Download Dr. Dawne Martin MKTG 241 Feb. 24, 2011

Innovation, Value & Positioning
DR. DAWNE MARTIN
MKTG 241
FEB. 24, 2011
Administrative Stuff
 Customer/Competitor Analysis: Thursday, Feb. 23
 Tuesday, Feb. 28: Quiz 2 – Chap 4 – 6, Business
Model
 Thursday: Chapter 6 & Business Model
Development
 Learning Objectives



To review value creation and map out your value proposition
To investigate and design a product positioning strategy.
To reassess what you need to know about customers and
customer perceptions of competitors in your marketing
research.
Three Simultaneously Challenges
5-3
 Anticipate and respond to change
 Leverage core competencies to
exploit new market realities
 Learning faster and innovating
better to explore new territory
Rethinking Marketing, 1st Edition
Creative Destruction: The Kissing Cousin
of Opportunity
5-4
 Entrepreneur is the innovator who



“Shocks” and disturbs economic
equilibrium
Exploiting and creating uncertainty
Creative destruction

Old replaces the new
Rethinking Marketing, 1st Edition
7 Outcomes of Entrepreneurial Creativity
?
Wealth
Employment
Growth
New ventures
Change
New markets
Innovation (products, service, processes)
Value
Rethinking Marketing, 1st Edition
5-5

In curve A, and B the optimal
time period during which
5-6
to pursue an opportunity with a given business concept
is during the shaded area.
Rethinking Marketing, 1st Edition
Examples of Great Ideas
5-7
i. Ikea discovered its “flat-pack” furniture concept when an
employee, Gillis Lundgren, cut the legs off a bulky table
he had just purchased because it would not fit into the
trunk of his car.
ii. Wal-Mart store manager in Crowley, Louisiana, tried to
scare off shoplifters by introducing “store greeters” rather
than security guards—this new perspective soon became
a signature of Wal-Mart stores.
iii. American Express Travelers Checks were born out
of
the frustration of an Amex executive who tried
unsuccessfully to cash his letters of credit while on
holiday in Europe.
iv. Skip Yowell & JanSport http://www.jansport.com/skip_yowell_collection/js_ski
p_yowell_collection.html
Rethinking Marketing, 1st Edition
Value

Company perspective


Value must be captured or appropriated
Market perspective



5-8
Value with innovation, called “value innovation”
Southwest Airlines offers outstanding customer service
and rock-bottom prices, defies traditional marketing
logic
Customer perspective



Meeting needs
Solving problem better than competitor
Innovative products and services that were initially
rejected by consumers: the microwave, CNN, the Sony
Walkman, and Boeing’s 747
Rethinking Marketing, 1st Edition
5-9

Company perspective


Market perspective



Value must be captured or appropriated
Value with innovation, called “value innovation”
Southwest Airlines offers outstanding customer service
and rock-bottom prices, defies traditional marketing
logic
Customer perspective



Meeting needs
Solving problem better than competitor
Innovative products and services that were initially
rejected by consumers: the microwave, CNN, the Sony
Walkman, and Boeing’s 747
Rethinking Marketing, 1st Edition
Economic Benefits and Value Creation
Differentiation and Customer Value
Positioning Strategy
 Study and understand the market
 Critical strategic decisions
 Choice
of the target segment.
 Determine specifications to meet the target
segment’s needs
 Determine the product or service’s competitive
positioning from the customer’s perspective
Copyright ©1997 Harcourt Brace & Company.
All Rights Reserved.
Segment Positioning
 Value Proposition: all the key elements of
the situation and benefits the target
customer is looking for in purchase
 Segment Positioning Strategy: product
features, relative price, added value through
channels and promotion.
 Acid Test of Positioning – storyboard target
slogan, benefits and products – participants
select storyboards based on their needs – Do
they match?
Mapping Competitive Positions
 Perceptual Mapping: two-dimensional map to
compare the consumer’s image of competing
products on two critical performance features
Product position relative to competitors
 Product position relative to ideal points

 Uses for perceptual mapping
 Unique product differentiation & positioning
 Image differentiation
 New product or service
Copyright ©1997 Harcourt Brace & Company.
All Rights Reserved.
An
Intuitive
Map of the
Analgesic
Market
Gentleness (side effects)
Segment cluster 1
Age=5+5
Use: fever
Segment cluster 2
Age=70+10
Use: arthritis
Tylenol
Datril
Generic
acetaminophen
Buffering
Advil
Extra-Strength Tylenol
Segment cluster 3
Age=30+10
Use: aches
Effectiveness
(efficacy)
Bayer
Private-label
aspirin Anacin
Demand void
Copyright ©1997 Harcourt Brace & Company.
All Rights Reserved.
Has a touch of class A car I’d be proud to own
Distinctive looking
Porsche
#4
Lincoln
Cadillac
Mercedes
Conservative
looking
#5
BMW
Chrysler
Buick
Oldsmobile
Appeals to
older people
Ford
#2
Spirited
performance
Sporty
looking
Pontiac
Fun to drive
Appeals to
young people
Datsun
Chevrolet
#1
Dodge
#3
Toyota
Plymouth
VW
Very practical Gives good gas mileage Affordable
The Planned Repositioning of Pontiac
High price Upscale Luxurious
Cadillac
Mercedes
Buick
Porsche???
Oldsmobile
Conservative
Familyoriented
Source: Adapted from
John Koten, “Car Makers
Use ‘Image’ Map as Tool
to Position Products,” The
Wall Street Journal, March
22, 1984, 31.
Pontiac
Expressive
Sportyoriented
Nissan
Chevrolet
VW
Low price Practical
Toyota
Honda
Mazda
Copyright ©1997
Harcourt Brace &
Company.
All Rights Reserved.
Major Sources of Competitive Advantage
Defining your Value Proposition and Positioning
 Identify the market
 Identify the key issues/desires of that market as they
relate to your product
 Identify the key benefits your product/service will
provide
 Identify product/service characteristics that will
provide those benefits
Defining your Value Proposition and Positioning
 Investment Program A


How to Beat Inflation and
Higher Taxes
Key Benefits

Capital Appreciation
 Minimal Taxation



 Investment Program B
Growth/Appreciation
 Safety

Products
Growth Stocks
 Municipal Bonds
 Growth Funds

Special Help for Women
with Special Money
Problems
Key Benefits

Products
Growth Mutual Funds
 Blue-Chip Stocks
 High-Grade Bonds
