Chapter 12 Economic Value, Frames of Reference, and the Impact of Framed Positioning Strategies in Business-to-Business Markets

Abstract

The predominant view of positioning in both the literature and practice – a remarkably uni- or two-dimensional view – asks these questions: (1) What dimension should the product or service be positioned on, for example, unique styling, design, performance, and quality? (2) What category does the product or service compete in or belong to? So marketers therefore ask: Should the computer brand be positioned as reliable (Dell), or faster (Toshiba)? Research on economic value is well established in the pricing literature, especially in business-to-business pricing. Most of this literature focuses on differentiation value, that is, how to calculate the worth of the differential benefits a customer receives from using the firm's product versus the competitive substitute. But a much less studied area of this research deals with the price of the competitive reference product, or competitive frame of reference. Rarely do marketers extend positioning strategy to the level of economic value, asking: How is the product framed, and how valuable is the frame? The purpose of this chapter is to explore competitive frames of reference in business-to-business positioning. Specifically, what are alternative types of frames of reference? What is the role of the reference price in frames of reference? What are the implications of choosing one type of frame of reference versus another?

Citation

Smith, G.E. (2012), "Chapter 12 Economic Value, Frames of Reference, and the Impact of Framed Positioning Strategies in Business-to-Business Markets", Glynn, M.S. and Woodside, A.G. (Ed.) Business-to-Business Marketing Management: Strategies, Cases, and Solutions (Advances in Business Marketing and Purchasing, Vol. 18), Emerald Group Publishing Limited, Leeds, pp. 283-322. https://doi.org/10.1108/S1069-0964(2012)0000018017