Philip Kotler describes four stages in the development of a value proposition:
- Choose the market position for the brand
- Choose a specific position for the individual product
- Develop a value proposition for the product (e.g. More for More, More for Less, The Same For Less, etc)
- Develop a total value proposition for the brand (Answer the question; Why should I buy from you?)
When building a brand, you have to do more than simply choose a brand name. You have to develop rich associations and promises for the brand. You have to manage all contacts the consumer has with your organisation and your brand. These contacts must match; or better; exceed customer expectations.
Managing a brand at a strategic level than managing it at a tactical level. Managing at a tactical level does not have the requirement of coordinating all areas of your organisation and integrating organisational behaviour to reflect the meaning and values desired of the brand.
Many senior managers only start to take a brand seriously when it appears as an asset on the company’s balance sheet. Only then do they consider its true potential. They start to see brand management as a strategic goal which requires long-term investment, commitment and innovation.
Positioning a brand in the marketplace take place at both strategic and tactical levels. At the strategic, organisational level, it must determine a unique position in the market which differentiates the brand from those of competitors. this has significant implications for marketing and communications strategies; they must reflect the competitive position and be designed to create, build maintain and improve that position.
This strategic position will direct the tactical position through a positioning statement which defines communications which reflect the actual and/or desired market position.
Once a strategic position is established, every area of the organisation and everything it does should be coordinated to deliver products and services based on that position. It will determine your marketing choices. In particular it will inform your marketing mix, the specific benefits and values associated with products and services.
Consumers attach both emotional and rational values to brands. These can be displayed graphically on positioning maps. Usually these take two attributes e.g. customer service versus reliability or innovativeness versus modernity. On these maps, the basis of perceptual mapping, you place consumers views of your products and the products and brands of your competitors.
Treacy and Wiersema stated that there were three basic value disciplines:
- The operationally excellent firm (management efficiency),
- Product leadership,
- Customer intimacy.
They also stated that customers only notice excellence or below adequate performance. Adequate or average performance did not catch the eye of consumers.
Treacy and Wiersema suggest that to achieve a strong market position you should:
- Become the best at one of the three value disciplines;
- Achieve adequate sector performance of the other two disciplines
- Keep improving your superior position so not to lose out to competitors
- Retain adequate position in the other two disciplines as consumer’s impression of what is adequate is constantly evolving.
This strategy can be equated with Michael Porter’s generic marketing strategies in that to try to develop excellence in all three value propositions will spread your resources too thinly. You will end up with, at best, average performance in each discipline and fail to develop a noticeable differentiated market position. You will enter a value discipline no man’s land.
There are a vast range of options when it comes to developing a specific market position for product or a brand e.g. Best quality, best performance, most reliable, most durable, safest, fastest, best value for money, least expensive, most prestigious, best designed or styled, easiest to use, most convenient, etc.
Some firms compete on more than one product position. For example, Volvo lead their marketing on being the safest car on the market; but in some markets they also position themselves as the most durable car brand. Fairy market their washing up liquid as the best for cleaning crockery but they also state they are the best value for money as you need to use less and a bottle will last longer than other brands.
Philip Kotler advocates that when designing a specific market position for a product of brand you should consider:
- Attribute positioning – e.g. first established firm in the market or the tallest skyscraper in the city. However Kotler warns that such positioning strategies are weak as they often do not involve easily explained benefits to consumers.
- Benefit Positioning – e.g. Cillit Bang is marketed as being a strong cleaning fluid that cuts through grime. Most marketing communications are based on benefits positioning.
- Use/Application Positioning – For example Apple Computers are advertised as the best machines for graphic designers. Sun Microsystems advertised their computers as the best for engineers.
- Competitor Positioning – Position your products in the context of your competitor’s products. Suggest superiority or difference. Avis described itself as the car hire company which ‘tries hardest’, implying they had better customer service than Hertz.
- Category Positioning – Kodak means photographic film, Xerox means photocopiers, Hoover means vacuum cleaners, Jacuzzi means jet baths.
- Quality/Price Positioning – Chanel No. 5 positions itself as high quality/high price. Fairy liquid is best value for the money and better quality cleaning.
Kotler also advises that you avoid:
- Under-positioning- Failing to present a strong central benefit or reason to buy the brand.
- Over-positioning – Adopting such a narrow position that some potential customers will overlook the brand.
- Confused Positioning – Offering two or more benefits that are contradictory.
- Irrelevant Positioning – Offer a benefit few consumers will care about.
- Doubtful Positioning – Claiming things consumers doubt you can deliver.
Positioning your product or brand is a critical stage in the development of your marketing strategy. Your position should reflect your organisational goals and values but it should also differentiate your business from your competitors and attract your target customers. Doubtful positioning will often mean that your product or brand will fail to meet its potential.