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3.0 Product Planning It is very important

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3.0 The importance of Business
Position

3.1 Product
Planning

It is very important to
understand the positioning of the product before entering the market. Product
positioning is a very important tool for an effective marketing strategic
planning. Product positioning creates an image of the company’s products in the
mind of consumers, highlighting the most important benefits that differentiate
the product from similar products in the market. Product positioning starts
with identifying the specific, niche market segments to target. After
segmenting the target market by demographic and psychographic qualities, all
marketers must understand the needs of the customers, this will help them
define the target segments and also the product positioning this helps the
business meet particular needs in the market segment. In this Dissertation I
have added a questionnaire to see all the different kind of consumers and
business owners there are and to see how they target the needs of the
consumers. Marketers must keep an eye on the competition while considering
positioning elements of their marketing strategy.

The next stage is how to
communicate the differentiated offerings to the identified niche market
segments. This is possible by selecting the appropriate communication channels
that are tailored to connect with the identified target audience when they will
be most open to these messages. So for example having advertisement shown on TV
and also billboard so that the business can communicate with the consumers.

The business should include
the product positioning across all sides of the business, including
manufacturing and customer service in order to ensure reliability of the
positioning from the consumer’s side. Using strong product positioning is a key
component to the success of the Marketing Strategy and to meeting overall
corporate objectives.

3.2 Brand Positioning 

Having your brand relevant to
the target market is very important. Brand positioning is when you are serving
a need or want that your target market is aware of. If the product or service
needs solves a problem that the target market is not aware of the business or
company would need to educate them and show them the problem so that it can get
fixed. Positioning
for your market. Brand positioning is defined as the conceptual place you want to
own in the target consumer’s mind. You can easily draw your own market
positioning chart by identifying two important factors and positioning product
offerings around them. A brand’s position is the set of perceptions,
impressions, ideas and feelings that consumers have for the product compared
with challenging products. Marketers plan positions that give their products
the greatest advantage in selected target markets, and they design marketing
mixes to create these planned positions.( See Appendix 3) This is important
when setting your own business having a perceptional map ready you can see what
type of things you wil be targeting different consumers.

In planning their
positioning, marketers often prepare perceptual maps that show consumer
perceptions of their brand versus competing brands on attributes that are
important to the consumer, whether functional or symbolic.

3.3 Brand Loyalty

Having a brand positioning and also a market
decision it is very important to fix the decision with the overall message.
Having a strong brand positioning are the one with the single focused message,
one that’s easily adjust by the market. If the brand message is not been
promoted properly the message becomes weak, and much less effective. Having a
loyal customer base can help a business push past its competitors and give it
the competitive advantage it needs to succeed in the marketplace.

Companies with strong brand loyalty will see
customers frequently buy the products or services, regardless of changes in
price or convenience.

Having higher sales than those without brand
loyalty, companies that have successfully established a loyal following can
enjoy a growing customer base as well. Loyal customers have the potential to
turn into open advocates and brand ambassadors for a company. Satisfaction with
a business will drive them to spread brand awareness and refer new customers,
effectively providing a company with costless advertising.

4.0 Marketing Mix

The marketing mix is one of
the most famous marketing terms. The marketing mix is the tactical or
operational part of a marketing plan. Marketing Mix are the set of tools that a
company uses to check its marketing objectives in the target market they are
known as the 4ps in marketing they are Product, Price, Promotion and also
Place.

Product is all about the
variety the quality and design of the brand the packaging the design and also
the features all customers look at the product first if the item is likable
they have an interest at looking more in to it. “Product means the goods-and-services combination the company
offers to the target market.” (Kotler and Armstrong (2010).

Price is about is all about
the discounts the allowance the payment period and also the credit terms. Price
is the amount the consumer must exchange to receive the offering. (Solomon et
al (2009).

Promotion is the advertising
the PR the sales force and the product promotion. Place is the location,
transport, assortments. “Promotion includes all of the activities marketers
undertake to inform consumers about their products and to encourage potential
customers to buy these products.” (Solomon et al (2009).1

5.0
Kotler’s Five Product Level model provides businesses with a recognized method for organizing the
product portfolio to target various customer segments. This enables them to
analyses product and customer profitability (sales and costs) in a structured
way.2 “According to Philip Kotler, who is an
economist and a marketing guru, a product is more than a tangible ‘thing’.3(Kotler)
A product meets the needs of a consumer and in count to a real value
this product also has an abstract value.

5.1. Core Product

This is
the basic product and the focus is on the purpose for which the product is
intended. For example, an umbrella will protect you from the rain.

5.2. Generic Product

This
signifies all the qualities of the product. For a umbrella it is about how the
material and shape of the product is.

5.3. Expected Product

This is
about all features the consumer expects to get when they purchase a product. So
the umbrella it should protect them from the rain it should be strong for windy
days not too heavy.

5.4. Augmented Product

This is
all about the additional factors which sets the product apart from the
competition. And this mainly involves brand identity and image. Is umbrella in
style, does the color stand out But also factors like service, warranty and
good value for money play a major role in this.

Moreover,
in the marketing of a product, there are three distinct levels, the third of
which is the augmented aspect. The first two levels include the core benefit
and the actual product. The core customer benefit describes the value a product
offers to consumers.( Appendix 4)

New
Product Development (NPD) will take in to account the consumer’s preference for
benefits over features by considering research into their needs. NPD delivers
products which offer benefits at the core, actual and augmented levels.

5.5. Potential Product

This is
about expansions and transformations that the product may undergo in the
future.

The competition between all businesses mainly focuses on the
individualism of the augmented product. “Competition is determined not so much
by what companies produce, but by what they add to their product in the form of
packaging, services, advertising, advice, delivery (financing) arrangements and
other things that can be of value to consumers”.4
(Kotler) All five levels of the products add value for the customer. The more
production companies make at all levels the more they have a chance to be
unique.

6.0 BCG Model

In 1968 Bruce Henderson
created this BCG Chart to help all organisations with the task on helping them
to analyse their product line or portfolio. This Model helps to assess the
products on two dimensions. The first dimension focuses on the products general
growth within the market. The second dimension measures the entire products market
share to the largest competitor in the industry. Analysing products in this way
provides a useful insight into the likely opportunities and problems with a
particular product. Products are classified into four distinct groups, Stars,
Cash Cows, Problem Child and Dog.

Stars (high share and high growth)

Star products all have rapid
growth and dominant market share. This means that star products can be seen as
market leading products. These products will need a lot of investment to retain
their position, to support further growth as well as to maintain its lead over
competing products.

Cash Cows (high share, low growth)

Cash cows don’t need the
same level of support as before. This is due to less competitive pressures with
a low growth market and they usually enjoy a dominant position that has been
generated from economies of scale.

Dogs (low share, low growth)

Product classified as dogs
always have a weak market share in a low growth market. These products are very
likely making a loss or a very low profit at best. These products can be a big
drain on management time and resources.

Problem Child (low share, high growth)

These products are in a high
growth market but do not seem to have a high share of the market. The could be
reason for this such as a very new product to the market

A completed matrix can be
used to assess the strength of your organization and its product portfolio.
Organizations would ideally like to have a good mix of cash cows and stars.5

7.0 SWOT Analysis

Including a SWOT analysis
within a business is very important as this allows the business to see what the
strong a weak points are. This can make a business strong if it has been added,
and it can help to face all the threats in the market plac.

S.W.O.T. stands for
Strengths, Weaknesses, Opportunities, and Threats. A SWOT analysis is an
organized list of the business greatest strengths, weakness, opportunities and
threats. All strengths and weakness are all internal to the company they can
all change over time. Opportunities and threats are external like supplier’s
competitors and price.

To get the most complete,
objective results, a SWOT analysis is best shown by a group of people with
different viewpoints and rewards in the company. Management, sales, customer
service, and even customers can all contribute effective insight. Moreover, the
SWOT analysis process is an opportunity to bring your team together and
encourage their input in and devotion to company’s resulting strategy.

After SWOT analysis the Tows
analysis has to be done once the SWOT results, have been done then the business
can develop all the short term and also the long term strategies for the
business.

This is called a TOWS
analysis, looking at the strengths identified, and then come up with ways to
use those strengths to maximize the opportunities Then, look at how those same
strengths can be used to minimize the threats identified (these are
strength-threats strategies). Continuing this process, use the opportunities you
identified to develop strategies that will minimize the weaknesses
(weakness-opportunity strategies) or avoid the threats (weakness-threats
strategies). A
SWOT analysis is often created before a business is been introduced .When
creating the analysis, people are asked to pool their individual and shared
knowledge and experience. The more relaxed, friendly and constructive the
setting, the more truthful, comprehensive, insightful, and useful your analysis
will be. So getting all the information for your idea before introducing it to
the public is very important.

8.0 Porters Generic
Strategy

Michael Porter, an economic
researcher, examined competitive behaviors that include a successful business.
In the early 1980s, he set out to uncover the ways companies maintain long-term
advantages over their competitors. Over the work then he created a Porters
Generic Strategy three connected concepts that many organizations use to
develop key operating procedures. Understanding the ins and outs of Porter’s
techniques will offer growing entrepreneurs insight most business models.6

A firm’s position within the
industry decides whether the firm’s profitability is above or even below the
industry average. There are two basic type of competitive advantage a firm can
own they are Low cost or differentiation. The two basic types of competitive
advantage combined with the scope of activities for which a firm seeks to
achieve them, lead to three generic strategies for achieving above average
performance in an industry: cost leadership, differentiation, and focus. The
focus strategy has two variants, cost focus and differentiation focus.7

Cost Leadership is when a
firm sets out to become the low cost producer in its industry. A low cost
producer must find and exploit all sources of cost advantage. if a firm can
achieve and sustain overall cost leadership, then it will be an above average
performer in its industry, provided it can command prices at or near the
industry average.

Differentiation strategy the
business seeks to be unique in its industry along some dimensions that are
widely appreciated by the consumers. It selects one or more qualities that many
buyers in an industry see as important.

Focus The generic strategy of focus rests on the choice of a
narrow competitive scope within an industry. The focuser selects a segment or
group of segments in the industry and tailors its strategy to serving them to
the exclusion of others.

In cost
focus a firm seeks a cost advantage in its target segment, while in (b)
differentiation focus a firm seeks differentiation in its target segment. Both
variants of the focus strategy rest on differences between a focuser’s target
segment and other segments in the industry.

Sometimes some business fall
in the middle of the generic strategy the differentiation and also the cost
leadership, this happens when company don’t offer the high value for money and
individual product or service that you get from a differentiated business. So
focusing on this issue is very important when coming up with a business plan
all these issues have to sorted and looked over with.

1 http://www.marketingteacher.com/marketing-mix/

 

2 https://www.cgma.org/resources/tools/cost-transformation-model/kotlers-five-product-level-model.html

Five Product Levels by Philip Kotler

 

3

4 2.Kotler, P. (1967). Marketing Management: Analysis, Planning and
Control. Prentice Hall.

5 https://www.professionalacademy.com/blogs-and-advice/marketing-theories—boston-consulting-group-matrix

Nigel Piercy,
William Giles, (1989) “Making SWOT Analysis Work”, Marketing
Intelligence & Planning, Vol. 7 Issue: 5/6, pp.5-7,

David, F.
(1993). Strategic Management, 4th Ed. New York, NY: Macmillan Publishing
Company.

 

6 http://www.capsim.com/blog/an-introduction-to-porters-generic-strategies/

 

7 Porter, Michael E., “Competitive Advantage”. 1985, Ch. 1,
pp 11-15. The Free Press. New York.