What is Positioning? Types, Characteristics and Importance

Introduction

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:

Price Positioning

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.

Differentiation

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.

Convenience

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 themselves as convenience products.

Consumer Assistance

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.

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.

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