product positioning 15.823 internet marketing prof. glen l. urban spring 2001
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PRODUCT POSITIONING
15.823 Internet Marketing
Prof. Glen L. Urban
Spring 2001
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Understanding Customers
Consumer Behavior
B2C vs B2B
Strategy Formulation
Trust vs. Push
Product Design
Segmentation
Positioning
Customer Acquisition
Advertising / PR/Selling
Pricing & Promotion
Distribution
Channel
Logistics
Relationship Building
Fulfillment
Service
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OUTLINE
• Positioning Versus Segmentation
• Positioning Example
• Analytic support for Mapping
• Does it Pay to be First? -- Order of Entry Theory
• Implications for Internet
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B
C
A
D
BA •••
•
• • •
•
E
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POSITIONING
GIVEN SEGMENTATION
CBP
DIMENSIONS
COORDINATES
FULFILLMENT
UNIQUE POSITION
SHARE/PROFIT
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MAPPING STEPS
Define category/segment
Identify products that compete
Attributes and features that differentiate
Group attributes - perceptual dimensions
Draw map
Implications
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CLASS EXAMPLE
• On Line Trading
• evoke -- dimensions --triad comparisions
• judgement for position
• preference vectors
• implications
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POSITIONING ANALYSIS
LEVEL I
focus group
customer contact
inspect competition
perceptual map -- judgment
LEVEL II
factor analysis
preference vectors
conjoint analysis
LEVEL III
simulation models
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MAPPING INPUTS
BILL -- M.B. 500
BILL -- HONDA
BILL -- BUICK
ELECTRA
Lu x
u ry
s ty l
e
rel i
a bl e
MP
G
p er f
o rm
anc e
Du r
a bil
ity /
resa
le
q ua l
ity
ma i
n ta i
n
s af e
6
5
5
6
6
5
3
5
3
4
7
5
3
6
4
5
6
4
4
4
4
5
7
5
5
7
6
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DATA COLLECTION
• Email lists– Zoomerang
• On Line Panels– NFO– Burke– Greenfield
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FACTOR LOADINGS
Dimensions
Attribute
Luxury 0.88 0.10
Style 0.72 0.08
Reliable 0.45 0.63
M.P.G. 0.24 0.64
Safe 0.52 0.31
Maintain 0.10 0.67
Quality 0.48 0.64
Durability & Resale 0.38 0.60
Performance 0.67 0.35
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Emotional
•Honda
•Lincoln Town Car
•Chrysler New Yorker
•Buick Riviera
•Cadillac Eldorado
Rational
•Olds
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•Honda
•Lincoln Town Car
•Chrysler New Yorker
•Buick Riviera
•Cadillac Eldorado
Rational
•Olds
•BMW
•Jaguar
•MB
Emotional
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•Honda
•Lincoln Town Car
•Chrysler New Yorker
•Buick Riviera
•Cadillac Eldorado
Rational
•Olds
•BMW
•Jaguar
•MB
Emotional
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ENGINEERING
FEATURES
PERCEPTION
PREFERENCE
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SURUGA EXAMPLE
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Aim of eBusiness@Suruga
• Buyer Centric
• Idea Base
• Trust for Customer
• Construct business model of eCRM.
• Construct new services and products of eBusiness.
• Construct secure business with internet customers.
Keyword for Success What shall Suruga do?
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INTERNET STUDY?
• Talk to Customers -- Listen
• Study Competitors -- judgmental Map
• Focus Groups
• Budget study if VC -- Crowded Out There
• Active Role in Study
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Internet StudySTEPSBUDGET
DEFINE TARGET MARKET
DESIGN SURVEY
ATTRIBUTE GENERATION
STATISTICAL MAPPING
Name Dimensions
Number of Dimensions
Coordinates of Brands
Importance Vectors
MANAGER’S ROLE$50k to $250K
Be Sure Correct Segment Definition is Used
Specify Decision Requirements
Assure Completeness
Input Judgment
Examine Additional
Dimension for Relevance
Review for Reasonableness
Decide on Number of Sub-group
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Internet Study - Cont’d
STEPSFEATURES
SIMULATE IMPROVED POSITIONING
MANAGER’S ROLESelect Features and Levels,
Link to preference and/or Perception
Be Sure Shift Can Be Achieved, Confirm with Concept/Product Tests
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DOES IT PAY TO BE FIRST?
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THEORY• Determinants -- +/-
– Memory -- Accessibility
– Switching costs - risk and satisfaction
– Learning about Market
– Market Power - Share & Channel
– Scale -- Production and Funds
– Continuing Innovation
– Standard Setting
– Broader Product Line
– Technology/Market window
– Best Positioning?
• Empirical
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ORDER OF ENTRY AND MARKET SHARE IN CONSUMER GOODS BUSINESS
Average
Market Share
Pioneer 29
Early Follower 17
Late Entrant 12
(371 SBU’s)
Pioneer 16% 20% 23% 41% 100%
Early Follower 41% 24% 19% 16% 100%
Late Entrant 56% 25% 12% 7% 100%
Frequency Distribution
for Market Share
Less than 10 10-19 20-29 30 & up Total
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DATA
131 Brands
36 Categories
Share - Last Purchases
Order
Advertising
Preference
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ORDER OF ENTRY
1ST 2ND 3RD 4TH 5TH 6TH 7TH
100
57 43
42 32 26
34 26 22 18
29 22 18 16 15
25 19 16 15 13 12
23 17 15 13 12 11 9
Market Share
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Strategic Implications
Market Share Reward for Innovation
If First:
Position Well-Preempt
Support - Advertising & Promotion
If Second or Third:
Premium Position
Support - Advertising & Promotion
Faster But Lower
Innovate for Market
Leadership -- But Risk
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IMPLICATIONS FOR INTERNET
• Mapping -- Do It!
– Listen /Focus Groups
– Budget for Study in VC
• Segmentation and Positioning Strategy vs. Potential Competition -- Preempt
• Core Benefit Proposition -- Not Technology
• Establish with Features and Keep Innovating
• First In has Value
– But Catch window
– Have Best Position
– Spend behind It