- Niraj Dawar
- May 25, 2015
Strategic marketing decisions can either sink a company or drive an increase in sales. Traditionally, brand managers have relied upon outdated and stale brand mapping techniques which fail to link market position with performance outcomes.
In a breakthrough piece of research published in the June edition of Harvard Business Review, Ivey Marketing Professor Niraj Dawar and PhD student Charan Bagga are charting a new course for brand mapping which focuses on centrality and distinctiveness.
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While centrality demonstrates how a brand is represented in a given category, distinctiveness is a measure of the degree to which a brand stands out from others. Dawar and Bagga’s approach maps where a brand sits using these variables, and also incorporates market performance which has implications for measures such as sales, pricing, risk, and profitability. For example, in the car market the higher the brand scores on centrality, the greater its sales volume. Toyota had the highest centrality score surveyed and is the only car brand to have sold more than one million passenger cars in the United States in 2014.
“Striking the right balance between centrality and distinctiveness is critical, because a company’s choices influence not just how the brand will be perceived, but how much of it will be sold and at what price – and, ultimately, how profitable it will be,” said Dawar.
This new tool for measuring and managing brand positioning against market performance will help to convert brand knowledge into a powerful marketing strategy.
“Brand managers typically believe that their marketing differentiation strategy distinguishes their brand in consumers’ minds and accounts for its sales,” stated Dawar. “Measuring customers’ perceptions of a brand’s distinctiveness and linking that statistically to performance provides an instant check on a strategy’s effectiveness.”
In the Harvard Business Review piece Dawar and Bagga demonstrate how their centrality and distinctiveness mapping techniques can be applied to both the beer and automotive industries giving marketers a fresh tool in their strategic toolbox.