Positioning, in simplest terms, is the identity for/of a brand or product in the mind of the customers when compared to other similar products in the market. It is also the process of forming a mental picture of a product in the minds of consumers. Positioning is the process of establishing a new product’s position in consumers’ eyes. It involves examining the market and the positions of the competitors, determining where a new product stands in comparison to the competition, and promoting the product image of a specific brand.
Positioning aids in forming the first impression that target audiences have of brands. In plainer terms, placement aids in forming consumers’ perceptions of a good or service. Positioning is about how you want to position your products in the minds of your customers.
For example; Coca-Cola positioned itself as a refreshment drink in the minds of customers rather than a soda drink. Likewise, Apple positioned itself as an innovation, design and customer experience brand rather than a tech company selling computers and mobiles.
Types of Positioning
A company can position its brand or product in different ways considering the target market and nature of that market. Some of such positioning types are:
The majority of buyers base their decisions in part on pricing. In many product categories, companies can position themselves with the lowest prices and acceptable levels of quality typically prevail. For instance, compare Dollar Shave Club to Gillette. The market for razors and refill blades has evolved as a result of more affordable alternatives to some high-end brands like Gillette. Price positioning either competes with the available product or fills the gap in the market.
Most pricing conflicts can be avoided by focusing on quality. Quality can determine who the competitors are in some industries, such as those for high-end cosmetics or automobiles.
What distinguishes a product or service from the competitors is differentiation. Competitors may not be as dangerous if your product or service is very different from theirs. Product differentiation gives you a competitive advantage and you can market your products through its differentiation.
Presenting a brand or product different to the available similar product helps business to create a different position (space) for the product. When Apple launched its first iphone, it differentiated its products and created a supreme position in the world of smartphones.
Another way of positioning a brand or product is “convenience based”. Customers’ lives are made easier through convenience. Convenience could include anything from accessibility to location, availability, including free returns and online shopping. Therefore, businesses can position their products as a convenient product among their competitors.
Different soft drink brands, detergent brands, milk brands position themself as convenience products.
Customer service places a strong emphasis on developing positive, cordial relationships. This can be especially important in some sectors of the economy, like the restaurant, hotel tourism and banking sectors. Therefore, the company can also position themselves as a customer centric brand by providing customers with excellent customer service.
Companies like Amazon, the Ritz-Carlton, Aldi, Costco Wholesale etc. are companies with exceptional consumer assistance. All these companies have their competitors but they have a good position based on the customer service they provide. The consumer assistance could be in any form.
A User Group (Demography Based )
This kind of positioning focuses on a certain user demographic and explains why the company’s products are pertinent and directly related to this demographic. For example; a company can position themselves as a lifestyle brand among certain user groups, especially from age 18 to 50 or they can target the women of a certain age or specific income group.
Characteristics of Effective Positioning
- It needs to be meaningful to the consumers. Only positioning is effective when it means something valuable and relatable to consumers.
- Companies position brands or products to stand out in the competition. Hence, an effective positioning is unique to the products or brands.
- An effective positioning is credible in itself. When a company positions a product or a brand, it needs to be believable. The purpose of an effective positioning is to make consumers believe in the products and its position of what it delivers. A doubtful positioning is a failed positioning.
- A brand or product position is a unique identity. It requires effort and careful consideration to define the positioning strategy. Hence, an effective positioning strategy must be durable i.e. should not be frequently changed.
Product Positioning Process
The following are the process of product positioning:
Understanding Target Market
The first step of product positioning is understanding your target market. In the STP model, positioning comes after selecting the target niche. It is crucial for marketers to pinpoint their target market before learning about their wants and preferences. Every person has a unique set of requirements, wants, and preferences. Nobody can think in the same way twice. Therefore, the company should understand where their target market is and what their needs, preferences and habits are.
Understand what your customers want from you
After identifying the target market, the next process is to understand what they want from you. The products must satisfy consumers’ needs. The company must specify the features of the product. The features and advantages of the products must be well known to the marketers themselves. It is true that you cannot sell something until and unless you are fully persuaded by it.
Unique Selling Proposition (USP)
Every product ought to have distinctive selling points, or at least a few of them. Organizations must develop unique selling propositions for their businesses and communicate these to target audiences successfully. Without USP, the products become homogeneous with other products and the customers will not be attracted towards the product. Therefore, it is crucial for the business to identify it’s unique selling proposition and communicate it to the consumers.
Marketers need to be aware of what their rivals are selling. They should make people know how their product is superior to the competition and how they can get benefits from it. Similarly, the marketers should know how their competitors are influencing the customers in the market and what they can do differently from their competitors. The company should not undervalue its rivals. They should inform their target market why they should choose their product over competitors. To have an advantage over their rivals, marketers must continuously put up great effort.
The next step for product positioning is to develop the strategies for brand promotion. The marketer should select a suitable topic for the advertisement. They should come up with catchy taglines and create a hook for the customers. There must be no ambiguity in the advertisement. The marketer needs to emphasize the advantages of the goods and how it is different from other competitors and can add value to their purchase.
Maintain the Brand’s Standing
The marketers must maintain a high standard of customer service in order to maintain an effective positioning. Even after promoting the brand, the marketer should maintain the position of the brand in the market consistently. For this, the company should never skimp on the quality and also shouldn’t significantly lower the cost of their goods.
Importance of Positioning
- Positioning helps companies create clear marketing strategies around its product. Positioning determines and justifies the pricing and differentiating strategies of the company.
- It strategy is the factor that makes sure the brand appeals to the right audience. It is the interface between brand identity and brand image.
- This strategy provides competitive advantage to companies over its competitors. Companies with positioning strategies know their target audience, unique proposition they are selling and surety of marketing mix.
- It helps customers in their buying decision. A correct position of the product or brands allows the target audience perceive the brand correctly. This will invite the positive emotional response in the audience leading to purchasing decisions.
- It can be a good differentiation strategy. An effective position will stand out the product from its competitors. There are many luxury automobile companies but Rolls Royce Motor Cars stands above all, positioning leading to differentiation.
Major Positioning Errors
Not all the time, companies are right with their positioning strategies. There is multiple evidence where a product or a brand could not benefit from the company’s positioning strategies. Sometimes companies under position its products or brands and sometimes over position it. There are four major positioning errors. They are:
- Under Positioning
- Over Positioning
- Confused Positioning
- Doubtful Positioning
This positioning error means the unsuccessful effort to establish a compelling competitive position for a brand, product or service. In this, customers feel no emotion to consider for the particular product from a wide range of options. In this positioning, the brand or product just acts as another entry in the marketplace with no unique proposition. There is no clarity in the existence of the product or brand.
Illustration: Pepsi introduced Crystal Pepsi in its new product line. Consumers see no connection with the product and they didn’t find any other reason to go for Crystal Pepsi over their regular drinks. Later, this product was discontinued.
It means over emphasizing the certain characteristics of a brand or product that the target customer finds unnecessary, irrelevant or too special to their position. In this error, the target audience believes that the product is not made for them and the target audience disconnects with the product or brand.
Illustration: When Maruti launched its Baleno Model, the company over positioned this car. The loyal customers of Maruti were in delusion that it can make cars comparatively more expensive than their regular ranges. There was an image issue with the Maruti Baleno model. Customers started questioning this high end model from Maruti Baleno.
In this positioning error, the company claims too much about its brand or its product/services. Consumers are confused regarding its utility and usage. Such confused positioning hampers the brand, product and the company.
Illustration: the positioning of Nestle’s Milkmaid was a confused positioning. It is marketed as a tea whitener, then positioned as a topping powder and finally placed as base for desserts.
It is the positioning error where the claims of the company regarding its delivery are doubtful and rejected by the customers. In this error, companies promise unachievable propaganda or features.
Illustration: Asset Management companies promising 100% return in different financial investments. Similarly, Fair and Handsome and other beauty cream promising 100% fair skin is another example of doubtful positioning.