New Product Development

Proactive versus reactive strategies The pioneering advantage Opportunity identification Positioning strategies Consumer-driven engineering

Copyright 1999 Addison Wesley Longman, Inc.

TM 12-1

Copyright 1999 Addison Wesley Longman, Inc.

TM 12-2

The best choice for positioning strategy

When to use proactive versus reactive strategies: Market growth Proactive Reactive

High

Low

Protection for innovation Market size and margin Competition

Strong

Weak

Large

Small

High

Low

Channel position

Strong

Weak

Copyright 1999 Addison Wesley Longman, Inc.

TM 12-3

Pioneer Advantage
1. Inherent Advantage
Risk Aversion Standard of Comparison Brand Attitude Accessibility Set Size Effect Direction-of-Comparison Effect

2. Enabling Advantage
Experience Curve Positioning Advantage Channel Distribution Advantage

3. Spurious Correlation
Third Variable Problem

Copyright 1999 Addison Wesley Longman, Inc.

TM 12-4

A pioneering brand that is still popular

Copyright 1999 Addison Wesley Longman, Inc.

TM 12-5

The most likely scenario for pioneering advantage The pioneering advantage
Inherent advantage Enabling advantage Spurious effect

Speed up new product development at all costs

Speed up only if product can be positioned and marketed effectively because you know more about the category than your competitor

Take your time

Copyright 1999 Addison Wesley Longman, Inc.

TM 12-6

The Set size effect

Refers

to the tendency to form more extreme and confident judgment increases, even when the favorableness of the individual pieces of information is controlled .

Copyright 1999 Addison Wesley Longman, Inc.

TM 12-7

Copyright 1999 Addison Wesley Longman, Inc.

TM 12-8

Copyright 1999 Addison Wesley Longman, Inc.

TM 12-9

Opportunity Identification
Sales

potential Penetration Scale Input Reward Risk

Copyright 1999 Addison Wesley Longman, Inc.

TM 12-10

Positioning
I. Positioning Strategies 1. Positioning a Leader 2. Establishing a Strong Alternative Position A. Doing the Opposite B. Turing Disadvantages in Advantages 3. Positioning by Attributes/Benefits 4. Positioning by Price 5. Positioning with Respect to Use or Application 6. Positioning by the Product User 7. Repositioning the Competition II. Perceptual Mapping III. Preference Regression

Copyright 1999 Addison Wesley Longman, Inc.

TM 12-11

Positioning a Leader
Standard of Comparison - The real thing - Coke is it We invented the product - Xerox copiers - Polaroid cameras - Zippo lighters Were Number 1 could imply: - low price - high availability - insecurity Marketing Myopia
Copyright 1999 Addison Wesley Longman, Inc.

TM 12-12

Establishing a Strong Alternative Position

Look for a gap and fill it

Do the opposite
- Volkswagon - 7-up 1929: Mixer and headache remedy 1967-70: The Uncola (20% sales increase)

Turn disadvantages in advantages

- Avis: Were no. 2 - we try harder - Smuckers: With a name like Smuckers, it has to be good

Copyright 1999 Addison Wesley Longman, Inc.

TM 12-13

Positioning by Attributes/Benefits...
Toyota Volvo BMW Bounty Viva Crest Aim

Copyright 1999 Addison Wesley Longman, Inc.

TM 12-14

Positioning by Price...
Nieman-Marcus Bloomingdales Saks Fifth Avenue Sears Michelob Budweiser Busch S.T. Dupont lighters cost $1,500 and down Joy - the costliest perfume in the world Piaget - the worlds most expensive watch High Price is not only for luxury items: - Whitneys Yogurt - Orville Redenbachers - Eukanuba
Copyright 1999 Addison Wesley Longman, Inc.

TM 12-15

Positioning by Price...

Copyright 1999 Addison Wesley Longman, Inc.

TM 12-16

Positioning by Price...

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TM 12-17

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TM 12-18

Copyright 1999 Addison Wesley Longman, Inc.

TM 12-19

Copyright 1999 Addison Wesley Longman, Inc.

TM 12-20

Positioning with Respect to Use or Application...

Campbells Soup for Lunch AT&T Reach out and touch someone Gatorade Arm & Hammer Baking Soda Industrial Products

Copyright 1999 Addison Wesley Longman, Inc.

TM 12-21

Positioning by Use...

Copyright 1999 Addison Wesley Longman, Inc.

TM 12-22

Positioning by Product User...

Marlboro Country Miller High Life, the champagne of beers Johnson & Johnson baby shampoo

Copyright 1999 Addison Wesley Longman, Inc.

TM 12-23

Positioning Malaysia Airlines as the most popular airline originating in southeast Asia

Copyright 1999 Addison Wesley Longman, Inc.

TM 12-24

Repositioning the Competition...

For the millions who should not take aspirin if your stomach is easily upset or if you have an ulcer or if you suffer from asthma, allergies, or iron-deficiency anemia.. It would make sense to check with your doctor before you take aspirin. Aspirin can irritate the stomach lining, trigger asthmatic or allergic reactions, cause small amounts of hidden gastrointestinal bleeding. Fortunately, there is Tylenol. Royal Doulton - The china of Stoke-on-Trent, England vs. Lenox - The china of Pomona, New Jersey Samovar: Made in Schenley, Pennsylvania Smirnoff: Made in Hartford, Connecticut Wolfschmidt: Made in Lawrenceburg, Indiana Stolichnaya: Made in Leningrad, Russia Bordens Wise: Potatoes, Vegetable oil P & Gs Pringles: Dehydrated potatoes, mono- & diglicerides, ascorbic acid, butylated hydroxy-anisole Listerine: Medicine Breath Scope: Fresh Minty Breath

Copyright 1999 Addison Wesley Longman, Inc.

TM 12-25

A perceptual map
Not Fruity
Pepsi

Diet Pepsi
Diet Coke

New Coke Dr. Pepper Coke Classic

Not Sweet
Tab
Fresca

Sweet
Cherry Coke
Sprite 7Up

Fruity

Copyright 1999 Addison Wesley Longman, Inc.

TM 12-26

Perceptual Maps...

Copyright 1999 Addison Wesley Longman, Inc.

TM 12-27