Competitive advantage is another strategy a company can use in positioning their product. This is where the company identifies a differentiating factor of a product and decide to aggressively promote it to be the best in the business. According to Kotler (2006:289) Adnam Rosser Reeves said a company “a company should develop a unique selling proposition (USP) for each brand and stick to it. Each brand picks and attribute and touts itself as the number one on that attribute, aspires tend to remember the number one better especially in an over communicated society.”
Companies can use more than one attribute and tout them as there number one factor however this could be dangerous as consumers may think the company is lying about their product or companies can risk a clear position. On the other hand good positioning can help to build a brand loyalty and therefore companies should be very careful when deciding upon their positioning strategy otherwise they will risk making poisoning errors. There are three types of positioning errors:
1, under positioning: this is when the consumers only have a vague knowledge about the product or plan or there is nothing special about the product or the brand.
2 over poisoning: this is consumers having a really narrow picture about the product or the brand.
3 confused positioning: which is when consumers are confused about the product, that is the company cannot identify any unique selling position and therefore go about trying to position their product with anything that they think will be useful to them.
Case study
Ericsson Global Brand Campaign
MAKE YOURSELF HEARD.
In February 1998, Ericsson launched a major campaign for its brand of mobile phones. This was inspired by the fact tat personal contact is the most important and powerful element in mobile communication. In the past, Ericsson realised that among the big three, Nokia had 21%, Motorolla 22% and Ericsson had only 16% of the global market share.
Initially the management believe that their product will sell themselves as they are good products and there was no need to advertise or position itself. They however realised that because of the competitive nature of the market, they need to advertise and position themselves otherwise they will lost their share of the market.
In 1997, they launched a campaign with the slogan “its about” in conjunction with the James bond movie tomorrow never die projecting Ericsson as the leading technological and style innovator.
Ericsson estimated that mobile users will be expected to grow to 570million in the next 5years from 137millions in 1997 and that mobile phone producers will increase significantly in the near future, it is therefore paramount to become the market leader, but also know that the leadership was a privilege of those mobile companies that could build a strong bond with the end users (consumers). The fastest growth was expected in Asia pacific, followed by Latin America, Europe and North America. The management also realised that the need for brands with consumer values was paramount due to the following reasons:
Product differentiation based on technology and features was becoming difficult.
The life cycle of new product are becoming shorter
The market has change.
Ericsson believe tat they can enjoy a price premium over their competitors only if their reputation as technological leader could be back up with a strong brand. Goran Andrsson the marketing director for brand communication commented, “while the network operators have tried to commoditize mobile phones by nearly giving them away to attract subscribers, we want the consumers to ask not just for a mobile phone, but to ask for Ericsson mobile phones even if it cost more. Like the business buyers before them, we would like the new comers to the market to think of our product as something special worth a premium”.
Ericsson decided to launch two market studies in parallel. The first “Take Five” was aimed at understanding the profile of the mobile consumers. The second one called the corporate “soul searching” was aimed at assessing Ericsson’s current brand perception and defining direction for the future. Take five identified five consumer segments
- Pioneers: they are motivated by innovation and are willing to pay a higher price for quality. They are only loyal to technology but no brand.
- Achievers have limited brand loyalty; they are motivated by productivity, comfort, appearance, success and advance technology.
- Materialists are very brand loyal. They are status seekers motivated by recognition, status and sense of belonging.
- Sociable: this group is also loyal to brand and are also well informed about the product and buy product that are easy to use and attractive. They are also highly rational.
- Traditionalists are attracted to social harmony rather than change. They are attracted to established product with basic features that offer reliability. Low price and well known brands are important to them.
The study shows that the pioneers were the largest group in each country and they decided that any future product will be designed and marketed with the values of the different segment in mind.
The second study reveals that although in the UK, about 36% knows the Ericsson brand and is willing to buy it within the next 12months; this is at par with Motorolla but well below 45% of Nokia. However in the United States, the awareness of Ericsson was almost non existence.
Ericsson decided to launch a campaign with the slogan “make yourself heard”. This was aimed at projecting Ericsson as a human and a compassionate company as stated by the Ericsson group chairman Lars Ranqvist “it is our belief that communication is between people and the rest is technology”. To ensure that “make yourself heard” is betting on the right campaign, it was retested in 19 countries representing 85% of all mobile sales and found out that:
The advert generated usually consistent reaction across countries. The slogan “grew” on people showing its long term potential.
It was found to have a universal appeal as it was seen to be intelligent
The customers found Ericsson as a brand that “will help you to say what you need/want to say”, cut distance mentally and physically, between people, know about and is interested in people and support a global community.
Before any positioning strategy is selected by any company it is important a considerable time is taken in determining which competitive advantage it wishes to tout as not all competitive advantage is worth following. In order to determine which advantage is worth pursuing the competitive advantage must deliver a higher value benefit to the targeted segment. It must be offered in a more distinctive way or that competitors do not offer the same difference. It must be of a higher or superior quality even if it costs more. It must be visible and can be easily communicated to the targeted consumer. It cannot be easily copied by you competitors. It must also be affordable as there is no point if your target consumer cannot afford the product. It must be worth pursuing, that it must be profitable to the company (Kotler 2006:289)
When the company establishes the need for positioning the next step is to do a market study to establish or assess their position and also to ascertain the market segment they want to target for the product for example in the case study Ericsson launch two studies to assess the market and also determine what there position was in the market they will then have to decide what position study to adapt.
“position strategy is the choice of a target market segment which describes the customer a business will seek to serve and the choice of differential advantage notice defines how it will compete with rivals in the segment (BrooksBank (Doyle 1983)
Another method of identifying a marketing position of a company can be done be drawing a perpetual map of the product or brand.
Perpetual map (see page 5)
A perpetual map is a marketing tool used to measure the brand or products position. Mapping will allow you to see where the brand stands; it will also identify gaps in the market that the company can tap. It also shows brands which are close to each other and as a result of this can cause brand cannibalisation that is one brand taking over the sales of another brand close to it (R Dace 2007)
Perpetual mapping is the process in which companies plot themselves according to features to determine their position in the market. Perpetually mapping will also identify if there is the need for brand re positioning.
If a positioning strategy is agreed upon, then a positioning statement will have to be decided. For example, Ericsson chooses the statement “Make yourself heard”. A positioning statement shows how the positioning will be communicated to chosen market segment.
Once everything have been finalised, the positioning strategy needs to be translated into action. This is where we have to employ all the marketing mix. The marketing mix is the 4ps.
Product: are the goods or services the company wishes to launch to the market.
Price is a very important mix as this determines the cost of the product. It is important that the company take a cautious approach to the pricing policy and also decide how the want to launch the product. There are two pricing approach they can take:
Market Skimming: this is when the company sets the price high in order to skim the market revenue layer by layer. This can only happen if the quality and image support the high price and consumer know that they are getting value for money or the competitors cannot enter the market that easily.
Market penetration: is when the company sets a low price in order to penetrate the market and win a large share of the market and also with the aim of driving other companies out of the market.
Promotion: how do we make our product known to the consumers? Do we have to use the print media or internet? The promotion strategy is as important as any of the other 3ps. If the company get them wrong, the product will fail miserable.
Place: this shows where the products have to be launched. These are the channel of distribution. It will also show how the product reaches the consumers.
In conclusion, positioning is the battle for the mind (Trout 1969: 51-55). It is where companies mentally aid consumers make purchasing decisions by putting their product in the mind of the consumers. When position strategies are implemented, the company should audit it so see if the desired outcome is achieved. As in the case of Ericsson, they identified three points. Positioning can also be about making the consumers know what company stand for as stated by the vice president of Ericsson, Jan Ahrenbring, “the brand campaign is about Ericsson value, not just product. The brand platform is meant to convey a clear massage about Ericsson’s belief in the value of self-expression and ease of communication in relation to one another”.
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