
 Marketing managers often convert their positioning ideas for
an offering or a brand into a briefly written positioning
statement.
 
 The positioning statement is used:
  a. Internally, within the marketing department.
  b. Externally, with research and development engineers or
advertising agencies.
BASES FOR POSITIONING
PRODUCT
PRODUCT
BENEFIT/
FEATURE
ADVANTAGE

COMPETITORS
 PRODUCT POSITIONING
Product Positioning Using Perceptual Maps
 
 A key to positioning a product or brand effectively is
discovering the perceptions of its potential customers.
 
 Companies take four steps to determine its positioning in the
minds of customers:
 
a. Identify the important attributes for a product or brand class.
 PRODUCT POSITIONING
b. Discover how target customers rate competing products or
brands with respect to these attributes.
 
c. Discover where the company’s product or brand is on these
attributes in the minds of potential customers.
 
d. Reposition the company’s product or brand in the minds of
potential customers.
 Perceptual Map

A perceptual map is a means of displaying in two

dimensions the location of products or brands in
the minds of consumers to enable a manager to see
how they perceive competing products or brands,
as well as the firm’s own product or brand.
Locate these drinks on the perceptual map: (a) cappuccino, (b)
beer, and (c) soy milk, and (d) chocolate milk
Locate these drinks on the perceptual map: (a) cappuccino, (b)
beer, and (c) soy milk, and (d) chocolate milk
 PRODUCT REPOSITIONING
• Regular evaluation of current position of existing product is
important.
• Product repositioning may be required to strengthen market
share and profitability.
• Repositioning can be done through:
− changing the product physically
− revising its pricing and/or distribution strategy
− changing the product image
− targeting a different market.
Recently, U.S. dairies decided to reposition chocolate milk in
the minds of American adults.
Recently, U.S. dairies decided to reposition chocolate milk in
the minds of American adults.

a. Identify the important attributes (or scales) for adult drinks.

Research reveals the key attributes adults use to judge
various drinks are:
 Low versus high nutrition.
 Children’s drinks versus adult drinks.
 
b. Discover how adults see various competing drinks.
 
c. Discover how potential customers see chocolate milk. Adults
see chocolate milk as:
 Moderately nutritious (vertical axis).
 Mainly a child’s drink (horizontal axis).
 
d. Reposition chocolate milk to make it more appealing to
adults.
In which quadrant should the dairies try to move chocolate
milk to reach adults and increase sales?
 
 POSITIONING THE PRODUCT
 Perceptual Map
 A Perceptual Map to Reposition
Chocolate Milk for Adults
• Identify Important Attributes for Adult Drinks

• Discover How Adults See Competing Drinks

• Discover How Customers See Chocolate Milk

• Reposition Chocolate Milk to Make It More

Appealing to Adults
FIGURE 9-11 The strategy American dairies are using
to reposition chocolate milk to reach adults
The strategy American dairies are using to reposition
chocolate milk to reach adults

These are the marketing actions dairies implemented:

 
a. Dairies sought to move chocolate milk to the location of the “star”
 Chocolate milk provides calcium, critically important in female
diets.
 Dieters get a more filling, nutritious beverage than with a soft drink
for about the same calories.
 The strategy American dairies are using to reposition
  chocolate milk to reach adults
b. Chocolate milk sales increased
dramatically because of adult
consumption.
 This is due to giving
chocolate milk “nutritional
respectability” for adults.
 Another part is due to the
innovative packaging that
enables many new chocolate
milk containers to fit in a car’s
cup holders.
 SEATWORK NO. 2

• Do some brief research on McDonald’s.

• Discuss some strategies/ changes it has done in
the past few years to reposition its brand.
• Why do you think McDonald’s need to reposition
its brand?