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Outline the steps in the positioning process

What are the steps in the market positioning process?

Market positioning is a key step to help your product reach the right target market and achieve the expected success.

It is a crucial step that ensures that your product reaches the right target audience and finds acceptance.

However, creating the right positioning and differentiation strategy is a slightly lengthy process.

The main aim of the process is to design or create an identity that affirms the product/brand’s value in the customers’ minds and also informs about the superiority of the product compared to its rivals.

In order to achieve the desired positioning, the marketers have to follow the positioning process, which generally involves five steps.

The first step in the positioning process requires the marketer to verify that he has a complete and firm understanding of his target market.

In the next step, the marketers need to identify their competitive advantage.

In the third step, the marketers will focus on the competitive advantages that define their niche.

After marketers have built an understanding of their target market and identified the key competitive advantages, they can define their positioning strategy.

In the fifth and final state comes execution, which involves communication and then delivering on the basis of the positioning strategy.

Here, we will deal with these five steps in detail below:-

Steps in the process of positioning your product offering:

Understanding the market dynamics and the target market:

The focus of the positioning strategy is your target market and in order to make your positioning strategy a success, you must have a clear and complete understanding of your target market and market dynamics.

Typically, marketers must ask themselves the following questions before they embark upon the journey.

The first question is related to developing a frame of reference or deciding which product or market category, the positioning strategy is being created for?

Which target segment will be the focus of your positioning strategy?

What factors do the buyers consider important for evaluation before making a purchasing decision?

What do the customers think of the rival products in the same category?

Answers to these questions are important and unless the marketer has the answers to all these questions, he must not move on to the next steps.

To build an understanding of the target market and the market dynamics that affect it, the marketers might need to conduct market research.

It is helpful at initial stages to carry out market research to understand the target market and know the factors they consider important for making buying decisions.

While in some cases, the marketers may have the required time and resources, at other times, they may need to depend on their own experience and informal market research.

The crucial thing to note here is that your customer is at the center of the picture and knowing him is the first key step to developing your positioning strategy and the marketing mix.

So, you must start by knowing which segment of customers you are targeting.

Know your competitive advantage:

In simplest terms, competitive advantage means a special strength or capability that allows you to outperform your competitors.

When it comes to buying decisions, it is your competitive advantage that matters, and it will make customers think favorably about your brand/product.

Competitive advantage can come from several sources.

Sometimes, the easiest way to gain a competitive advantage is to price your product lower than competitors while offering similar quality and value.

Several times companies that have strong manufacturing and supply chain capabilities are able to price their products lower by exploiting economies of scale.

Lower prices allow them to attract customers faster.

At other times, you can gain a competitive advantage over your competitors by adding a special attribute that makes the product more attractive in the eyes of the customer.

You can also offer your customers unique benefits to gain a competitive advantage.

Benefits are the intangible favorable outcomes your customers enjoy when they buy your product.

Your product can offer time savings, increased convenience, a larger number of choices, and other similar benefits to the customers.

It can also help you gain a competitive advantage and attract more customers quickly.

To know about their competitive advantage, marketers must prepare a list of the things that make the brand/product different from the rivals.

Then, they must select the factors that are the most influential in terms of making the product outperform the rival products and will make the customers buy their product over the others.

Sometimes, it might be difficult to gain a lasting competitive advantage through pricing or features.

It is because competitors might also aggressively cut prices in response to your offer or introduce new features to retain customers.

Maintaining a consistent advantage in any of these two areas therefore becomes difficult.

It is why the market leading products differentiate on the third basis or on the basis of benefits.

These are the intangible benefits offered by the product that are generally difficult for the competitors to imitate.

For example, Volvo has positioned its brand as a maker of safer automobiles.

While its competitors may also achieve strong results in terms of passenger safety, it is difficult for them to match Volvo’s long-standing reputation in terms of safety.

Volvo’s long-standing focus on safety offers it a solid competitive advantage.

The same is true about many other market leading brands including Apple, Starbucks and Nike.

You do not need to have a large list of competitive advantages but the things that matter the most are the ones that make the gap between you and your competitors’ offerings grow.

However, marketers will need to dig deeper to gain an understanding of such intangible benefits that will make their offering superior to the alternatives.

Select the competitive advantages that define your niche:

By preparing a list of competitive advantages, you will be able to generate a set of positioning strategies that you can use for your product/services.

Each competitive advantage in the list represents one possible positioning strategy.

Next, you must examine how the factors that you have selected fit into your target market’s perception of the broader set of competitors currently operating in the market.

At this step you can use something like a perceptual map to see how different competitors have positioned their brand/products in the market.

Using these perceptual maps allows marketers to gain an understanding of the gaps that currently exist in the market and where their product can fit in easily.

You can easily analyze the gaps representing opportunities in niches that are currently not being addressed by the existing brands/products.

You can use criteria like price and quality to create your perceptual map or another one like consumer convenience.

If the need arises you can create several perceptual maps to draw a clearer picture of the current market condition.

However, as outlined in step one, carrying out market research before drawing your positioning strategy can be very helpful.

Particularly, at this stage market research data can be used to draw perceptual maps and understand the positioning strategy of competitors as well as identify the niches that can be filled.

Such perceptual maps which are based on real marketing research data are actually better and provide more robust results.

If you are launching a new product, you would like to find areas where the competition is lower.

Drawing a perceptual map can help you find such areas easily where there is lower competition and you will not face much difficulty positioning your brand/product.

Check out your competitive advantages and then find out the areas where your product can easily fit in on the basis of your existing competitive advantages.

It will help you find the best positioning opportunities for your product.

Another approach that you can use in the place of a perceptual map is to prepare a list of competitors and then note down their competitive advantages.

After that, you can add your own product and competitive advantages to the list.

Based on this list, you can also draw clear conclusions about the gaps between customer expectations and what they are getting.

Find out what they expect or value the most and what the current alternatives are offering them.

Be creative while defining your competitive advantages and select the ones that will define your positioning and market niche.

Suppose you are able to create a unique and distinct positioning where you do not have any significant competitors, it will be another advantage for you.

Apart from that, you will be fulfilling a previously unmet need, which will help you generate higher excitement about your product and gain customer loyalty faster.

Defining your positioning strategy:

Once you have defined your competitive advantages and collected information about the positioning strategies of your competitors, you are ready to define your own positioning strategy.

Now is the time to make the decision regarding how you plan to position your product relative to the rival products in the market.

You need to decide at this stage that how your product is going to be different or superior compared to the rest of the products available in the market.

Here, we have listed some of the common positioning strategies that you can consider for your product:

DifferentiatorPositioning strategy
Category BenefitPositioning the product as having an important benefit which it can deliver better than any other product. For example: Volvo makes the safest cars.
Most suited to the customerProduct positioned as the one that fits best into your customers’ lifestyles and approach. For example, Levi’s jeans are cool and fashionable.
Business approachPosition your brand as one with a distinct approach to business. For example, remember Apple’s Think Different slogan. Apple stands for everything innovative.
Anti-competitionPositioning the brand/product as one that is your best alternative compared to all competitors. For example, Walmart has used an EDLP (lower pricing) approach.
PricePosition your brand/ product on the basis of prices. Not necessarily the lowest prices but on the basis of prices. For example, lower priced, premium priced, value for money etc. Apple makes premium products and Starbucks offers only premium coffee.
QualityPosition your brand/product on the basis of quality. Best in class quality or reasonably high quality at reasonable prices. For example, Starbucks offers high quality coffee.

You can use any of the above listed strategies to positioning your product.

Strong positioning does not complicate things.

It rather keeps things simple.

Its focus is on the thing that is the most important for your target customer.

Its basis is your most promising competitive advantage which it uses to carve a niche in which no other product or brand fits better than yours.

Your positioning strategy puts your competitive advantage into the frame of competition and shows what sets you apart from your competitors.

Perhaps you deliver a tangible benefit or some intangible benefit like an emotional connection.

Marketers need to focus on crafting a focused positioning strategy since it is what will set you apart and then make you stand out.

Communicate and deliver your positioning strategy:

At last, when everything is in place, it is the time to communicate your positioning strategy.

It is an important step and begins with a positioning statement.

First of all, craft a positioning statement.

After you have crafted the statement, share it internally with key people so everybody knows how your product is going to fit in the market.

Your positioning strategy will be based on your competitive advantage and so it is important that you deliver on the promises you are making while positioning your product.

You must be able to meet the expectations that your positioning strategy sets in your customers’ minds.

Another notable thing is to design a positioning strategy that stands the test of time or endures, though you know that you will need to update it to reflect the changes in your target market, market dynamics, competition and other things.

Suppose you are planning to launch a product to fit beautifully into the lifestyles of your customers, you must be able to demonstrate that your offering is designed according to the needs and experiences of the target segment.

It will then continue to evolve as your target market does and will reflect the changing trends.

In another case, if your product offering is designed to deliver an important benefit like security, reliability or flexibility, then you should try to find ways to deliver the benefit better than any of your competitors who might try to imitate your offering.

However, to execute your positioning strategy, you will need to create your promotions mix.

Your promotion mix on the other hand, will be based on your positioning strategy.

How to develop a positioning statement:

A positioning statement is generally a one sentence statement that identifies your target market and clearly lays out what you want your target market to think about your brand/product.

Ideally, a positioning statement must include the following:

  • The target market: It includes a brief description of the target market that you are targeting with your positioning strategy. For example, it can be small business owners or Gen Z females or urban millennial customers.
  • The brand name: It is the name of your brand or product. For example, Product X or Product Y or Brand X or Brand Y.
  • The category: It is the frame of reference or the category of products or services you are competing in. For example, chatbot services, automobiles, athleisure products, or online streaming.
  • Points of differentiation: It includes the benefits you are expecting to deliver or simply put the problem you are trying to address and how you do it better than your competitors. It highlights the competitive advantages or differentiators that reinforce your positioning strategy. So, marketers need to explain what is different about their product or brand and why customers must care about it.
  • Reasons to believe in your positioning statement: This part includes any proof or evidence to show to your customers that you can really deliver upon your claim about your product being different and superior.

A simple positioning statement will look something like this:

To [target market], Product X [product/brand name] is the only [category or frame of reference] that [key differentiators/benefits] because [reasons to believe].

Checking out your positioning statement:

How will a marketer know if the positioning statement he has crafted is going to be effective or not?

Before finalizing the positioning statement, the marketers must evaluate it for effectiveness.

They must look for all the elements discussed above in the previous part since that is crucial so you can develop your positioning statement into a great marketing mix.

Here is a checklist to help you.

Tailored to the target market:

Your target segment is a unique group and therefore, your positioning statement must be tailored to the unique needs and wants of that group. However, many times positioning statements either miss out on that part completely or are not really suitable for that unique target segment.

A positioning statement cannot be generic by all means. It must not be targeted at different customer segments. It will mean that the marketer has not worked enough on his target market and positioning strategy.

You should not select a too broad target segment either. Your positioning statement must include a clearly defined target market.

Simple, focused and easy to remember:

Positioning statements do not need to be complex since that makes the execution part too difficult. If it is not focused enough, it will fail to deliver a clear message to the customers. So, marketers must ensure to be clear about the problems they are trying to solve in their positioning statement.

Instead of using complex jargon that could potentially mess the meaning of the statement they must use simple words to make it easy to remember. In case, you have developed a too long positioning statement, you must consider removing a few differentiators or benefits from it.

Generally, the best practice is to keep only the essentials and remove the rest to make sure the meaning is clear. You need to make each word in your positioning statement count.

Offers a clear picture of your brand/product:

Your positioning statement must offer a clear picture of your brand and product. Suppose you craft a positioning statement that does not apply to just your brand but others too, then it will be ineffective.

It must work for your brand and not for every other brand. If that is the case, you must try to work more on your key differentiators and competitive advantages.

A brand that wants to win in its market niche, must develop a positioning that no other brand can fill. Your place should be distinct from the others and it should reflect in your positioning statement.

Must deliver on the promises made:

In your positioning statement you include some benefits or promises for your customers. You should be able to deliver upon the promises you made in this statement. If you are unable to, you will lose credibility then your brand will fail to earn the consumers’ trust.

So, your positioning statement must look realistic. If you think the promises made in your statement are not so reliable, take a second look.

Must support the marketing mix and important marketing related decisions:

Your positioning statement also forms the basis of your marketing mix and other important marketing related communication. It must offer you some clear information about what type of marketing will work with this positioning.

It will help you develop a consistent marketing strategy and craft consistent messages for the target market. Your positioning statement must offer a clear direction since it supports the type of brand you are trying to build.