Product Positioning. POSITION IN THE MARKET The location of a product or service alongside key...

Product Positioning

POSITION IN THE MARKET

• The location of a product or service alongside

key competitors in the mind of the consumer

• The way customers perceive a product relative to competing products

• Refers to the place the product occupies in the customer’s perceptual map of the market

• A product’s position ultimately depends on the attitudes of people in the target market.

• Firms will seek to position their products to increase sales

POSITIONING

• The process of creating an image for the product in the minds of customers

• Arranging for a brand or product to occupy a clear and distinctive place in the minds of target customers relative to competing products and brands

• As we know, it is vital in business to offer a product or service that is both demanded by the customer and different than your competition

• Porter believes that for a business to position themselves as unique, they must either be:

» Different

• Let’s take a look at each…….

• In 1980, Michael Porter created his “Generic Strategies” concept

» Cost Leader

1. DIFFERENTIATION

• Be different / distinctive

• Have a feature or benefit that nobody else has

• If you’re the only business selling that particular product, the consumer has no option but to buy from you

EXAMPLE: How is RIM’s “Blackberry” different from the competition ? What do they do that nobody else does?

2. COST LEADER / CHEAPER

• As a result, if your product is similar to the competition’s yet it is cheaper, they will likely buy from you

• The “me too” strategy….we offer the same product as everyone else, but we’re cheaper

• Compete by being the lowest cost producer

• If you can produce your product / service cheaper, you can sell it cheaper

Product Differences should be…..

• Possible for the company to produce / engineer

• Distinctive

• Clear

• Visible

• Communicable

• Difficult to copy

• Profitable

• Relevant / Important to the buyers

Positional Map

• The visual representation of a brand within a specific market place showing its positioning relative to the competition

• Shows how products compete in the mind of the consumer and suggests how a product can be positioned to maximize sales

• Defines the market in terms of the way buyers perceive key characteristics of competing products

Constructing a Positional Map

• Select key variables that differentiate products– Ie – price, quality, safety, design, durability, range of services, etc..

• Conduct market research to find out how brands are perceived

• Plot information on a two dimensional diagram based upon the two key variables you feel position the industry competitors

• Let’s create a “positional map” for the grocery industry in Kitchener / Waterloo…….

The main players are:

• Price Chopper

• Sobey’s

• Zehr’s

• Food Basics

We need to decide on:

• Relevant industry variables we can use to differentiate the competitors

• Their position relative to each other………

A Positional Map of Grocery Stores in Kitchener / Waterloo

• Let’s look at another one………

A Positional Map of Car Manufacturers

in North America

• In order to successful, a business must position themselves with one of these strategies, otherwise they will be “caught in the middle” and not the best at what they are trying to do

• Successful marketers position their products with the above strategies in mind

• By trying to be “everything to everyone”, they will ultimately fail

• As a result, they will be “everything to nobody”

• As a result, a business can use the “map” to:

2. Understand how a product can be positioned to maximize sales

1. Understand its positioning relative to the competition

• By understanding its position in the marketplace, a business can then begin to create a marketing plan that optimizes its chance for success………

• The End !!