PRESENTED BY

AMANPREET KAUR

NEHA GOSWAMI

SHUBHANKAR VATSAL

TANA KURKETI

MOTOROLA CASE: In the year 2007 – apple was about to launch its revolutionary i-phone . And Motorola its next generation razr2 cell phone PC world magazine ranked Razr – 12 on a list of the 50 greatest

gadgets for the past 50 years. As the cellular telephones sales were tapering off – the company

fate rested on razr2 The CEO and the top management were worried about their cell

phone razr-2 Would i-phone take razr-2 head on? For this company-Motorola decided to map competitive position So that companies build fresh competitive advantages and destroy

others which are not yet needed The process is disorderly and unstable . Senior executives

desperately need new tools to help them systematically analyze their own and other players competitive position

One way is to track the relationship between prices and prodcut key benefit over time.that

Its not easy to identify the features that determine the prices they are willing to pay for the products

If the customer don’t know what they are paying for and managers don’t know what they are charging for its almost impossible for companies to identify their competitive position.

Different executives place their firm offerings in different spots oon a price benefit map they overestimate the benefits of their own offerings while under estimating their rivals

Also lack of understanding about competitive position where the number of features makes comparison complicated .

Companies can capture competitive position graphically to seve as basis for strategy discussions .

MAPPING YOUR COMPETITIVE POSITION

Drawing postioning maps

In a price benefit positioning map shows the relationship between the primary benefit of the product and prices of all

the products in a given market Defining the market : to draw a meaningful map

you must specify the boundaries of the market . So firstly identify consumer needs you wish to

understand you should cast a wide net for products and services that satisfy those needs .

Choose the country you wish to study. Have a limited geographical scope

Finally decide if you want to track entire market for a product or only a specific segment if you wish to explore the retail or wholesale market

Interpreting Positioning Maps

Valuing Intangible Benefits

• Many companies spend a great deal of money

on offering supplementary services to retain

customers without knowing if the customer

wants to pay enough for it.

• This leads to drain of corporate resource.

• This can be avoided by calculating the

premiums they earn for intangible secondary

benefits.

Example-Harley-Davidson• A positioning map showed that, in 2002, most

of Harley Davidson’s models earned 38% more premiums compared to rival products.

• Even though Japanese Big Four offered 8-10% more engine power.

• High premium was the result of intangible secondary benefits like brand image created by HOG and apparel from Harley Davidson Motor-Clothes.

• Harley has attained cult status, especially among the baby boomers generation.

Example-Harley-Davidson• In 2004, positioning map revealed a

different picture.• The price of Harley Davidson was higher

than Japanese motorbikes, but it no longer commanded the highest premium in market.

• New American rivals earned 41% premium over HD.

• Now Gen X and Y were seeing Harley as their father’s bike and women hated its bad boy image.

Example-Harley-Davidson By 2006 Harley recognized the need to

create a new image. Apart from the usual activities that they do, they did activities that included:

Garage Parties for ‘ladies only’ Women’s jacket in pink, blue red and

other bright colors. Using its new Buell line to reach out to

younger riders.

Anticipating shifts in the value of benefits Companies can employ price-benefit

equation to get ahead of rivals in market.

Once they have identified the benefits appealing to the customers, they can decide Which features to develop, At what cost and How soon can they create a differentiation.

Example-Major U.S Hotel Chain• In 2000 it wanted to know: What new restaurants it should open? Which to reformat? And how to earn more from them all?

For this, a study was conducted and the results were:

• “Customer Experience” accounted for 73% of price variation.

• Cuisine-3.5%• Location-2.5%

Example-Major U.S Hotel Chain• It also analyzed that a hotel chain would do

better if it placed restaurants outside its properties.

• The premium on seafood and Russian food rose while it declined for French and Japanese cuisines.

• As income rose in the city, more people frequented upscale restaurants whereas declining demand at low end meant that such restaurants had to offer better deals.