marketing management

Use the template in the slides to create a perceptual map (on the last slide of the 2021 discussion ppt) and comment on the re-positioning strategy of Kodak. Upload the perceptual map and add a 1-2 paragraph analysis.  

Case Study to understand Product Positioning
Using the Perceptual Mapping Technique 

Eastman Kodak

Eastman Kodak – some background

• Since inception in 1888, Kodak a market leader in the photography business. 
• As late as 1976, Kodak commanded 90% of film sales and 85% of camera sales in the U.S.

• Japanese competitor Fujifilm entered U.S. market with lower‐priced film
• Kodak did not believe that American consumers would ever desert its brand.
• Kodak began to struggle financially in the late 1990s ‐ decline in sales of photographic film 
and its slowness in transitioning to digital photography, despite developing the first self‐
contained digital camera.

• By 1993, its share had declined to 70% from 76% in only 5 years

• Kodak’s research: 
• 50% of buyers “Kodak‐loyal”; 40% ‘Samplers’; 10% shopped on price. 
• Importance of Brand name in decision making to buy film was still strong. 
• But number of price sensitive consumers was increasing.

Eastman Kodak – proposed solution

• To stop eroding share position and compete with less expensive rivals, Kodak 
management preparing to launch a new brand called Funtime.   

• Kodak’s existing product line :
• Ektar ‐ professional brand at $4.27/roll
• Royal Gold – household brand at $3.49/roll

• Kodak’s new product line strategy replaces the existing brands with:
• Royal Gold ‐ for “very special” occasions, especially to make an enlargement (to replace Ektar).
• Gold Plus ‐ for “everyday” use (to replace Royal Gold as mainstay brand).
• Funtime ‐ for “casual picture taking”

• Funtime would have the following characteristics:
• Only available during off‐peak times
• Value‐size package of 4 rolls
• Limited quantities; no advertising

Eastman Kodak contd…

Brand Price Overall Quality Score
Superpremium Brands

Fujicolor Reala $4.69 

90

Kodak Ektar $4.27 

92

Premium Brands
Kodak Gold Plus $3.49 

93

Agfacolor XRG $3.49 

88

Economy Brands
Fujicolor Super G $2.91 

94

Konica Super SR $2.91  93
ScotchColor $2.69  92

Price Brands
a

(S) Polaroid High Definition $2.49 

95

(S) Kroeger $2.49 

91

(A) Walgreen’s $2.49  91
(S) York $2.40  90
(A) Clark Color $2.35  90
(S) Kmart Focal $2.29 

89

(S) Target $2.19  92

Notes:
• ScotchColor was also sold as private label 

from Kmart, Kroeger , Walgreen’s, Target and 
York, among others as shown in the table.

• Consumer Reports regarded score 
differences of less than 5 points as ‘not 
significant’.

• Let us review the market situation and the 
proposed Funtime strategy to see if it might 
resolve Kodak’s problems.

(S) Designates the film was procured from 3M and was equivalent to ScotchColor
(A) Designates the film was procured from Bayer’s Agfa and was equivalent to AgfaColor XRG

Eastman Kodak contd…

Price

Quality

$1                        $2                       $3                        $4                       $5                      $6

95
94
93
92
91
90
89
88

(S) Designates the film was procured from 3M and 
was equivalent to ScotchColor

(A) Designates the film was procured from Bayer’s 
Agfa and was equivalent to AgfaColor XRG

Kodak plans to replace Ektar with Royal Gold and 
introduce Funtime @ ± 20% price difference

Position all these
brands on the map:

Brand Price Overall Quality Score
Superpremium Brands

Fujicolor Reala $4.69  90
Kodak Ektar $4.27  92

Premium Brands
Kodak Gold Plus $3.49  93
Agfacolor XRG $3.49  88

Economy Brands
Fujicolor Super G $2.91  94
Konica Super SR $2.91  93
ScotchColor $2.69  92

Price Brands
a

(S) Polaroid High Definition $2.49  95
(S) Kroeger $2.49  91
(A) Walgreen’s $2.49  91
(S) York $2.40  90
(A) Clark Color $2.35  90
(S) Kmart Focal $2.29  89
(S) Target $2.19  92

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MGT 209: Marketing Management

Session 4:

Product and

Positioning Strategies

MGT 209: Marketing Management

Professor Ashish Sood

Agenda

• Recap Session 3
• Segmentation and Targeting

• Product
• New Product Adoption – product vs. customer characteristics

• Market Pioneering

• Positioning
• Value Proposition

• Segment storyboards – creating a powerful Positioning Statement

• Specific examples of Positioning Strategies from the industry

• Using Perceptual Maps for marketing strategy

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Customer Company Competitor Collaborators Context

Today’s Focus

Market
Segmentation

Target Market
Selection

Product and
Service Positioning

Product &
Service

Place\
Channels

Promotion Pricing

Customer Acquisition
Customer Retention

Profits

What is a new product anyways?

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What is a Product?

A product is anything that can be offered to a market to satisfy a want or need,
including physical goods, services, experiences, events, persons, places,

properties, organizations, information, and ideas.

What would be these levels for a car?

Innovation and Value

WHY DO
FIRMS

CREATE NEW
PRODUCTS?

Changing
Customer

Needs

Market
Saturation

Managing
Risk

through
Diversity

Fashion
Cycles

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file://agsmad.ucr.edu/DFS/homes/asood/My Documents/My Videos/Positioning Hyundai Elentra Autostart.mp4

file://agsmad.ucr.edu/DFS/homes/asood/My Documents/My Videos/Positioning Hyundai Elantra Autobrake.mp4

https://www.youtube.com/watch?v=wapLaF5jmrU

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How do consumers make decisions about buying
a new product

Think about your decision to select UCR for your MBA.

Describe the process of making the decision including
your thoughts, actions, and emotions.

Include the time since you began the decision process
till the end of orientation.

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The Consumer Decision Process

• Does everyone go though the same process?

• Every time?

• What is the difference?
• Across consumers?

• Across purchase occasions?

• Over time?

2º 3º 4º 5º

RANKING MUNDIAL DE USUÁRIOS DE INTERNET

1º 6º

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Diffusion of Innovations

• Innovators
• Venturesome, ‘techies’, multiple info

sources, willing to pay premium
despite product/service deficiencies

• Early adopters
• Social leaders, popular, educated,

high WTP

• Early majority
• Quality conscious, many informal

social contacts, somewhat price
sensitive

• Late majority
• Skeptical, traditional, often lower

socio-economic status, need lower
price, higher availability and high
advertising

• Laggards
• Neighbors and friends are main info

sources, fear of debt, often price
constrained

Consumer decision funnel:
Successive Sets in Decision Making

• Importance of creating awareness and
influencing preference throughout the
consumer decision making process

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Factors Influencing the Consumer Decision Process

What makes a new product
appealing to customers?

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Characteristics of Innovation

Roger’s Diffusion of Innovations Model

• Relative Advantage – over existing technologies – can be perceived, may be measured
in economic terms, social prestige, convenience and satisfaction.

• Compatibility – with existing values, past experiences, needs of potential adopters
(and their social system)

• Complexity – degree to which an innovation is perceived as difficult to understand
and use.

• Trialability – degree to which an innovation may be experimented with on a limited
basis. A trialable innovation represented less uncertainty to a potential adopter.

• Observability – degree to which the results of an innovation are visible to others.

Adoption of New Products

• Relative Advantage

• Compatibility

• Complexity

• Trialability

• Observability

e-book vs. i-pod

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http://www.google.com/glass/start/how-it-feels/

http://www.youtube.com/watch?v=8aghzpO_UZE

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Developing and delivering a complete solution requires more than improving the

product and making it affordable to the mainstream market.

Forces that Shape Market Growth

Forces that Shape Market Growth

❑ Products or services with weak overall
scores for both customer forces and
product forces experience very slow
market growth.

❑ The best results naturally occur when
both the customer forces and the
product forces are strong overall.

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Which company pioneered photocopying
machines?

How many firms were already in the market when Xerox
(Haloid) introduced its first photcopying machine?

Why is it important to be the First?

• Consumer advantages
• Brand loyalty

• Pioneers shape consumers’ tastes, leading to
enduring preferences

• What should a Cola taste like?

• Inertia
• Due to switching costs, consumers prefer to

stay with a pioneering brand

• Learning time, habit formation, low
involvement products…

• Learning theory
• Consumers develop standards based on

pioneer product and evaluate later products
with that as reference e.g. What should an
mp3 player look like?

• Positioning
• Pioneers have opportunity to position in the

middle and then branch out

• Targeting the mass market instead of niches

• Manufacturer advantages
• Economies of scale

• Pioneers enjoy bigger overall markets e.g.
Intel vs. AMD

• Experience curves

• Higher cost and learning curves benefits
spread over a longer time

• Patents

• Pioneers protect their technological lead

• Technological leadership

• Enables firm to have consistently better
products than competitors

• Resource mobilization

• Pioneers mobilize the best suppliers, supplies,
distributors and preempt scarce assets e.g.
Debeers, Nintendo

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Dangers of Pioneering

• Free rider effects
• Late entrant acquires same technology at lower cost

• Shifts in technology
• Late entrant benefits from technology improvements e.g. Sony vs. Ampex

• Shift in consumer trends (esp. for new-to-the-world products)
• Change in preferred flavor from lemon to ginger ale to cola since 18

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• Improper positioning
• Shifting targets e.g. if ideal point becomes evident only after product is widely available e.g. netbooks,

e-books

• Overestimation of market size
• Pushed despite poor marketing research findings

• Insufficient investments
• Small firms, firms lacking vision

Potential for first mover advantages

• Calm waters
• Very likely (moving first almost always pays off)

• Brand awareness helpful but resources less critical

• The Market Leads
• Likely (address all segments as they emerge)

• Large scale marketing, distribution and production capacities essential

• The Technology Leads
• Unlikely (fast change creates opportunities for entrants)

• Strong R&D and NPD; deep pockets

• Rough Waters
• Very unlikely (worst conditions)

• Large scale marketing, distribution and production capacities and strong R&D (all at once)

Ref: Suarez and Lanzolla 2005

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Takeaways

• New product success in markets depends on
• Consumer characteristics

• Product characteristics

• Understanding the forces that shape market growth helps to predict
market acceptance of nwe products

• Pros and cons of entering market first/ early

Product Positioning

Influencing what consumers think
about a product

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The STP Process

S
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TA
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TA
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T
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To achieve above-average profits, a business has to develop some source of competitive

advantage that provides target customers with positive customer value.

Superior customer value results in superior profits

Competitive Advantage, Customer Value, & Profitability

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Sources of Advantage & Performance

A competitive advantage results in some level of superior customer value based on a customer’s

preference for performance benefits, the cost of the purchase, and the ease of the purchase.

Competitive Advantage, Customer Value, & Profitability

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Compare and contrast the three companies above in terms of their sources of

competitive advantage and the relative impact on their financial performance

Sources of Advantage & Performance

Each type of cost

advantage can be

achieved in several ways.

A cost advantage relative

to competition

contributes to higher

levels of profitability.

Cost Advantage and Profitability

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As volume increases, the cost per unit

generally decreases.

❑ Scale Effect: larger unit volume allows for

production and purchasing economies that lower

the per-unit manufacturing cost of a product.

❑ Scope Effect: a business can lower the average

unit cost of all products by adding products that

have similar manufacturing processes and that are

made of the same materials as its other products.

❑ Learning Effects: each unit produced provides

additional learning and the opportunity to build the

next unit more efficiently.

Unit Cost & Experience Curve

For Honda, the cost of ignition switches is lower than for some other manufacturers because

the same ignition switch components are used in cars, motorcycles, lawn mowers, all-terrain

vehicles, snow blowers, snowmobiles, jet skis, and generators.

Scale and Scope Cost Advantages

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Procter & Gamble’s sales force

expense per pound of detergent

sold should decrease as it adds

more brands of detergent to its

product line.

Each time a soup is advertised,

the ad reinforces top-of-the-mind

awareness of Campbell’s Soup

brand and other soups in the

product line.

Product Scope and Marketing Cost Advantage

The more dominant the share leader is with regard to market share compared with its top three

competitors, the greater are the share leader’s profits.

Market Share Advantage & Profits

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A product’s durability, reliability, performance, features, appearance, and conformance to a

specific application each have potential to be a differentiation advantage.

Product Differentiation Advantage

By tracking its service performance each day, FedEx is able to create greater overall customer

satisfaction with fewer errors, lower costs, and greater profits for shareholders.

Service Differentiation Advantage

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file://agsmad.ucr.edu/DFS/homes/asood/My Documents/My Videos/Positioning Hyundai Elantra Autobrake.mp4

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The stature of brand names adds a dimension of appeal that is an important customer benefit for

many less price-sensitive, more image-conscious consumers.

Brand Advantage & Profitability

A broad product line gives a business more prospective customers and the

potential to sell more to each customer—translating into more sales and higher

levels of profitability.

Microbrew Segment

Import Position

Low-Cal, Low-Carb

Product Line Advantage

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file://agsmad.ucr.edu/DFS/homes/asood/My Documents/My Videos/Positioning Hyundai Elantra Autobrake.mp4

1/24/2021
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A business that has exclusive access to

distributors can control channels in a given

market and, to some degree, can control

market access.

Channel Advantage

• __________ (product/brand) is __________ (unique and most important
claim) among all __________ (competitive frame) for __________
(target segment) because __________ (support / evidence).

Step 6. Create ‘segment storyboards’
Positioning Statement

• Land Rover Discovery is the most versatile and flexible among all SUVs for the family because

of its off-road durability and luxury seating.

• Apple offers the best personal computing experience to students, educators, creative

professionals and consumers around the world through its innovative hardware, software

and Internet offerings.

• For businesses who need computers, IBM is the company you can trust for all your needs.

• Chrysler PT Cruiser is an inexpensive, small car, that is versatile, fun to drive, and will appeal

to active singles and young couples with children who otherwise would have bought an SUV

or a minivan.

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file://agsmad.ucr.edu/DFS/homes/asood/My Documents/My Videos/Positioning Hyundai Elantra Autobrake.mp4

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Some More Successful Positioning Themes

Apple iPod

BMW

Burger King

Charmin Tissue

Coke

Chevy Trucks

Colgate Total Toothpaste

Disney

GE

Mobil Service Stations

Universal’s Orlando

Visa

Volvo

Viagra

Lipitor

1000 songs

Exceptional performance

Have it your way

Softness

Authentic, real, original

Tough, strong, durable

Total dental protection

Wholesome family entertainment

Quality of life

Fast, friendly service

Thrills, excitement, escape

Accepted everywhere

Safety

Quality of life

More potent at lower price

Positioning Yourself!

“What people say about you when you
have left the room.”

Jeff Bezos, founder and CEO of Amazon

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Step 7 – Marketing Mix Strategy

• Product Positioning:

• Finding the proper location in mind of
consumers or market segment, so that
they think about a product or service in
the desired way to maximize benefit for
firm

• Use all aspects of marketing mix –
product, place, price, promotion – to
create desired positioning

Positioning Strategies

• Important to identify differences across segments and market to them differently

• Helpful to ask why:
• Why would someone want this product?

• Are these reasons the same for everyone?

• Often companies offer multiple products that appeal to different market
segments and let customers self-select.
• That is, the firm does not identify customers in various market segments;

• Instead, the customers reveal their market segment identity by choosing different products.

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What is the logic behind the Intel’s Product Positioning?

Early 1990’s

Late 1990’s

1990

Mid 2000’s

Year Introduced

Intel Product Positioning Strategy

Black & Decker (B&D) owns DeWalt.

Why don’t they use B&D with the DeWalt brand name?

Black & Decker Positioning Strategy

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Samsung – Repositioning Strategy

Which product features drive

interest in this Nike shoe?

Nike Shoe Positioning

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https://www.youtube.com/watch?v=ajD2WZioOOc

https://www.youtube.com/watch?v=whpJ19RJ4JY

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What is the logic behind GE’s

Product Line Strategy?

GE Appliance Product Line Positioning Strategy

Every register at Nordstrom stores has pen and paper for customers to share their stories.

Every morning before each store opens, Nordstrom employees gather in the main lobby for

the store manager to share some of the best stories from the previous day and reward the

employees in those stories.

Customer
service has
become
synonymous
with
Nordstrom

Nordstrom Service Quality

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https://www.youtube.com/watch?v=0mybsSaZkg8

https://www.youtube.com/watch?v=uq7iRC02slc

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Product Positioning

Perceptual Maps

Understanding what consumers think
about a product

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Perceptual Maps
Perceptual Maps

• Perceptual maps represent how your
target segment currently thinks/ feels
about these brands;

• may be inaccurate and

• can be influenced (corrected) by
advertising and consumer education

• Used frequently to formulate strategy

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Takeaways

• Successful Product Positioning depends on creating and
communicating customer value

• Competitive advantage from customer value takes many forms:
• Cost advantage

• Differentiation advantage

• Marketing advantage

• Positioning statement help to consolidate the customer value
succinctly

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