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New Product Development Proactive versus reactive strategies The pioneering advantage Opportunity identification Positioning strategies Consumer-driven engineering

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The best choice for positioning strategy

When to useproactive versusreactive strategies:

Proactive Reactive

Market growth High Low

Protection forinnovation

Strong Weak

Market size andmargin

Large Small

Competition High Low

Channel position Strong Weak

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Pioneer Advantage

1. Inherent AdvantageRisk AversionStandard of ComparisonBrand Attitude AccessibilitySet Size EffectDirection-of-Comparison Effect

2. Enabling AdvantageExperience CurvePositioning AdvantageChannel Distribution Advantage

3. Spurious CorrelationThird Variable Problem

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A pioneering brand that is still popular

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The most likely scenario for pioneering advantage

The pioneeringadvantage

Inherent advantage

Enablingadvantage

Spurious effect

Speed up new productdevelopment at all costs

Speed up only if product canbe positioned and marketed effectively because you knowmore about the category than

your competitor

Take your time

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Opportunity Identification

Sales potential Penetration Scale Input Reward Risk

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Positioning

I. Positioning Strategies

1. Positioning a Leader

2. Establishing a Strong Alternative PositionA. Doing the OppositeB. Turing Disadvantages in Advantages

3. Positioning by Attributes/Benefits

4. Positioning by Price

5. Positioning with Respect to Use or Application

6. Positioning by the Product User

7. Repositioning the Competition

II. Perceptual Mapping

III. Preference Regression

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Positioning a Leader

Standard of Comparison

- The real thing

- Coke is it

We invented the product

- Xerox copiers

- Polaroid cameras

- Zippo lighters

“We’re Number 1” could imply:

- low price

- high availability

- insecurity

Marketing Myopia

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Establishing a Strong Alternative Position

Look for a gap and fill it

Do the opposite

- Volkswagon

- 7-up 1929: Mixer and headache remedy1967-70: The Uncola (20% sales increase)

Turn disadvantages in advantages

- Avis: We’re no. 2 - we try harder

- Smuckers: With a name like Smuckers, it has to be good

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Positioning by Attributes/Benefits...

Toyota

Volvo

BMW

Bounty

Viva

Crest

Aim

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Positioning by Price...Nieman-MarcusBloomingdalesSaks Fifth AvenueSears

MichelobBudweiserBusch

S.T. Dupont lighters cost $1,500 and downJoy - the costliest perfume in the worldPiaget - the world’s most expensive watch

High Price is not only for luxury items:- Whitney’s Yogurt- Orville Redenbacher’s- Eukanuba

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Positioning byPrice...

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Positioning byPrice...

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Positioning with Respect to Use or Application...

Campbell’s Soup for Lunch

AT&T Reach out and touch someone

Gatorade

Arm & Hammer Baking Soda

Industrial Products

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Positioning byUse...

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Positioning by Product User...

Marlboro Country

Miller High Life, the champagne of beers

Johnson & Johnson baby shampoo

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Positioning Malaysia Airlines as the most popular airline originating in southeast Asia

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Repositioning the Competition...For the millions who should not take aspirin… if your stomach is easily upset… or if you

have an ulcer or if you suffer from asthma, allergies, or iron-deficiency anemia.. It would make sense to check with your doctor before you take aspirin. Aspirin can irritate the stomach lining, trigger asthmatic or allergic reactions, cause small amounts of hidden gastrointestinal bleeding. Fortunately, there is Tylenol.

Royal Doulton - The china of Stoke-on-Trent, England vs. Lenox - The china of Pomona, New Jersey

Samovar: Made in Schenley, PennsylvaniaSmirnoff: Made in Hartford, ConnecticutWolfschmidt: Made in Lawrenceburg, IndianaStolichnaya: Made in Leningrad, Russia

Borden’s Wise: Potatoes, Vegetable oilP & G’s Pringles: Dehydrated potatoes, mono- & diglicerides, ascorbic acid, butylated hydroxy-anisole

Listerine: Medicine BreathScope: Fresh Minty Breath

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A perceptual map

Diet Pepsi

Diet Coke

Tab

Fresca

Pepsi

New CokeDr. Pepper

Coke Classic

Cherry Coke

Sprite

7Up

Not Fruity

Not Sweet Sweet

Fruity

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Perceptual Maps...