Marketing Case Study on Product Positioning

2021-07-14 08:46:53
6 pages
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Wesleyan University
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Case study
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Jyoti (2010) defines product position as a unique type of marketing that aims at presenting various benefits of an organizational newly or existing product to a specific target market segment. Appropriate product position is a critical component of the organizational marketing plan and helps the firm in achieving its desired outcomes especially when it comes to identification of the effective market. However, firms need to conduct thorough market research and feasibility studies through continuous surveillance and active focus groups to determine the most appropriate segment to target in respect to the favourable responses gathered on the product (Panda, 2008). This paper analyses different issues to be considered by executives from Portland Drake Beverages (PDB) while positioning Crescent pure, a newly acquired product in the non-alcoholic beverage market. The paper begins with a determination external and internal influences driving the companys decision in positioning Crescent pure and makes a succinct conclusion after analysing whether positioning the product as an organic beverage would be a viable option based on the companys current portfolio.

Analysis of the External and Internal Influences Driving the Companys Decision

Jyoti (2010) adds that external and internal factors play a critical role in influencing the decision of a given company when it comes to the most appropriate market segment to position its products. It is evident that a plethora of internal and external forces impact the companys new product positioning with respect to the case study. Internal factors driving the companys decision include PDBs corporate objectives, finance, human resources, operational issues, and the business culture. First, the company management is faced with challenge of ensuring that the objective of position Crescent in the appropriate market segment should not conflict with its corporate objectives (Quelch & Zalosh, 2014).

Secondly, PDBs management must ensure that its decision in positioning the newly acquired Crescent pure maintains or improves its financial position in terms of the net profits generated, its liquidity ratios and cash flow. It will be critical to start marketing the new product if it will pose synergistic improvements in the three financial components. The product position process will also be affected by the development of a motivated and a well-trained workforce which will help in creating a competitive edge over others. In terms of business culture, PDB will be required to develop a marketing-oriented culture in order to meet the evolving customer demands, needs and preferences (Quelch & Zalosh, 2014). Operational issues may impact the product positioning process by allowing the company to compete cost and quality.

On the other hand, economic environment, market dynamics, social and political changes, technological change, and actions vested by competitors are critical factor that may impact PDBs decision while positioning Crescent pure in the appropriate market segment. Economic environment reflects the forces of demand and supply in the market (Quelch & Zalosh, 2014). Currently, the USA market shows a great preference for non-alcoholic drinks hence favouring the sale of Crescent pure. In terms of competition, PDB needs to invest in a plethora of strategies including product differentiation and diversification to compete favourably with the existing market players such as Fright, Torque, Stellar, and Razor which dominate the market by 85 percent.

Market dynamics may affect PDBs new product positioning in terms of the market size, growth as well as segmentation. Changes in the three factors will have a great impact the companys marketing objectives. The company should, therefore, target a market segment whose growth is rapid due to its higher probability in supporting the development of the new product as well as boosting revenue growth. Nevertheless, PDB needs to understand the effect of technological changes on product positioning. Technological changes may help in the product positioning process by shortening the products life cycle and creating more opportunities for innovation which may boost the products competitive advantage (Jyoti, 2010). Lastly, social and political changes which occur through legislation may impact the firms decision by creating or preventing more marketing opportunities.

Customer Segmentation

Understanding the segment to which a company services should be offered is a critical step towards achieving sustainability in terms of customer satisfaction. Panda (2008) defines customer segmentation as the process of differentiating a customer base into groups of different individuals that have similar characteristics relevant to the marketing process of a given product such as spending habits, age, gender, personal interests and sexual orientations. Segmentation allows a company to effectively serve its wider group of customers. In this case, PDBs management has a critical role to play in ensuring that they select the best target audience for their newly acquired beverage drink, Crescent pure.

According to the companys case study, the largest group of energy-drink consumers were males between the ages of 18 to 34 (Quelch & Zalosh, 2014). In addition, this report showed that parents to different children had higher probabilities of consuming the drink with respondents who earn below $ 25, 000 accounting for the highest number of consumers on annual basis. Since there is ultimate projection in the growth of the market size of these drinks, PDB needs to base its product on a population age ranging from 18 to 34 years. However, the company can divide its target market into two segments to develop multiple audiences; the primary segment and the secondary one to increase its market scale and generate more sales revenue.

Analysing How PDB Needs to Position and Advertise its New Product

According to Kitchen and Proctor (2011), the success of a product in terms of market performance depends on its market positioning strategy and its advertisement methods. This process should begin with effective identification of the target market segment before identifying the advertisement channels. Product positioning for PDBs new product can take place in five simple steps (Panda, 2008). First, PDB needs to understand its target market by using the Target Audience Profile template to identify consumer characterises such as purchasing power and preferences.

Secondly, the company should understand the level of market competition by carrying out primary and secondary research to determine how competitors are positioning themselves, the strategies being used, and their success in meeting their targets (Quelch & Zalosh, 2014). Thirdly, it is important to map customers buying criteria against the companys competitive positioning before assessing PDBs products strength against the predetermined buying criteria.

Lastly, PDB should evaluate the effectiveness of its positioning strategy while identifying gaps for further improvement. In terms of advertisement, it is important to use mixed or integrated strategies since the company is out to serve two types of segments; the primary and the secondary segment. Online platforms such as Twitter, LinkedIn, YouTube, and Facebook can play a critical role when combined with offline strategies such as TV ads, Radio ads, use of billboards and word of mouth to advertise the companys new product (Jyoti, 2010).

Understanding the PDBs Best Positioning Option Basing on the Perceptual Mapping

According to Kitchen and Proctor (2011), it is important to understand that product position doesnt have to be limited to a single market segment despite it being a critical element of the firms market plan. Products may have more than one target audience. The primary target should comprise of the main target audience while the secondary one should entail other individuals also interested in the product, most probably in different ways. As a result, each audience usually find the new product interesting in different ways, which is the reason behind the need to tailor marketing messages that emphasize on the benefits that each audience prefers most (Panda, 2008).

Similarly, a critical examination of the perceptual mapping integrated positioning options would best fit PDBs scenario. This type of positioning needed to focus on multiple aspects of the product including its appeal to wellness, health, and the overall use of natural ingredients.

Analysing whether an Organic Beverage would be a Viable Option for PDB Product Positioning Basing on its Current Brand Portfolio

PDB has a large market segment to serve considering that Crescent pure is coming in the market as a new product with a lot of customer expectations. Basing on the companys case study, it is evident that Crescent pure had a wide acceptance from different market segments despite variations in consumption and preference patterns. This assertion implies that PDB needs to consider a more integrated strategy in deciding on its product positioning process. Considering organic beverage as the main criteria exposes the company to a price premium of 25 percent as opposed to conventional beverages of the same variety. However, limiting the companys to this single attribute exposes it to a risk of eliminating its additional, lucrative customer segments.

Conclusion

Appropriate product positioning is a critical determinant in the success of a given business organization. Firms need to develop appropriate procedures and processes to use when deciding on the correct type of market segment to target. For instance, PDB management has a critical role to play in ensuring that the company develops the best strategy that leads it towards achieving its targets. Despite the numerous advantages associated with the choice of organic beverage as the main product position technique for Crescent pure, the company would lock out itself from numerous segments leaving integrated strategies as the best approaches.

References

Jyoti, A. (2010). Marketing management. New Delhi: Gennext.

Kitchen, P. J., & Proctor, T. (2011). The informed student guide to marketing. London: Thomson Learning.

Panda, T. K. (2008). Marketing management: Text and cases: Indian context. New Delhi: Excel Books.

Quelch, J. &Zalosh, A. (2014). Brief Cases: Crescent Pure. Harvard School of Business.

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