Positioning Map
A product positioning map helps measure your organization against the competition on two dimensions that are important in your marketplace. Examples could be capacity, customer service, conservative versus edgy, price, convenience, or customer loyalty. Many organizations are increasingly using product positioning maps to find ways to implement strategies. Organizations continually look at how their products and services are positioned in comparison to competitors. This information is especially useful for marketing managers.
To develop a product positioning map for your organization, first you must determine the two important factors and descriptors for the ends of the continuums. See Figures 7-11 and 7-12 in your eBook (textbook), for examples. Include your organization’s competitors in your map for the same two factors you choose for your company. Make sure to analyze and discuss issues that leaders face when interpreting these results. Submit your map as an attachment in the assignment area.
Perceptual Mapping
Firms continuously monitor the image of their brands as perceived by consumers. A product-positioning tool widely used in marketing is perceptual mapping, or developing schematic representations to reflect how a firm’s goods or services compare to competitors’ in the mind of consumers. Perceptual mapping is widely used for deciding how to better meet the needs and wants of particular consumer groups. The technique can be summarized in five steps:
Select key criteria that effectively differentiate products in the industry. Specifically, consider the key characteristics of your brand offerings that provide unique value to your target customers.
Diagram a two-dimensional product-positioning map with specified criteria on each axis.
Plot major competitors’ brands in the resultant four-quadrant matrix.
Assess whether your brand’s location in the matrix is ideal, especially relative to competitors. That is, consider whether your brand’s position, as perceived by consumers, offers unique value.
Reposition your brand’s offering as needed to shift consumers’ perceptions of the brand to a location that provides a competitive advantage over rival brands.
An effective product-positioning strategy uniquely distinguishes a company from the competition. Companies commonly develop several perceptual maps to better understand competitive advantages and disadvantages versus rival companies, rival products, or in-house products. Figure 7-11 shows a perceptual map of major U.S. auto insurance companies. Consider for example that Allstate is implementing a market-penetration strategy with objectives aimed at increasing revenue; the perceptual map in Figure 7-11 may help guide Allstate managers by suggesting that the firm needs to either focus on improving customer service or lowering prices. For incumbent firms planning to enter the auto-insurance business as part of a diversification or product-development strategy, the perceptual map in Figure 7-11 could foster the implementation of such strategies.
Figure 7-11 A Perceptual Map for Auto-Insurance Providers
Source: Based on a variety of sources.
Figure 7-11 Full Alternative Text
Figure 7-11 indicates that several firms already offer average range prices and customer service, but a firm could perhaps differentiate itself by offering enhanced customer service for moderately or slightly higher prices (while remaining below State Farm). Perceptual maps also reveal unclaimed space that may contain a target market. Marketers draw a line of best fit through the plots and look for places along the line that are uncontested. Also, items well above or well below the line may be over- or underserving customers and costing the firm money. Allstate for example may look decent at first glance, but they would have to significantly lower price or raise customer service to remain competitive. GEICO is possibly overserving customers on customer service; sure customers will accept this, but they probably would accept less and not run away based on still being above the “line of best fit.”
A perceptual map for Marriott is shown in Figure 7-12, illustrating how several of the firm’s hotel brands compare to or are differentiated from one another in terms of price and customer satisfaction. When implementing strategies, Marriott may use a perceptual map such as the one shown in Figure 7-12 to understand which of its individual brands are doing best, to identify potential problems with underperforming brands, or to visualize potential markets that could best serve as a focus for a new brand of Marriott hotels. For example, the addition of another mid-range hotel brand may cannibalize sales of existing Marriott brands, but the addition of an economy-brand of hotels may be fruitful for Marriott to consider as a means of implementing a growth strategy.
Figure 7-12 A Perceptual Map for Marriott’s Brands of Hotels
Source: Based on a variety of sources.
Figure 7-12 Full Alternative Text
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