Products and Positioning

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University of Texas, San Antonio *

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3343

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Marketing

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Nov 24, 2024

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Products & Positioning 1 Products & Positioning What is a product? A product is a good, service, or idea consisting of a bundle of tangible and intangible attributes that satisfies customers and is received in exchange for money or some other unit of value Products & Different POVs How Managers See the Product solution for customers brand cash machine cost machine signal of quality and value promise service obligation marketing tool for future products How Customers See the Product tool to build sales (B2B) tool to reduce costs (B2B) solution to a pain point (B2C) symbol mechanism for fun mechanism tot interact with others mechanism to avoid others How Society Sees the Product tool to build customer & societal welfare tool that has the potential to harm customers and society Products, one and all physical goods services

Products & Positioning 2 ideas places Goods-Service Continuum Product Levels

Products & Positioning 3 Level 1: Core Product Core product refers to the actual benefits received by consumers. As Theodore Levitt said, “Buyers don’t buy quarter-inch drills; they buy quarter-inch holes.” Level 2: Actual Product Actual product refers to the quality level, features, design, packaging, and brand name of the product. Level 3: Augmented Product Augmented product includes additional customer services and benefits, such as delivery and credit, warranties, and after-sale service associated with the product. Non-physical aspects of a product can also be considered as part of the augmented product. For example, Tiffany & Co offers free resizing and repairs on its diamond rings, and BMW provides complimentary service after the sale. Level 4: Desired Product Desired product is the ideal product that a consumer really wants or at least thinks they want in a perfect world. Marketing research can reveal these types of products to marketers and guide them in how to develop actual and augmented features into products desired by consumers.

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Products & Positioning 4 Summary of the Four Product Levels The core product is what the consumer requires from the product (i.e., the intended purpose) The actual product is the physical, tangible item The augmented product is the non-physical aspect of the product that helps differentiate it and tailor the core product to the specific needs of an individual consumer The desired product is what the consumer ultimately wants Products: There are No Commodities Theodore Levitt, a renowned marketing theorist, argued that there are no commodities. He maintained that all products could be differentiated. The four levels of a product can be used to avoid falling into the commodity trap. Product Mix vs. Product Line The Product Mix refers to the full range of product lines offered by a company. P&G: household cleaners, dental products, and laundry detergents Kelloggs: ready-to-eat cereals, cookies and crackers, frozen meals Disney: theme parks, apparel, movies The Product Line refers to a group of closely related products. P&G: laundry detergents Kelloggs: ready-to-eat cereals Disney: apparel and accessories Product Mix: Breadth & Depth Product mix reflects the breadth and depth of the company’s product lines Company’s Product Mix Category A Category A 30 SKUs Category B Category A 5 SKUs Category C Category A 185 SKUs Category D Category A 75 SKUs ↓ ↓ ↓ ↓

Products & Positioning 5 Product Line Breadth: variety of different product lines a firm carries Product Line Depth: more depth means the firm carries a larger assortment of items within that line Product Positioning what is a product 4 levels product line v product mix Positioning: the act of designing a company’s offering and image to occupy a distinctive place in the minds of the target market the value proposition articulates this positioning Value Propositions All benefits: listing all the benefits that managers believe their offering might deliver to target customers. The more benefits they can list the better Favorable Points of Difference: lists all favorable points of difference that managers believe their market offering has relative to the next best alternative Resonating Focus: focus on 1 or 2 points of difference (& perhaps, 1 point of parity) that deliver the greatest value to the customer Building Blocks of a Successful Customer Value Proposition Points of Difference: elements that make the supplier’s offering either superior or inferior to the next best alternative Points of Parity: elements with essentially the same performance or functionality as those of the next best alternative Points of Contention: elements about which the supplier and its customers disagree regarding how their performance or functionality compares with next best alternative Resonating Focus Value Proposition: Specialty Resin Supplier “The new resin enables coatings producers to make architectural coatings with higher film build and gives the painting contractors the ability to put on two coats within a single shift, thus

Products & Positioning 6 increasing paint productivity while also being environmentally compliant. ” Craft Your Own RFVP Create a resonating focus value proposition for your personal brand that includes the following: target segment (eg target employers) product offering next best alternative benefits Product Strategy: What Elements Should We Focus A product growth strategy involves 3 major steps management formally lays out the scope of the project and their hypotheses about customer value Gather data to test hypotheses and determine what customers truly value the most Develop your proposition and product strategy Scope & Hypotheses Step 1: Defining the Context Context statement template “my goal is to grow [company unit/product offering] by creating more value for [customer segment] than competitor does” Scope & Hypotheses Step 2: Customer Analysis (Perceived Performance x importance ) Assumption: There are attributes, i, on which customers base their evaluations of brand, j These attributes/benefits vary in their importance Customers have varying beliefs about the competitive brands on these attributes Step 2a: Executives identify their best guesses regarding customer value ∑ i =1 N i i

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Products & Positioning 7 Step 2b: Obtain customers’ actual perceived value Data Analysis - Step 3: Sorting Value with Three Circles Data Analysis - Step 4: Deep Diving The deeper values behind drug efficacy personal value functional consequence attribute Develop Your Value Proposition & Product Strategy Step 5: Preliminary Value Proposition Ideas First, consider our options in the different ideas

Products & Positioning 8 Second, begin prioritizing our options

Products & Positioning 9

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Products & Positioning 10 Develop Your Value Proposition & Product Strategy Step 6: Analyze our Resources, Capabilities, & Assets Step 7: Analyze their Resources, Capabilities, & Assets Step 8: How do we build/acquire the RCAs necessary to execute our product strategy Step 9: Consider Market Dynamics How we manage and protect our IP can keep competitors from encroaching on Area A

Products & Positioning 11 Step 10: Vetted Product Growth Strategy Product Growth Strategy #1 Reposition “Efficacy” from Area B to A Provide the sales force with "proof points" from lab studies that show superior head-to-head results Presenting this information to physicians will also address a need we discovered in Step 2B (availability of clinical evidence) Product Growth Strategy #2

Products & Positioning 12 Optimize Area A "Dosing Strength" Promote the dosing feature as a point of differentiation between Vivatrol and Optimod, particularly when a rheumatologist views their efficacy as similar. Increase the prominence of the dosing message on sales material. Product Growth Strategy #3 Transitioning from Area C to B "Managed Care" The sales force should educate doctors about the position of managed care on Optimod in local areas. Develop an awareness campaign that highlights MedFactor's current commitment to rheumatology and its future pipeline. Ensure that key opinion leaders are aware of MedFactor's PODs. Continue partnering with professional associations to increase awareness of the MedFactor brand. Results Over the next fiscal year, optimod grew Rx volume by 20% Optimod took over the market leadership position in its category during that same year

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Products & Positioning 13 Key Takeaways Understanding a Product Positioning and Value Propositions Comprehensive Benefits Advantageous Points of Difference Resonating Focus Formulating a Product Strategy 3-Circle Analysis Focusing on the most valuable benefits for our customers Conducting necessary due diligence Identifying a suitable target market Recognizing the next best alternative from the perspective of our target market Strategically deciding on 2-3 primary benefits Being prepared to validate those benefits Recognizing the evolving customer needs, as well as the Points of Difference (PODs), Points of Parity (POPs), and Points of Contention (POCs) for us and our competitors

Products & Positioning 14

Products and Positioning

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