CHAPTER 3: BRAND POSITIONING & VALUES

1. Learning Objectives

After reading this chapter, you should be able to

1. Identify the four components of brand positioning.

2. Describe the guidelines in developing a good brand positioning.
3. Explain brand mantra and how it should be developed.
4. Understand internal branding and brand audit.

2. List of Contents: Chapter 3 Brand Positioning & Values

1. Identifying and Establishing Brand Positioning

1.1 Basic Concepts
1.2 Target Market
1.3 Nature of Competition
1.4 Points-of-Parity and Points-of-Difference

2. Positioning Guidelines
2.1 Defining and Communicating the Competitive Frame of Reference
2.2 Choosing Points-of-Difference
2.3 Establishing Points-of-Parity and Points-of-Difference

3. Defining Establishing Brand Mantras

3.1 Core Brand Associations
3.2 Brand Mantras

4. Internal Branding

5. Brand Audit
5.1 Brand Inventory
5.2 Brand Exploratory

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3. Description of Contents:

1. Identifying and Establishing Brand Positioning

1.1 Basic Concepts

 Brand Positioning:

Brand Positioning is at the heart of the marketing strategy. It is the “act of designing the
company’s offer and image so that it occupies a distinct and valued place in the target customer’s
minds” (Philip Kotler). According to the CBBE model, deciding on a positioning requires
determining a frame of reference (by identifying the target market and nature of competition) and
the ideal points of parity and points of difference brand associations.

 Determining a frame of reference

 What are the ideal points-of-parity (POP) and points-of-difference (POD) brand
associations vis-à-vis the competition?
 According to the CBBE model, marketers need to know:
o Who the target consumers are?
o Who the main competitors are?
o How the brand is similar to these competitors?
o How the brand is different from these competitors?

1.2 Target Market

 A market is the set of all actual and potential consumers of a product who have the sufficient
interest in, income for and access to a product.
 Market segmentation divides the market into distinct groups of homogeneous consumers who
have similar needs and consumer behavior, and who thus require similar marketing mixes.
 Market segmentation bases are: Behavioral, Demographic, Psychographic, and Geographic.
Market segmentation requires making tradeoffs between costs and benefits.

 Example of the toothpaste market

Four main segments:
1. Sensory: Seeking flavor and product appearance
2. Sociables: Seeking brightness of teeth
3. Worriers: Seeking decay prevention
4. Independent: Seeking low price

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 Criteria for Segmentation

 Identifiability: Can we easily identify the segment?

 Size: Is there adequate sales potential in the segment?
 Accessibility: Are specialized distribution outlets and communication media available to
reach the segment?
 Responsiveness: How favorably will the segment respond to a tailored marketing
program?

1.3 Nature of Competition

 Deciding to target a certain type of consumer often defines the nature of competition.
 Do not define competition too narrowly. For Example, a luxury good with a strong
benefit like CD player equipment may compete as much with a vacation as with other
durable goods like furniture.

1.4 Points-of-Parity and Points-of-Difference

 Points-of-difference (PODs) are attributes or benefits that consumers strongly associate

with a brand, positively evaluate, and believe that they could not find to the same extent
with a competitive brand.
 Points-of-parity associations (POPs), on the other hand, are not necessarily unique to the
brand but may in fact be shared with other brands. There are 2 types:
Category and competitive.

2. Brand Positioning Guidelines

The concepts of points-of-difference and points-of-parity can be invaluable tools to guide
positioning.
Two key issues in arriving at the optimal competitive brand positioning are (1) defining
and communicating the competitive frame of reference and (2) choosing and
establishing points of-
parity and points-of-difference.

2.1 Defining and Communicating the Competitive Frame of Reference

 Two key issues in arriving at the optimal competitive brand positioning are:
 Defining and communicating the competitive frame of reference
 Choosing and establishing points-of-parity and points-of-difference

 Two key issues in arriving at the optimal competitive brand positioning are:
 Defining and communicating the competitive frame of reference
 Choosing and establishing points-of-parity and points-of-difference

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  Defining a competitive frame of reference for a brand positioning is to determine
category membership.
 The preferred approach to positioning is to inform consumers of a brand’s membership
before stating its point of difference in relationship to other category members.

2.3 Choosing POP’s & POD’s

 Desirability criteria (consumer perspective)

 Personally relevant
 Distinctive and superior
 Believable and credible
 Deliverability criteria (firm perspective)
 Feasible
 Profitable
 Pre-emptive, defensible, and difficult to attack

2.4 Examples of Negatively Correlated Attributes and Benefits in Establishing Points-of-

Parity and Points-of-Difference

Low price vs. high quality

Taste vs. low calories
Nutritious vs. good tasting
Efficacious vs. mild
Powerful vs. safe
Strong vs. refined
Ubiquitous vs. exclusive
Varied vs. simple

 Attribute and Benefit Trade-offs

 Price and quality
 Convenience and quality
 Taste and low calories
 Efficacy and mildness
 Power and safety
 Ubiquity and prestige
 Comprehensiveness (variety) and simplicity
 Strength and refinement

 Strategies to Reconcile Attribute and Benefit Trade-offs

 Establish separate marketing programs
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  Leverage secondary association (e.g., co-brand)
 Re-define the relationship from negative to positive

3. Defining Establishing Brand Mantras

To better establish what a brand represents, marketers will often define a brand mantra. A
brand mantra is a short, three- to five-word phrase that captures the irrefutable essence or
spirit
of the brand positioning. It’s similar to “brand essence” or “core brand promise,” and its
purpose
is to ensure that all employees and external marketing partners understand what the brand
most
fundamentally is to represent to consumers so they can adjust their actions accordingly. For
example, McDonald’s brand philosophy of “Food, Folks, and Fun” nicely captures its brand
essence
and core brand promise.
Brand mantras are powerful devices. They can provide guidance about what products to
introduce under the brand, what ad campaigns to run, and where and how the brand should
be
sold. They may even guide the most seemingly unrelated or mundane decisions, such as the
look
of a reception area and the way employees answer the phone. In effect, brand mantras
create a
mental filter to screen out brand-inappropriate marketing activities or actions of any type
that
may have a negative bearing on customers’ impressions of a brand.

3.1 Brand Mantras

 An articulation of the “heart and soul” of the brand, similar to “brand essence” or “core brand
promise”
 Short three- to five-word phrases that capture the irrefutable essence or spirit of the brand
positioning and brand values
 Considerations
 Communicate
 Simplify
 Inspire

 Designing the Brand Mantra

 The term brand functions describes the nature of the product or service or the type of
experiences or benefits the brand provides.
 The descriptive modifier further clarifies its nature.
 The emotional modifier provides another qualifier—how exactly does the brand provide
benefits, and in what way?

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 Brands Emotional Descriptive Brand
Modifier Modifier Functions
Nike Authentic Athletic Performance

Disney Fun Family Entertainment

McDonalds Fun Folks Food

3.2 Core Brand Values

 Set of abstract concepts or phrases that characterize the five to ten most important
dimensions of the mental map of a brand.
 Relate to points-of-parity and points-of-difference.
 Mental map  Core brand values  Brand mantra.

4. Internal Branding
 Members of the organization are properly aligned with the brand and what it represents.
 Crucial for service companies.

5. Brand Audit
 Externally, consumer-focused assessment.
 A comprehensive examination of a brand involving activities to assess the health of the
brand, uncover its sources of equity, and suggest ways to improve and leverage that
equity.
 It includes brand vision, mission, promise, values, position, personality, and performance.

 Importance of Brand Audits

 Understand sources of brand equity
o Firm perspective
o Consumer perspective
 Set strategic direction for the brand
 Recommend marketing programs to maximize long-term brand equity

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 5.1 Brand Audit Steps: Brand Inventory (supply side)
 A current comprehensive profile of how all the products and services sold by a company
are branded and marketed:
 Brand elements
 Supporting marketing programs
 Profile of competitive brands
 POPs and PODs
 Brand mantra
 Suggests the bases for positioning the brand
 Offers insights to how brand equity may be better managed
 Assesses consistency in message among activities, brand extensions, and sub-brands in
order to avoid redundancies, overlaps, and consumer confusion

5.2 Brand Audit Steps: Brand Exploratory (demand side)

 Provides detailed information as to how consumers perceive the brand:
 Awareness
 Favorability
 Uniqueness of associations
 Helps identify sources of customer-based brand equity
 Uncovers knowledge structures for the core brand as well as its competitors

 Suggested Brand Audit Outline

 Brand audit objectives, scope, and approach
 Background about the brand (self-analysis)
 Background about the industries
 Consumer analysis (trends, motivation, perceptions, needs, segmentation, behavior)
 Brand inventory
o Elements, current marketing programs, POPs, PODs
o Branding strategies (extensions, sub-brands, etc.)
o Brand portfolio analysis
o Competitors’ brand inventory
o Strengths and weaknesses
 Brand exploratory
o Brand associations
o Brand positioning analysis
o Consumer perceptions analysis (vs. competition)
 Summary of competitor analysis
 SWOT analysis
 Brand equity evaluation
 Strategic brand management recommendations.

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Case

Case 3.1: Positioning Politicians

The importance of marketing has not been lost on politicians, and, although there are a number
of different ways to interpret their words and actions, one way to interpret campaign strategies is
from a branding perspective. For example, consultants to political candidates stress the
importance of having “high name ID” or, in other words, a high level of brand awareness. In
major races, at least 90 percent awareness is desired. Consultants also emphasize “positives–
negatives”—voters’ responses when asked whether they think positively or negatively of a
candidate. A 3:1 ratio is desired (and 4:1 is even better). This measure corresponds to brand
attitude in marketing terms. The last three decades of presidential campaigns are revealing about
the importance of properly positioning a politician.

George H. W. Bush ran a textbook presidential campaign in 1988. The objective was to move the
candidate to the center of the political spectrum and make him a “safe” choice, and to move his
Democratic opponent, Massachusetts governor Michael Dukakis, to the left and make him seem
more liberal and a “risky” choice. Specific goals were to create a point-of-difference on
traditional Republican issues such as defense, the economy (and taxes), and crime and to create a
point-of-parity—thus negating the opponent’s point-of-difference—on traditional Democratic
issues such as the environment, education, and abortion rights. Having successfully achieved
these points-of-parity and points-of-difference in the minds of the voters, Bush won in a
landslide.

Although the Republicans ran a nearly flawless campaign in 1988, that was not the case in 1992.
The new Democratic candidate, Bill Clinton, was a fierce campaigner who ran a focused effort to
create a key point-of-difference on one main issue—the economy. Rather than attempting to
achieve a point-of-parity on this issue, Bush, who was running for reelection, campaigned on
other issues such as family values. By conceding a key point-of-difference to the Democrats and
failing to create a compelling one of their own, Bush and the Republicans were defeated handily.
Failing to learn from their mistakes, the Republicans ran a meandering campaign in 1996 that
failed to achieve either points-of-parity or points-of-difference. Not surprisingly, their
presidential candidate, Bob Dole, lost decisively to the incumbent Bill Clinton. The closeness of
the 2000 election between Al Gore and George W. Bush reflected the failure of either candidate
to create a strong point-of-difference with the electorate. There was a similarly tight election in

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2004 because neither George W. Bush nor John Kerry was successful at carving out a strong
position in voters’ minds.

The 2008 presidential election, however, was another textbook application of branding as Barack
Obama ran a very sophisticated and modern marketing campaign. Republican candidate John
McCain attempted to create a point-of-difference on experience and traditional Republican
values; Obama sought to create a point-of-difference on new ideas and hope. Their vice
presidential choices helped shore up their needed points-of parity: Joe Biden for Obama offered
trusted seniority; Sarah Palin for McCain, albeit controversial, offered a younger, fresher voice.
The Obama campaign team effectively hammered home his message. Multimedia tactics
combined offline and online media as well as free and paid media. In addition to traditional print,
broadcast, and outdoor ads, social media like Facebook, Meetup, YouTube, and Twitter and
long-form videos were employed so people could learn more about Obama and the passion
others had about the candidate. Even Obama’s slogans (“Yes We Can” and “Change We Can
Believe In”) and campaign posters (the popular stencil portrait of Obama in solid red, white, and
pastel and dark shades of blue with the word “PROGRESS,” “HOPE,” or “CHANGE”
prominently below) became iconic symbols, and Obama breezed to victory.

Source: “Gore and Bush Are Like Classic Brands,” New York Times, 25 July 2000, B8; Michael
Learmonth, “Social Media Paves Way to White House,” Advertising Age, 30 March 2009, 16;
Noreen O’Leary, “GMBB,” AdweekMedia, 15 June 2009, 2; John Quelch, “The Marketing of a
President,” Harvard Business School Working Knowledge, 12 November 2008.

Case 3.2: FRENZ HOTEL

To create a positive brand image, Frenz Hotel needed to sufficiently develop its brand awareness.
Frenz Hotel, founded in 2010, is a Malaysian boutique hotel in Kuala Lumpur that has 86
boutique-style rooms and suites. It aims to combine elegance, modern technology, and luxury.
The motto “Where Guests Become Friends,” is aimed not only at local customers with medium-
to higher-income levels, but also at leisure and business travelers. Although the hotel has won
awards, such as TripAdvisor’s “2012 Travelers’ Choice Award,” customer brand awareness of
this hotel is still relatively low. The hotel has taken a step in the right direction by introducing
itself to Facebook, a move that will encourage close links with fans and help spread its name. In
addition to social networking sites, Frenz Hotel has also become involved with transit advertising
using local taxis. The tagline, “Stay with Frenz,” has been displayed on the back of selected taxis
in Kuala Lumpur. The attractive layout of the ad aims to catch the attention of potential
customers. As of March 2012, Frenz Hotel’s revenue has increased by 15 percent compared to

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2011 totals; guests now need to make their bookings at least a week in advance due to high
demand.

Source: https://www.frenzhotel.com.my.

Collected From: “Strategic Brand Management: Building, Measuring, and Managing Brand
Equity”, Kevin Lane Keller, 4th Edition, PEARSON

Questions:

1. Take financial services as a category and apply the categorization model to it. How do
consumers make decisions regarding whether or not to open an account in a specific
Bank and how do they arrive at their final brand decision? What are the implications for
brand equity management for the Banks and how does it affect positioning?

2. In the beverage market, Coca Cola and Pepsi are the two major rivals. Evaluate the
positioning of each of these brands. Who are their target markets? What are their main
points-of-parity and points-of-difference? Have they defined their positioning correctly?
How might it be improved?

3. Can you think of any other negatively correlated attributes and benefits? Can you think
of any other strategies to deal with negatively correlated attributes and benefits?

4. If you consider yourself as a brand, can you come up with a brand mantra to capture your
positioning?

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