455 Marketing

Targeting

1. Segment Characteristics: size, growth rate, profitability 2. Competition: strengths, intensity, resources 3. Company Fit: Objectives, competencies, resources When choosing among segments, it is tempting for a company to target segments that are large, have high growth potential, and where the share of the company's brands is low. The implicit assumption in this choice is that the firm has a lot more room to grow in a large segment with low share. But the segment share for a company might be small because its products do not appeal to that segment or because of intense competition in that segment. In general, three factors should influence the selection of segments . First, a firm should consider the characteristics of various segments, such as how large they are, how fast they are growing, and how profitable they are likely to be. Second, the firm should consider its own competencies and resources that are available to address the needs of the different segments. Even if a segment is large and growing, a firm may not have the capability to address the needs of this segment. Managers should also consider their long-term objective in pursuing a segment; for example, they may want to target a small and emerging segment, since it may allow their organization to build unique skills that provide it with a strong competitive advantage in the future. In this case, the choice of target segment may be driven less by profits and more by the desire to learn and develop long-term skills. Finally, a firm should consider current and potential competition in each segment. A large and growing segment is likely to draw attention from many competitors, which may eventually lead to a price war and low margins. Sometimes it may be better to pursue a small niche segment that does not attract the attention of large and powerful competitors.19 These criteria may lead a firm to choose one or more segments. Small firms or firms with a unique product (e.g., Ferrari) may choose to focus on a single segment and pursue a niche strategy. This strategy allows a firm to have a dominant share in its segment, and even if this segment is small in size, it can have high profit margins. Some companies target multiple segments simultaneously, often by designing different products to meet the needs of different segments. Automobile companies target multiple segments with sports cars, minivans, hybrid cars, sports utility vehicles, and so on. Sometimes companies design a strategy with a sequential entry into multiple segments. In such a case, a firm may start by building a strong position in one segment of the market and slowly expand its reach in adjacent segments. For example, Porsche started with an exclusive focus on the sports car segment and later expanded its product line with the launch of Porsche Cayenne, a midsize luxury crossover SUV, and Porsche Panamera, a four-door luxury sedan. Often a firm's strategy evolves in a way that leads it to target different segments over time. When Brian Chesky and Joe Gebbia, co-founders of Airbnb, could not afford the rent for their San Francisco loft apartment in October 2007, they decided to put an air mattress in their living room and turned their place into a bed and breakfast targeting price-sensitive students and millennials. By 2011, they moved to a larger target market for short-term home rentals. And in 2018 they launched Airbnb Plus, aiming to serve the high-end customers who prefer to stay in hotels. In some cases firms may decide to target all segments in the market. Sansiri, a residential housing developer in Thailand, targeted market segments along the full price range—high, medium, and low—and supplied all types of housing, from houses to townhouses and condos.20 This strategy is often used to preempt the competition from gaining a foothold in any of the segments and later encroaching on a firm's more profitable markets. Even so, the approach not only requires significant investment but also carries a risk of failure because of its lack of focus. Sansiri faced such a challenge when its rapid expansion into all segments led to poor construction quality and many unsold units, which in turn forced the company to undertake heavy discounting. As a result, its stock hit a 52-week low in November 2018.

What type of attributes are likely to be vertically and horizontally differentiated, respectively?

Battery life; color

Ideally segmentation reflects customers ___________ but in practice segmentation often reflects __________.

Benefits sought (needs); observable characteristics

Creation of a Brand

Segmentation, Target Identification/ General Positioning, Brand Essence Statement (Actions, Behaviors, and Statements Made by the Brand: brand messages, shopping exp. Customer service exp and Information about the brand from external sources: WOM, News, Social Media), Brand Image

Dog (BCG Matrix)

a company with a small share of a market that is not growing/ do not want to invest in

How did telstra slow vulnerable valuables from leaving when optus entered the market

by offeering new pricing options

Question Mark (BCG Matrix)

high growth, low market share

Cash Cows (BCG Matrix)

low growth, high market share

Behavioral Segmentation

usage rate, loyalty, product knowledge, involvement, purchase occasion, buying stage

Fighter Brand Strategy

A fighter brand is designed to combat, and ideally eliminate, low-price competitors while protecting an organization's premium-price offerings, fighter brand not only eliminates competitors but also opens up a new, lower-end market for the organization to pursue ex. Bud light was doing well until cheaper beers came out Realized price is important to one segment of their consumers Don't want to lower budweiser/bud light Introduce Busch Light- lower quality brand, lower price

Diversification

new product, new market (future, future)

Rediscovering Segmentation

Consumer Identities, Actual Consumer Behavior, Too much sophisticated technology

Benefits Sought Segmentation

Convenience, value, safety, status

positioning statements

For [Target Market], Brand X is the only brand among all [Competitive Set] that [Unique value claim] because [Reasons to Believe]. Note that, unlike brand slogans or taglines, positioning statements are strategic in nature, developed for an internal managerial audience rather than an external consumer audience. They help guide the tactical execution of the brand and are often the starting point for developing the marketing messages that will be delivered to consumers. Positioning statements contain four essential components: • For whom, for when, for where? An explicit description of the target market segment that helps consumers easily discern which brands directly address their specific needs and which don't. This component can outline a particular type of person (e.g., mothers concerned about their children's health), a particular usage situation (e.g., when you need to decorate your dinner table), and/or a particular usage location (e.g., when you are on the go). For more on how managers can choose a target market segment. • What value? A simple, straightforward description of the unique value claim the brand offers, written from the consumer's viewpoint. This will become the thing for which the brand is known. There are four types of value that customers can derive from a product or service: economic value, functional value, experiential value, and/or social value. Products that provide tangible monetary savings either at purchase or over their long-term use offer consumers economic value. When comparing many products (e.g., mobile phones or laptops), consumers often consider not only price but also different features, or the functional value of the products. Many consumers, however, buy products for their experiential value—intangible psychological and emotional values associated with the brand. Finally, in many settings, consumers derive social value from products or services. Facebook's value comes from sharing information, pictures, and videos with friends. For more on how customers derive value from the brands they use. • Why and how? Evidence that provides consumers with reasons to believe the brand's claims. Supporting evidence for the product's value can come from logical arguments, scientific and technological data, consumer testimonials, celebrity or expert endorsements, product demonstrations and experiments, and independent agency seals of approval. • Relative to whom? An explicit description of the competitive set in which the brand classifies itself and the alternatives consumers may be considering. This helps consumers establish a frame of reference for the purchase decision. This section of the positioning statement can either help consumers classify the brand as similar to other brands or product categories they are already familiar with, or differentiate and distinguish it as something completely different. For example, Hyundai—known for low-cost, functional vehicles—launched a luxury automobile by positioning it as "a brand new luxury car as spacious as the Mercedes S-Class, yet priced like a C-Class." This statement drew both a parallel to and a distinction between Hyundai and one of the world's leading luxury car brands. When 7-Up wanted to differentiate itself from market leaders Coca-Cola and Pepsi-Cola, it positioned itself as "the Uncola," offering customers something different to quench their thirst. Sandal maker Sanuk prominently declares on its point of purchase displays, "These are not shoes" to clearly differentiate its Sidewalk Surfers as being more comfortable than other footwear. The four components of positioning statements can be summarized in this general format: For [target market], Brand X is the only brand among all [competitive set] that [unique value claim] because [reasons to believe]. Below is an example of how three bottled water companies might use this format to position their brands to address three distinct target markets with unique value claims: • For [upscale consumers looking to make a design statement with their choice of water],Voss is the only brand among all [bottled waters] that offers [the purest and most distinctive drinking experience] because [it derives from an artesian source in southern Norway and is packaged in a stylish, iconic glass bottle]. • For [middle-class consumers looking for an affordable and accessible luxury], Perrier is the only brand among all [bottled waters] that offers [an elegant, sparkling, and refreshing water, with just a hint of zaniness] because [it is naturally carbonated by volcanic gases deep beneath the soil in southern France and features clever bottle designs by Andy Warhol]. • For [millennial consumers who are socially conscious], Ethos is the only brand among all [bottled waters] that [cares about solving the world's clean water crisis], because [it donates five cents for every bottle sold to programs that help support water, sanitation, and hygiene education programs in water-stressed countries].

Characteristics that make segmentation useful

Identifiable - observable characteristics Substantial - Size Accessible/Actionable - Can be reached with a marketing tactic at the firms disposal Stable - consistant over time Differentiable.- distinct from others Identifiable. An organization should be able to identify customers in each segment and to measure their characteristics, such as demographics or usage behavior. In Africa, for example, Procter & Gamble and Unilever appeal to lower-income consumers by selling small packets of products, such as detergent or salt, at small kiosks.5 • Substantial. Although the increasing availability of data makes it possible to create microsegments, it is usually not cost-effective to target small segments. To be useful, a segment therefore needs to be substantial—large enough for a firm to serve profitably. Consider Coca-Cola's 2004 launch of Coke C2, a beverage aimed at 20- to 40-year-old males who liked the taste of regular Coke, but not the calories, and who disliked the taste and the female association with the Diet Coke brand. Coke C2 tasted like regular Coke but had half the calories and carbohydrates. The drink was not a success, however; the intended male target audience was looking for a full-flavored drink with no calories, not reduced calories, and market data showed that any product sales of Coke C2 were just cannibalizing sales of existing Coca-Cola beverages. Not long after its launch, Coke C2 was replaced with the more successful brand, no-calorie Coke Zero (recently rebranded as Coke Zero Sugar).6 • Accessible. There is not much value in creating a segmentation scheme if an organization cannot reach the segments. To be accessible, a segment needs to be reachable through communication and distribution channels independent of other segments. For example, young consumers, who increasingly use social media, have become more accessible to firms that are eager to engage them via Facebook, Twitter, Instagram, and blogs. • Stable. A segment should be stable over a long enough period of time that any marketing effort would be successful and profitable. For example, lifestyle is often used as a segmentation variable but the stability of lifestyle segments in the international context appears to be low. Many experts believe in the global convergence of consumer needs and wants, which also suggests that international segments may be very dynamic and constantly evolving.7 • Differentiable. Consumers in a segment should have similar needs, and these needs should differ from the needs of consumers in other segments. In Japan, for example, there was a market segment for alcohol-free drinks, from nonalcoholic beer to wine to gin and tonic mixes. Sales in this segment doubled between 2009 and 2012 to 12 million cases of beverages. In 2011, Sapporo released a premium, beer-flavored beverage to meet the demand, and by 2012 Suntory and Kirin had also released their own nonalcoholic beers.8 Sales of nonalcoholic beer are expected to grow from $1.26 billion in 2013 to $1.77 billion in 2022.9 • Actionable. An organization should be able to create products and marketing programs for attracting and serving customers in the segments identified. For example, a leading US insurance company spent a lot of time and money on segmentation, only to realize later that it could neither identify customers in those segments nor design any specific actions to target them. Not surprisingly, it abandoned its segmentation effort.

micro/local marketing

cities, neighborhoods, specific stores

market development

existing product, new market (present, future)

competitive advantage is increasingly likely to come from

harnessing network effects, reducing customer costs

RFM

recency, frequency, monetary Order each of the customers by recency, frequency, and monetary value. Combine for a score. Higher score= more value customers! Can quantify customers in two ways- an average of all or cell based approach (a value for each of the categories- allowing for segmentation JUST on 1 or 2 elements instead of all 3) Companies such as L.L.Bean that have traditionally used catalogs to reach their customers often segment them based on three factors, called RFM: recency, frequency, and monetary value of purchases. This approach is commonly used in database marketing and is easy to implement for companies who track their customers' transaction data. Research has shown that segments based on this RFM model correlate well with customers' future purchases. Customer loyalty—or the likelihood that a customer will return to buy a company's products over those of a competitor's—is another important variable for segmentation. A study of the banking markets in Belgium, Germany, and Italy revealed that loyal bank customers bought 40% more products and generated 30% to 70% more value for the banks over the life of their relationship when compared to average bank customers.14 This study suggested segmenting bank customers based on the bank's share of wallet and their loyalty to the bank. Customers with high share of wallet but low loyalty are valuable customers who are at risk of defecting, so a bank should invest resources to improve its relationship with them. Wikipedia: RFM is a method used for analyzing customer value. It is commonly used in database marketing and direct marketing and has received particular attention in retail and professional services industries.[1] RFM stands for the three dimensions: Recency - How recently did the customer purchase? Frequency - How often do they purchase? Monetary Value - How much do they spend? Customer purchases may be represented by a table with columns for the customer name, date of purchase and purchase value. One approach to RFM is to assign a score for each dimension on a scale from 1 to 10. The maximum score represents the preferred behavior and a formula could be used to calculate the three scores for each customer. For example, a service-based business could use these calculations: Recency = the maximum of "10 - the number of months that have passed since the customer last purchased" and 1 Frequency = the maximum of "the number of purchases by the customer in the last 12 months (with a limit of 10)" and 1 Monetary = the highest value of all purchases by the customer expressed as a multiple of some benchmark value Alternatively, categories can be defined for each attribute. For instance, Recency might be broken into three categories: customers with purchases within the last 90 days; between 91 and 365 days; and longer than 365 days. Such categories may be derived from business rules or using data mining techniques to find meaningful breaks. Once each of the attributes has appropriate categories defined, segments are created from the intersection of the values. If there were three categories for each attribute, then the resulting matrix would have twenty-seven possible combinations (one well-known commercial approach uses five bins per attributes, which yields 125 segments[2]). Companies may also decide to collapse certain subsegments, if the gradations appear too small to be useful. The resulting segments can be ordered from most valuable (highest recency, frequency, and value) to least valuable (lowest recency, frequency, and value). Identifying the most valuable RFM segments can capitalize on chance relationships in the data used for this analysis. For this reason, it is highly recommended that another set of data be used to validate the results of the RFM segmentation process. Advocates of this technique point out that it has the virtue of simplicity: no specialized statistical software is required, and the results are readily understood by business people. In the absence of other targeting techniques, it can provide a lift in response rates for promotions.

Vertically Differentiated

if buyers agree product A is better than B - Take advantage of consumers' differences in their willingness to pay for quality

which fighter brands were successful

luvs, busch, celeron failure: funtime, ted, saturn

product mix depth

number of versions offered for each product in the line ex. for nutri grain bars- all the flavors

Offensive Strategies: Imitation, Price, Differentiation

Imitation: Samsung imitating leader- apple. Strategy is to imitate rather then produce a better quality, spend less on production so still profitable Price: lower price to beat the leader Differentiation: Find a unique way to differentiate themselves from the company (Strategies if not leader) - Companies can gain much by copying another business's innovation if it's not legally protected. Fast following is often the strategy of choice in industries where first-mover advantages are illusory. Today's startup economy is rife with fast followers, who imitate entrepreneurs' innovations and use their scale or professional marketing organizations to bring imitation products to market more effectively. Even big companies knock each other off. Burger King, for instance, launched a copycat version of McDonald's Egg McMuffin and poked fun at itself by running an ad that showed the King, Burger King's mascot, breaking into McDonald's headquarters to steal the recipe. The tagline for the ad? "It's not that original but it's super affordable." Offering a comparable product at a lower price is a quick way to steal customers from a rival, particularly in industries characterized by elastic demand and highly price-sensitive customers. Nescafé took on Starbucks's Via instant coffee with an aggressive outdoor billboard campaign proclaiming, "Starbucks makes great instant. We make great instant. So why does theirs cost 400% more?" Everyone Loses in a Price War Price wars often devolve into lose-lose situations. The US telecommunications industry offers a sobering example. Following deregulation of the US long-distance telecommunications market in the 1980s, a newly emerged rival, MCI, tried to chip away at former monopolist AT&T's market share by offering consumers lower-priced long-distance calling. When consumers resisted moving away from AT&T because of the hassles involved in switching carriers, MCI began offering switching bonuses. Soon, long-distance customers were bombarded with $100 checks from both companies, inviting them to switch from one carrier to the other. Savvy consumers switched from AT&T to MCI, cashed the check from MCI, and then waited for an incentive from AT&T to switch back. Before long, both companies' profits began to suffer. MCI finally wised up to the folly of this approach and launched its "Friends and Family Plan," offering residential customers discounts when they called other people on the MCI network. This plan turned MCI's customers into its sales force, encouraging them to recruit people they knew to switch to MCI. Given that most customers remained with AT&T, MCI had to offer its discounted rates for only a small percentage of calls placed. Thus, it could reap greater profits from calls outside the network. MCI's stroke of genius came from its realization that AT&T would have trouble matching this program. With its dominant market share, offering discounts for calls within AT&T's network would have carried a much larger price tag for the telecom giant. Thanks to its smaller size, MCI could change tactics far more nimbly than AT&T could. Offering Differentiation Many companies use product and service differentiation to gain advantage in the marketplace and to stop price wars. Giving consumers more reasons to choose an offering, not just its pricing versus the competition's, reduces the price sensitivity of consumers. Undifferentiated products and services become commodities, and consumers rely on price differences to choose from among them, usually opting for the least expensive choice. When a company deploys marketing strategies that convince customers its offering is unique and better than its rivals', it doesn't have to get pulled into a price war that another company starts. In more mature, stable industries, competing firms invest heavily in research and development to differentiate their offerings. But this approach can catalyze a features arms race, in which contestants produce differentiation merely for its own sake versus adding features that deliver real benefits that customers value. Youngme Moon terms this "heterogeneous homogeneity," where all products are different in the category, but their differences are indiscernible to most consumers. A glance at the toothpaste aisle in most supermarkets brings this phenomenon to life. An endless struggle to differentiate products in highly competitive categories has led to augmented products that add costs but fail to generate new value.

According to the article "Developing a Superior Brand Essence Statement" article, a brand image is:

consumers' representation of the brand in their minds

cluster analysis

is a method to group customers based on a set of variables so that customers in one group are similar to each other but are different from customers in another group. For example, if a company decides to segment its customers based on their annual income and the amount of money they spent on the company's product last year, then we can plot each customer in a two-dimensional space, as shown in Exhibit 10. Cluster analysis then attempts to group these customers and determine the number of clusters or groups so that the distance between two customers in a cluster is small, but the average distance between the two groups is large. In Exhibit 10, Cluster A (Segment A) is the group of customers with low incomes but high expenditures on the company's products, while Segment C represents high-income consumers who spend relatively less on the company's products. In general, segmentation is carried out with more than two variables. For example, a firm may decide to segment its customers based on several demographics (e.g., age, income, and occupation) and several purchase behavior characteristics (e.g., RFM). Cluster analysis creates a "distance" metric between these multiple variables and creates groups in a manner similar to the one shown in Exhibit 10.

pyschographic segmentation

lifestyle, personality, activities, interests, opinions

Horizontally Differentiated

If A and B are sold at the same price some will prefer A over B or B over A, opinion

Red Ocean, Blue Ocean Perspective

If the way an existing industry is structured leaves little or no room for profitable strategic maneuvering, managers may decide to find a new game. W. Chan Kim and Renee Mauborgne studied more than 100 years' worth of strategic moves made by firms in competition. They found that trying to outperform the competition in an existing market often ends in futility. The researchers term this type of game a red ocean, because competitors bloody the "water" as they battle to win a greater share of existing demand. In red oceans, demand is stagnant, and the only way to win is to savage the competition—a scenario that no one really wants. For this reason, Kim and Mauborgne recommend looking for so-called blue oceans, new market spaces where competition does not yet exist. These uncontested market spaces offer ample opportunities for companies to create demand through tactics such as attracting new customer segments, expanding the boundaries of an existing industry through revolutionary products or services, reinventing solutions to unsolved problems, or uncovering needs that consumers themselves didn't know they had. Blue oceans hold a greater promise of profitable growth because market demand is expanding and competitors are often slow to dip their toes in. RED OCEAN: compete in existing marketing- beat competition, capture more existing demand, make the value/cost trade off BLUE OCEAN: new market creation - make competition irrelevant, create new demand, improve of value/cost trade off xbox/ playstation: red ocean, blue ocean: nintendo/ low tech/ fun/ family ex. Yellowtail: fun, easy, approachable- amateur wine drinker, fun labels, screwtops - rather then trying to compete against strong wine market, take a different route- blue ocean Brita: Tons of water filter, in attempt to be a more blue ocean, they focused on positioning their product versus bottled water where they can stand out more Changing the Ancient Game of Winemaking The wine industry had long been dominated by so-called Old World producers from France, Italy, and Spain. New World competitors from Australia, the United States, and Chile challenged Old World producers' market leadership. Rather than taking on entrenched competitors on the existing battlefield, where the incumbents held all the advantages, the newcomers altered the value proposition and the marketing mix (product, price, promotion, and place strategies) they used to sell their wine, in order to make the wine game more favorable to them.10 The new companies recognized that ancient traditions, restrictive industry regulations, and national and international laws bound Old World producers to a particular business model that also created daunting entry barriers. These customs and regulations dictated almost every aspect of winemaking, including harvesting, production, marketing, and quality control. Producers were locked into inflexible distribution channel agreements with multiple partners that extracted a portion of the value along the way and left little for the winemaker. To avoid going head-to-head with Old World opponents, New World wine companies deployed a five-pronged strategy. First, they pursued a different target market: unpretentious people who liked beer and spirits and who had felt intimidated by the wine industry's mystique. The companies sought to make brands that such consumers would see as fun, not stuffy or snooty. Second, the new companies experimented with new grape-growing and winemaking technologies that enabled them to produce larger quantities at lower costs, with less variability in the final product. They built huge vineyards to boost their grape-growing capacity so they could readily adapt their product lines when consumers' tastes changed. Third, they differentiated themselves with innovative "wine-in-a-box" packaging, which gave consumers a convenient way to transport and store wine. Screw-off caps replaced corks, which lowered costs further and eliminated wine spoilage. Fourth, the New World firms controlled the entire distribution chain, from grape growing to product placement in retail chains. This control increased their bargaining power with retailers, reduced distribution costs, and ensured quality. The cost savings allowed them to price their wines lower, achieving price points equivalent to the price of a six-pack of beer. Fifth, they built strong brands for their products. The small size of the Old World vineyards put constraints on their marketing budgets, so building a global brand was beyond their reach. New World brands leveraged their size advantage to invest heavily in strengthening their brands. By 2007 New World wine producers claimed as many as 14 of the world's top 20 wine brands.

market penetration

a marketing strategy that tries to increase market share/ existing product among existing customers (present, present)

Which is not true for fighter brands

typ offer completely diff benefits than a company premium brand is true: lower price, companies should spend less effort managing them and they should not receive as much promo support

Targeting Strategies

undifferentiated (Mass) marketing, differentiated (segmented), concentrated, micromarketing (local, individual)

Defensive Strategies: Positive, Parity, Inertial, Retarding

(for leaders) positive- retain customers by leveraging your strengths parity- retain by mitigating rival strength inertial- slow rate of loss by leveraging your strength retarding- slow rate of loss by mitigating rivals strengths ex. Realizing its dual weaknesses in this area-hindered from offering better pricing because of its higher cost structure and now realizing that its customers wouldn't value its price cuts as much as Optus's - Telstra adopted a parity strategy in which it created strategically chosen, but quite limited, points of price superiority over Optus. That is, while Optus on average offered lower prices, Telstra's prices were lower on some routes and at certain times of day. This meant that the lower-priced carrier for a given customer depended on that individual's specific calling patterns-a muddied situation in which consumers were less likely to take the big step of switching phone companies on the basis of price. Another area of weakness that Telstra needed to counter, this one with a retarding strategy, concerned what might be called the "punishment factor." The model suggested that people would switch more quickly to Optus if they were angry with Telstra and wanted to "teach Telstra a lesson." Telstra moved swiftly to assuage these people with a television advertising campaign that implicitly acknowledged the company's service shortcomings but emphasized its vow to improve. The anthemic jingle proclaimed,"Good, better, best. We will never rest. Until our good is better. And our better best." In mounting this campaign, Telstra leveraged the incumbent's typical advantage of advertising clout: Six months after Optus entered the market, Telstra still had a market share 12 times that of its rival and could afford a major advertising effort. this retarding strategy wouldn't have worked if Telstra hadn't backed up its message with improved service. Telstra considered and rejected one inertial strategy. The customer data suggested that consumers' perceptions of reliability were an important driver in the rate of share loss: "Using Optus might be risky" was one of the strongest factors in people's decisions about whether to switch quickly to the new provider. Telstra wondered if it could leverage this risk aversion, as well as its long-established reputation for dependability, to slow customers' defections to Optus. But the market research also showed that customers felt they could easily switch back to Telstra if Optus did not live up to its promise, so Telstra decided not to make any marketing moves based on customers' differing perceptions of reliability.inertial strategy that the company did use is one available, in some form, to many incumbents. Based on consumers' positive perceptions of Telstra as a homegrown company, the incumbent (in its advertising copy, press releases, and product support) played up its Australian roots

(Sustainable) Competitive Advantage

- Competing differently from rivals constitutes the heart of marketing strategy. A competitive advantage is something a company does that has value for consumers and that competitors cannot match. A sustainable competitive advantage is one that is likely to persist over time despite changing market and competitive conditions. Firms build competitive advantage by doing something better than other companies do, doing something that the others don't do, or doing what rivals can't do. - To assess their company's competitive advantage, managers should determine what makes their products or services unique. Do the firm's offerings have a cost, product, or service advantage that sharply distinguishes them from others'? Does the company have marketing advantages, such as advertising efficiencies gained from a large market share or big marketing budgets? Does the company already have an established, strong brand? Does it have enduring relationships with customers and with key complementors? Does it boast superior R&D expertise to keep new products flowing through the development pipeline? Does it have employees who excel at delivering customer service? ex. brand loyalty, innovation, network effect, locked-up supply, proprietary information, scale, intellectual property, location

Competition and Marketing Myopia

- Disrupting Photography - The business landscape is littered with companies that failed to anticipate and respond effectively to disruptive innovations. Kodak is a case in point. The company entered bankruptcy after failing to take seriously the threat presented by digital photography. Surprisingly, the technology that enables digital photography was invented at Kodak, but managers who saw it as inferior to film photography shelved it. Fearing that Kodak would cannibalize its own high-margin film business if it launched the inferior technology, Kodak let Nikon, Sony, and Canon enter the market. Today, digital photography accounts for the vast majority of all pictures taken. - Even now, a new disruption is shaking up the photography business. Cameras embedded in smartphones, initially dismissed as inferior substitutes for digital cameras, are gaining ground. Consumers love them because it's so easy to take pictures and upload them to social media sites. As smartphone manufacturers have continuously improved their cameras, the quality differential between a camera phone and a digital camera has shrunk. More and more consumers see no need to spend big on a digital camera when their mobile device does the job for them. - Marketing Myopia- companies that have a short sided/term strategy, what to sell to products rather then what the consumers needs are Kodak invented the first film camera- marketing myopia- thought about creating film (product), instead of needs- storing memories, missed opp to develop first digital camera b/c wasn't in line with their current product Blockbuster didn't think about consumer need : making entertainment convenient, netflix did

Marketing resources and capabilities

- Resources are the hard and soft assets a company owns, such as its product designs and performance, brands, retail establishments, and customer relationships. - Capabilities (also referred to as competencies) are activities that the firm performs proficiently and that are valued in the marketplace, such as managing customer relationships, providing customer service, and enticing customers with inbound marketing communications. - Marketing resources and capabilities constitute important building blocks in a firm's business model—a framework that captures the way a company creates value in the marketplace, the resources and capabilities that enable it to deliver that value to customers, and the financial engine and profit formula that help it capture some of that value in the form of profits. Successful companies build a stable of marketing resources and capabilities that support their business model and that are ideally distinctive from and superior to those of competitors

5 hazards of a fighter brand

-Cannibalization: fighter brand have annoying tendency to also acquire customers from a company's own premium offering, Positioning a fighter brand presents a manager with a dual challenge: You must ensure that it appeals to the price-conscious segment you want to attract while guaranteeing that it falls short for current consumers of your premium brand you must match your fighter brand's low price with equally low perceived quality. 2. Failure to Bury the Competition- organizations actually overprotect their premium brands from cannibalization at the expense of the combative potential of their fighter brand. 3. financial losses- Fighter brand success depends on more than initially matching the price and value of your intended enemy; you must also achieve those goals while attaining a sustainable level of profits. 4. missing the mark with customers- DNA of a fighter brand is therefore potentially flawed from the very outset because it is derived from company deficiencies and competitor strengths, not a focus on consumers. 5. Management Distraction- Launching a fighter brand while selling a premium brand is like fighting a war on two fronts. An organization must divide its resources at the very time when it should perhaps concentrate its efforts on the business at hand. Rather than going off to war with a fighter brand, should a manager stay and defend the homeland?

Offensive Strategies: Comparative Advertising

Comparative Advertising: , go directly against the leader to challenge the leader. DON'T WANT TO do this as the leader, Smaller companies can sometimes benefit by using comparative advertising to launch a direct frontal attack on the market leader. The blind taste or use test is a case in point. In 1975, for example, Pepsi's brand team found a compelling way to differentiate its product when blind taste tests showed that people preferred the taste of Pepsi to that of its archrival, Coca-Cola. The team took the Pepsi Challenge taste test on a national tour, setting up booths in supermarkets and on street corners, inviting customers to taste for themselves. The effort energized Pepsi sales, catapulting the brand into the number one slot for the best-selling soft drink in American supermarkets. More recently, the pizza giant Domino's used a similar strategy to combat rival Subway by demonstrating that people prefer Domino's oven-baked sandwiches. Subway tried to stop Domino's from running the campaign, sending a cease-and-desist letter. Domino's retaliated with an ad in which the company's president, David Brandon, reinforced his product's positioning by cooking the letter in a pizza oven and quipping, "I was going to burn the letter, but everything is better when it's oven-baked."

Market Positions

Competitors occupy different positions in the marketplace - market leaders= dominating their industries and enjoying large market shares. - market challengers= aggressively pursuing strategies to gain market share and unseat the market leader. - market followers= content to let others lead while they doggedly mimic rivals' innovations. - market nichers= delivering specialized products designed to serve small segments in the marketplace that competitors have ignored. - Understanding market positions can also help managers plan their own strategies. Which market position does the firm want to occupy? Which resources and capabilities (e.g., deeper understanding of customers or development of new technologies) will it have to acquire or strengthen to gain and hold that position? Ex. Market leader= google, challenger= bing, follower= yahoo, nicher= technorati (only user generated content)

3. Positioning

Define value proposition for target segments, develop action plan The final step is positioning, or formulating the firm's value proposition for the target segments, and developing an action plan for them. In our example, the company may position its high-priced tea as a premium/luxury product designed for the consumer with good taste, while its low-priced tea could be positioned as a good value for the smart consumer. This positioning is communicated to consumers through the ways in which the product is designed, packaged, distributed, and advertised.

RFM implications

Depending on the nature of your businesses, you might increase or decrease the relative importance of each RFM variable to arrive at the final score. For example: In a consumer durables business, the monetary value per transaction is normally high but frequency and recency is low. For example, you can't expect a customer to purchase a refrigerator or air conditioner on a monthly basis. In this case, a marketer could give more weight to monetary and recency aspects rather than the frequency aspect. In a retail business selling fashion/cosmetics, a customer who searches and purchases products every month will have a higher recency and frequency score than monetary score. Accordingly, the RFM score could be calculated by giving more weight to R and F scores than M. For content apps like Hotstar or Netflix, a binge watcher will have a longer session length than a mainstream consumer watching at regular intervals. For bingers, engagement and frequency could be given more importance than recency, and for mainstreamers, recency and frequency can be given higher weights than engagement to arrive at the RFE score.

Ansoff Matrix

Different ways a company can grow as a company because given time your product will become obsolete and you'll need opps for growth Organize thoughts on growth - 2 dimensions New or existing product New or existing segment Market Penetration, Product development, Market development, Diversification

Every brand must clearly identify all the levels of the BES pyramid to be successful

FALSE more importantly, not all people make it to the top of the pyramid. The pinnacle of the pyramid-based BES is the way in which the brand connects at a very deep indelible level with the target consumer and helps them achieve their ultimate purpose. Very few brands reach this level. (doesn't mean they aren't successful)

Eliciting Segments from consumer preferences : multi-attribute model

Ideally, segments highlight how customers in different groups differ in their needs and preferences. There are two broad approaches in performing such a preference-based segmentation. The first approach, , explicitly asks consumers about their preferences for a variety of attributes that a manager may consider relevant for their purchase decision. For example, in choosing a mobile phone, consumers may consider the brand (e.g., Apple or Samsung), screen size, data storage capacity, price, and the number of apps available for the operating system. A survey would then ask consumers to divide 100 points across these attributes in the order of importance, and then group consumers with similar preferences. As a result, we may find that 30% of consumers find price to be the most important variable, that 20% choose mobile phones primarily on the basis of brands, and so on. While this method is simple, it is often difficult for consumers to articulate the relative importance of various product attributes.

The goals of segmentation include

Identify groups that clearly differ from one another Identify groups that are internally homogeneous

Segmentation, Targeting, and Strategy Formation at the Gas Pump

In the early 1990s, price wars at the gas pump threatened the profitability of oil companies, as gas stations often matched prices to the penny, which significantly eroded their margins. Oil companies inherently assumed that consumers were extremely price-sensitive, and that small differences in price would drive them away to competitors. To better understand its customers and their price sensitivity, Mobil conducted a study of 2,000 customers and uncovered the following five segments. Road Warriors (16% of buyers). Customers, such as salespeople, who used their cars as part of their profession. They typically drove between 25,000 and 50,000 miles a year, tended to be middle-aged men with higher incomes who preferred credit cards to cash, liked to buy food during their visit, and would use the car wash from time to time. True Blues (16% of buyers). Brand-loyal and occasionally station-loyal consumers, with moderate to high incomes, who preferred to pay in cash and buy premium gas. Generation F3 (27% of buyers). Upwardly mobile young consumers who drove often and habitually purchased a lot of snacks. Roughly 50% were under 25 years old. Homebodies (21% of buyers). Stay-at-home mothers who valued gas station proximity, either to their homes or to their normal travel routes for their children's activities. Price Shoppers (20% of buyers). Customers on a budget who rarely bought premium gas and were usually not brand- or station-loyal. What surprised Mobil was that only 20% of customers were Price Shoppers, and they spent an average of $700 per year. In contrast, Road Warriors spent as much as $1,200 annually on gas and were not particularly price-sensitive. Instead of low prices, these customers were looking for well-lit gas stations that were open long hours, offered snacks and drinks, and made it easy for them to get in and get out quickly. This insight led Mobil to focus on the 80% of the non-price-sensitive market. Mobil redesigned its gas stations with better lighting, kept many of its stations open 24 hours, and offered a larger variety of snacks and drinks, which were high-margin items. It also started Mobil Speedpass, which was linked to customers' credit cards and offered contactless payment at the pump. Once Mobil decided to focus on segments that were not price-sensitive, it increased its average price at the pump by two cents a gallon. These changes led to more than a 20% increase in sales and an extra $118 million in annual earnings.

Finding a profitable competitve space

Industry Analysis A thorough analysis of the six forces can help managers understand the constraints of the current game being played in their industry and craft strategies for changing that game to make it more attractive. For example, if many substitutes for a product exist, a firm can differentiate its offering to enhance its appeal to consumers to a degree that they view it as nonsubstitutable. If suppliers become too powerful, companies can vertically integrate—producing the raw materials they need in-house and developing their own branded ingredients. Industry Competitors Analyzing an industry's competitors can help managers assess the intensity of its competitiveness (low, moderate, or high). Industries characterized by highly intense competition often witness price wars, big spending on advertising and marketing, and frequent new-product introductions—all of which can sap players' profits. By contrast, industries that aren't as intensely competitive can be more profitable for players that venture into them. Potential Entrants The entry of new players into an industry raises the intensity of competition, putting profits under pressure.8 Thus, industries that have formidable entry barriers (e.g., high startup costs), where the costs of entering the industry are high, and minimal exit barriers (e.g., write-off and closure costs), where the costs of exiting the industry are low, are the most attractive. That's because few firms are drawn into the industry, and companies that are struggling can easily leave rather than try to stay and eke out a profit. Marketers can use numerous strategies to erect entry barriers that discourage other companies from entering the industry. For instance, they can build brand equity, beef up their marketing communications, and strengthen customer loyalty. Building brand equity takes time and money, resources that newcomers may have in short supply. Industries characterized by large media budgets are often unattractive to startup firms with meager budgets, as they cannot compete in a communications war. Locking customers into long-term contracts can make it hard for new firms to steal those customers, further decreasing the industry's attractiveness. Substitutes When substitutes for a firm's offerings exist, consumers can easily shift to them. To retain customers, companies may lower prices or step up their marketing spending to create a perception of differentiation. Both moves drive down profitability. The worst type of industry to compete in is one in which there are perfect substitutes for a product or service. Firms confronted with many substitutes need to differentiate their offerings to command a price that will deliver a profit. If they don't differentiate, customers will buy from the company that has the lowest price, making it impossible for other businesses to compete profitably. Patents and trademarks can help firms differentiate their products from substitutes and protect them from copycat imitations. A strong brand with established equity with consumers can also help transform a commodity product or service into a differentiated offering. Buyers The amount of power that buyers have in an industry also determines profitability. Buyers can be the end users of a product or service, such as the consumer who uses a manufacturing company's laundry detergent. Or they can be other middleman companies, such as retailers or distributors that bring the product or service to the end user. Suppliers The amount of power that suppliers have in an industry also determines its profitability. A company's suppliers include enterprises that sell the raw materials needed to manufacture its products or the processes needed to deliver its services. Suppliers also include the employees who make a company's products or deliver its services. Complements Many offerings can be bundled with other products or services (complements) to deliver greater value to customers. The consideration of complements as a sixth force was added to the model by industry researchers in the 1990s. These bundles, made up of complementary offerings from various firms, can help each company involved attract and serve more customers or sell more of their own products. Imagine how much less peanut butter would be sold without jelly, or how many fewer hotel rooms would be sold in Orlando, Florida, without direct flights from major cities. A web of complementary products well marketed by others can enhance sales for any one of the companies contributing a part of the bundle and thus boost that firm's profitability

which strategy slows customers from leaving by leveraging your strengths

Inertial

All Nutrition/Nutraline

Mission: Best in class omnichannel experience company- consistency through channels, shift from sales focus to consumer focus Create value/vertical integration Loyalty Understand consumers: design better products, needs - process, why use/why stop Segments Relevant Background: $210 total market// 25% 20% market growth per year Import restrictions/retailer stock South America (possible growth) Product mix offering Competitors: Pharmacy/Grocery Big Picture: Sales force Informal interviews/observation Secondary Research: commercial reports Focus Groups Segments Plans for survey Details: First group too large Mixed sample (professional vs. not, imbalance of contribution) (incomplete sample) (unrepresentative- didn't use non users) Small Sample Size (3 focus groups and 1 large) Self-run but pretended it was a third party (psychologist) - improved over time, better data over time 30 dollars per person, cheap data - could have spent more money for better data Did some prep but questions not consistent with goal Focus Group Themes- Look at the Data Skeptics - reputable information Sales people untrusted Uncertainty - lack of info, ingredients Price sensitivity (want not need) Word of mouth- athletes Varying motives Segments Too specific Building off of customer persona: too restrictive Not different enough Given the segments what decisions as a marketer would you make: spend resources on those who are not price insensitive, develop different promos for different segments: ex. Promote this is not steroids, create a loyalty program or lower cost for price sensitive, high performance users, hire or partner with gyms/ athletic people, provide more expensive option with training for newbies/health and keep cheap option for high performance

Under Armour

No competitive advantage with products: everyone caught up in the technology Brand competitive advantage: Brand Loyalty Under Armour wants to be #1, but wants to continue with this small/ limited market- they are inconsistent / can't achieve both- need to move away from just hardcore athletes- very limiting Lack of strategy Under Armour Brand: Performance, Innovation, Technology, Winning, Under Dog, Quality, Intensity Brand Extensions: Footwear (cleats with an ankle support, basketball shoes) tracking devices, skiing/baseball, womens, kids,gold. Life style (trench coat), Sunglasses, running gloves (snot dripping), Jerseys, Sleep wear Brand Extensions Passed on: Sports drink, Medical apparel, Cycling, Work Wear, Style Focus Brand Extension Logic: Not dilute brand, need unique benefit (existing benefits), Money, Size, Large Size of the pie Does Under Armour have a clear strategy for growth? NO! CEO was unsure/ lacked clarity of where to grow and how much to grow. Their brand extensions versus what they passed on were contradicting brand fit. Losing identity. Competitive Analysis - Early Days Market Leader: Nike Market Challenger: Adidas Marker Follower: Reebok, Russel, Champion Market Nicher: Under Armour (IN THE BEGINNING), Lululemon In the beginning Under Armour's competitive advantage - INNOVATION/ technology- first to create sweat-wicking product

Undifferentiated (Mass) Marketing

Some markets may be undifferentiated, meaning that there are virtually no differences in the needs of customers. In these markets, companies may decide to adopt a mass-marketing approach by designing the same product for everyone. Large global firms such as Coca-Cola tend to follow this approach by appealing to the largest number of customers via broad distribution and mass communication. This approach allows firms to reach the largest potential market at low cost because of economies of scale in product design and marketing. The risk, however, is that competitors (e.g., Snapple or Poland Spring) are able to nibble at the edges of large firms like Coca-Cola by carving out a niche for themselves.

Defensive Strategies: Marketing Support, Customer Relationships, Market Coverage, Parity

Strategies as the leader Steadfast Marketing Support Many market-leading incumbents become complacent, particularly when their products reach the maturity phase of their life cycle and sales growth slows or even sputters. Managers often milk mature brands for profits, treating them as cash cows and reducing marketing support for these offerings. This leaves the mature brands vulnerable to competitive attack. To sustain their brand equity and loyalty and protect them from competitive attack, companies should maintain marketing support for such brands. Strong Customer Relationships An incumbent's installed base of customers is a tremendous asset. Actively managing and nurturing customer relationships, even long-standing ones, constitutes smart defense. Creating incentives for customers to lock into longer-term contracts, offering complementary products and services, and connecting customers to each other to create network effects are all moves that increase switching costs. Many car companies, for instance, have learned that online brand communities and car clubs build relationships among people who have bought their vehicles. These consumer-to-consumer (C2C) relationships provide valuable social benefits and make it harder for drivers to switch brands when the time comes to replace their cars. Market Coverage Incumbents can also leverage their scope and size by covering the market with a broad line of offerings that address major market segments' needs. Covering the market closes off opportunities for market nichers by eliminating gaps—unmet needs—that they would otherwise strive to fill. For instance, consumer-goods manufacturers use line extensions to add new flavors, sizes, product delivery methods, or colors to their product line and lock up incremental shelf space in distribution outlets. Launching fighter brands, lower-priced brands designed to combat, and ideally eliminate, low-priced competitors while protecting the company's premium brands, is another market-coverage strategy. The consumer-goods giant Procter & Gamble deployed this strategy in the diapers category to protect its premium Pampers brand, and Anheuser-Busch used it in the beer category to protect its Budweiser brand. These companies' fighter brands—Luvs and Busch, respectively—serve as deterrents against disruptive competitors introducing less expensive offerings. Winning without a Fight The best defensive strategies are those that help companies win without having to fight at all. Examples include price-match guarantees (which diminish the incentive for competitors to lower their prices to steal customers), signals warning rivals of a firm's intentions (such as preannouncing a product launch), and public commitments to future courses of action (such as intentions to invest in new manufacturing facilities). These and other strategies can discourage competitors from making aggressive moves.

Value and vulnerability

Valuable-vulnerable: retain them Valuable- not vulnerable: maintain margins Not valuable- vulnerable: encourage their departure Not valuable - not vulnerable: make them valuable or vulnerable

A good positioning statement answers which questions?

What segment is being targeted? What benefits (needs) does the segment seek (have)? Why should customers buy this product?

How to write a BES

While each company has its own format, there are some consistent attributes of BESs that tend to be common across companies. Those elements are: 1. basic needs 2. rational benefits and proof that the brand can deliver on the rational benefits (reasons to believe), 3. emotional benefits, 4. activation of self (or ultimate purpose), and 5. personality.

Star (BCG Matrix)

a company with a large share/ valuable products of a growing market

Volvo illustrated its value of omtanke by:

creating the living sea wall

Product Life Cycle

introduction, growth, maturity, decline most growth, profit= growth peak = maturity OBJ: Gain Awareness, Stress differentiation, Maintain Brand Loyalty, Harvesting Deletion Competition: Few, More, Many, Reduced Product: One, More versions, Full product line, Best Sellers Price: Skimming (highest in beg and lowers)/Penetration (low price from start) Promotion: Inform/ Educate, stress points of difference, reminder, minimal promo Place (distribution): limited, more outlets, max outlets, fewer outlets

In the article "Why Your Customers' Social Identities Matter" the author states that: (select all that apply)

Consumers existing social identities can impact how they use products Social identities can be foster through creative processes such as designing an ad Brands can create social identities to foster favorable consumer behaviors Consumers existing social identities can impact which products they pick Frito-Lay's innovative Crash the Super Bowl contest, held since 2007, asks consumers to develop their own TV ads for Doritos and post them on a website. The best, as decided by voters on the site, are broadcast during the football game. Presenting a clear goal to the group participants—scoring the top spot on USA Today's Ad Meter assessment of ad effectiveness for the evening To put it another way: We didn't need to find consumers with certain attitudes as a precursor to specific behaviors. Our "manufactured" social identities led them straight to those behaviors. And because we got these results with a brand that had not existed in consumers' minds 20 minutes earlier, we believe these effects are within the reach of every marketer If social identity shapes decisions, then a company's marketing strategy should encourage customers to tune in to an identity that inspires behaviors like visiting a website, going into a store, buying the product or service, getting more value from it, telling others about it, and helping design a better product. first step is to shift from the traditional focus on an individual's attitudes to a focus on the individual's social self

According to the article "Why Your Customers' Social Identities Matter," customers have stable social identities.

FALSE!

Re-positioning

Existing consumers will leave the brand because it is no longer communicating the identity they wish to present. Many customers abandoned the Liz Claiborne women's fashion brand when discount clothing retailer J.C. Penney acquired it. Ford's acquisition of the esteemed Jaguar vehicle line disillusioned many of Jaguar's faithful owners, who left to purchase other luxury brands. • Existing consumers will fight against the brand's repositioning by co-creating their own meaning for it, thereby changing its position in the minds of other consumers. Porsche owners fought back against the Cayenne by claiming it was not a real Porsche and by ridiculing its owners within the brand community. They excluded Cayenne owners from the community's cultural rituals, refusing to wave to or acknowledge Cayenne owners on the road as part of the Porsche family. This maintained Porsche's male-oriented positioning.25 • Existing customers will stay with the brand, but devalue it due to its loss of identity signaling power. Existing customers will struggle with the new identity meanings associated with the brand and how it reflects on them. This may cause them to lower the price premium they are willing to pay for the brand and may make them question their loyalty to it. • New customers will not be attracted to the repositioned brand because the memory trace of the old brand positioning is too strong and unappealing. Oldsmobile failed to attract younger buyers to its new cars, despite its "Not Your Father's Oldsmobile" campaign, because Generation X continued to view the brand as positioned to their parents and grandparents. Despite EILEEN FISHER's attempts to attract younger women with more fitted styles and edgier advertising, women in their 30s and 40s continued to associate it with older and fuller-figured women and stayed away. Similarly, yoga apparel company lululemon has had trouble with a new product line for men, who don't want to be associated with "a woman's brand."

Consumers' Social Identities

Idea in brief The issue: often consumer behavior turns out to be very different from what marketing research predicts Why: The social group that customers identify with when they encounter a product or brand influences how they react to it. Subtle changes in context can make customers shift their social identities quickly, triggering drastically diff responses How to address: market research and the design of customer experiences should take social identity into account, shaping customer responses by reinforcing a particular identity, redefining what it means to have that identity, or finding means to have that identity. Companies can also quickly create new identities that will inspire targeted behaviors.

consumer needs

Self Actualization Esteem love/belonging Safety physiological

Why are observable characteristics used in segmentation?

They are easy to identify and target

Define your position from top to bottom

Value Positioning, Benefit Positioning, Feature Positioning

The data used to assess the effectiveness of Volvos Omtanke campaign showed that consideration of its cars increased, but sales did not.

false

which companies successfully introduced downstream innovations`

hyundai (lose your job= can return car), orica (data for safety), brita (position next to water bottles rather then filters)

product mix length

refers to the total number of items a company carries within its product lines ex. for cereal the length is all bran , fruit loops, frosted flakes

Historically, Volvo's brand has been known for _____________, but they wanted to increase the extent to which consumers also associated them with _________.

safety; luxury

product mix width

the number of product lines an organization offers ex. cereal, crackers, warm breakfast, bars

The shifting source of competitive advantage

upstream to downstream network effects, reduce customer costs and risks

Describing your position

value positioning- b/c your worth it, so much riding on ur tires Benefit positioning- softest diaper wrap baby in comfort and protection, remove more plaque feature positioning- 3/4 moisturizing cream, no antibiotics or hormones

Eliciting Segments from consumer preferences : Conjoint Analysis

works around the problem of difficulty to articulate the relative importance of various product attributes, by forcing consumers to make tradeoffs between several pairs of products that differ on a carefully designed combination of attributes. For example, would you choose a house with a large kitchen but a small backyard or a similar house with a small kitchen but large backyard? Your choice tells researchers about your preferences and what you consider more important. Repeated paired comparisons of this kind can be used to infer how a consumer weighs different attributes. Consumers can then be grouped into different segments based on the similarity of their preferences.

Strategic Group Mapping

- Position maps are valuable to understand how consumers view your products and help you understand your competitors. - To analyze the competitive landscape, managers visually represent the competitive field by constructing a topological map identifying strategic clusters—groups of industry rivals that share similar characteristics, such as products, target markets, price points, quality levels, and points of differentiation - marketing managers can: • Identify their closest competitors—those mimicking their company's strategies and posing the biggest threat • Identify future contenders by illuminating competitors in adjacent strategic groups that might easily shift closer to the firm's strategic group • Analyze barriers limiting movement among groups to anticipate future competitors • Identify untapped opportunities—ones where competition is slim—that may be fertile for expansion, particularly if those opportunities have the potential to serve unmet consumer needs

A Dynamic Process Model for Managing Marketplace Competition

Analyze the games and their players, choose the right game or change the game to reshape the playing field, execute offensive/defensive competitive moves - The most talented marketing strategists excel at two things: choosing where to play, and figuring out how to win on their selected playing field. In the process model shown in Exhibit 1, the choice of where to play (that is, which competitive context will be appropriate for the company) is informed by a thorough analysis of a firm's business model, its competitors, and the game's landscape, including what the firm and its competitors bring to the table, as well as the opportunities and constraints of the competitive context. Ideally, "the right game" will be one in which the resources and capabilities that the firm brings to bear are superior to those brought by the competition and are well aligned with what customers value. Once managers have chosen the right game, they execute offensive and defensive moves in the marketplace, while simultaneously observing and analyzing rivals' moves. These actions either reinforce the existing game or reshape the playing field in ways that create new advantages for one or more competitors.

2. Targeting

assess attractiveness of each segment, select segments to target The next step is targeting, or selecting segments that the firm wants to focus on for its products or services. This is done based on the attractiveness of segments (such as size and potential profitability), intensity of competition, and a firm's capability to serve customers in each segment. The tea company might decide to focus only on the price-insensitive customers by offering a premium product. For these customers, the company might offer an attractive tin containing loose tea mixed with bits of fruits and flowers, or a tin filled with individual, pyramid-shaped linen sachets. Or it might aim for both segments by offering two different tea products, perhaps targeting the price-sensitive segment with tea packaged in a box containing simple, flow-through paper teabags.

geographic segmentation

country, region, city, urban/rural, climate

How did cialis beat viagra

introduced new product feature (duration)

Branded House v. House of Brands

Branded house- Apple ipad, macbook, phone - same brand attached to all the products House of brands- Gap, Old Navy, Athleta, banana republic- bunch of brands diff cust May be easier for UA to take a house of brands approach rather than repositioning- ex. new brand for athleisure Within companies, there is often an internal struggle when it comes to brands: diversify or standardize? The decision about how to brand numerous products within a given company depends on many factors and is extremely important in determining resource allocation and organizational structure. Newer and smaller companies striving for brand recognition typically choose the branded-house strategy, focusing resources on increasing awareness of a single brand name across all products. This is certainly efficient in terms of managing the marketing mix and creating a consistent image, along with messages and values. However, this strategy can limit a company's ability to target a wide audience, limit product expansion opportunities, and leave a company with a tarnished reputation should a crisis affect just one product within the branded group. Larger, more diversified companies often choose the house-of-brands strategy, creating distinct brand lines that target broad consumer audiences. Some companies even encourage internal competition, as Procter & Gamble does by owning Joy, Dawn, and Ivory dish detergents. While this might risk cannibalizing the products' own individual market shares, it also creates the opportunity to dominate a particular product category. Naturally, this strategy requires greater resources to manage a diverse product portfolio with multiple product images and accurate messaging. Today, however, given the dynamic markets resulting from increasing rates of globalization, consolidation, and acquisition, most companies now employ hybrid, or house-blend, strategies. Disney is a great example of the use of the house-blend strategy. It expanded its G-rated movie focus to an R-rated audience through its acquisitions of Touchstone and Miramax. Google is also a good example. With the acquisition of YouTube by Google's parent company Alphabet, maintaining the YouTube brand despite its otherwise uniformly Google-branded products.

Example RFM

Champions are your best customers, who bought most recently, most often, and are heavy spenders. Reward these customers. They can become early adopters for new products and will help promote your brand. Potential Loyalists are your recent customers with average frequency and who spent a good amount. Offer membership or loyalty programs or recommend related products to upsell them and help them become your Loyalists or Champions. New Customers are your customers who have a high overall RFM score but are not frequent shoppers. Start building relationships with these customers by providing onboarding support and special offers to increase their visits. At Risk Customers are your customers who purchased often and spent big amounts, but haven't purchased recently. Send them personalized reactivation campaigns to reconnect, and offer renewals and helpful products to encourage another purchase. Can't Lose Them are customers who used to visit and purchase quite often, but haven't been visiting recently. Bring them back with relevant promotions, and run surveys to find out what went wrong and avoid losing them to a competitor.

A lesson in brand essence

Coca-Cola is a favorite example of emotional branding. Despite its long history in the United States and its global popularity, the Coca-Cola Company made a bold move in 1985. Believing the Pepsi Challenge results, the company spent more than $4 million on "the biggest taste test ever" and created a new formulation of Coke, with which they were convinced they could soundly beat Pepsi. When New Coke was introduced, there were protests, nearly 8,000 complaint calls per day, organized letter-writing campaigns, and threats of a class action lawsuit. Ten weeks later, the company reintroduced their original formula as Coca-Cola Classic, sending the company's stock price to a new 12-year high. While market researchers had measured for taste, they had obviously failed to measure the emotional attachment customers had to Coca-Cola. marketing support

Offensive Strategies: First-Mover Advantage

Many firms hurry to be the first to market with an innovation, believing they can gain a first-mover advantage. Being the pioneer can sometimes give a company time to establish brand clout and build customer loyalty. Gillette, for example, tries hard to be the first razor a young man uses when he starts shaving. Gillette sends a birthday greeting and a free razor to men across America on their eighteenth birthday, in an effort to establish loyalty so strong that competing brands can't break it. First movers may also gain an opportunity to lock in customers, distribution channels, or complementors (providers of compatible goods or services). In product categories with large switching costs, being first can enable a company to capture customers and keep them, owing to the "stickiness" of the ensuing relationship. In industries where distribution channels are limited or where retailers or other partners carry only one brand, getting in early can block other competitors from entering. Locking up complementors, as Apple did in the early days of smartphone applications (apps), provides a natural advantage over the competition. Developing an app is a time-consuming and costly endeavor, and the different standards required by Apple versus Google's requirements for its Android network forced app developers to choose which rival they wanted to work with first. Apple's earlier entry into the app marketplace gave it a significant head start.

Individual Marketing- mass customization

On the other extreme, companies can customize their products and services for individual customers. A firm's ability to collect immense amounts of data and reach customers in real time through the internet can enable one-to-one marketing and mass customization. Thus companies are able to offer customers the ability to design or personalize their own products on a mass scale, effectively turning customers into a "segment of one." Levi's offers customizable jeans, Adidas allows you to personalize your shoes, Google's Gmail serves up ads based on the content of an individual's emails, home improvement retailer Lowe's can match a paint color to a fabric swatch, and Shutterfly allows customers to design their own holidays cards, calendars, and photo books. IBM even offers a cloud-based medical platform that draws on extensive medical research and patient cases.17 One example, the Watson for Oncology solution based on data compiled by IBM's Watson supercomputer, can be accessed through any computer or tablet and offers personalized recommendations on cancer treatments for oncology patients based on their medical records and insurance. But mass customization is not suited for all products. It is appropriate either for technology products and services where the cost of a new product version is ...

sub-branding

Some brands choose to launch a sub-brand to reach out to new target markets. Others use their existing brand as an endorser brand. For example, managers of the luxury fashion brand Marc Jacobs worried that repositioning to appeal to customers looking for a lower price point would alienate existing customers. Instead, the firm appealed to lower-income consumers with a sub-brand dubbed Marc by Marc Jacobs, essentially "protecting" the identities of customers wearing the higher-end line. Still other firms launch a new brand to position an existing brand's products to a new audience. When The Coca-Cola Company and PepsiCo could not get men to buy Diet Coke and Diet Pepsi, they created brands—Coke Zero and Pepsi Max—which featured masculine packaging in black and silver cans and advertising that celebrated masculine ideals.

According to the article "Developing a Superior Brand Essence Statement," a BES does which of the following (select all that apply)?

captures the intrinsic nature of the brand that makes it unique to the target describes the holistic nature of a brand Serves as a beacon to direct and align firm operations It is a document, picture, video, or some other communication vehicle that captures, usually in words and visuals, the intrinsic nature and indispensable quality that makes the brand unique, compelling, and meaningful to the target. the BES goes far beyond marketing communications to describe the holistic nature of the brand. In sum, the BES serves as a beacon that directs and aligns all firm operations. It is much more than simply a messaging statement and for most firms, it serves to summarize the brand's unique positioning in the marketplace.

product development

company growth by offering modified or new products to current market segments (future, present)

Rfm is not for new customers

its for existing

In the article "Why Your Customers' Social Identities Matter" the experiment run by Philip Zimbardo involved what context?

prisons

Game theory

provides a useful lens for analyzing a competitive game, comprises sets of concepts aimed at understanding the decision-making processes of individuals or firms in interactive situations of competition with complementary and conflicting interests, use the acronym PARTS as a framework for analyzing games (P)layers- companies that compete and supporting actors who contribute- supplies, customers, collab, complementors (A)dded values: incentives and disincentives in the game that move competitors toward and away from actions, benefits/costs of playing the game (R)ules of engagement- laws, contracts, customs, pracs that guide players action (T)actics - the possible actions each competitor has at its disposal (offensive and defensive moves) (S)cope- boundaries of played- the market segment served or cust need served

Strong Brand Criteria

• Memorable. Brand elements, particularly brand names, should be easy to say, read, spell, and remember. Short brand names like Tide, Silk, Dove, Bold, and Gain do this well. Kotler and Keller suggest asking the following questions: How easily do consumers recognize and recall the brand? And when? At both purchase and consumption? • Meaningful. A good brand name may also position a product well if it suggests the corresponding category, product ingredient, purpose, or type of customer that might use it. Consider Beautyrest mattresses, Drano drain cleaner, DieHard batteries, Caress soap, and Hungry-Man dinners. All brand elements must also be credible. • Likable. The brand elements should leave consumers with a positive feeling about the brand. All elements should be aesthetically pleasing. Certainly, the trade characters of the Jolly Green Giant (representing canned and frozen vegetables) and the Snuggle Bear (representing soft, huggable fabric and clothing) accomplish this well. • Transferable. Can the brand element introduce new products in the same or different categories? Does it add to brand equity across geographic borders and market segments? Given the global nature of 21st-century marketing, creating truly global brands can be quite challenging (see the • Adaptable. How adaptable and updatable is the brand element? In other words, can the name, logo, or tagline become dated quickly? Does it have only regional meaning? • Protectable. How legally defensible are the brand elements? Can you trademark (protect) your name, mark, or trade character? Interestingly, when a class of products becomes widely known by the original brand name of a specific product, the brand name can become a generic name and the original owner can lose trademark protection. The words nylon, aspirin, linoleum, and zipper all once were protected brand names. Although many routinely refer to facial tissues as Kleenex (in the United States) and use the word Hoover as a verb meaning "to vacuum" (in England and Australia), those words have not lost trademark protection primarily due to defensive actions taken by their owners to clarify the proper use of the trademark.

Theodore Levitt explains that marketing myopia may in part stem from which of the following myths of continuous growth? (select all that apply)

There is no such thing as a growth industry, only companies organized and operated to create and capitalize on growth opportunities, industries that assume they are riding some automatic growth escalator invariably descend into stagnation There are four conditions that usually guarentee this cycle: The belief that growth is assured by an expanding and more affluent population The belief that there is no competitive substitute for the industry's major product Too much faith in mass production and in the advantages of rapidly declining unit costs as output rises Preoccupation with a product that lends itself to carefully controlled scientific experimentation, improvement, and manufacturing cost reduction

Positioning statements serve as a guide for marketing mix decisions

True

demographic segmentation

age, income, gender, generation, marital status, family size, occupation, education, ethnicity, religion

Concentrated (niche) marketing

concentrate on one, or a few, segments or niches

differentiated marketing

decide to target several different market segments, separate offers for each

Each segment can have

different targeting strategies

Brand Positioning

the art of staking out a particular piece of mental real estate for a brand in the consumer's mind by crafting and communicating a differentiated positioning statement. Brand positioning provides a strategic roadmap for creating powerful, resonant, and unique messages to help a company's products and services stand out amid the cacophony of the marketplace. A consumer stands before a set of supermarket shelves, staring at the myriad choices in the bottled water category. Before she can choose one, there's a multitude of questions to answer. After all, in today's marketplace, water is much more than just H2O. Sparkling or still water? Vitamin-enriched or energy-boosting? With zero calories or sweetened and fruit-flavored? A small bottle for lunch boxes or extra-large for long-term storage? In a slender glass bottle evoking fine art or packaged in lightweight, eco-friendly plastic? Beyond these functional differences, each brand tells its own unique story. Fiji claims that equatorial trade winds purify its water. Perrier describes how its mineral water's bubbles originate on the Languedoc plain in southern France when rainwater seeps into the ground and combines with volcanic gases. Poland Spring touts its Maine roots, while Crystal Geyser highlights its alpine origins near Mount Shasta. Dasani and Aquafina, respectively owned by The Coca-Cola Company and PepsiCo, attempt to hide their corporate parent affiliations and their less glamorous sources (the public water supply). Instead, Dasani boasts about its environmentally conscious bottle design and its reverse-osmosis filtering process. Aquafina highlights its trademarked HydRO-7™ seven-step purification process. Each brand tries to stake a particular claim of superiority—the cleanest, freshest, purest, healthiest, most natural, most environmentally sensitive, most socially conscious, most fashionable—that resonates with a particular type of consumer. The consumer's choice will depend on how strongly she perceives that a particular brand offers the best solution to her needs. Is she a mother who cares about her children's health? Is she a hostess throwing an important dinner party? Is she preparing for surviving a natural disaster? Is she a concerned citizen of the world? Each brand is positioned to appeal to a different customer need. Ted Levitt on Positioning Marketing experts often regard Theodore "Ted" Levitt, an economist, Harvard Business School professor, and former editor of the Harvard Business Review, as a founder of modern marketing. His provocative Harvard Business Review articles lambasted marketing managers for their shortsighted views of their businesses.3 Levitt argued that companies should not define themselves by the products they sell, but rather reorient themselves to their customers' perspective by defining themselves through the value they produce in consumers' lives—the "value proposition." He realized that consumers attach value to a product or service in proportion to its perceived ability to solve their problems or meet their needs. Stating that there was no such thing as a "commodity product," Levitt understood that even something as basic as water could be differentiated. He suggested that a company's deep understanding of its customers is the key to creating a value proposition that allows consumers to perceive a product as a differentiated solution that meets their specific needs, rather than as a commodity. Levitt declared that commodity products are simply failures of marketing. The problem, he claimed, does not lie with the products themselves, but exists within the minds of consumers: "There is no such thing as a commodity, only people who act and think like commodities." In Levitt's view, managers do not need to change the products they are selling; instead, they need to fix their positioning in consumers' minds. In today's marketplace, we see brands like Dole, Chiquita, and Purdue creatively differentiating products in categories once viewed as commodities (fruit and poultry).

Boston Consulting Group (BCG) Matrix

Where we should dedicate our resources among the product mix as a company, Organize all products were selling into 1 of 4 categories according to GROWTH RATE and MARKET SHARE

Deciding which firm to target is based on (select all that apply):

target segments' attractiveness Company capabilities Differential advantages (competitive analysis)

Benefits of STP

to the organization- Sustainable Profit Growth: identification of unfulfilled needs, better product design, more targeted promos, increased customer satisfaction to the customer- compelling customer experiences: convenience and time savings, tailored products and services, relevant offers, personalized experience

Resource examples

Customer relationships, CRM database (internal data)- effectively target, Brand equity- help with premium price, distribution channel relationships- can limit competitors access to marketplace, Retail stores and e-commerce websites- deliver offerings, Patents and trademarks- legal protection, marketing communications creative platform- right brand positioning/ strong creative/ delivered through right media, market communications and media budget

There is usually only one acceptable benefit based segmentation scheme for a given context

False

Personal Branding

For many people, personal branding has become almost inextricably tied to how their careers develop and evolve. Although personal branding is a relatively new concept, in a broad sense, it is really not much different from product branding. It is the process by which you as a person bring all the aspects of yourself into alignment: your characteristics, personality, strengths, and values. It is how you market yourself to others, and this necessitates establishing concrete goals, positioning relative to your "competition," and choosing methods for measuring how your "brand" is perceived. Some describe personal branding as "the logical extension of . . . previous brand forms." • Discover. First, you need to know (or figure out) who you are and what you want to do in life, with a focus on your strengths, passions, and goals. Then create a development plan that aligns your short-term and long-term goals and then craft a personal marketing plan. • Create. Traditional ways to create your personal brand include a business card, professional portfolio, résumé, cover letter, and list of references. Nontraditional ways include a video résumé, LinkedIn profile, blog, a personal website, Twitter account, and accounts on various other social networks. Ensure that the content, including pictures and text, is concise, compelling, and consistent with how you want to represent yourself. • Communicate. To communicate your brand properly through self-promotion, make sure your story is clearly developed and target it toward people who will be interested in what you have to say. Depending on your audience (hiring managers, teachers, clients), you may want to adjust your materials accordingly. • Maintain. The brand that people see has to grow along with you. Update everything you have created to reflect your new accomplishments: jobs, awards, press articles, and client victories, to name a few.

Benefit Laddering

How to Use Laddering in Qualitative Marketing Research Laddering is a qualitative marketing research technique, which seeks to understand why people buy and use products and services. You find out which product features are important to product users and end with users' emotional benefits. You use the technique to create ads, positioning messages, and develop new products. Thomas J. Reynolds and Jonathan Gutman developed and introduced laddering in 1988, based on Gutman's Means-End Theory of 1982. They describe product attributes, consequences, and values. Product attributes produce consequences that produce personal meaning (values) for product users. In other words, product features produce functional and emotional benefits, which are personal to the product user. People buy features and benefits that satisfy emotions and beliefs. And they rationalize buying with features and functional benefits. There are four levels to the features-benefits-emotions chain. They are, Features Functional benefits Higher Order benefits Emotional Benefits Each level links to the next level. Each level influences buying behavior. All four levels are important in understanding why people buy a product or service. The feature is specific. It performs a specific job. The functional benefit is the outcome of the feature. It is tangible. The higher benefit is what the functional benefit delivers. It is a general benefit. The emotional benefit satisfies feelings and beliefs. Features and functional benefits deliver emotional benefits. Emotions are powerful motivators that drive wants or needs. Emotions are general but real. They are personal. They are conscious and subconscious. Features and functional benefits are specific. Features are important. They rationalize and justify buying. Features and benefits are easy to talk about. It is what business buyers use to rationalize buying, even though emotional benefits influence them too. You can create powerful ads and positioning with the results from laddering. How to Conduct It A laddering question sequence usually consists of four questions related to a feature. Sometimes, there may be more than four questions. First, you ask about a feature. "Which feature do you like best?" Second, you listen to the answer, and then you ask about the feature's functional benefit. "What does the feature do?" Third, you listen to the answer, and ask about the higher benefit of the functional benefit. "What does the functional benefit do for you?" Fourth, you listen to the answer again, and ask about the emotional benefit of the higher benefit. "What does the benefit do for you?" Once you've exhausted a feature, ask about other features and their functional, higher, and emotional benefits. The technique asks about a specific product feature and poses a series of why questions that builds on previous answers. Note...don't use the word why. It puts people on the defensive. Ask why in different ways. Using why is a mistake often seen in laddering. Laddering works well with depth interviews. Interviewing one person provides focus, depth, and privacy. You want to interview people who use the product or service category. You can develop laddering chains at the category, brand, or product level. An Example Here is an example about sports scores on cell phones. Moderator, "What do you like best about your phone?" Respondent, "Getting real-time sports scores" [feature] Moderator, "What is important about that?" Respondent, "I know what's happening right away." [functional benefit] Moderator, "What does that do for you?" Respondent, "I can tell my friends, as soon as I know." [higher benefit] Moderator, "What does telling your friends right away do for you?" Respondent, "I am the go-to guy for sports. My friends expect me to know. It is what we talk about." [emotional benefit] In this example, sports scores on a cell phone lead to emotional benefits of social acceptance and friendship. The same feature may lead to a different emotional benefit for a different person. It depends on the person. Emotional benefits are personal.

1. Segmentation

Group customers based on similar needs, profile each segment The first step of the process, segmentation, groups customers with similar needs into customer segments and then determines the characteristics of customers in those segments. For example, a company that sells packaged tea leaves might uncover two customer segments—price-insensitive customers and relatively price-sensitive customers. These price-sensitive customers may have lower incomes but perhaps buy tea frequently and know a lot about the product category.

Capabilities examples

Market sensing- anticipating market forces/trends for future plans, customer relationship management - reduce acquisition costs and max customer profitability, brand management - enhance asset value, Channel relationship management - reduce channel conflict, product and service R&D- superior design, market research, marketing communications, pricing flex and expertise

Tools to analyze the market

Positioning map/ strategic group mapping, Industry analysis, Market position, (sustainable) competitive advantage, Competitive strength assessment, Resources and capabilities

how did orica gain a competitive adv?

Provided customers greater guidance on how to use their product

competitive-strength assessment

Report card of you and your competitors, quantitative Importance weight * Strength rating

Which of the following is NOT a potential hazard of segmentation identified by the article Rediscovering Segmentation?

Segmenting consumers different ways for different managerial decisions

The article rediscovering segmentation argues that

The right way to segment depends on how the information is going to be used

Brand Report Card

Another tool to measure brand strength comes from Kevin Lane Keller, who developed the Brand Report Card33 to evaluate how a brand stacks up on the ten traits that he believes the world's strongest brands share. Keller recommends that organizations rate their brands on a one-to-ten scale on each of the following attributes: • Ability to Deliver Benefits. The brand creates an engaging customer experience and delivers benefits that customers desire. • Relevance. Elements of the brand, such as the type of person who uses the brand, are modified to fit the times. • Value Perception. The nature of the product—for example, premium versus household staple—influences its price. • Positioning. The brand clearly communicates its similarities to and differences from competing brands. • Consistency. Marketing communications don't send conflicting messages over time. • Brand Architecture. All brands in the portfolio work together logically. • Brand Equity. All marketing activities and channels communicate the same message about the brand, solidifying the brand's identity. • Brand Meaning. Managers know consumers' different perceptions about the brand. • Internal Support. Companies consistently invest in building and maintaining brand awareness. • Measuring Brand Equity. Companies use a formal brand-equity-management system. Keller recommends that organizations regularly rate their brands across these attributes and chart them on a bar graph to stimulate discussion among cross-functional teams to identify areas for improvement. Brand managers can also apply these criteria to their competition and perform a competitive analysis from a consumer perspective and/or management perspective. Although extensive, this report card is a good representation of how all of the concepts introduced thus far tie together. It also illustrates well how branding must be integrated into the broader marketing function to be effective. Maintaining a strong brand means striking the right balance between continuity and change across all these dimensions. Such a report card can prove quite useful in identifying the actions needed to maximize brand equity across a product's life cycle.

Brand Models

The BrandDynamics Pyramid, originally developed by Millward Brown, depicts brand building as a series of steps. Starting with presence (i.e., familiarity), a brand strengthens as it moves up to relevance (applicability to the consumer's needs), performance (belief that the product delivers on its promise), advantage (belief that the product has an emotional or rational advantage over other brands), and finally to bonding (consumers forming rational and emotional attachments to the brand to the exclusion of most others). Similarly, the Brand Resonance Pyramid, which was developed by Kevin Lane Keller, is a widely accepted model that also views brand building as a series of steps.7 At the lowest level or the base of the pyramid, brand managers must first ensure that customers can identify the brand and associate it with a specific product class or need. This can be measured by how often and easily customers think of a brand under various consumption or purchase situations. Next, the product must meet the customer's functional needs through performance, while also meeting his or her social and psychological needs by linking the product to a host of tangible and intangible brand associations. Moving up, successful products must elicit positive customer responses (subjective opinions and evaluations, and also emotional responses and reactions) with respect to the brand. Finally, achieving "resonance" establishes a product or brand's relationship with consumers such that they feel a personal connection to the brand. Only when the customer has been successfully steered from identity to meaning to response to relationship, Keller believes, can brand response be converted into the intense and active loyalty that creates significant brand value

Brand Strategy

Unsuccessful Brand Extensions In an attempt to capitalize on its strong brand name, Harley-Davidson released several short-lived new products carrying the company name in the 1990s, including a perfume and a line of wine coolers—products clearly the antithesis of the motorcycle maker's strong, tough brand identity. The company soon realized that overextending its brand with these "softer" products could severely damage the company's loyal (and very vocal) customer base. In the early 1980s, Levi Strauss tried to introduce higher-end, more formal men's clothing (Levi's Tailored Classics and Levi's Action Slacks and Suits). Sales never caught on, probably because Levi is so well known as a "denim only" company and because it strayed too far outside its core competency and people's perception of the brand. Levi Strauss did realize great success, however, with its Dockers brand, establishing separate but complementary positioning for the line. Campbell's is also considered a "narrow brand," known primarily for its Campbell's Soup. When the company tried to enter the spaghetti-sauce market under the Campbell's brand name, it realized little success until creating the Prego brand—again, a line that is separate but complementary to its main focus on soup