Module 2

Consumer Behaviour
 Theory of Consumer Behaviour
• According to the psychological theory, a consumer’s
behavior is influenced by his experience.
• Psychological Theories Explaining Consumer
Behavior
• Repetition. Repetition is necessary for the progressive
modification of psychological influences.
• Motivation. Individual motivation is the most
important factor involved in indicating and governing
his or her decisions
• Conditioning. It is a way of learning in which a new
response to a particular stimulus is developed.
 The Economic Theory
• The economic theory of consumer behavior explains the distribution of consumer income.
• There are 2 theories included under the economic theory.
 The Utility theory of demand.

• The Utility theory stresses on customer satisfaction as the main point influencing consumer
behaviour.

• The utility of the product directly induces consumers to buy it.

 The more the utility, the more the consumer’s influence towards making purchase decisions.

The Indifference preference theory

 Under indifference preference theory, consumer preference towards particular goods &
services attracts his behaviour.

 Here the nature of goods is the influencing factor rather than satisfaction level.

• Social Cultural Theory : States that society ,culture, fashion & trend have great influence over
consumer behavior.
• Consumers behave according to his group in society.
• Consumers no longer behave as per their personal choices & preferences.
• Businesses acquire information from society for attracting customers efficiently.
 Importance of Consumer Behavior
• Increase Sales
• Consumer behaviour study helps the businesses in understanding their customers.

• They have full information about their customer’s likes & dislikes.

• This helps in satisfying the wants of their customers properly & efficiently.

• Business will offer the right product to its customers. Customers will become loyal if getting
the right product. This will increase sales & revenue for business.

• Setting Prices

• Setting prices is one of the important & difficult task for any business.

• It directly influences the demand for its products in the market.

• Understanding consumer behaviour, makes it easy to determine whether the

customer is price or quality conscious.

• There are some customers in the market who buy products only because they are
cheaper.
• Understanding their behaviour will help companies to produce as per their price limit.
Designing Sales Promotion Methods
.

• Sales promotion activities are the different methods used for inducing customers to
buy a product.

• Promotion activities are effective if they present clearly the features of the product as
per customer needs.

Helps In Competitive Analysis

•
Facing competition is a very tough job for every business.

• There is a large number of competitors available in the market offering the same
products.

• It becomes difficult to attract customers towards your products.

• Understanding their behaviour helps in analysing the reasons for which they are going
for competitors’ products.

• It helps in understanding the advantages that competitors are possessing.

• This help in facing the competition in a better way.

• Helps In Forecasting
.

• Forecasting helps in taking competitive advantages from the

businesses.
• If the business is able to forecast about the future it can easily
take several advantages.
• Consumer behaviour enables the businesses in easy forecasting of
sales & demand forecasting.
• It helps companies in saving their resources, time & cost.
• They can easily predict future demands & focus on their
operations.
• Helps In Targeting & Segmentation

• After understanding consumer behaviour, customers can be

segmented into different classes.
• Segmentation & Targeting helps in serving customers properly.
 It segments the customers according to their taste & class.
.

•
• Segmentation helps in It helps businesses to focus on
customers as per their needs
Helps In Designing Product Portfolio

• Product portfolio refers to a set of different products offered by

businesses. Every business product portfolio must consist of all
class of products.
• It should have products for all class of peoples in the market.
• Understanding customer behaviour helps the businesses in
easy understanding demand of market.
• This will help in proper designing of product portfolio for the
businesses.
 Factors influencing Buying Behaviour
1. Psychographic Factors
 Human psychology is a major determinant of consumer behavior.
 Theses are powerful to influence a buying decision.
• Motivation
• Perception
• Learning
• Attitudes & beliefs
2. Social Factors
 Humans are social, their buying behaviour influenced by people who live
around them.
 Humans try to imitate other humans and also wish to be socially accepted in
the society.
 Hence their buying behavior is influenced by other people around them.
 Family
• Reference Groups
• Roles & Status
 .

3. Culture
 People are associated with values and ideologies that belong to a particular community.
 Their behavior is highly influenced by the community’s culture .
• Culture
• Subculture
• Social class
4. Personal Factors
 Personal factors influence consumer buying behavior.
 These personal factors differ from person to person.
 They thereby producing different perceptions and consumer behavior.
• Age
• Income
• Occupation & Lifestyle
5.Economic/ Situational Factors
 The consumers’ buying habits & decisions depend on the economic situation of a country or a market.
 When a nation’s economy is strong, there is more money supply in the market.
 The consumers have a higher purchasing power . & are confident to spend on buying products.
 Whereas, a weak economy reflects a struggling market that is impacted by unemployment and lower purchasing power.
 Some of the important economic factors are:
• Personal Income
• Family income
• Consumer credit
• Liquid assets
• Savings
 Consumer buying decision process
The consumer decision-making process can seem mysterious, but all consumers go through basic steps when making
a purchase to determine what products and services will best fit their needs.

Think about your own thought process when buying something—especially when it’s something big, like a car. You
consider what you need, research, and compare your options before making the decision to buy. Afterward, you often
wonder if you made the right call.

The consumer buying decision process is a series of steps that consumers go through before, during, and after making
a purchase. It is a key concept in consumer behavior, as it helps marketers understand how consumers make
purchasing decisions. Here are the five stages of the process:
1. Problem Recognition
• This is the first stage where the consumer realizes they have a need or problem that requires a solution. This
need can be triggered by internal stimuli (e.g., hunger, thirst) or external stimuli (e.g., advertising, social
influence).
• Example: Feeling hungry and realizing the need for food, or seeing an ad for the latest smartphone and feeling
the urge to upgrade.
2. Information Search
• After recognizing the need, consumers seek information about products or services that can satisfy their need.
This can be done through:
• Internal Search: Recalling past experiences or knowledge.
• External Search: Looking for information from friends, family, online reviews, advertisements, or expert opinions.
Example: Checking online reviews for different smartphones or asking friends about their recommendations.
 .

3. Evaluation of Alternatives
• Consumers compare different products or brands based on various attributes such as
price, quality, features, and benefits. They weigh the pros and cons of each option to
make an informed choice.
• Example: Comparing smartphones based on features like camera quality, battery life, and
price.
4. Purchase Decision
• At this stage, the consumer makes the decision to buy a specific product or service.
However, the purchase decision can still be influenced by external factors like discounts,
promotions, or last-minute opinions from others.
• Example: Choosing to buy a particular smartphone model due to a festive discount.
5. Post-Purchase Behavior
• After the purchase, the consumer evaluates the product's performance against their
expectations. If satisfied, they may become loyal to the brand. If dissatisfied, they may
experience buyer's remorse and share negative feedback.
• Example: Feeling happy with the new smartphone's features or feeling disappointed if it
doesn’t meet expectations.

Why is it Important for Marketers?

• Understanding this process helps marketers:
• Design effective marketing strategies.
• Create targeted advertising campaigns.
• Improve customer satisfaction and brand loyalty.
• Address consumer concerns at each stage.
Types of Buyer Decision Process
 .

• High involvement implies that the consumer is more

invested in the buying process, while low involvement
implies that the consumer is not very invested in the buying
process. For example, some consumers like to perform due
diligence on their own before making a purchase, whereas
others just go with the flow.
• In other words, high involvement implies that a consumer
actively looks for information that can enrich their buying
process. High involvement behaviors are usually observed
when the purchase is infrequent, the product is costly, the
purchase might be risky overall, etc.
• Low involvement implies that the consumer does not feel
the need to actively look for information about the purchase
because it does not involve a lot of risks. For example,
when buying shampoos or detergents, a consumer is likely
to just go and buy a famous brand or one they have been
buying since a long time instead of researching the pros and
cons of each competing brand in the market.
 .

1. Complex Buying Behavior

• High involvement: Buyers are highly engaged in the purchase process. This usually occurs when
the purchase is expensive, risky, or reflects the buyer's self-image.
• Significant brand differences: Buyers perceive clear distinctions between brands and may conduct
extensive research to compare options.
• Example: Buying a car, a house, or a high-end laptop.
• Marketing Implications:
– Provide detailed information and expert advice.
– Highlight key features and benefits that differentiate your brand.
– Build trust and credibility through testimonials and reviews.

2. Dissonance-Reducing Buying Behavior

• High involvement: Buyers are highly involved in the purchase, often due to high prices or
infrequent purchases.
• Few perceived brand differences: Buyers may see limited variations between brands.
• Post-purchase dissonance: Buyers might experience anxiety or regret after the purchase,
questioning if they made the right choice.
• Example: Buying a new appliance or furniture.
• Marketing Implications:
– Reinforce the purchase decision with positive information and reassurance.
– Provide excellent customer service and support to address any concerns.
– Offer warranties and guarantees to reduce perceived risk.
3. Habitual Buying Behavior .

• Low involvement: Buyers have little interest in the purchase

decision.
• Few perceived brand differences: Buyers see minimal distinctions
between brands and may purchase out of habit or convenience.
• Example: Buying everyday items like groceries, toiletries, or snacks.
• Marketing Implications:
– Focus on brand familiarity and visibility through repetitive advertising.
– Utilize price promotions and sales to attract buyers.
– Make products readily available and accessible.

4. Variety-Seeking Buying Behavior

• Low involvement: Buyers are not heavily invested in the purchase

decision.
• Significant perceived brand differences: Buyers perceive notable
variations between brands and may switch brands to try new
things.
• Example: Trying different flavors of a beverage or different brands
of clothing.
 Business Market
• Business markets involve transactions between businesses, where goods or services are sold for
further production, resale, or operational use. Unlike consumer markets, where products are sold
directly to end consumers, business markets focus on selling to other companies or organizations.

Feature Business Markets (B2B) Consumer Markets (B2C)

Customers Organizations, companies, institutions Individuals, households

Purchase Purpose Production, operations, resale Personal use, consumption

Complex, involve multiple stakeholders, rational, based Simpler, often individual, can be emotional, based on
Buying Decisions on needs wants

Sales Volume Larger quantities, higher value transactions Smaller quantities, lower value transactions

Relationships Long-term, close partnerships Transactional, less personal

Demand Derived from consumer demand, fluctuates more Direct, influenced by consumer preferences

Marketing Focus on value, features, solutions, direct sales Focus on brand, image, benefits, mass marketing
 .

Participants in the Business Buying Process

The business buying process often involves a team of people with different roles:
• Users: Those who will use the product or service.
• Influencers: People who provide input or expertise (e.g., technical staff).
• Buyers: Those who make the actual purchase (e.g., purchasing department).
• Deciders: Those who have the final authority to approve the purchase.
• Gatekeepers: Those who control the flow of information to the buying center (e.g., administrative staff).
•
Stages in the Business Buying Process

• Problem Recognition: Identifying a need or challenge that can be solved by a purchase.

• General Need Description: Defining the characteristics and quantity of the needed item.
• Product Specification: Developing the technical requirements or specifications for the product.
• Supplier Search: Identifying potential suppliers who can meet the specifications.
• Proposal Solicitation: Requesting proposals or bids from qualified suppliers.
• Supplier Selection: Evaluating proposals and choosing the best supplier based on various factors (price,
quality, reliability, etc.).
• Order Routine Specification: Finalizing the order details, including terms, delivery, and payment.
• Performance Review: Evaluating the supplier's performance and the product's effectiveness.
•
Key Considerations for Business Markets

• Building strong relationships: Trust and long-term partnerships are crucial.

• Understanding customer needs: Tailoring solutions to specific business challenges.
• Focusing on value: Demonstrating the return on investment (ROI) of the purchase.
• Professionalism: Maintaining high standards of communication and service.
.
 The logic of Market Segmentation
• Companies cannot connect with all customers in large, broad, or diverse markets.
• But they can divide such markets into groups of consumers or segments with
distinct needs and wants.
• A company then needs to identify which market segments it can serve effectively.
This decision requires a keen understanding of consumer behavior and careful
strategic thinking.
• To develop the best marketing plans, managers need to understand what makes
each segment unique and different.
• Identifying and satisfying the right market segments if often the key to marketing
success.

Advantages of segmentation

– Increased Focus of the Company leads to focused communications,

competitiveness, brand recall, brand equity, customer retention, profitability
– Market expansion with similar products into other segments
– Product expansion with different products in the same segment
 Concept of Market Segmentation
 Companies aim connect with all their customers in Large Diverse Markets
• They need to identify the markets that they can serve effectively.
• Each market is unique in terms of offerings.
• Understanding consumer behaviour and strategic thinking is required.
• To attract customers and sustain them requires market segmentation .
 The process involves :
• Breaking down an entire heterogeneous market into small markets / customer segments.
• Segments must be identical in terms of characteristics like needs ,wants & buying behavior.
• The organization divides his customers into smaller groups
• Each group is and approached with customized promotional programs

– Importance
1. To better match the customer needs
2. To enhance the company’s overall profits
3. To search better opportunities for growth
4. To retain customer base
5. To tap unexplored markets

6. To foray into competitors markets

 Mass Marketing
• The starting point for discussing segmentation is mass marketing.
• In mass marketing, the seller engages in the mass production, mass
distribution, and mass promotion of one product for all buyers.
• The argument for mass marketing is that it creates the largest potential
market, which leads, to the lowest costs that in turn can lead to lower prices or
higher margins.

Segment Marketing

• A market segment consists of a group of customers who share a similar set of

needs and wants.
• The marketer does not create the segments.
• The marketer’s task is to identify the segments and decide which one(s) to
target
 Why Segment Markets?
• Increased Efficiency: Focus marketing efforts on the most profitable
segments.
• Competitive Advantage: Tailor products and services to specific segment
needs, differentiating from competitors.
• Better Understanding of Customer Needs: Gain deeper insights into
customer motivations and purchasing behavior.
• Effective Resource Allocation: Optimize marketing spend by targeting
the most promising segments.

Criteria for Effective Segmentation:

• Measurable: Segment size and purchasing power can be quantified.

• Accessible: Segments can be reached through marketing channels.
• Substantial: Segments are large enough to be profitable.
• Differentiable: Segments respond differently to marketing mixes.
• Actionable: Effective marketing programs can be developed for each
segment.
 Targeting
• Targeting involves selecting one or more market segments to serve.
Strategies include:
• Undifferentiated Marketing (Mass Marketing): Targeting the entire
market with one product and marketing mix. Example: Historically, Coca-
Cola used this approach. Less common today.
• Differentiated Marketing: Targeting multiple segments with different
products and marketing mixes. Example: A cosmetic company offering
different product lines for different age groups.
• Concentrated (Niche) Marketing: Focusing on a single, well-defined
segment. Example: A company specializing in vegan skincare products.
• Micromarketing (Individualized Marketing): Tailoring products and
marketing to individual customers. Example: Personalized
recommendations on Amazon.
Positioning

Positioning is creating a distinct and desirable image for your product or

brand in the minds of target customers. It's about how you want customers to
perceive your offering relative to competitors. A strong positioning statement
clarifies your target audience, value proposition, and competitive advantage.
 Rural Market
• A rural market refers to buyers and sellers in villages or non-urban areas where economic activities
and consumer behaviors differ from urban markets. In India, where around 65% of the population
resides in rural areas, rural markets offer vast potential for businesses, especially in FMCG,
agriculture, banking, and technology sectors.
• Understanding and managing rural market is not an easy affair, as it is full of challenges. If we study
the Indian rural society, there are different villages, each being different in terms of geographical,
economic, cultural, moral and other structures. The behavior patterns of the habitants and their
beliefs, ideas, faiths etc are different.
• Rural marketing is a function of all efforts made by the companies to move their already marketed
goods and services to the rural consumers that gives them satisfaction, enhances their standard of
living and thereby attains the organizational goal”.

Features of Rural Markets

Population is large and scattered. In India around 65 percent of population lives in rural areas. Rate of
increase in population is also higher. This large population is scattered in over six lakh villages. Although
it poses some difficulty to the marketers but also gives them a huge and promising market.

Steady market growth. Rural market is growing steadily over the years. Consumption pattern and
preference is also changing. Unlike the past years, rural market has demand for branded products along
with the traditional products such as bicycles, mopeds and agricultural inputs. IT and media has further
increased the awareness amongst the rural consumers
 Development of infrastructure facilities.
• Infrastructure facilities have developed in the rural areas. This has
reduced the distance of villages to the cities. With the construction
of roads and transportation, communication network, rural
electrification and several public service projects run by the
government, connectivity of villages to cities has increased. This has
increased the scope of rural marketing.
• Traditional outlook. Rural consumers value their old values, culture,
customs and tradition. This influences their demand pattern.
However, their demand pattern is changing gradually and demand
for cosmetics and branded goods are gradually seeping in the rural
markets.
• Separate marketing mix is required. Considering the features of
the rural market, it becomes essential for the companies to prepare
a separate marketing mix for the rural markets to tap its potential
to the fullest. Infrastructure facilities are becoming better which in
turn will help in improving the supply chain operations. The
consumption pattern of rural consumers is also witnessing a
change.
 Factors affecting Growth of Rural Market

• Increased demand due to increase in population;

• Agriculture sector is prospering which has risen the rural
income;
• Increased Standard of living;
• Government and non-government organizations are taking
keen interest in rural development;
• Increased literacy rate and educational level;
• Inflow of foreign remittances and foreign made goods into
rural areas;
• Improved Rural Infrastructure;
• Increasing awareness of rural consumers about new products;
and
• Growing urban-rural interaction.
 Challenges of Rural Markets
• In many remote locations even today the barter system exists. This is one of the
major obstacles in the way of development of rural marketing in India.
• Impact of information technology is not experienced uniformly across the nation.
The advantage of it has been experienced primarily by the farmers with big land
holdings. Farmers with small land holdings are not able to enjoy the advantage. This
inequality has made the markets underdeveloped even today.
• In terms of facilities related to physical communication, it is not equally good for all
the corners across the nation. Most villages in eastern part of the country are
inaccessible during monsoons.
• Demand in rural markets depends primarily on the agricultural situation as
agriculture is the main source of their livelihood. This means the purchasing power
of the customers is dependent upon the monsoon and it varies from one year to the
other
• Difference in language and dialects also poses problems to the marketers. The
language and dialects differ not only from state to state but also from one region to
the other. This makes the formulation of marketing strategy very difficult
• Besides, there are certain other challenges related to rural warehouse, supply chain
operations, rural infrastructure and fluctuation in the price of agricultural products
etc.
The 4’A’ Approach of Rural Marketing

Affordability
(Price)

Acceptability
(Product value)

Awareness
(Communication Availability
(Physical Distribution)
or promotion)
 Product(Acceptability)
• Affordability: Pricing products competitively for lower income levels. Smaller
packs, value packs.
• Relevance: Products should meet the specific needs and preferences of rural
consumers. Consider local tastes and preferences.
• Durability: Products need to withstand harsh conditions and limited access to
repairs.
Price(Affordability)
• Value for Money: Emphasize the value proposition and benefits of the product.
• Pricing Strategies: Consider lower unit prices, promotional offers, and flexible
payment options.
Physical Distribution(Availability)
• Reaching the Rural Consumer: Utilize a multi-channel approach, including
local retailers, distributors, and mobile vans.
• Building a Strong Distribution Network: Overcoming infrastructure
challenges is crucial. Leverage local networks and partnerships.
Promotion(Awareness)
• Localized Communication: Use local languages and dialects in advertising and
promotions.
• Traditional Media: Utilize traditional media like haats (weekly markets),
village fairs, and folk performances.
• Word-of-Mouth Marketing: Leverage the strong social networks in rural
communities. Personal selling is often effective.
 Competitive Dynamics and Models
• Competitive dynamics in marketing management refer to the
continuous actions and reactions between firms in a competitive
marketplace. These dynamics shape market positioning, pricing,
innovation, and overall business strategy.
• Competitive dynamics focus on the series of actions (like price
changes, new product launches, or marketing campaigns) that
companies take, and how their rivals respond.

Several models help analyze and predict competitive behavior

• BCG (Boston Consulting Group) Matrix

This model helps firms analyze their product portfolio based on market growth and market
share:
• Stars: High growth, high market share.
• Cash Cows: Low growth, high market share.
• Question Marks: High growth, low market share.
• Dogs: Low growth, low market share.
 Porter's Five Forces Model

• Threat of new entrants: Barriers to entry like capital investment, economies of scale, and
brand loyalty.
• Bargaining power of suppliers: The influence suppliers have over pricing and
availability.
• Bargaining power of buyers: Customers' ability to negotiate lower prices or demand
better quality.
• Threat of substitutes: The presence of alternative products that can replace existing ones.
• Industry rivalry: The intensity of competition among existing firms.
 Ansoff Matrix
• This model helps businesses decide their growth strategies:
• Market Penetration: Selling more of existing products to current markets.
• Market Development: Expanding into new markets with existing products.
• Product Development: Introducing new products to existing markets.
• Diversification: Entering new markets with new products.

Kotler’s Competitive Strategies

• Philip Kotler outlines four types of competitive strategies:

• Market Leader Strategy: Dominant firms focus on expanding the market
and defending their position.
• Market Challenger Strategy: Companies directly challenge the leader with
aggressive strategies.
• Market Follower Strategy: Firms adopt a low-risk approach by following
the leader’s strategies.
• Market Nicher Strategy: Companies focus on a small, specialized segment.
 Competitive dynamics involve strategic decisions companies make to gain and
sustain a competitive edge. Based on Philip Kotler’s framework, businesses
typically adopt one of four strategies:

Market Leader Strategies

• - Expand market demand
• - Defend market share
• - Innovate & lead in product development
• - Achieve cost leadership
• - Strategic acquisitions
• Example: Coca-Cola
Market Challenger Strategies

• - Frontal attack (head-to-head competition)

• - Flanking attack (target leader’s weakness)
• - Encirclement attack (multiple advantages)
• - Bypass attack (new tech, new markets)
• - Guerrilla marketing (unconventional tactics)
• Example: Pepsi
 Market Follower Strategies

• - Imitate and adapt successful strategies

• - Avoid direct confrontation
• - Leverage cost advantages
• - Niche focus within mainstream market
• Example: Oppo & Vivo

Market Nicher Strategies

• - Specialize in a specific segment

• - High differentiation & premium pricing
• - Geographic or customer-based focus
• - Customer-centric innovation
• Example: Rolex & Lamborghini
Choosing the Right Strategy
• - Consider company resources
• - Analyze market conditions
• - Align with growth aspirations

• Which strategy best fits your business?

 Product Life cycle
• The Product Life Cycle (PLC) describes the stages a product goes through from its
introduction to decline.
• The four stages of PLC are:
• - Introduction
• - Growth
• - Maturity
• - Decline

• Stage 1: Introduction

• - High costs, low sales, no profit

• - Heavy marketing & promotional expenses
• - Focus on product awareness & market penetration

Strategies:
• - Price skimming or penetration pricing
• - Heavy advertising
• - Limited distribution
• Example: Electric Vehicles (EVs) in early adoption phase
 Stage 2: Growth
• Rapid sales growth & increasing profits
• - Market acceptance & customer base expansion
• - Competitors enter the market
Strategies:
• - Improve product features
• - Expand distribution channels
• - Competitive pricing
• Example: Smartwatches gaining popularity

• Stage 3: Maturity-
• Peak sales, high competition, market saturation
• - Profit stabilization or decline
• Strategies:
• - Product differentiation & innovation
• - Promotional offers & brand loyalty programs
• - Cost-cutting measures
• Example: Smartphones (Apple, Samsung, etc.)
 Stage 4: Decline
• - Declining sales & profits
• - Customers shift to newer alternatives

Strategies:
• - Product repositioning or redesign
• - Harvesting (reducing investment to maximize profit)
• - Discontinuation or liquidation

• Example: DVD Players, MP3 Players

• PLC helps businesses make informed decisions.

• - Strategies must be adapted at each stage to maximize profitability.
• - Understanding PLC ensures effective product management and longevity.

• Which stage do you think is most challenging for businesses?

 What is Brand Positioning?

• Brand positioning is the process of creating a unique image of a brand in the

consumer’s mind.

• Key Elements:
• - Target Audience
• - Competitive Advantage
• - Unique Value Proposition

• Example: Volvo is positioned as the 'safest' car brand.

BRAND

• A brand is a unique identity that distinguishes a product, service, or company from

others in the market. It includes elements such as a name, logo, tagline, design,
and reputation that create a perception in the minds of consumers.
 Developing Brand Positioning

• 1. Identify Target Market & Customer Needs

• 2. Analyze Competitor Positioning
• 3. Define Unique Value Proposition (UVP)
• 4. Craft a Clear and Consistent Message
• 5. Implement & Communicate Brand Positioning
• 6. Monitor and Adapt Based on Feedback

Establishing Brand Positioning

• - Build Emotional Connection with Consumers

• - Maintain Consistency in Branding (logo, messaging, experience)
• - Use Multiple Marketing Channels
• - Align Product, Pricing, and Promotion

• Example: Apple consistently reinforces premium and innovative branding.

 Differentiation Strategies
• Product Differentiation: Unique features, quality, design
• Service Differentiation: Exceptional customer service
• Image Differentiation: Strong brand identity, emotional appeal
• Price Differentiation: Luxury vs. budget positioning
• Distribution Differentiation: Exclusive partnerships, convenience

• Example: Tesla differentiates through innovation & sustainability.

Perceptual Mapping

• Perceptual maps help visualize brand positioning against competitors based on key
attributes.

• Example: BMW vs. Toyota – Luxury vs. Affordability

• A strong brand position ensures differentiation & customer loyalty.

 Types of Brand Positioning Strategies

• Value-Based Positioning: Offering the best value for money (e.g., Walmart)
• Quality-Based Positioning: Superior quality & premium appeal (e.g., Rolex)
• Feature-Based Positioning: Unique features & innovation (e.g., Tesla)
• Problem-Solution Positioning: Addressing pain points (e.g., Sensodyne for sensitive
teeth)
• Lifestyle Positioning: Aligning with a specific lifestyle (e.g., Nike – ‘Just Do It’)

Repositioning a Brand
• - Brands may reposition due to changing customer needs, competition, or declining sales.

Key Repositioning Strategies:

• New Target Audience: Expanding or shifting the audience (e.g., Old Spice from older
men to younger consumers)
• Change in Brand Image: Revamping brand perception (e.g., McDonald's focus on
healthier options)
• Product Modifications: Improving or innovating products (e.g., Nokia’s shift to Android
smartphones
 Case Study: Coca-Cola vs. Pepsi
Coca-Cola:
• - Positioning: Emotional branding (‘Happiness & Togetherness’)
• - Strategy: Nostalgia, tradition, and family values

Pepsi:
• - Positioning: Youthful, energetic brand (‘Live for Now’)
• - Strategy: Celebrity endorsements, pop culture influence

• This highlights the importance of unique positioning even in similar markets.

Key Takeaways

• Strong brand positioning builds customer trust & loyalty.

• Differentiation is key to standing out in a competitive market.
• Positioning strategies should align with consumer perception.
• Repositioning helps brands stay relevant in changing markets.

• How can you apply these strategies in real-world branding?