Table of Contents
Definition
The frame of reference is defined as a process that enables comparing a product or service with other offerings from rival brands. It is generally undertaken by potential stakeholders to know about the target market of a specific company.
The process also includes a comparison of dissimilar types of products and services.
Meaning of frame of reference
It is described as a specific set of ideas and beliefs on which someone can base his judgment. It is also referred to as a primary standard or assumption that sanctions or determines a typical behavior. It is often called a multi-dimensional and complex concept that can be deep or narrow depending upon certain situations. It has a direct impact on the positioning of products and services of a brand.
The frames of reference is used in an overall context in which a situation is placed, inferred, or examined. If it is said to belong to a too-narrow frame, it means leaving out some essential factors whereas a too-broad frame signifies factors that may prove irrelevant to the context or are simply distractions.
Did you know how critical a strong frame of reference is for your brand?
According to the Edelman Trust Barometer 2020, 81% of consumers say that brand trust is a deciding factor in their purchasing decisions. This underscores the importance of establishing a strong frame of reference to build trust and credibility with your audience.
As marketing strategists Al Ries and Jack Trout famously stated, “Positioning is not what you do to a product; it’s what you do to the mind of the prospect.” This highlights the crucial role of frame of reference in shaping consumer perceptions and achieving a competitive advantage.
Understanding the frame of reference
In business or in marketing, the frames of reference is a structure of views, values, and customs through which a group or an individual can perceive, identify, evaluate and assess information and data and can communicate ideas and concepts and monitor behavior.
In simple language, the perceptions are filtered to create a meaning on which an individual or a group can base his understanding of the concept and his judgment. This is why the frames of reference can also be described as the conception of an action, the outcome as well as contingencies that are linked with a specific choice.
The term frame of reference in marketing is used to describe the conscious or mindful placement of a product or service in the marketplace. The marketing starts when you create a reference because, at the onset, it is the way the consumer in the market perceives your service or product.
For example, it becomes easy to identify a chocolate ice-cream to the ice-cream category. Similarly, potential clients need a viable reference to make comparisons between products of a similar type that offer the same benefits.
It is a concept that makes certain how a product or service is seen in the market by the target audience. Its basic idea is to create a particular image or view or opinion about the service, product, or concept that is being marketed by business entities.
The marketing strategy of various business organizations is focused on specific target markets and involves making comparisons between similar products or newly introduced products with existing products to know about their actual worth.
It is a fact that individual culture and personality have a lot of say in shaping the reference for a person. It is often manipulated by communicators in the market to target certain attitudes, perceptions, and ideals of the audience and appeal to their core beliefs. Before creating, brands must understand the prevailing opinion in the market and create the reference accordingly.
Remember, it helps to categorize a product or service by highlighting specific points like the point of parity and point of difference so that certain items start looking attractive to potential consumers.
In the purchase journey of a consumer, it is their perception that matters most because it helps them to choose and interpret information in a certain manner. This creates a personalized understanding of what a consumer is experiencing and assigns meaning to his attitude and belief towards a brand or its products and services.
Examples of frame of reference
When you look at a group of people wearing dark clothes at night riding bicycles, the first assumption is that they are a gang of bikers looking out to create trouble. The fact might be quite different as the group could be plain-clothed policemen on rounds at night looking for troublemakers. It is your reference that was based on a similar act and decided upon the assumption.
It is what a person considers reality through his subconscious frames that helps in making certain perceptions about situations, people, products, and services. The fact is that it is considered an essential tool in changing minds based on our understanding of the situation.
The brand name often becomes a frame of reference to the products or services launched by the brand. If LG, a worldwide brand launched a new product in the consumer market, it is already established as people will compare it with the other products launched by the brand.
Advantages of a frame of reference
The advantages are as follows
1. Clarifies the value proposition of the product
It is a competitive market with numerous products and services, and every company wants its items to be the best selling ones in the market. How does a consumer decide which one is the one that he wants to purchase amongst hundreds of similar ones?
It proves a blessing in disguise and helps him to make comparisons with others so that he can come to a decision.
Remember a company can persuade people through this process that it is their product or service that is the best in the market and will prove advantageous for you to use it. It is an admirable concept that helps to clarify the value proposition of a product or service so that the user can know its advantages beforehand
2. Head-to-head comparisons
An essential advantage is direct or head-to-head comparisons which serve a dual purpose in marketing and business. It takes several products or services and creates references to make comparisons using existing products or services as the baseline. The process also aids in equating new items with established brands to give them a strong competitive advantage.
For example, if a brand launches an exclusive coffee cafeteria, then it is in direct competition with existing brands like Starbucks who has already made a name for itself. The consumers will bypass the years of its existence and make a direct comparison between both the companies and their products and services.
This is an advantageous situation for the new brand whose frame of reference has already given it a valuable standing and promotion in the market
3. Points of parity
The brands often establish their frame of reference at the onset so that the consumers can compare their products and services with similar types. It highlights points of parity and proves beneficial because the consumer gets to know how your product or service is superior from the ones that rival brands are offering in the consumer market.
Highlighting the points of parity provides a solid reason for the consumer to buy that item.
4. Point of difference in a reference frame
Another important advantage of the frame of reference is that it helps a brand to highlight the points of difference. Suppose your product or service has some extraordinary feature that is not available in other items in the consumer market then this point can make a considerable amount of difference in the way the consumer views your product or service.
Highlighting and publicizing them will be beneficial in terms of good sales figures and higher revenues for the company.
5. Helps in making choices based on information
When a person comes across a new product or service to make sense and know about it, he has to use the frame of reference that already exists in his mind. He will think of the category where it might fit and then look at the specifications and details as well as price points and decide whether the product or service is what he is looking for or not. The advantage of such a reference is that it helps in making choices in everyday life.
6. Process information and make fast decisions
It serves a valuable purpose as it allows a person to take in various information and process it based on past experiences. It is a fact that it encourages stability in life and helps a person to make fast decisions.
7. It is used in a change initiative
The change initiative is entirely dependent on the frame of reference. When an organization implements the change initiative, it encourages feedback. This is then subjected to the reference to evaluate the change process systematically and adequately.
8. Build a positive brand image
The marketing effectiveness of a business entity is dependent on the perception of a very great deal. It serves as a useful key that is used with a specific intention of making contact and engaging the potential consumers to shape, define, and influence their perception of a brand or its product.
When a customer starts identifying with a brand because of the frame of reference, it aligns with the product and ultimately is used to build a positive brand image in the consumer market.
