Positioning (marketing)

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Positioning is a marketing strategy that aims to make a brand occupy a distinct position, relative to competing brands, in the mind of the customer. Companies apply this strategy either by emphasizing the distinguishing features of their brand (what it is, what it does and how, etc.) or they may try to create a suitable image (inexpensive or premium, utilitarian or luxurious, entry-level or high-end, etc.) through advertising. Once a brand is positioned, it is very difficult to reposition it without destroying its credibility. It is also called product positioning.

Definitions[edit]

Positioning was first introduced by Jack Trout in 1969 ("Industrial Marketing" Magazine- June/1969) and then popularized by Al Ries and Jack Trout in their bestselling 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. An important concept in positioning is that it expects that consumers compare and analyze products in the marketplace, whether based on features of the product itself (quality, multiple uses, etc.), price, and/or packaging and image.[1] It will happen whether or not a company's management is proactive, reactive or passive about the ongoing 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[edit]

Effective Brand Positioning is contingent upon identifying and communicating a brand's uniqueness, differentiation and verifiable value. While "me too" brand positioning contradicts the notion of differentiation, this type of "copycat" brand positioning can work if the business offers its solutions at a significant discount over the other competitor(s.) According to Lamb, some companies position their brands "as being similar to competing products or brands"; a few examples are "margarine tasting like butter" and "artificial sweeteners tasting like sugar".[1] This can also be seen in reactive marketing, when companies reposition more than just products: after Target added food and grocery items to become a "supercenter", certain grocery stores (such as Texas chain HEB) added retail products to become supercenters as well. Another example would be the iPhone spawning several competitive smartphones - differentiated from Apple, yes, but not as significantly as Apple would prefer based on the patent infringement lawsuits filed by Apple.[2] The conclusion seems to be emulate, but do not duplicate. As the Harvard Business Review notes when discussing positioning and strategy, "A company can outperform rivals only if it can establish a difference that it can preserve."[3]

Product positioning process[4][edit]

Generally, the brand positioning process involves:

Segmentation:[edit]

It is the process of identifying variables that allow someone to divide the market into distinct subsets that can be selected as a marketing target to be researched using the Marketing Mix[4]. Segmentation is essential because without it, the best thing a firm could do is to deliver average value.

Segmentation Methods:[edit]
  • Characteristics of the customers (male, female, rich, poor, etc.)
  • Benefits sought
  • Systematic Product Related Behavior (by purchasing behavior or by channel)
  • Cohort Analysis
  • Geographic Segmentation

Targeting:[edit]

Targeting is the process of evaluating the attractiveness of each segment and choose a target. In order to select a target segment, firms must first balance attractiveness with capability and monitor whether actual buyers match the target segment.

Characteristics that make a segment attractive:[edit]
  • Segment Size
  • Growth of Segments
  • Value of Segments
  • Stability
  • Current Company position within the segment
  • Easy of entry
  • East of competitive entry
  • Number and strengths of competitors

Positioning:[edit]

Positioning is the process of identifying concepts for each target segment, select the best and communicate it.

Positioning concepts[edit]

More generally, there are three types of positioning concepts:

  1. Functional positions
    • problems
    • Provide benefits to customers
    • Get favorable perception by investors (stock profile) and lenders
  2. Symbolic positions
    • Self-image enhancement
    • Ego identification
    • Belongingness and social meaningfulness
    • Affective fulfillment
  3. Experiential positions
    • Provide sensory stimulation
    • Provide cognitive stimulation

Repositioning a company[edit]

Main article: Turnaround management

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.

See also[edit]

References[edit]

  • Business Dictionary. (n.d.) Definition of Positioning. Retrieved from http://www.businessdictionary.com
  • Lamb, C. (2013). e-Study Guide for MKTG 7. Retrieved from https://books.google.com/books
  • 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

External links[edit]