Positioning is the marketing activity and process of identifying a market problem or opportunity, and developing a solution based on market research, segmentation and supporting data. Positioning may refer the position a business has chosen to carry out their marketing and business objectives. Positioning relates to strategy, in the specific or tactical development phases of carrying out an objective to achieve a business' or organization's goals, such as increasing sales volume, brand recognition, or reach in advertising.
Although there are so many different definitions of brand positioning, probably the most common is: identifying and attempting to occupy a market niche for a brand, product or service utilizing traditional marketing placement strategies (i.e. price, promotion, distribution, packaging, and competition).
Positioning is also defined as the way by which the marketers attempt to create a distinct impression in the customer's mind.
Positioning is a concept in marketing which was first introduced by Jack Trout ( "Industrial Marketing" Magazine- June/1969) and then popularized by Al Ries and Jack Trout in their bestseller book "Positioning - The Battle for Your Mind." (McGraw-Hill 1981)
This differs slightly from the context in which the term was first published in 1969 by Jack Trout in the paper "Positioning" is a game people play in today’s me-too market place" in the publication Industrial Marketing, in which the case is made that the typical consumer is overwhelmed with unwanted advertising, and has a natural tendency to discard all information that does not immediately find a comfortable (and empty) slot in the consumer's mind. It was then expanded into their ground-breaking first book, "Positioning: The Battle for Your Mind," in which they define Positioning as "an organized system for finding a window in the mind. It is based on the concept that communication can only take place at the right time and under the right circumstances" (p. 19 of 2001 paperback edition).
What most will agree on is that Positioning is something (perception) that happens in the minds of the target market. It is the aggregate perception the market has of a particular company, product or service in relation to their perceptions of the competitors in the same category. It will happen whether or not a company's management is proactive, reactive or passive about the on-going process of evolving a position. But a company can positively influence the perceptions through enlightened strategic actions.
A company, a product or a brand must have positioning concept in order to survive in the competitive marketplace. Many individuals confuse a core idea concept with a positioning concept. A Core Idea Concept simply describes the product or service. Its purpose is merely to determine whether the idea has any interest to the end buyer. In contrast, a Positioning Concept attempts to sell the benefits of the product or service to a potential buyer. The positioning concepts focus on the rational or emotional benefits that buyer will receive or feel by using the product/service. A successful positioning concept must be developed and qualified before a "positioning statement" can be created. The positioning concept is shared with the target audience for feedback and optimization; the Positioning Statement (as defined below) is a business person's articulation of the target audience qualified idea that would be used to develop a creative brief for an agency to develop advertising or a communications strategy.
Positioning Statement As written in the book Crossing the Chasm (Copyright 1991, by Geoffrey Moore, HarperCollins Publishers), the position statement is a phrase so formulated: For (target customer) who (statement of the need or opportunity), the (product name) is a (product category) that (statement of key benefit – that is, compelling reason to buy). Unlike (primary competitive alternative), our product (statement of primary differentiation).
Differentiation in the context of business is what a company can hang its hat on that no other business can. For example, for some companies this is being the least expensive. Other companies credit themselves with being the first or the fastest. Whatever it is a business can use to stand out from the rest is called differentiation. Differentiation in today’s over-crowded marketplace is a business imperative, not only in terms of a company’s success, but also for its continuing survival.
Brand positioning process
Effective Brand Positioning is contingent upon identifying and communicating a brand's uniqueness, differentiation and verifiable value. It is important to note that "me too" brand positioning contradicts the notion of differentiation and should be avoided at all costs. This type of copycat brand positioning only works if the business offers its solutions at a significant discount over the other competitor(s).
Generally, the brand positioning process involves:
- Identifying the business's direct competition (could include players that offer your product/service amongst a larger portfolio of solutions)
- Understanding how each competitor is positioning their business today (e.g. claiming to be the fastest, cheapest, largest, the #1 provider, etc.)
- Documenting the provider's own positioning as it exists today (may not exist if startup business)
- Comparing the company's positioning to its competitors' to identify viable areas for differentiation
- Developing a distinctive, differentiating and value-based positioning concept
- Creating a positioning statement with key messages and customer value propositions to be used for communications development across the organisation
Product positioning process
Generally, the product positioning process involves:-
- Defining the market in which the product or brand will compete (who the relevant buyers are)
- Identifying the attributes (also called dimensions) that define the product 'space'
- Collecting information from a sample of customers about their perceptions of each product on the relevant attributes
- Determine each product's share of mind
- Determine each product's current location in the product space
- Determine the target market's preferred combination of attributes (referred to as an ideal vector)
- Examine the fit between the product and the market.
More generally, there are three types of positioning concepts:
- Functional positions
- Solve problems
- Provide benefits to customers
- Get favorable perception by investors (stock profile) and lenders
- Symbolic positions
- Self-image enhancement
- Ego identification
- Belongingness and social meaningfulness
- Affective fulfillment
- Experiential positions
- Provide sensory stimulation
- Provide cognitive stimulation
Repositioning a company
In volatile markets, it can be necessary - even urgent - to reposition an entire company, rather than just a product line or brand. When Goldman Sachs and Morgan Stanley suddenly shifted from investment to commercial banks, for example, the expectations of investors, employees, clients and regulators all needed to shift, and each company needed to influence how these perceptions changed. Doing so involves repositioning the entire firm.
This is especially true of small and medium-sized firms, many of which often lack strong brands for individual product lines. In a prolonged recession, business approaches that were effective during healthy economies often become ineffective and it becomes necessary to change a firm's positioning. Upscale restaurants, for example, which previously flourished on expense account dinners and corporate events, may for the first time need to stress value as a sale tool.
Repositioning a company involves more than a marketing challenge. It involves making hard decisions about how a market is shifting and how a firm's competitors will react. Often these decisions must be made without the benefit of sufficient information, simply because the definition of "volatility" is that change becomes difficult or impossible to predict.
Positioning is however difficult to measure, in the sense that customer perception of a product may not have been tested on quantitative measures.
- Brand management
- Brand community
- Customer engagement
- Marketing management
- Target market
- Product management
- Market segment
- Product differentiation
- Marketing plan
- Sustainable competitive advantage
- Strategic management
- Marketing strategies
- Placebo (origins of technical term)
- Right-time marketing
- List of renamed products
- Trout, J., (1969) ""Positioning" is a game people play in today’s me-too market place", Industrial Marketing, Vol.54, No.6, (June 1969), pp. 51–55.
- Ries, A. and Trout, J. (1981) Positioning, The battle for your mind, Warner Books - McGraw-Hill Inc., New York, 1981, ISBN 0-446-34794-9
- Trout, J. and Rivkin, S. (1996) The New Positioning : The latest on the worlds #1 business strategy, McGraw Hill, New York, 1996, ISBN 0-07-065291-0
- Moore, G. (1991) Crossing the Chasm, HarperCollins Publishers, 1991.
- Levi, K. (2007) "Differentiate or Diminish: The Art and Necessity of Business Positioning", (March 2007), p. 9