Executive Summary CH7

To develop an effective positioning, a company must study competitors as well as actual and potential customers.

Developing a positioning requires identifying a frame of reference—by locating the target market and the nature of the competition—and the optimal points-of-parity and points-of-difference brand associations.

Industry- and market-based analyses both help uncover competitors and latent competitors. Points-of-difference are those associations unique to the brand that are also strongly held and favorably evaluated by consumers. Points-of-parity are associations not necessarily unique to the brand but perhaps shared with other brands.

Several approaches exist to position a product or service. Less structured, more qualitative approaches are based on concepts such as brand narratives, storytelling, and cultural branding. Market leaders stay number one by expanding total market demand, protecting current share, and increasing market share, even if market size remains constant. Firms that are not leaders can be challengers by attacking the leader and other competitors, or they can be market followers. An alternative to being a follower in a large market is to be a leader in a small market or niche.