The challenge here is that they are competing against Saira, an older company based in the U.S. that beat Tela to the market capturing 60% of the market share, with their buy one, give one business model which is parallel to TOMS social mission. Tela is based in Peru while Saira is not. Both are socially responsible. Saira donates one poncho for each poncho they sell while Tela helped local workers by teaching them weaving. As a second mover against Saira, the company strives to create a concise marketing message that would ultimately deliver the company s mission. With this in mind, Tela conducts a focus group in Surrey, England as an aid for their marketing strategy that resonate with its target market. In this case study we have Alejandra with the company s executive team as they struggle to come up with Tela s message, discussing whether to emphasize the social mission, authenticity of their products, affordable price or to communicate a combined message. These four options for their company s positioning statement were approached in the focus group, showing them brand tag lines in hopes to determine which Tela should focus more on as a brand and to see what resonates most with them.
There are four options that are considered for the company s positioning statement:
Social Mission
Both the companies have a social responsibility, with Tela putting forward their business model to their consumers that they create employment and develop economies. This appears to be a lot more complicated compared to Saira s simple and straightforward campaign of buy one, give one , buy one, donate one business model. They donate one in need after every purchase made. The focus group highlights the importance of buying socially responsible products, and giving back to a cause. Saira was successful in promoting this, resulting with Tela being perceived as copycats. In the case study, they discuss about how, “Okay. Tela isn’t a life style. It’s a livelihood. Our ponchos keep you warm, and keep women entrepreneurs in business.” There was a brief positive response, but the company s executive team and the participants thought otherwise. Everyone knew that
Saira has already made their territory in owning this position statement.
Authenticity
However, with authenticity the second position statement is a position not quite occupied by Saira. Tela is originally made in Peru with an emphasis on tradition and back-to-the-land craftsmanship. In contrast with Saira being made overseas in Bangladesh and a U.S. based company, still appropriating the Peruvian heritage behind its design. So Tela has the opportunity to take claim as the legitimate and authentic poncho straight from Peru.This is a compelling positioning statement. Alejandra, the founder of Tela cares about the home country Peru and doing well there, a case in which she would feel comfortable with. The question is, would it be enough to compete against the likes of Saira?
Authenticity is a popular positioning statement in today s market. Consumers generally response well to authentic goods, looking into the materials, ingredients and the processes of the manufacturing. The heritage and the history of the companies, to determine which products are really authentic. In this case study, the audience would seem sceptical about the price being cheaper in Tela, if it is really authentic, the real deal. In comparison to Saira s poncho s which costs more.
This relates to Michael Porter s differentiation strategy which states that organisations that pursues a differentiation strategy try to make their products and services unique and distinctive by enhancing product quality. Customers are willing to pay more because they perceive the product/service is more valuable. (Tiernan, J. Morley, 2013)
Affordability
Finally, affordability is the third position statement that the company could possibly focus on. Saira s poncho sell somewhere from 60 to 100 dollars, while Tela has a lower price range from 40 to 60 dollars. Tela s tagline Fashion at the right price, a poncho for real people, should Tela emphasize the fact that they are cheaper, less expensive than Saira. There s a difference of about 20 dollars in price. Price positioning has been around for a long time as a viable option, generally companies position themselves either on price we are the cheaper option. Or they try to search for a point of differentiation and position on a non-price attribute. Tela can cut costs unlike Saira because they do not give donations and invest less in marketing. There s also an assumption from the consumers that Tela is not paying the workers enough. Consumers tend to assume that the lower the price of the product the lower the quality. The demand curve shows that lower prices equals to higher demand. This is not the case in terms of higher status or better image that consumers perceive quality from price.
This relates to Porters cost leadership strategy, which states that organisations offer the lowest-cost product or services by reducing manufacturing and other costs. By keeping costs low the organisation can offer the products or services at a lower price. (Tiernan, J. Morley, 2013, p.135)
Combination of Social Mission, Authenticity and Affordability
As a small company of five years experience in the industry, Tela shouldn t be too eager in possessing all the three combination as a positioning statement. This will only lead to confusion towards their consumers. From the case study, it is evident that the participants of the focus group were unsure of the company s main brand positioning statement, what does it actually represent? As Soledad points out, trying to figure out the soul of your company is key to a start-up business.
2.Explain the concept of brand positioning and why it is so important for brands.
Brand Positioning: What is it?
These are a few definitions that would describe the concept of brand positioning.
Brand positioning is the act of designing the company s offer and image so that it occupies a distinct and valued place in the target customer s mind. Keller, Aperia, Georgson
The message a company wants to imprint in the minds of customers and prospects about its product or service and how it differs from and offers something better than competitors. Copernicus Marketing
…the part of the brand identity and value proposition that is to be actively communicated to the target audience. Thus the brand position, which should demonstrate an advantage over competitor brands, represents current communication objectives. David Aaker
It is established that brand positioning is at the heart of marketing strategy. Positioning would involve searching that distinct location routed in the minds of a group of consumers or market segment so that they would perceive a product or service in a certain or desired way. Therefore, key messages are obtained from that position. Simply, positioning is what you want to be known for. Positioning is relatively important in marketing because it can analyse the optimal location of a brand and its competitors in the minds of consumers to maximize the potential benefit to the firm. A brand positioning that is precise and useful helps to guide
marketing strategy by clarifying what a brand is all about, how it is unique and how it is similar to competing brands and why consumers should purchase and use the brand.
According to the CBBE (Customer-based brand equity) model, deciding on a positioning requires determining a frame of reference which is to identify the target market and the nature of competition and the ideal points of parity and points of difference brand associations. In particular, there are four factors that are relevant for the positioning statement, deciding who the target consumer is, who the competitors are, how the brand is similar to these competitors and the difference from these competitors.
Target Market
In order to appeal to specific consumers, distinguishing which target market the company is focused on is essential to know what type of brand knowledge the consumers already attained and the different perceptions and preferences for the brand. The question is, which consumers is the company trying to attract? By knowing the answer, this helps to develop a clear and strong positioning for the company s brand.
Competitors
Constant engagement of the competitor side is an advantage but a start up company should not dwell too much on the competitor or it starts to lose its sense of identity. Choosing a positioning that s distinctive, different than what competitors are offering is beneficial to the company s growth. Brand positioning is standing out from the crowd. What aspect of the brand differentiates itself from the competitor?
Points of parity and Points of difference
Therefore it can be explained in two sections, the points of parity and points of difference. Points of parity are associations that may be shared with other brands. While points of difference are attributes or benefits that consumers strongly associate with a brand, positively evaluate and believe that they could not find to the same extent with a competitive brand. (Keller, Aperia, Georgson, 2012)
3.What positioning should Tela use? And why?
Alejandra, the founder of Tela seems to be for the combination of the three positioning statement. However, this only caused confusion which is evident in this case study. As an observation, Tela is too focused on competing with the Goliath Saira and trying to please the customers when they should concentrate on searching for their own niche and story the soul of their company. In order for them to create a successful brand strategy Tela should look inward to define their company. Rather than a focus group with stranger s opinions, they should listen to the weavers and co-worker s to find its strength. Linking social mission with authenticity is a perfect combination for Tela. The company produces and designs their poncho s in Peru which is their points of difference compared to Saira (made in Bangladesh). As well as that they support local entrepreneurs and workers as their social responsibility. There s a points of parity in terms of both company s social mission but Saira s inauthenticity may lead to a problem specially in today s digital age. Consumers want the real deal. Company s that say they re good but do not live up to their promises are ethically questionable and customers will immediately point it out. There s a possibility of a public relation disaster. For example, Starbucks is thought to be a fair trade coffee company yet only 8.5 percent of its coffee is actually fair trade certified.
Finally, by marketing authenticity, Tela would feel more comfortable and assured that they are creating resonance with the consumers who are emotionally driven as individuals. Tela should certainly incorporate authenticity with their social mission. A large number of consumers today are very engaged in social mission particularly causes that are close to their heart and feel strongly about a personal level. It is a simple idea which pin points Tela s message and purpose, specially with people s short attention span; too many combinations can cause dilution and will not have an impact on the start-up company.
4 (a) If you were asked to be involved with this scenario, what advertising message would you recommend that Tela use to convey this positioning?
If I were involved in this scenario with Tela s company, I would recommend them to create an ad campaign that includes the weaver s life from Peru that s changed by Tela, featuring the quality of the poncho s in their locality. The idea is to collect an account of stories behind Alejandra s company through their social mission and authentic poncho s which will differentiate itself from Saira, also capturing the essence of their brand.
An attire that Tela story.
Passionate for Poncho s. Not for the average Joe.
Forget mediocre. Join the Tela story.
4 (b) What key words and concepts should be emphasised in the advertising message?
The word story instantly engages people, entertain them and helps build a strong connection with the listeners. Stories influence action, it uniquely moves a person s heart, mind and feel as well as their wallet. It motivates the audience to a goal. A great example would be Steve Jobs, an entrepreneur who converted sales presentation into an experience. His stories had persuaded fans to