5.6.09

Positioning Strategy


An exasperated CEO stood up in the board meeting and exclaimed, “Is that all you marketing know how to do, compete on price?!”

In today’s marketplace where everybody’s competing for the same shrinking budget and differentiation is hard to come by, marketers often think of price as their only lever.

That’s just incompetent marketing, plain and simple.

There are lots of ways to differentiate a product. You can even create the perception of differentiation, if you’re creative enough. It’s called product positioning and it’s something of an art.

Here are Five fundamental product positioning principles that will help you destroy the competition:

  1. Find a product attribute that captures the customer’s imagination. It’s so easy to get trapped in the same old box of features and benefits. If you can’t differentiate that way, look at the problem with fresh eyes and fresh data. Find a new attribute that can get customers excited and focus your positioning around it.
  2. Market share gains are expensive. There’s simply no way around this. Market share comes at a heavy cost and your product planning and positioning must reflect that or your P&L will suffer and you’ll end up back at the drawing board. The cost is a function of how entrenched the leaders are and the perceived “switching cost” for customers.
  3. Reinvent the “customer experience.” Nothing matters more, and it’s not just for Internet and B2B. Just as with product attributes, you can shake up the competitive landscape by rethinking the customer experience in new terms. What’s important to customers changes as a function of time and market conditions. Take advantage of it.
  4. Only target up, not down the totem pole. Publicly and to customers, always position your product relative to the market leader. It elevates your product in terms of customer perception. That said, train your sales force (and other internal groups) on features - benefits versus all competitors. That’s a whole different story.
  5. Infrastructure (or ecosystem) as a competitive barrier. This is an important and often ignored aspect of product planning and positioning. Many products and services, especially in technology, require related companies and industries to support them in some way. If you get enough support for your product, it can be an extraordinarily effective competitive barrier that you can use in positioning.

Here’s a great example that utilized four of the five principals. When Toyotaentered the luxury automotive sector with the Lexus brand, it 1) made “ergonomics” and “quality” the new “performance” and “luxury,” 2) initially undercut the competition to gain entry and early market share, 3) created a low-stress and more respectful showroom experience, and 4) targeted Mercedes andBMW - up the totem pole.

Apple also uses positioning strategy extraordinarily well.

Samsung has done a great job with their product positioning. They focused on their strengths of innovations in technology and design to overtake Sony in consumer electronics.

Subway Sandwiches "EAT FRESH" have done a good job with their positioning. They're leveraging on their 'fresh, natural food' strength to edge out the competition in the fast food market.


on the other side in today’s marketplace, positioning has multiple problems:

1) Positioning is immeasurable: You can’t say “our positioning has improved our sales by 5 % or as a result of our positioning strategy, our brand is 12% better than competitions. Furthermore, it is impossible to measure the ROI or benchmark positioning.

2) Positioning is only suitable for mass markets. Yet branding today is about segmentation and communicating and engaging with those segments via relevant channels and with messages that resonate specifically with those segments or niche markets. Does this mean that a company should develop different positioning for different niches?

3) Positioning is suitable for mass markets with limited competition and limited consumer access to media and information. Today, consumers can get any information they want on anything from anywhere.

4) The wikipedia definition is a top-down, company knows best, hierarchical marketing approach. Yet we live in a C2C environment in which consumers define brands.

5) Positioning is one-way. The company knows best and you must listen to us. We tell you how our products are positioned. Bu today, if you are not entering into 2 way conversations with consumers you are about to join the brand graveyard.

6) Positioning was developed for the US mass market of the 1970’s. But we’re in a globalized world now, with much more competition and more knowledgeable consumers.

7) Positioning is competition, not customer driven. The basic premise of positioning is that you want to be number 1 or number 2 in a category in a prospect’s mind. If you can’t be number 1 or number 2 in an existing category because of competition, you make your own category. In today’s congested marketplace, the investments required to develop a new category are enormous. Furthermore, besides the difficulty and expense of creating your own category, you are also letting your marketing be driven by the competition rather than consumer demands for value.


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Positioning (marketing)

From Wikipedia, the free encyclopedia

http://en.wikipedia.org/wiki/Positioning_%28marketing%29




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