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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 !!