Perceptual Maps Differentiation and Positioning Are Closely

Perceptual Maps

Differentiation and positioning are closely related, but they are not the same. Borna and Chapman (1993) argues that differentiation is a form of positioning, but I would argue the reverse. A product can be differentiated in a number of ways. Thorr Motorcycles are differentiated on the basis of bike features and branding, for example -- things that make Thorr bikes unique. Positioning reflects the perception of differentiation that the company pursues.

The perceptual map helps Thorr to analyze how the consumer thinks about the different points of differentiation of Thorr motorcycles and from there it can be better understand if Thorr is pursuing the right positioning. The views of consumers about the different attributes of Thorr bikes -- and whether those attributes are important or not -- help to characterize a best fit positioning for Thorr. Consumers see Thorr bikes as high quality machines with superior design, but not necessarily superior engineering. These perceptions should be incorporated into Thorr's positioning, for example as a timeless high-end product that may not change much technologically but looks good and is of excellent quality.

The perceptual map should also illuminate for Thorr management one of its key issues, being the low score for service. Thorr pursues high-end positioning, which appeals to the 35-50 demographic, but does not support the high-end positioning or price tag with high-end service. This disconnect between the level of differentiation and the positioning is going to cause trouble for the company with some customers, and could drive customers away to competitors who perform better with respect to the service function.

The strategy should reflect a desire to close the gap between the positioning and the differentiation. The positioning can be changed, but for Thorr the high-end positioning allows it to charge high prices and therefore earn high margins. The more likely strategy from the initial simulation is to improve service levels so that they more closely match the perception of the company as a whole.

With introduction of the Thorr Cruiser represents an opportunity to focus on product positioning. The Cruiser did not perform well despite being positioned roughly in line with other Thorr bikes. The problem appeared to be one of demographics -- the target market for Thorr is shrinking, so there was no real room for the new product. There is an opportunity with the Cruiser to re-position the product, if that could be done without diluting the positioning of the rest of the Thorr lineup. The product is differentiated in that it is a cruising bike, but is insufficiently differentiated that the positioning of Thorr can be completely ignored -- customers are going to perceive the Cruiser much as they would perceive any Thorr bike. The challenge for Thorr, then, may not be to reposition the Cruiser but to launch a new bike that can be better positioned for growth.

The new bike, the RRoth, could potentially be positioned in a manner that attracts younger riders. If the product does not bear the Thorr name prominently, there may be room for distinct positioning. In particular, if the design of the RRoth deviates significantly from the design of the existing range of Thorr bikes, it has an opportunity to break from the perceptions typically associated with the brand. The question of the Cruiser vs. The RRoth reflects the difference between positioning and differentiation -- the bike was differentiated but the company had difficulty positioning it far from the core product line. In order to achieve the desired positioning, Thorr would need a new product, preferably one that did not bear the Thorr name.

2. Product life cycle is an important aspect of marketing. The life cycle is: introduction, growth, maturity and decline (QuickMBA.com, 2010). In the introduction stage, marketing is usually fairly aggressive, as is the pricing. With the Cruiser, Thorr did not price aggressively and seemed to largely assume that the product would market itself. The lack of attention paid to marketing contributed to the weak sales and the perceived need to reposition the bike or replace it in the lineup.

For the regular Thorr range, the problem facing the company was different. The perception of the motorcycles was tied with the traditional target market. While this made it difficult to market the Cruiser outside of this target market, it also made it difficult to market the regular line outside of the target market. As the size of the target market declined, the product moved into maturity and was headed for the decline stage. The marketing approach needed to focus, with particular attention to changing the position of Thorr to include a broader range of target markets. This in turn is likely to change the distribution, the communications strategy and possibly even the pricing. In order to appeal to younger customers, for example, Thorr products would need to be priced and positioned differently, more in line with the needs of that particular demographic.

Thus, the simulation addresses products at different stages of the life cycle. The issue created was that the Thorr name is highly correlated with a specific product positioning. The Cruiser, for example, is differentiated but the positioning remains the same; what needed to happen was that the Cruiser needed to be positioned differently. The product life cycle complicates this issue, because the Cruiser has already been through the introduction part of the cycle. The nature decision to come from this is that the Cruiser needs to be re-introduced if it is to receive new positioning. This may not be possible, casting the future of the product in doubt. However, if a re-introduction is possible then that is the best approach, to start the product life cycle anew.

It is recommended that the older product line see its positioning shifted downward. While it may appear that improving service is essential, this is pumping more money into the brand while it is in the maturity or decline stage of the life cycle, decreasing profitability in the process. Ideally, this would not be the case. The positioning should be lowered, as lower prices will help to attract younger consumers who currently do not see themselves as part of the target market for Thorr. By moving into the younger market, and making strategic cuts to the product to lower production costs, Thorr can increase sales while maintaining profit levels.