- Aims, not attributes: People don’t want to buy a quarter inch drill, they want a quarter inch hole.
Reference dependence & Diminishing marginal value
- Loss aversion’s slope is much steeper than gains
- VHS to DVD to 4K to 8K… 4K to 8K is 10x more pixels but its an example of diminishing returns. What’s satisficing.
- All green apple vs. Lime skittle example. New coke
- proposition: benefits and costs of the offering
- Positioning: Why would I choose this offering. Positioning identifies the primary benefit of the offering. The key reason for the customer to choose the company’s offering.
- diminishing returns means that a moat like reliability starts to become a necessity that everyone must have
He used two examples one was the AT&T first time that in 2007 the iphone was introduced the Hello commercial and the second one was for the comparative positioning which was the famous Macbook 1st Microsoft where they just used two different humans one that is cool and one that was obviously supposed to be dorky and then Microsoft's innovative commercial where they found a guy named Macbook and then had him endorse the windows surface laptop
“You never actually own a patek philippe, you merely look after it for the next generation”
Primary benefit must be meaningful & Sustainable (functional, monetarily, and psychologically)
Myths:
- More is NOT better. less is more.
- Why? Info overload, simplify their choice. Primary attribute heuristics → choose the offering that is the best on th emost imporatnt attirbute and helps the consumer justify w/ less regret. + Specialization = single benefit perceived as superior to multi-benefit
- Buckley’s → it tastest awful and it works.
- Company CANT control. Reality is that all 5 Cs have a vote.
- Adverts are NOT the primary positioning tool. Adverts have some but all tactics come together to define the positioning (product, service, brand, etc.)
- A yellowtail which is from the brand above brought in simplicity went through Costco for wholesalers and only had a Shiraz as well as a Chardonnay and through that identified that the majority of people are not sophisticated wine drinkers and would likely drink it if they were not so self-conscious and so they simplified the purchasing process all the way down to how they presented the wines which goes to show the strategic brand gestalt
Option A is incorrect because competitors could emerge from a different industry (even though the Five Forces framework refers to cross-category competitors as substitutes, from a marketing perspective they are considered competitors because they are competing with the company for the same target customers). Option D is incorrect because the cost structure, although important, is not a primary factor in identifying competitors (it is also reflected in the company’s core competencies and strategic assets)
Points of dominance are dimensions on which a company’s offering is superior to the competition. Points of compromise are dimensions on which a company’s offering is inferior to the competition. Points of dominance lead to a competitive advantage, whereas points of compromise lead to a competitive disadvantage. Points of dominance and points of compromise are also often referred to as points of difference.
The positioning statement is an internal company document aimed at company employees and collaborators, and is not intended to be seen by customers.
: The loss-leader strategy entails setting a low price for an offering (often at or below cost) to create the strategic benefit of increasing the sales of other, more profitable items. The loss-leader strategy might have the secondary strategic benefit of strengthening customers’ perceptions of the retailer as having low prices. Because the offering price is set at or below cost, it is unlikely to directly create monetary value for the company.