Market Positioning: Definition, Strategies, Importance, Erros

Marketing positioning is the process of developing a marketing mix that puts the product in a unique position to the targeted segments for attracting potential buyers. Marketing positioning involves arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers, which is accomplished through formulating competitive positioning for a product and a detailed marketing mix.

What is Market Positioning?

Market Positioning Definition

A product’s position is how consumers define the product on important attributes. It indicates the place the product occupies in consumers’ minds relative to competing products.

For example, in the automobile market, Toyota Tercel and Subaru are positioned on the economy, Mercedes and Cadillac on luxury, and Porsche and BMW on performance. Volvo positions powerfully on safety.

Consumers are bombarded with a lot of information about products and services. In each buying situation, they cannot reevaluate products. Consumers arrange products into different categories by positioning products, services, and companies in their minds.

A product’s position refers to the complex set of perceptions, impressions, and feelings that consumers bear in their minds for the product compared with competing products.

Consumers position products in their minds with or without the help of marketers.

But marketers want to play an active role in positioning their products. They must plan positions in a way that will ensure their products the greatest advantage in selected target markets. This implies that marketing mixes must be designed to create these planned positions.

Market Positioning Strategies

To be successful, a company should decide on the number and type (s) of differences planning to promote. Let us now have some idea of how a company can decide on this issue. There are differences in opinions among marketing experts and writers about how many differences a company should promote.

Some argue that it is always wise to find one suitable attribute and promote that aggressively, highlighting the company’s strength in it. The need to invest distinctive benefits in a product gives rise to the concept of the Unique Selling Proposition or USP. This is the feature or feature in a product that offers unique benefits not found in its competitors.

To understand the concept, let us take the example of holiday marketing companies. Several holiday companies specialize in the organization of package tours aimed at the young (18-30) travel market. While the product offered is similar in many respects, companies focusing on this market segment seek ways to differentiate their product from others.

Thus, company ‘A’ may emphasize that their hotels are used exclusively by their customers. In contrast, company ‘B’ may place stress on the added adventure and, company ‘C’ may focus on the blatant sexual promise of their holidays. USP basically highlights on picking one attribute and trying to be number one in that attribute.

There are many attributes available to which a company may pick one and try to establish it as number one because number one always draws more attention than others. The attributes could be ‘quality,’ ‘service,’ ‘price,’ ‘value,’ ‘reliability,’ ‘safety,’ ‘speed,’ ‘customization,’ ‘modern’ etc.

There are situations when companies may need to go for double-benefit positioning. It happens when more than one firm claim to number one on the same dimension or attribute. Companies pursue double benefit positioning usually intend to find a special niche within the target market.

On some other occasions, companies may go for pursuing a triple-benefit positioning strategy. Some toothpaste manufacturers are found to pursue this strategy by claiming that their products can serve three purposes. They try to convince the claimed benefits market by developing toothpaste that squeezes out of the tube in three color stripe.

Marketers can adopt various positioning strategies.

  • Products can be positioned on specific product attributes – Sunsilk keeps hair soft and shining.
  • Products can be positioned on the needs they satisfy or the benefits they give – Peps Flouride prevents tooth decay.
  • Products can also be positioned on usage occasions – no Eid without Banoful vermicelli.
  • Products can also be positioned for certain classes of users – Lifebuoy for athletes.
  • A product can also be positioned against a competing product. For example, in its ads, Citibank VISA compares itself directly with American Express, saying, “You’d better take your VISA card because they don’t take American Express.”
  • Another approach is to position the product away from competing products. For many years, 7-up has positioned itself as the “Un-cola,” the fresh and thirst-quenching alternative to Coke and Pepsi.
  • Products are also positioned for different product classes. For example, some hair creams are positioned against hair oils. Marketers often use a combination of the strategies discussed above.

Importance of Market Positioning

1. Positioning as the interface between brand identity and brand image

Brand identity in the marketplace depends on positioning. Customer’s perception of the brand develops only when the Market Positioning is proper.

2. Positioning as a source of competitive advantage

Better marketing positioning will give the company a competitive advantage over other firms on the market.

3. Market Differentiation with Positioning – Positioning breaks the clutter of noise

The are plenty of products, and the number of firms delivering them is several. Positioning will help a firm to stand out in the crowd of sellers.

A clear Brand Position enables you to efficiently and effectively communicate and reach your target audience. Clear market positioning makes the brand and its product visible and attractive to the customers.

4. Positioning Makes Buy easy for Customers

Consumers want easy solutions and options to make purchase decisions. And positioning triggers an emotional response from your target audiences, giving them a quick way to trust you and increase the interest level of customers and increase sales numbers.

Why do Companies adopt a Positioning Strategy?

In the previous lesson, you were given ideas on differentiation. You have seen there that a company can try to differentiate its product in many different ways. No matter how a company tries to differentiate its product, it will not be considered different if customers do not perceive it differently.

Adopting a policy of differentiating products involves a cost to the company, and it expects to realize such costs by increased sales. But, there is no guarantee that sales will go up unless customers act positively. To act positively, customers look for something in a product claimed by its seller as different.

A company should, therefore, be careful in selecting ways of differentiation and provide for the following criteria in its offer:

  • Importance: If a product can deliver highly valued benefits to most customers, it will be considered important by them.
  • Distinctive: A product will be considered distinctive by the buyers if it offers something not offered by the competing brands.
  • Superior: If the difference seems to be better by the customers than other ways obtaining the same benefit, they consider it superior.
  • Communicable: Marketer should develop such a difference which can easily be intimidated to market, and the market should be able to visualize that easily.
  • Preemptive: If the competing firms cannot easily copy the difference, they possess the preemptive feature.
  • Affordable: Differentiation, you know, costs to the company, and the company realize that from customers. It should, therefore, consider whether customers are in a position to bear the same. If they can, such differentiation is called affordable.
  • Profitable: To work out a differentiation company needs to incur a lot of costs. A company does so with the hope of making a sizable profit through increased sales. If sales do not increase proportionately to warrant company profit, such differentiation cannot be called profitable.

Experiences say that several companies could not meet the above criteria in their differentiation.

The reason may be that customers did not consider the product different, or the particular company failed to take its product in the customers’ own frame of reference. This resulted in the failure of and loss to the firms.

To meet the need for particular market segments, companies should differentiate their products based on specific attributes or characteristics to meet specialized market segments’ needs.

To achieve this task, marketers use the positioning. The position is a term that describes a product’s objective or subjective characteristics with competing brands. Positioning may be an attempt to differentiate a marketing offer from competitors.

A positioning strategy may be used to:

  • Differentiate a firm from its competitors in a mass-product market, or
  • Position a firm to serve target customers in one or more product­ market niches.

Choosing and Implementing a Positioning Strategy

The task of choosing and implementing a positioning strategy involves three steps. The company must first identify a set of possible competitive advantages on which the position will be built and then select the appropriate competitive advantages.

Finally, the company must find a way of effectively communicating and delivering the chosen position to the market.

Identifying Possible Competitive Advantages

For being successful, the company must choose a positioning strategy that gives it an advantage over competitors. Competitive advantage can be gained by offering consumers greater value, either through lower prices or by providing more benefits that justify higher prices.

But promises only are not enough to build strong positions. When a company positions its product as offering the best quality and service, it must ensure the delivery of promised quality and service.

So positioning starts with differentiating the company’s marketing offer from competitors, making the consumers believe that this will give them more value than competitors’ offers do.

Gaining a competitive advantage by differentiating the offer may not always be possible. Some companies find many insignificant advantages that are swiftly imitated by competitors. These companies should, therefore, keep identifying new potential advantages, and they introduce them one by one.

These companies do not think that they will have a single major permanent advantage. Rather, they expect to gain many minor ones that can be introduced over some time.

A company can differentiate its offer from competitors based on product, services, personnel, or image.

Product Differentiation

A company’s physical product can be differentiated. Although some companies offer highly standardized products (antibiotics), meaningful differentiation might be possible in some cases.

Some products can be highly differentiated, such as apartment furniture. In such a case, the company can offer various standards or optional features not provided by competitors.

Thus, Volvo provides new and better safety features; Delta Airlines offers wider seating and free in-flight telephone use. Products can also be differentiated according to performance. Whirlpool designs its dishwasher to run more quietly; Procter & Gamble formulates Liquid Tide to get clothes cleaner.

Companies also can differentiate their products by style and design. Products can be differentiated on attributes such as consistency, durability, reliability, or reparability.

Product Differentiation Example

Many car lovers buy Jaguar cars even though Jaguar has a poor reliability record. But car lovers call Jaguar cars ‘jaaaggg’ because of the unique look and feel they get from owning a Jaguar car.

Services Differentiation

A company can also differentiate the services that are associated with the product. Speedy and careful delivery can provide a competitive advantage. Deluxe, a check supply company, has built an impressive reputation for shipping out replacement checks one day after receiving an order – without being late once in 12 years.

Companies can also be differentiated based on the installation.

IBM, for example, is known for its quality installation service. It delivers all pieces of purchased equipment to the site at one time rather than sending individual components to sit and wait for others to arrive.

And when asked to move IBM equipment and install it in another location, IBM often moves competitors’ equipment as well,

Repair services also can differentiate one company from another. Many automobile buyers will be willing to pay a little more for post-purchase repair services. Companies can differentiate their offers by providing training services to buyers.

For example, General Electric not only sells and installs expensive X-ray equipment in hospitals but also trains the hospital employees who will use this equipment.

Some companies offer free or paid consulting services like data, information systems, and advising services that buyers may need.

Marketers can discover many other ways of differentiating services that add value to their products. They can choose from myriad services and can even create new ones to differentiate themselves from the competitors.

Personnel Differentiation

One way of gaining a competitive advantage is to employ and train better people than those of competitors. For example, Singapore Airlines enjoys an excellent reputation largely because of the grace of its flight attendants.

MacDonald’s people are courteous, IBM people are professional and knowledgeable, and Disney people are friendly and upbeat. Personnel differentiation calls for careful and proper selection and training of customer-contact people.

Image Differentiation

Buyers can also differentiate marketers based on company or brand images. Companies try to create images that differentiate them from competitors.

A company or brand image should reflect the distinctive benefits and positioning of the product. Creating a strong and distinctive image requires creativity and hard work.

Symbols, signs, logos, and colors are used to create a strong company or brand recognition and image differentiation. A company can also build an image through the types of events it sponsors.

For example, Pepsi Cola has identified itself closely with sports events, such as cricket tournaments.

Selecting the Right Competitive Advantages

Even if a company finds several potential competitive advantages, it must choose the ones on which to build its positioning strategy. It faces two important issues – how many differences to promote and which differences to promote.

How Many Differences To Promote?

Many marketers believe that companies should vigorously promote only one benefit to the largest market. Each brand should select an attribute and claim itself as “number one” on that attribute.

Buyers tend to recognize “number one” easily. Thus, Peps toothpaste consistently promotes its decay prevention. Some of the popular “number one” positions to promote are “best quality,” “best service,” “lowest price,” “best value,” and “most advanced technology.”

Other marketers believe that companies should position themselves on more than one differentiating element. This may be required in situations where two or more companies claim to be best on the same attribute.

Steelcase, an office furniture systems company, differentiates itself from competitors on two benefits: best on-time delivery and best installation support.

As the mass market is fragmenting into many small segments, companies are trying to widen their positioning strategies to appeal to more segments.

For example, Beecham promotes its Aquafresh toothpaste as offering three benefits: “anti-cavity protection,” “better breath,” and “whiter teeth.”

Clearly, people want all three benefits, and the challenge is to convince them that the brand delivers all three. Beecham’s solution was to create a toothpaste squeezed out of the tube in three colors, thus visually confirming the three benefits.

However, too many claims for a brand expose the company to risk ­disbelief and a loss of clear positioning.

Positioning Errors That a Company Should Avoid

If a company emphasizes more attributes while positioning its brand, it may put itself in trouble.

Emphasizing too many attributes or claiming to be best in many aspects creates confusion in buyers’ minds, resulting in distrust. This leads to a situation called a ‘loss of clear positioning’ by the marketing experts.

Four major positioning errors are;

  1. Under-Positioning.
  2. Over-Positioning.
  3. Confused Positioning.
  4. Doubtful Positioning.

By avoiding the following four major positioning errors, a company can ensure clear positioning of its product:

Under-Positioning

If buyers sense ambiguity about a company’s claim or is unable to differentiate the product from competing brands, we call this under-positioning. In such a situation, a brand of a product is considered the same as some other brand.

Over-Positioning

If buyers develop a very focused or insular/narrow image toward the brand, the brand is said to be over-positioned. Buyers here cannot believe the product having certain attributes or options.

Confused Positioning

If buyers are found to be confused about the image either due to too many claims made by the seller or frequent changes brought in the positioning of the brand, it is known as confused positioning.

Doubtful Positioning

If buyers are suspicious about the sellers’ claims, it is called a doubtful positioning. It is due to the lack of conformance between the claims and the physical features of the product, price, or the manufacturer’s image.

Thus, positioning focuses on buyers’ perceptions and preferences about the place a product occupies in a specified market. A positioning strategy is basically the design of a marketing program consisting of marketing mix decisions.

Alternative Positioning Strategies Available to a Firm

A perceptual map can help a company identify different positioning strategies available and select the appropriate one. A company can pursue one of the following positioning strategies:

  • Attribute Positioning: If a company positions itself in terms of a certain attribute such as years of experience it has, its size, or so on, it is called attribute positioning.
  • Benefit Positioning: In the benefit positioning, the company tries to establish its brand as offering the best benefit in one or more areas.
  • Use/Application Positioning: If the product is positioned as best in certain use or application, it is called use/application positioning.
  • User Positioning: User positioning is when the product is positioned as best for certain user groups/segments.
  • Competitor Positioning: In competitor positioning, a producer tries to establish his product as superior to his competitor/s.
  • Product Category Positioning: In the product category positioning, a product is positioned as the best/leader in a particular product category.
  • Quality/Price Positioning: In quality positioning, the seller tries to give the market the idea that his product offers the best value to consumers’ money.

Which Differences To Promote?

How do you decide which difference (s) you should promote to position your product in consumers’ frame of reference?

To decide on this, you should, first of all, identify alternative positioning platforms. Second, you should compare your relative standing on each of them with your major competitor.

Third, you should find out the importance of improving standing on each of the platforms. Fourth, you should calculate whether you are able to afford improvements and how fast you can do that.

Next, you assess your major competitor’s ability to improve standing on each of the previously identified platforms.

Based on the above analysis, you decide which difference (s) you should promote – whether technology, quality, service, or any other.

After you arrive at the positioning decision, you should implement measures to communicate it to your target market. How do you do that? Obviously, you communicate your position through marketing mix elements.

For example, you have decided to position your product as a quality one. You can communicate this by exploiting one of the elements of the marketing mix – the price.

You can give the market an idea that your product is superior since there is a price-quality relationship by charging a high price. Customers perceive the higher-priced brand as a quality product.

For gaining a competitive advantage, a company or a brand can be differentiated in many ways.

But all differences are not meaningful and worthwhile. Moreover, each difference is likely to enhance company costs as well as customer benefits simultaneously. So the company must be careful in selecting ways of distinguishing itself from competitors.

A difference is worth promoting to the extent that it satisfies the following criteria:

  • Important: The difference delivers a highly valued benefit to target buyers.
  • Distinctive: Competitors do not offer the difference, or the company can offer it more distinctively.
  • Superior: The difference is superior to other ways that customers might obtain the same benefit.
  • Communicable: The difference is communicable and visible to buyers.
  • Preemptive: Competitors can not easily copy the difference.
  • Affordable: Buyers can afford to pay for the difference.
  • Profitable: The company can introduce the difference profitably.

Many companies have introduced differentiations that failed one or more of these tests.

The Westin Stamford Hotel in Singapore advertises that it is the world’s tallest hotel, a distinction that is not important to many tourists as it turns many off.

AT&T’s original picture vision phones bombed, partly because the public did not think that seeing the other person was worth the phone’s high cost. Thus, choosing competitive advantages to position a product or service can be difficult, yet such choices may be crucial to success.

3 Positioning Deliverability Criteria – Ask if the Positioning is Justified

The biggest challenge in marketing and branding is developing a proposition for the product. Just market segmentation and marketing targeting will not help in market positioning.

You need to position the product in a way that attracts the customer.

Three positioning deliverability criteria are;

  • Is the position feasible? Markets need to find out if the position has growth potential so that the sales numbers, market share grows.
  • Can the position be communicated? A successful positioning depends on how well it is communicated in the minds of the customers.
  • Is the position sustainable? A marketer needs to know if the company can keep up the production, sales, and marketing efforts.

Communicating and Delivering the Chosen Position

After choosing a position, the company must take effective measures to deliver and communicate the chosen position to target consumers. Marketing mix efforts should be synchronized to back the positioning strategy.

If the company wants to build a position on better quality and service, it must first take necessary action to deliver that position. Tactical details of the positioning strategy must be worked out to guide marketing mix-product, price, place, and promotion.

A company that chooses a “high-quality position” must produce high-quality products, charge a high price, distribute through high-quality middlemen, and use high-quality media for promotion.

The company must recruit and train more service people, find service-oriented retailers, and develop sales and advertising messages that communicate its superior service.

Thus, a company can build a consistent and convincing high-quality, high-service position.

Developing a positioning strategy is easier than implementing it in the market.

Creating a position or changing a position takes a long time. Also, positions built over a long time can be lost quickly.

After building the most profitable market position, the firm must maintain consistent product quality, service, and marketing. Too many changes might create confusion in the minds of consumers.

Rather, modifications and changes in the product’s position should be congruent with the ever-changing marketing environment.

Final Words on Positioning

To get a competitive edge, firms try to position their products differently in the minds of customers. A company can position its product through many positioning strategies. Positioning is done, making the product different from the competing products and convincing customers of these differences. Care should be taken by the firm to avoid the errors involved in positioning.

During the process of making decisions on positioning strategy, you should ask yourself several questions.

Your final move should be absolutely based on the answers to these following questions :

  • Question-1: What position, if any, do we already own in the prospect’s mind?
  • Question-2: What position do we want to own?
  • Question-3: What companies must be out-gunned if we are to establish that position?
  • Question-4: Do we have enough marketing money to occupy and hold the position?
  • Question-5: Do we have the guts to stick with one consistent positioning concept?
  • Question-6: Does our creative approach match our positioning strategy?.

The name of the marketing game in many industries is “positioning.” In such a game, you can survive only if you are a better player.

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