bowmans-strategy-clock

What is Bowman’s Strategy Clock And Why It Matters In Business

Bowman’s Strategy Clock is a marketing model concerned with strategic positioning. The model was developed by economists Cliff Bowman and David Faulkner, who argued that a company or brand had several ways of positioning a product based on price and perceived value. Bowman’s Strategy Clock seeks to illustrate graphically that product positioning is based on the dimensions of price and perceived value.

Understanding Bowman’s Strategy Clock

Bowman’s Strategy Clock seeks to illustrate graphically that product positioning is based on the dimensions of price and perceived value. Usually, the Browman’s Strategy Clock features price on the x-axis and perceived value on the y-axis.

On the graph lies the circular Bowman’s Clock. Varying combinations of price and perceived value lead to eight conceivable marketing strategies. Businesses can pick one of the eight strategies that suit them best, according to the price and perceived value of the product, service, or brand they are trying to market.

The eight strategies of Bowman’s Strategy Clock

1. Low price and low value-added.

Since the first strategy involves low-value products sold at the lowest possible price, there is little scope for strategic positioning if a competitor is already selling for the lowest price possible. The consumer also perceives very little value, despite the low price, which decreases brand loyalty.

2. Low price

The low price strategy means a product is the lowest cost option in its marketplace. Businesses who want to utilize this strategy must manufacture products in large quantities while also being cost-effective and efficient. Walmart is a classic example of a low price strategy market leader.

3. Hybrid

In the hybrid strategy, consumers perceive added value through a combination of competitive low pricing and product differentiation. If the added value is offered consistently, this can be an effective positioning strategy. Flatpack furniture outlet IKEA is a great example of the hybrid strategy.

4. Differentiation

The differentiation strategy is equated with high perceived value. Because of this, brand equity is high – allowing businesses to compete in highly competitive markets. Ultimately, the consumer chooses to pay a higher price for a product they could purchase elsewhere for less. Starbucks is a company who use the differentiation strategy to their advantage.

5. Focused differentiation

Focused differentiation is where most luxury brands reside. They have extremely high perceived value and a price to match. Companies such as Rolex and Ferrari are competitive in this sphere through product promotion to their highly targeted audience. Brand equity is similarly very high. 

6. Risky high margins

As the name suggests, this is a high-risk strategy where businesses set high prices without offering much value in return. Often, they are relying on brand equity to drive sales. Inevitably, a competitor will enter the market and offer a product for similar perceived value but at a lower price. Businesses who offer gym memberships are one such example.

7. Monopoly pricing

A company who enjoys a monopoly over its market is less concerned about perceived value or pricing. This is because the consumer is reliant on the business for the products and services that it offers. Thus, perceived value is often low and so too is brand equity. Despite total market share, monopolies are difficult to obtain and such companies are often dissolved by regulatory bodies. American telecommunication company AT&T is a notable recent example.

8. Loss of market share

The loss of market share strategy involves products with low perceived value but with disproportionately high pricing. When the iPhone was first launched in 2007, it quickly rendered the dominant Blackberry obsolete. As a result, Blackberry phones lost their perceived value and market share very quickly.

Key takeaways

  • Bowman’s Strategy Clock is a marketing model that investigates how a product might be positioned to give it maximum competitive advantage.
  • Bowman’s Strategy Clock features eight possible competitive strategies that apply to different markets and products.
  • Of the eight strategies, perhaps half offer undesirable market positioning. Nevertheless, many businesses find themselves in these positions.

Other strategy frameworks

More resources:

Published by

Gennaro Cuofano

Gennaro is the creator of FourWeekMBA which target is to reach over two million business students, executives, and aspiring entrepreneurs in 2020 alone | He is also Head of Business Development for a high-tech startup, which he helped grow at double-digit rate | Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy | Visit The FourWeekMBA BizSchool | Or Get in touch with Gennaro here