MM 3rd Edition Dawn Iacobucci Solutions Manual 1
MM 3rd Edition Dawn Iacobucci Solutions Manual 1
MM 3rd Edition Dawn Iacobucci Solutions Manual 1
CHAPTER 5 – POSITIONING
KNOWLEDGE OBJECTIVES
CHAPTER OUTLINE
TEACHING NOTE: Ask students to say the first words that come to their mind when
the following brands are mentioned: Omega, the Gap, Starbucks, IKEA,
BlackBerry,and Target. Note down their answers on a whiteboard and then discuss
their responses. This activity will help students understand how these companies have
positioned their products in the minds of customers.
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MM – Instructor Manual
Perceptual maps are graphical depictions of the positioning of particular brands with
respect to their competitors. These pictures help marketers envision how customers think
about their brands.
Figure 5.1 shows a perceptual map of four hybrid car models (Toyota Prius, Lincoln
MKZ, Lexus RX450h and Tesla Model S). Brands presented close together are perceived
to be similar (Lexus and Lincoln), whereas brands farther apart are seen as more different
(Prius and Tesla). The Lexus and Lincoln would be preferred by consumer segment 1.
But the customers in segment 2 seek nice luxury at inexpensive prices. Thus, a car
company might not find this position profitable, or the image desirable.
TEACHING NOTE: Students could be asked to draw a perceptual map for five
electronic gadget manufacturers to highlight their competitive positions. Students can
rate these companies on dimensions such as affordability, quality, innovativeness,
durability, and the like.
This figure is a perceptual map of cities in which a large, global hotel company has
resorts. The company wants to know more about its customers’ travel needs, because
they’re trying to redesign some of their vacation packages. The factors considered here
are price, beaches, and points of interest. The map also identifies two customer segments.
Analyzing the map in detail will help understand the hotel’s current positioning and the
needs of its customers.
TEACHING NOTE: The instructor could ask the students to redraw Figure 5.2 by
retaining the price dimension and changing the other dimension to “seasons of the
year.” Ask them to observe the changes that occur in the figure and discuss how this
would impact the positioning of each of the resort.
TEACHING NOTE: Should a firm change its positioning depending on the market?
What are the potential advantages and disadvantages of doing this? Ask students for
their viewpoints and discuss.
2
© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
MM – Instructor Manual
Figure 5.3 contains descriptors for a single service provider, a health club. Patrons have
rated the gym on a number of qualities: the convenience of the location, the variety of the
machines it offers, are there plentiful new machines so that there’s never a long wait, and
finally, whether the staff is helpful, friendly, and trained to give good work-out
instructions. Customers have also given their judgments on the importance of each of the
qualities when choosing a gym. The figure tells us that the gym is conveniently located
but people don’t care much about this attribute. The staff isn’t great, but people are ok
with this too. What people really care about is the number of machines and this particular
gym is not well stocked in that respect. So, the gym has to do something in this regard.
This figure allows us to determine the perceived strengths and weaknesses of Gym 1
compared with gyms 2 and 3. Gym 1 is seen as relatively expensive. On the attribute of
machines, it is dominated by both gyms 2 and 3.
One of the limitations of perceptual maps is that they typically look at only two attributes
at a time.
The figure is a bar chart comparing the three gyms on four attributes – price, location,
staff, and number of machines. This figure shows that there are alternative ways of
conducting a competitor analysis. The graph clearly shows that Gym1 has a competitive
advantage in terms of location, but not in terms of staff or machines.
This figure shows the juxtaposition of product and price. The basic 2×2 matrix shows that
a match of low-low and high-high makes sense. Brands that offer high quality at low
prices and vice-versa have a short life.
This figure shows an analogous 2×2 matrix for promotion and distribution. If a company
promotes broadly and heavily, they are probably looking to move a lot of merchandise,
and so it would be smart to make the goods widely available. Similarly, if a brand has a
more exclusive image and distribution chain, it would make better sense not to overly
promote it.
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© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
MM – Instructor Manual
Figure 5.8 Marketing Management Framework: All 4Ps: Product by Price by Promotion
by Place
The figure suggests eliminating the “low price” and “exclusive distribution”
combinations.
This figure indicates the possibility of eliminating the combinations that involve the
“high price” and “low quality” strategies.
The figure suggests that the “heavy promotions” and “exclusive distribution”
combinations should also be eliminated.
The figure shows that the “good value” purchases—high quality at relatively low prices
—is a position that is hard to sustain.
This figure shows that the “wide distribution” and “light promotion” combinations are
rather inactive strategies.
Figure 5.14 Quality and Price Tend to Realign (see Figures 5.10 and 5.12)
This figure shows that we don’t often see overpriced or good value products. We more
often see “basics” (low price, low quality) or “high-end” products (high price, high
quality).
Figure 5.15 Promotion and Distribution Tend to Realign (see Figures 5.11 and 5.13)
This figure shows that we usually see a match on heaviness of promotion with greater
availability in the marketplace.
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© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
MM – Instructor Manual
This figure shows that many brands may be classified in the extreme upper-left and
lower-right cells—the optimal combinations. But there can be exceptions. Some brands
appear in all the other suboptimal combinations.
There are other management strategies that are consistent with the two basic positioning
strategies proposed.
Michael Treacy and Fred Wiersema in The Discipline of Market Leaders identify three
basic corporate strategies to creating value and achieving market stature:
• operational excellence (Dell and Southwest Airlines),
• product leadership (Johnson & Johnson and Sony), and
• customer intimacy (Nordstrom and Amazon)
In the matrix, operations and products would map roughly onto the low costs and high
quality cells, respectively. Customer intimacy is simply good service so that can be
classified in the high quality cell as well.
Michael Porter in his books on Competitive Strategy discusses generic strategies driven
by keeping costs down and prices competitive, leading by differentiation or when
appropriate, niche positioning. The latter is merely a matter of exclusivity and size, and
the first two can be mapped onto the low price vs. high-quality basic combinations.
Once a company has decided upon its positioning, either for the corporation as a whole,
or for one of its brands, it must be able to communicate succinctly the parameters of that
position to a number of different audiences (to customers, employees, shareholders,
general public, etc.).
5
© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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"In 1773 the tax on tea was imposed. On October 25th the
Mohawks of New York, a band of the Sons of Liberty, were
ordered by their old leaders to be on the watch for the tea
ships; and it was merely the chances of time and tide that
gave the opportunity of fame first to the Mohawks of Boston.
… An 'association' was now circulated for signatures,
engaging to boycott, 'not deal with, or employ, or have any
connection with' any persons who should aid in landing, or
'selling, or buying tea, so long as it is subject to a duty by
Parliament'; and December 17th a meeting of the subscribers
was held and a committee of fifteen chosen as a Committee of
Correspondence that was soon known as the Vigilance Committee.
Letters also were exchanged between the speakers of many of
the houses of assembly in the different provinces; and January
20, 1774, the New York Assembly, which had been out of touch
with the people ever since the Stamp Act was passed in the
year after its election, appointed their Speaker, with twelve
others, a standing Committee of Correspondence and Enquiry, a
proof that the interest of all classes was now excited. April
15th, the 'Nancy' with a cargo of tea arrived off Sandy Hook,
followed shortly by the 'London.' The Committee of Vigilance
assembled, and, as soon as Captain Lockyier, of the' Nancy'
landed in spite of their warning, escorted him to a pilot boat
and set him on board again. … April 23d, the 'Nancy' stood
out to sea without landing her cargo, and with her carried
Captain Chambers of the 'London,' from which the evening
before eighteen chests of tea had been emptied into the sea by
the Liberty Boys. The bill closing the port of Boston was
enacted March 31st, and a copy of the act reached New York by
the ship Samson on the 12th.
{2337}
Two days later the Committee of Vigilance wrote to the Boston
Committee recommending vigorous measures as the most
effectual, and assuring them that their course would be
heartily supported by their brethren in New York. So rapid had
been the march of events that not till now did the merchants
and responsible citizens of New York take alarm. Without their
concurrence or even knowledge they were being rapidly
compromised by the unauthorized action of an irresponsible
committee, composed of men who for the most part were noted
more for enthusiasm than for judgment, and many of whom had
been not unconcerned in petty riots and demonstrations
condemned by the better part of the community. … 'The men
who at that time called themselves the Committee,' wrote
Lieutenant Governor Colden the next month, 'who dictated and
acted in the name of the people, were many of them of the
lower ranks, and all the warmest zealots of those called the
Sons of Liberty. The more considerable merchants and citizens
seldom or never appeared among them. … The principal
inhabitants, being now afraid that these hot-headed men might
run the city into dangerous measures, appeared in a
considerable body at the first meeting of the people after the
Boston Port Act was published here.' This meeting, convoked by
advertisement, was held May 16th, at the house of Samuel
Francis, 'to consult on the measures proper to be pursued.'
… A committee of fifty, Jay among them, instead of one of
twenty-five, as at first suggested, was nominated 'for the
approbation of the public,' 'to correspond with our sister
colonies on all matters of moment.' Three days later these
nominations were confirmed by a public meeting held at the
Coffee House, but not until a fifty-first member was added,
Francis Lewis, as a representative of the radical party which
had been as much as possible ignored. … At the Coffee House
again, on May 23d, the Committee of Fifty-one met and
organized; they repudiated the letter to Boston from the
Committee of Vigilance as unofficial," and prepared a response
to another communication just received from Boston, by the
famous messenger, Paul Revere. In this reply it was "urged
that 'a Congress of Deputies from the Colonies in General is
of the utmost moment,' to form 'some unanimous resolutions …
not only respecting your [Boston's] deplorable circumstances,
but for the security of our common rights;' and that the
advisability of a non-importation agreement should be left to
the Congress. … The importance of this letter can hardly be
exaggerated, for it was the first serious authoritative
suggestion of a General Congress to consider 'the common
rights' of the colonies in general. … The advice of New York
was followed gradually by the other colonies, but even before
a Continental Congress was a certainty, the Committee of
Fifty-one, with singular confidence, resolved that delegates
to it should be chosen, and called a meeting for that purpose
for July 19th. … Philip Livingston, John Alsop, James Duane,
and John Jay were nominated as delegates to be submitted to
the public meeting, July 19th. The people met accordingly at
the Coffee House, and after a stormy debate elected the
committee's candidates in spite of a strong effort to
substitute for Jay, McDougall, the hero of the Liberty Boys."
This election, however, was not thought to be an adequate
expression of the popular will, and polls were subsequently
opened in each ward, on the 28th of July. The result was a
unanimous vote for Jay and his colleagues. "Thus, fortunately,
at the very inception of the Revolution, before the faintest
clatter of arms, the popular movement was placed in charge of
the 'Patricians' as they were called, rather than of the
'Tribunes,' as respectively represented by Jay and McDougall."
G. Pellew,
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chapter 2.
Mrs. M. J. Lamb,
History of the City of New York,
volume 1, page 768.
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B. J. Lossing,
Life and Times of Philip Schuyler,
volume 1, chapters 17-18.
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"On Sunday, the 24th of April, 1775, the news of the battle of
Lexington reached the city. This was the signal for open
hostilities. Business was at once suspended; the Sons of
Liberty assembled in large numbers, and, taking possession of
the City Hall, distributed the arms that were stored in it,
together with a quantity which had been deposited in the
arsenal for safe keeping, among the citizens, a party of whom
formed themselves into a voluntary corps under the command of
Samuel Broome, and assumed the temporary government of the
city. This done, they demanded and obtained the keys of the
custom house, closed the building and laid an embargo upon the
vessels in port destined for the eastern colonies. … It now
became necessary to organize some provisional government for
the city, and for this purpose, on the 5th of May, a meeting
of the citizens was called at the Coffee-House, at which a
Committee of One Hundred was chosen and invested with the
charge of municipal affairs, the people pledging themselves to
obey its orders until different arrangements should be made by
the Continental Congress. This committee was composed in part
of men inclined to the royalist cause, yet, such was the
popular excitement at the time, that they were carried away by
the current and forced to acquiesce in the measures of their
more zealous colleagues. … The committee at once assumed the
command of the city, and, retaining the corps of Broome as
their executive power, prohibited the sale of weapons to any
persons suspected of being hostile to the patriotic party. …
The moderate men of the committee succeeded in prevailing on
their colleagues to present a placable address to
Lieutenant-Governor Colden, explanatory of their appointment,
and assuring him that they should use every effort to preserve
the public peace; yet ominous precautions were taken to put
the arms of the city in a serviceable condition, and to survey
the neighboring grounds with a view to erecting
fortifications. … On the 25th of June, Washington entered
New York on his way from Mount Vernon to Cambridge to take
command of the army assembled there. The Provincial Congress
received him with a cautious address. Despite their
patriotism, they still clung to the shadow of loyalty; fearing
to go too far, they acted constantly under protest that they
desired nothing more than to secure to themselves the rights
of true-born British subjects. The next morning Washington
quitted the city, escorted on his way by the provincial
militia. Tryon [Governor Tryon, who had been absent, in England
since the spring of 1774, leaving the government in the hands
of Lieutenant-Governor Colden, and who now returned to resume
it] had entered it the night before, and thus had been brought
almost face to face with the rebel who was destined to work
such a transformation in his majesty's colonies of America.
The mayor and corporation received the returning governor with
expressions of joy, and even the patriot party were glad of
the change which relieved them from the government of Colden.
… Meanwhile, the colony of New York had been ordered by the
Continental Congress to contribute her quota of 3,000 men to
the general defence, and four regiments were accordingly
raised. … The city now presented a curious spectacle, as the
seat of two governments, each issuing its own edicts, and
denouncing those of the other as illegal authority. It was not
long before the two powers came into collision." This was
brought about by an order from the Provincial Congress,
directing the removal of guns from the Battery. Shots were
exchanged between the party executing this order and a boat
from the ship of war "Asia"; whereupon the "Asia" cannonaded
the town, riddling houses and wounding three citizens.
"Hitherto, the governor had remained firm at his post; but
finding his position daily growing more perilous, despite the
pledges of the corporation for his personal safety, he
determined to abandon the city, and took refuge on board the
'Asia.'"
Mary L. Booth,
History of the City of New York,
chapter 16.
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chapter 7.
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volume 2, pages 251-252.
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