Reading: The Positioning Process

Getting to the Right Position

Arriving at the best positioning and differentiation strategy involves a process. The goal of the process is to design an identity that both confirms the value of the product, service, or brand in the customer’s mind and explains why and how the offering is better than the competition. To reach that goal, marketers typically follow a positioning process comprised of the following five steps:

Steps of the Positioning Process

Confirm your understanding of market dynamics
Identify your competitive advantages
Choose competitive advantages that define your market “niche”
Define your positioning strategy
Communicate and deliver on the positioning strategy

Step 1: Confirm Your Understanding of Market Dynamics

At the start of the positioning process, you need a firm understanding of your target market and answers to the following questions:

In which product, service, or market category (also called the “frame of reference”) do you plan to use this positioning?
Which target segment is your focus for the positioning you are developing?
What factors do these buyers evaluate when they make a purchasing decision?
How do these buyers view your competitors in the category?

If you don’t have answers to these questions, you should consider conducting formal or informal marketing research to reach a better understanding of your target market and the market dynamics around it. Some marketers may have the time and resources to conduct extensive research, while others may need to rely on their own experience and anecdotal conversations with target customers. Either way, you’ll remember that the customer is at the center of the marketing mix, so knowing whom you’re targeting is the only place to start.

Step 2: Identify Your Competitive Advantages

A competitive advantage is some trait, quality, or capability that allows you to outperform the competition. It gives your product, service, or brand an advantage over others in purchasing decisions. Competitive advantage may come from and or all of the following:

Price: Something in your production process or supply chain may make it possible for you to provide comparable value at a lower cost than competitors.
Features: You may provide tangible or intangible features that your competitors do not: for example, more colors, better taste, a more elegant design, quicker delivery, personalized service, etc.
Benefits: You may provide unique benefits to customers that your competitors cannot match. Benefits are intangible strengths or outcomes your customer gets when they use your offering. For example, time savings, convenience, increased control, enjoyment, relaxation, more choices, feeling better about oneself, being more attractive, etc.

Create a list of the things that make you different from competitors in positive ways. Then identify which of these factors are also competitive advantages: the influential factors that help you perform better in the marketplace and cause customers to choose your product, service, or brand over other options.

As a rule, it is relatively easy for competitors to undercut your pricing or match your features, so it is difficult to maintain a consistent competitive advantage in either of these areas. Market-leading products, services, and brands are most likely to differentiate based on benefits—the intangible strengths and outcomes that are harder for competitors to match.

For example, many car companies achieve strong ratings in safety tests, but driving a Volvo provides an extra, intangible benefit for the driver of feeling safer because of Volvo’s longstanding record and reputation for safety. A variety of theme parks in Southern California offer exciting rides and family fun, but only Disneyland’s Magic Kingdom makes people feel like they’re in the happiest place on earth.

You don’t necessarily need a long list of competitive advantages, but your list should be substantive: it should include the things that truly create distance between your offering and competitors. Dig deep to identify the intangible benefits your customers experience–or intangible benefits they could experience—from your offering that make it different and better than the alternatives.

Step 3: Choose Competitive Advantages That Define Your Niche

Your list of competitive advantages represents a set of possible positioning strategies you could pursue for your product, service, or brand. The next step is to examine how these factors fit into customer perceptions of your broader competitive set. Your goal is to pick a positioning approach that gives you a unique and valued position in the market that competitors are not addressing.

A perceptual map is a great tool for this step. Perceptual maps create a picture of how different competitors are positioned in the market, based on the key criteria that strongly influence customer decisions. Examples of two different perceptual maps are included below. The first one maps automobile brands based on customer perceptions of price and quality. The second one maps lifestyle programming on cable TV channels, according to whether it is younger/edgier vs. older/mainstream and educational vs. entertainment.

Consumer perception by Price and Quality. Two crossing axes with one representing quality and the other representing price. Car brands are listed from generally lowest quality and lowest price to highest. Dacia is considered the lowest quality and the lowest price. Next is Kia Motors at lower-middle low quality and low price. Next is Citroen and Renault. Citroen is considered better quality than Renault, but Renault is considered cheaper than Citroen. Next is Volkswagen. In the high price but low quality quadrant is brands Infiniti and Mini. Infiniti is considered middle-lower quality and slightly more expensive than Mini. In the high-quality, low price quadrant, Ford and Toyota are considered to be the same quality, but Ford is considered slightly more expensive than Toyota. Honda is considered higher-quality than Ford and Toyota, but it is considered slightly lower quality than Ford. In the high price, high quality quadrant, from lowest price and lowest quality to highest, are the brands BMW, Audi, Porsche, and Mercedes-Benz, with Mercedes-Benz at the very highest in price and quality.

Source: Sebastien Bellanger, https://rockstarsbm.wordpress.com/2014/11/23/perceptual-maps/

Perceptual Map: Lifestyle Programming. A selection of TV networks ranked on two axes, one ranging from escapism to enrichment, the other from younger/edgier to older/mainstream. In the escapism and younger/edgier quadrant is MTV as the highest ranked in escapism and younger/edgier. Next is VH1, with maximum escapism value but a lower younger/edgier value than MTV. Next is Bravo, which is more younger/edgier than VH1 and less escapism. Next is BBC America, which is the lowest ranked in younger/edgier of the quadrant, and is slight less escapist than Bravo. Next is The Style Network, which has the second-highest younger/edgier ratings but is less escapism than BBC America. Next is Entertainment Television, with the lowest escapism ranking of the quadrant and considered more younger/edgier than BBC America but less younger/edgier than Bravo. In the younger/edgier and enrichment quadrant are the Travel Channel, Discovery Channel, and Cooking Channel. The Cooking Channel is tied with the Travel Channel for younger/edgier, but the Cooking Channel ranks much higher in enrichment. The Discovery Channel is closer to center on younger/edgier and enrichment. In the enrichment and older/mainstream quadrant are eight networks. Food Network is closest to center on enrichment and mid-low in the older/mainstream ranking. The Oh! Oxygen network is tied with TLC and Lifetime for borderline older/mainstream ranking, but Lifetime ranks higher on enrichment than TLC, and TLC ranks higher on enrichment than Oh! Oxygen, which ranks slightly more on Enrichment than Food Network. The Outdoor Channel is slightly more enrichment than Oh! Oxygen, and is ranked high on older/mainstream. HGTV is ranked with higher enrichment than TLC and less older/mainstream than Food Network. WeTV is the highest in enrichment and is tied with HGTV in the older/mainstream ranking. DIY network is slightly less enrichment than WeTV but ranked more older/mainstream than all but The Outdoor Channel. In the escapism and older/mainstream quadrant are five networks. The History Channel is highly ranked on escapism but falls behind Spike and National Geographic Channel for least older/mainstream in the quadrant. Great American Country is highly ranked in older/mainstream and slightly less escapism than History Channel. Spike TV is less escapism than GAC but more escapism than National Geographic. Spike is also on the borderline between older/mainstream and younger/edgier, but Spike is more in older/mainstream. National Geographic Channel is centered on the borderline between younger/edgier and older/mainstream. Finally A&E is less older/mainstream than GAC but has a lower escapism ranking similar to National Geographic Channel's.

Source: Cooking Channel Marketing Project, http://www.slideshare.net/JenniferHoffmann/cooking-channel-marketing-project, Slide #60

Marketers use these sorts of perceptual maps to identify gaps in the market; these, in turn, represent opportunities to to fill a niche in the market that isn’t being addressed. For example, the lifestyle programming map suggests that there are not a lot of choices in the area of younger/edgier AND educational space. This might be a good place to position a new cable channel or programming direction. On the other hand, there are already lots of established players in the younger/edgier/entertaining space, so new entrants would have to beat out more competition to make an impact.

You can create a perceptual map similar to these by identifying the key criteria customers use when deciding what to buy and setting these as the horizontal and vertical axes. Then you can overlay competitors in the perceptual space where they seem to fit. You can even create multiple maps of the same market with different criteria on the horizontal and vertical axes to get a different view of how competitors are positioned. Perceptual maps are most robust when they are based on actual marketing research data, but marketers can also create directional maps based on their experience and anecdotal understanding of market dynamics.

With your maps in hand, look for areas where there are fewer competitors: these are the spaces where you are most likely to be successful creating your own niche. Consider where your competitive advantages would help you fit well into these gaps; this will direct you to the strongest positioning opportunities for your product, service, or brand.

Give this approach a try: Suppose you are exploring whether to introduce your homemade, artisan-style ice cream to a wider audience, which will mean competing with national brands carried in local and regional grocery stores. Looking at the following perceptual map, where are the gaps in which you could create a niche for your product? Who would be your closest competitors?

Source: Alexandre Anne, https://brandauditicecream.wordpress.com/2-customer-insight/

Your competitive advantage around a homemade, artisan-style product puts you on the upper half of the map. You would have to choose between more classic versus interesting and innovative ice cream choices. Based on your strengths and preferences, you can choose where to claim your positioning niche: Perhaps you stake your future on the classical side by introducing the most marvelous, pure, premium vanilla and chocolate ice creams your customers have ever tasted. Alternatively, you might choose to introduce an ice cream line that capitalizes on interesting flavor combinations using local and seasonal ingredients, which would position you squarely in the innovative quadrant. Either approach could be a winning combination in a unique market niche.

If you choose not to create a perceptual map, an alternate approach is to list competitors and their competitive advantages. Then, add your own own offering and competitive advantages to the list. Based on the alternatives available to customers, think about where there are gaps between what customers want and value most and what they can get from the choices available today. Identify where your competitive advantages can help you fit into these gaps, since they will be the most promising positioning approaches for you.

Remember to think creatively as you are defining your competitive advantages and choosing those that will define your positioning and market niche. You have a greater likelihood of success if you are also the first in the market to claim your positioning. You won’t have to displace anyone else, and you can generate excitement by fulfilling a previously unmet need.

Step 4: Define Your Positioning Strategy

With your competitive advantages identified and information about how key competitors are positioned, you’re ready to evaluate and select your positioning strategy. This is the decision you make about how, exactly, you plan to position your offering relative to the rest of the field. How will you be different and better?

There are several common positioning strategies you should consider, shown in the following table:

Common Positioning Strategies
Differentiator	Positioning Strategy	Examples
Category Benefit	Position yourself as “owning” an important benefit and delivering it better than anyone else	Volvo = Safety Hallmark = Caring shared Hawaii = Aloha spirit
Best fit for the Customer	Position yourself as an ideal fit for the customer’s personality, style, and approach	Red Bull = Extreme Guess Jeans = Sexy chic Virgin Atlantic = Ultra cool fun
Business Approach	Position yourself with a distinctive approach to doing business	Jimmy John’s = Unbelievably fast TurboTax = Easy DIY
Anti-Competition	Position yourself as a preferred alternative to the competition	Apple = Think different Seven-Up = The Uncola
Price	Position yourself according to pricing: lowest cost, best value for the money, luxury or premium offering, etc.	Wal-Mart = Lowest prices RyanAir = Cheap flights Old Navy = Affordable fashion
Quality	Position yourself according to a quality standard: high quality, best-in-class, or else reliably good quality at a reasonable price	Hearts on Fire = Perfect cut Ritz Carlton = Ultimate luxury

Strong positioning is simple: it focuses on a single, powerful concept that is important to the customer. It uses your most promising competitive advantage to carve out the niche you will fill better than anyone else. Your positioning strategy puts this competitive advantage into the context of your competitive set: it explains what distinguishes you from the competition. Perhaps you deliver an emotional benefit that your target audience doesn’t get anywhere else (escape? balance?) Perhaps you are hands down the best choice for a geeky, gear-head audience (bikers, coders). Perhaps you provide great customer service in a category where customer service is unheard of (cable TV, contractors).

Your positioning will become the “special sauce” that sets you apart. Concoct it well.

Step 5: Communicate and Deliver on Your Positioning Strategy

The next sections of this module will delve deeper into this step, but don’t underestimate its importance. Communicating your positioning strategy begins with creating a positioning statement and sharing it internally across the organization to make sure that everyone understands how and where your offering will fit in the market. Your positioning builds on a competitive advantage, and it is essential for you to deliver on the expectations your positioning sets in customers’ minds. You should design your positioning strategy to endure over time, while recognizing that it can and should be adjusted from time to time to reflect changes in the competitive set, your target segment, market trends, and so forth.

If your positioning is based on being an ideal “lifestyle” fit for your target audience, for example, you need to demonstrate how your offering is attuned to the needs and experiences of this audience. This includes evolving as your target segment evolves. If your positioning is based on “owning” an important benefit like security or reliability or delight, then you should explore all the ways you can deliver that benefit better than any competitor who might try to imitate you.

The marketing mix provides the set of coordinated tools you use to execute on your positioning strategy. You might think of your positioning strategy as the tune you want your target segment to hear. The marketing mix is how you orchestrate and harmonize that tune, making it a memorable, preferred choice for your target customers.

Module 8: Positioning