Product Positioning

What is Product Positioning?

Product positioning is a form of marketing that presents the benefits of your product to a
particular target audience. Through market research and focus groups, marketers can determine
which audience to target based on favorable responses to the product.

Research can also determine which product benefits are the most appealing to them. Knowing
this information helps streamline marketing efforts and create effective marketing messages that
drive more leads and sales. It also helps differentiate the product or service from the competition
in the marketplace.

Product positioning is an important component of any marketing plan, but it doesn‘t have to be
limited to one audience. For example, a product may have a main target audience and also a
secondary audience that is also interested in the product, but perhaps in a different way. Each
audience will find the product appealing for different reasons, which is why it‘s important to
tailor marketing messages to focus on the benefits each audience values most.

Examples of Product Positioning

Product positioning can involve a number of different elements. A product can be positioned in a
favorable way for a target audience through advertising, the channels advertised through, the
product packaging, and even the way the product is priced. For example, market research may
have revealed that the product is popular among mothers. What do they like about the product?
What should be highlighted about the product to attract them? And where should the product be
advertised to reach them? With the answers to these questions, an effective marketing campaign
can be created to send benefit-driven messages to the target audience wherever they may be
(such as Facebook, where targeted ads can be purchased based on demographics and interests).

Why is positioning important?

Product positioning is a crucial ingredient in the buying process and should never be left to
chance. It‘s your opportunity to influence the market‘s perception of your products.
Failure to proactively address product positioning is unlikely to end well. With or without your
input, customers will position your product—probably based on information from your
competitors, which will not flatter you. Clear, concise, meaningful product positioning also helps
you cut through the relentless advertising and marketing noise of the marketplace. In your
customer‘s mind, product positioning gives your messages some context so they can be better
heard and accepted.
Production Positioning for Small Businesses

While larger corporations have the budgets for extensive market research, small businesses may
have a difficult time coming up with the time or money to do it in depth. Instead of running focus
groups and doing tons of research, a small business owner can simply ask their network for their
opinions. If they collect information on customers and their purchases, future product positioning
strategies can be based on actual sales data. This may even be more effective than basing product
positioning on the opinions of potential customers, such as in a focus group, because this
positioning is based on real behavior rather than speculation.

In conclusion, a huge marketing budget is not necessary to take advantage of market research
and effective product positioning. Understanding the target audience and how to communicate
the benefits of a product to them in a compelling way is the first step toward a solid marketing
plan.

Positioning characteristics
The goal of product positioning is to keep your product on top of your customers‘ mind when
they‘re considering a purchase. To be successful, product positioning must achieve three
objectives:
• Differentiate your product from the competitions
• Address important customer buying criteria
• Articulate key product (or company) characteristics

Four Components of Positioning

The four basic components of positioning are as following:

1) Product class: A product class can be defined as the set of products or brands which are
perceived as substitutes to satisfy consumer needs. For example: The product class of chocolates,
Cadbury‘s Amul and Campco are clearly positioned against one another.

2) Consumer segmentation: In this competitive world, every producer has to find their closest
competitor and should also be able to identify the various segments in which their brand can
survive. Positioning of a brand and the target segment produced must be combined because
brand must be positioned to appeal to a target consumer segment and respond to a brand that
occupies the position preferred by it. Target market and positioning strategies are just similar to
the two sides of a coin.

3) Perpetual Mapping: Perceptual mapping means representing consumer perceptions in two

dimensional space so that the manager can readily see where his own brand prospect and in
relation to other brand. Consumers are asked to rate a set of brands along given attributes or
benefits or they may be asked merely to judge, by pairs, how similar or dissimilar the brands are.
There are various techniques available for such perceptual mapping profile charts are fairly
common in India. Research organizations offer hierarchical cluster analysis, multiple
discriminate analysis and some applications has also been reported of conjoint analysis.

4) Benefits offered by the brand: The brand must offer a benefit which is of important to the
customer. For example: Perceptual Map showing the benefits offered by different washing
products. Robin liquid is attempting to distinguish itself from detergent product on the dimension
of extra whiteness. Consumers can express preferences only in terms of benefits how much they
are obtaining a specific benefit from existing brands, how important this benefit is to them,
whether there is some benefit which they are missing, whether they would prefer to obtain a
specific benefit in greater or lesser measure. Such preferences are also called ideal points when
plotted on a perceptual map

Marketing messages and positioning have a lot in common

During the process of generating product positioning strategies, periodically review each one
against the following list of characteristics.
Is your product positioning strategy?
• Single-minded—does it convey one primary message at a time?
• Meaningful—will it connect with the target audience?
• Differentiating—does it contrast your strengths against the competition?
• Important—is it pertinent and significant to the target audience?
• Sustainable—will it resonate with the target audience well into the future?
• Believable—will it ring true with the target audience?

• Credible—can you clearly substantiate your claims?

Types of Positioning

Positioning is broadly classified into three types:

1. Functional Positioning: This is used when the brand or products provide solutions to
problems and provide benefits to customers. Functional positioning focuses on the function,
benefit or utility that it gives to the customer.

2. Symbolic Positioning: This is useful for creating a brand image which helps create brand
equity, a sense of social belongingness and ego-identification. Symbolic positioning is when a
customer has an affection, social connection, ego identification etc with the product.

3. Experiential Positioning: This creates sensory and cognitive simulation in the minds of the
customer. Experiential positioning is one of the basis of the experiences which a customer can
relate to.

Companies use a positioning process, which is step-wise method to place the product or service
in the right way in the consumer's mind. If a company decides to change the way people perceive
a brand, then they revamp the logo, slogan etc. of that brand. This process is known as
repositioning of the brand, which helps create a different image of the brand.

In positioning the product is differentiated based on 2 things to achieve competitive advantage: -

Points of Parity (POPs): The positioning is done on the basis of mostly similar elements
compared to a competitor.

Points of Difference (PODs): In this case, there is a clear difference in the product offerings vis-
à-vis the competitor.

The above product positioning graph for laptop, i-pod, netbook and kindle shows the benefits in
terms of different parameters. This method of understanding positioning is also known as
perceptual mapping or brand mapping.
The Positioning Process
Getting to the Right Position

Arriving at the best positioning and differentiation strategy involves a process. The goal of the
process is to design an identity that both confirms the value of the product, service, or brand in
the customer‘s mind and explains why and how the offering is better than the competition. To
reach that goal, marketers typically follow a positioning process comprised of the following five
steps:

Steps of the Positioning Process

1. Confirm your understanding of market dynamics

2. Identify your competitive advantages
3. Choose competitive advantages that define your market ―niche‖
4. Define your positioning strategy
5. Communicate and deliver on the positioning strategy

Step 1: Confirm Your Understanding of Market Dynamics

At the start of the positioning process, you need a firm understanding of your target market and
answers to the following questions:

 In which product, service, or market category (also called the ―frame of reference‖) do
you plan to use this positioning?
 Which target segment is your focus for the positioning you are developing?
 What factors do these buyers evaluate when they make a purchasing decision?
 How do these buyers view your competitors in the category?

If you don‘t have answers to these questions, you should consider conducting formal or informal
marketing research to reach a better understanding of your target market and the market
dynamics around it. Some marketers may have the time and resources to conduct extensive
research, while others may need to rely on their own experience and anecdotal conversations
with target customers. Either way, you‘ll remember that the customer is at the center of the
marketing mix, so knowing whom you‘re targeting is the only place to start.

Step 2: Identify Your Competitive Advantages

A competitive advantage is some trait, quality, or capability that allows you to outperform the
competition. It gives your product, service, or brand an advantage over others in purchasing
decisions. Competitive advantage may come from and or all of the following:

 Price: Something in your production process or supply chain may make it possible for
you to provide comparable value at a lower cost than competitors.
  Features: You may provide tangible or intangible features that your competitors do not:
for example, more colors, better taste, a more elegant design, quicker delivery,
personalized service, etc.
 Benefits: You may provide unique benefits to customers that your competitors cannot
match. Benefits are intangible strengths or outcomes your customer gets when they use
your offering. For example, time savings, convenience, increased control, enjoyment,
relaxation, more choices, feeling better about oneself, being more attractive, etc.

Create a list of the things that make you different from competitors in positive ways. Then
identify which of these factors are also competitive advantages: the influential factors that help
you perform better in the marketplace and cause customers to choose your product, service, or
brand over other options.

As a rule, it is relatively easy for competitors to undercut your pricing or match your features, so
it is difficult to maintain a consistent competitive advantage in either of these areas. Market-
leading products, services, and brands are most likely to differentiate based on benefits—the
intangible strengths and outcomes that are harder for competitors to match.

For example, many car companies achieve strong ratings in safety tests, but driving a Volvo
provides an extra, intangible benefit for the driver of feeling safer because of Volvo‘s
longstanding record and reputation for safety. A variety of theme parks in Southern California
offer exciting rides and family fun, but only Disneyland‘s Magic Kingdom makes people feel
like they‘re in the happiest place on earth.

You don‘t necessarily need a long list of competitive advantages, but your list should be
substantive: it should include the things that truly create distance between your offering and
competitors. Dig deep to identify the intangible benefits your customers experience–or intangible
benefits they could experience—from your offering that make it different and better than the
alternatives.

Step 3: Choose Competitive Advantages That Define Your Niche

Your list of competitive advantages represents a set of possible positioning strategies you could
pursue for your product, service, or brand. The next step is to examine how these factors fit into
customer perceptions of your broader competitive set. Your goal is to pick a positioning
approach that gives you a unique and valued position in the market that competitors are not
addressing.

A perceptual map is a great tool for this step. Perceptual maps create a picture of how different
competitors are positioned in the market, based on the key criteria that strongly influence
customer decisions. Examples of two different perceptual maps are included below. The first
one maps automobile brands based on customer perceptions of price and quality. The second
one maps lifestyle programming on cable TV channels, according to whether it is younger/edgier
vs. older/mainstream and educational vs. entertainment.
Marketers use these sorts of perceptual maps to identify gaps in the market; these, in turn,
represent opportunities to to fill a niche in the market that isn‘t being addressed. For example, the
lifestyle programming map suggests that there are not a lot of choices in the area of
younger/edgier AND educational space. This might be a good place to position a new cable
channel or programming direction. On the other hand, there are already lots of established
players in the younger/edgier/entertaining space, so new entrants would have to beat out more
competition to make an impact.
You can create a perceptual map similar to these by identifying the key criteria customers
use when deciding what to buy and setting these as the horizontal and vertical axes. Then you
can overlay competitors in the perceptual space where they seem to fit. You can even create
multiple maps of the same market with different criteria on the horizontal and vertical axes to get
a different view of how competitors are positioned. Perceptual maps are most robust when they
are based on actual marketing research data, but marketers can also create directional maps based
on their experience and anecdotal understanding of market dynamics. With your maps in hand,
look for areas where there are fewer competitors: these are the spaces where you are most likely
to be successful creating your own niche. Consider where your competitive advantages would
help you fit well into these gaps; this will direct you to the strongest positioning opportunities for
your product, service, or brand. Give this approach a try: Suppose you are exploring whether to
introduce your homemade, artisan-style ice cream to a wider audience, which will mean
competing with national brands carried in local and regional grocery stores. Looking at the
following perceptual map, where are the gaps in which you could create a niche for your
product? Who would be your closest competitors?

Your competitive advantage around a homemade, artisan-style product puts you on the upper
half of the map. You would have to choose between more classic versus interesting and
innovative ice cream choices. Based on your strengths and preferences, you can choose where to
claim your positioning niche: Perhaps you stake your future on the classical side by introducing
the most marvelous, pure, premium vanilla and chocolate ice creams your customers have ever
tasted. Alternatively, you might choose to introduce an ice cream line that capitalizes on
interesting flavor combinations using local and seasonal ingredients, which would position you
squarely in the innovative quadrant. Either approach could be a winning combination in a unique
market niche.

If you choose not to create a perceptual map, an alternate approach is to list competitors and their
competitive advantages. Then, add your own own offering and competitive advantages to the list.
Based on the alternatives available to customers, think about where there are gaps between what
customers want and value most and what they can get from the choices available
today. Identify where your competitive advantages can help you fit into these gaps, since they
will be the most promising positioning approaches for you. Remember to think creatively as you
are defining your competitive advantages and choosing those that will define your positioning
and market niche. You have a greater likelihood of success if you are also the first in the market
to claim your positioning. You won‘t have to displace anyone else, and you can generate
excitement by fulfilling a previously unmet need.

Step 4: Define Your Positioning Strategy

With your competitive advantages identified and information about how key competitors are
positioned, you‘re ready to evaluate and select your positioning strategy. This is the decision you
make about how, exactly, you plan to position your offering relative to the rest of the field. How
will you be different and better? There are several common positioning strategies you should
consider, shown in the following table:

Common Positioning Strategies

Differentiator Positioning Strategy Examples
Category Position yourself as ―owning‖ an important benefit Volvo = Safety
Benefit and delivering it better than anyone else
Hallmark = Caring shared

Hawaii = Aloha spirit

Best fit for the Position yourself as an ideal fit for the customer‘s Red Bull = Extreme
Customer personality, style, and approach
Guess Jeans = Sexy chic

Virgin Atlantic = Ultra-cool

fun
Business Position yourself with a distinctive approach to Jimmy John‘s = Unbelievably
Approach doing business fast

TurboTax = Easy DIY

Anti- Position yourself as a preferred alternative to the Apple = Think different
Competition competition
Seven-Up = The Uncola
Price Position yourself according to pricing: lowest cost, Wal-Mart = Lowest prices
best value for the money, luxury or premium
offering, etc. RyanAir = Cheap flights

Old Navy = Affordable

fashion
Quality Position yourself according to a quality standard: Hearts on Fire = Perfect cut
high quality, best-in-class, or else reliably good
quality at a reasonable price Ritz Carlton = Ultimate
luxury
Strong positioning is simple: it focuses on a single, powerful concept that is important to the
customer. It uses your most promising competitive advantage to carve out the niche you will fill
better than anyone else. Your positioning strategy puts this competitive advantage into the
context of your competitive set: it explains what distinguishes you from the competition. Perhaps
you deliver an emotional benefit that your target audience doesn‘t get anywhere else (escape?
balance?) Perhaps you are hands down the best choice for a geeky, gear-head audience (bikers,
coders). Perhaps you provide great customer service in a category where customer service is
unheard of (cable TV, contractors).

Step 5: Communicate and Deliver on Your Positioning Strategy

The next sections of this module will delve deeper into this step, but don‘t underestimate its
importance. Communicating your positioning strategy begins with creating a positioning
statement and sharing it internally across the organization to make sure that everyone
understands how and where your offering will fit in the market. Your positioning builds on a
competitive advantage, and it is essential for you to deliver on the expectations your
positioning sets in customers‘ minds. You should design your positioning strategy to endure over
time, while recognizing that it can and should be adjusted from time to time to reflect changes in
the competitive set, your target segment, market trends, and so forth.

If your positioning is based on being an ideal ―lifestyle‖ fit for your target audience, for example,
you need to demonstrate how your offering is attuned to the needs and experiences of this
audience. This includes evolving as your target segment evolves. If your positioning is based on
―owning‖ an important benefit like security or reliability or delight, then you should explore all
the ways you can deliver that benefit better than any competitor who might try to imitate you.

The marketing mix provides the set of coordinated tools you use to execute on your positioning
strategy. You might think of your positioning strategy as the tune you want your target segment
to hear. The marketing mix is how you orchestrate and harmonize that tune, making it a
memorable, preferred choice for your target customers.

Positioning strategies
The following is a list of some established product positioning strategies. Think about your
product in terms of each one and see how they fit.

• Against a Competitor: Positioning your product directly against a competitor‘s typically

requires a specific product superiority claim. A memorable example is Avis Rental Cars‘ We
try harder.

• Away from a Competitor: Positioning yourself as the opposite of your competitor can help
you get attention in a market dominated by some other product. A famous example is 7-UP
calling itself the Uncola.

• Benefits: This strategy focuses on a benefit your product provides to your target audience.
Examples include Volvo‘s emphasis on safety and Crest toothpaste‘s focus on reducing
cavities.
 • Product Attributes: Highlighting a specific attribute of your product can also be
compelling. For example, Ritz Carlton hotels focus on luxury; Motel 6 focuses on economy.

• Product Categories: Comparing your product to a product in a different category can be an

effective way to differentiate yourself. In a soap-compares-itself-to-lotion example,
Palmolive dishwashing liquid claims that it softens you hands while you do the dishes.

• Usage Occasions: This kind of positioning stresses when or how your product is used by
your target audience. Jeep‘s focus on off-road driving is an excellent example.

• Users: Focusing on the unique characteristics of specific users can also be effective. The
‗___For Dummies‘ series of instruction books are attractive to people who want to learn about a
topic from a source that doesn‘t assume any prior knowledge on the reader‘s part.