Imagine you want to be, let’s say, a detergent manufacturer, and there are thousands of other detergents in the market. Why do you think customers will buy your detergent from a cluster of “million options”?
However, if your detergent has unique features that can give your customers unique benefits, then that is a different story. People don’t want to buy a product that claims to do “everything.” Instead, they want a better solution that can tackle at least “something.” You just need to show them that your detergent can specifically do “this.”
To cut it short, you need to position your product or service uniquely. In marketing terms, this is called market positioning. Why is market positioning important, and what are your options regarding market positioning? Let’s find out.
What Is Market Positioning?
Market positioning, in simple words, is a marketing strategy that focuses on creating a unique image or perception of a brand, product, or service in the customer’s mind. A business can create that unique image by any means.
For instance, the four Ps of marketing (promotion, product, price, and place) are important factors in market positioning. The more a business focuses on these 4 Ps, the will better will be its positioning in the market. Still not getting a clear picture of market positioning? Here are some examples for basic understanding:
- A shoemaker specializes in making formal shoes for highly sophisticated or formal events.
- A fast-food franchise that makes unique grilled beef burgers.
- A car manufacturing company specializes in manufacturing luxury cars with unparalleled features.
So, what was the basic theme in these examples? The sellers in these examples are focusing on a specific niche rather than catering to a general audience.
Types Of Market Positioning
Different businesses use different techniques for market positioning. However, here some of the most common types of positioning in the market.
Quality of A Product or Service
Amidst the fearsome price wars, many brands strive hard to provide quality. Yes, when you please your customer with unparalleled quality, price becomes a less-concerned issue.
Example. Chipotle has quickly gathered immense fame and climbed to the 14th spot in the list of top 50 fast-food franchises in the USA (ranking from QSR magazine). This quality-oriented brand has already captured a significant market share and causing trouble for “big boys.”
Innovation and Uniqueness
Many brands focus on providing innovation and uniqueness. If you can bring something new and fascinating, you can charge higher prices and people will pay for it happily.
Example. What would be a better example of innovation than Apple? The electronics industry’s juggernaut has captured a massive global market just because of its mind-blowing and surreal innovations.
Price of A Product or Service
When a brand is not enriched with innovation or superior quality, then pricing is an excellent option to challenge your competitors. Whether you accept or not, price is still one of the most critical factors that affect many consumers’ purchase decision.
Example. Dollar Shave Club has proved to be a nightmare for Gillette because they offer the cheapest razor cartridge refilling (20 cents) while Gillette was doing it for $2-$5. Due to this massive difference, Gillette has seen a decreasing market share.
Similar to innovation, product differentiation is another excellent marketing strategy to take the lead. A different product or service can easily kill the competition.
Example. Tesla has revolutionized the automobile industry with its electronic cars. This has sidelined many economic cars such as Toyota Prius.
Customer services, if appropriately managed, can create a massive and defining image in consumers’ minds. In fact, this category is fundamental in specific industries such as banking and restaurants.
Example. Zappos, an American online shoe company, has unique customer service practices. They respond to every single email they get, even if the email is directly for the company’s CEO.
Targeting a micro-level market segment is another super-effective way of market positioning.
Example. Axe, also known as Lynx, is a famous British brand that focuses on male grooming products such as body sprays, deodorants, etc., for young males.
Advantages of Market Positioning
Market positing can help a brand in “countless” ways but here top five of them:
Increase in Revenue
Marketing positioning is purely dedicated to creating a unique image of any specific brand. When a brand succeeds in creating a unique market position, its revenue increases due to a boost in sales volume.
Built A Competitive Edge
Market positioning also helps brands to create a competitive edge. Either you are following a pricing strategy or focusing on providing quality products or services, you develop a competitive advantage when you position your brand in the market. Everything your competitors don’t have is a competitive advantage, whether it is your offering’s price, uniqueness, or quality.
Easy to Promote A New Product
A company that has already positioned itself in the market can launch a new product and penetrate the market easily. This significantly reduces marketing costs as well.
Create A Brand Identity
Brand identity is highly dependent on market positioning. Only proper marketing positioning can develop an image or perception in a customer’s mind.
Marketing Positioning Simplifies the Purchase Decision for Customers
Customers want easy options and solutions while making a purchase decision. Positioning allows them to determine what kind of benefits they will get from a specific product or service. It ultimately simplifies their buying process.
How To Create A Successful Market Positioning Strategy
The market positioning strategy of any brand should be based on its core objectives. Companies should be clear as to how do they want their customers to perceive them. Here are some “must-do” practices to develop a thriving market positioning strategy.
Identify Your Strengths Through Competitor Analysis
Identifying the differences between you and your competitors is mandatory. This ultimately helps you to determine your strengths and how you can use them to take advantage of opportunities.
Analyze the Current Market Position
Before you decide to position yourself in the market, it is better to evaluate your current position. This will assist you in differentiating yourself from your competitors.
Detailed Competitor Positioning Analysis
Apart from identifying your strengths, it is equally important to analyze your competitors’ strengths and how they can challenge you.
Create Your Market Positioning Strategy
Once you have examined the factors mentioned above thoroughly and understand your position, strength, and opportunities, develop your positioning strategy accordingly.
Positioning Errors That A Company Should Avoid
Excess of everything is bad, and the same is the case with market positioning. If a brand makes too many “promises” and claims to be the best, things may go south easily. So, here are some of the common mistakes marketers commit while developing positioning strategies:
- Confused Positioning. Making too many claims and frequently changing the product features can make the customers confused about brand image.
- Over Positioning. Over positioning means that a firm has gone way too specific in niche selection that only appeals to very few customers. It becomes challenging for a company to achieve its sales target with such a low number of potential customers.
- Under Positioning. Under position, in simplest terms, means that a brand has failed to create a unique or differentiated image in customer’s mind. That said, the customer fails to differentiate a specific brand from others.
- Doubtful Positioning. Doubtful positioning can be best described as “it’s too good to be true.” That said, it is a situation where customers become doubtful about the claims made by the brand because they look suspicious or unreal. This usually happens when a product’s price, physical features, etc., fail to match with the company’s claim.
Examples of Market Positioning
It will be an injustice if we don’t talk about Tesla as one of the best market positioning examples. The company has taken “price” out of the equation and only focuses on providing unparalleled quality to its customers. Tesla is more of a luxury brand, and its vehicles are:
One of the best and globally admired brands, Nike has positioned itself in the market as an innovator with a high focus on performance. The waffle shoes from Nike have become the most expensive sneakers in the world. After bossing the “shoes” category, Nike is now offering performance-boosting sports attires.
The finest portrayal of “inbound marketing,” HubSpot developed a huge customer-oriented platform by offering helpful content to its readers. HubSpot is:
- Customer-centric, and
Which makes it an automatic choice of many consumers around the globe. Apart from that, HubSpot has become an “all-in-one shop” that deals in:
- Marketing automation
- Sales and service
It won’t be wrong to say that Starbucks has revived the tradition of coffee consumption in the USA. That is because the country had witnessed a decrease in coffee consumption since 1960. Starbucks, therefore, carefully targeted office workers who were interested in purchasing a high-quality product.
Coffee is considered as a soothing and relaxing beverage in the US, and Starbucks has always been vigilant to live up to the expectations.