What Is Brand Positioning And Why It Matters In Business

Brand positioning is about creating a mental real estate in the mind of the target market. If successful, brand positioning allows a business to gain a competitive advantage. And it also works as a switching cost in favor of the brand. Consumers recognizing a brand might be less prone to switch to another brand.

Understanding brand positioning

Brand positioning allows consumers to view brands in unique ways. For example, a consumer may associate emotions, traits, feelings, and sentiment toward a brand. Ideally, these factors give the brand a competitive advantage because positioning encourages consumers to make the decision to buy from one brand over another.

Band-Aid is an example of a brand that is well-positioned in the minds of its customers. Whenever someone is injured, Band-Aid is the product that first comes to mind despite there being many similar products on the market. In fact, Band-Aid is so entrenched in the minds of consumers that the brand has become a noun and entered everyday usage. Such is the level of integration that even non-injury related problems are sometimes referred to as needing a “band-aid solution”. 

The importance of brand positioning

Effective brand positioning shapes consumer preferences by increasing consumer loyalty and brand equity. High brand equity is particularly important since companies can charge more for their products and increase profit margins. 

The perceived brand equity in one product can also extend to products that contain the brand name in their description. For example, Virgin had humble beginnings as a record store in 1970. 

But Richard Branson has since extended the Virgin brand to many other products in airlines, trains, financial services, and cell phones. 

With each successful foray into new markets, Virgin increases their credibility and brand position among consumers. This allows the Virgin brand to become competitive relatively quickly through market differentiation. 

Different types of brand positioning

Choosing the most effective brand positioning strategy will depend on how a company chooses to differentiate their product from others in the market. 

Here are a few of the most common positioning strategies:

Value-based positioning

Value-based positioning places the brand based on its value proposition – or the tangible benefits a customer will experience from purchasing or experiencing an offer.

Value often means different things to different people, but it is usually related to completing a task, solving a problem, and increasing convenience and/or status. 

Features-based positioning

Features-based positioning is important in competitive, saturated markets where there is little differentiation between products. 

Common in the cell phone industry, this form of positioning focuses on product-level features such as price and quality and service features such as warranties and money-back guarantees.

Lifestyle positioning

In lifestyle positioning, the brand attempts to sell an image or identity, instead of the product itself. Here, the main focus is on convincing a consumer that the product is associated with a lifestyle worth aspiring to. 

Alcoholic beverage brands most commonly use lifestyle positioning, but it can also be seen in the marketing of gambling services, luxury cars, and certain clothing products.

Key takeaways:

  • Brand positioning is the unique space a brand occupies in the minds of consumers.
  • Brand positioning facilities an emotional connection between brand and consumer, increasing brand equity in the process.
  • Brand positioning strategies differ according to the product market and the features of the product that need to be emphasized.

Connected Marketing Concepts

Affiliate Marketing

Affiliate marketing describes the process whereby an affiliate earns a commission for selling the products of another person or company. Here, the affiliate is simply an individual who is motivated to promote a particular product through incentivization. The business whose product is being promoted will gain in terms of sales and marketing from affiliates.

Ambush Marketing

As the name suggests, ambush marketing raises awareness for brands at events in a covert and unexpected fashion. Ambush marketing takes many forms, one common element, the brand advertising their products or services has not paid for the right to do so. Thus, the business doing the ambushing attempts to capitalize on the efforts made by the business sponsoring the event.

Brand Building

Brand building is the set of activities that help companies to build an identity that can be recognized by its audience. Thus, it works as a mechanism of identification through core values that signal trust and that help build long-term relationships between the brand and its key stakeholders.

Brand Equity

The brand equity is the premium that a customer is willing to pay for a product that has all the objective characteristics of existing alternatives, thus, making it different in terms of perception. The premium on seemingly equal products and quality is attributable to its brand equity.

Brand Positioning

Brand positioning is about creating a mental real estate in the mind of the target market. If successful, brand positioning allows a business to gain a competitive advantage. And it also works as a switching cost in favor of the brand. Consumers recognizing a brand might be less prone to switch to another brand.

Business Storytelling

Business storytelling is a critical part of developing a business model. Indeed, the way you frame the story of your organization will influence its brand in the long-term. That’s because your brand story is tied to your brand identity, and it enables people to identify with a company.

Content Marketing

Content marketing is one of the most powerful commercial activities which focuses on leveraging content production (text, audio, video, or other formats) to attract a targeted audience. Content marketing focuses on building a strong brand, but also to convert part of that targeted audience into potential customers.

Digital Marketing

A digital channel is a marketing channel, part of a distribution strategy, helping an organization to reach its potential customers via electronic means. There are several digital marketing channels, usually divided into organic and paid channels. Some organic channels are SEO, SMO, email marketing. And some paid channels comprise SEM, SMM, and display advertising.

Growth Marketing

Growth marketing is a process of rapid experimentation, which in a way has to be “scientific” by keeping in mind that it is used by startups to grow, quickly. Thus, the “scientific” here is not meant in the academic sense. Growth marketing is expected to unlock growth, quickly and with an often limited budget.

Guerrilla Marketing

Guerrilla marketing is an advertising strategy that seeks to utilize low-cost and sometimes unconventional tactics that are high impact. First coined by Jay Conrad Levinson in his 1984 book of the same title, guerrilla marketing works best on existing customers who are familiar with a brand or product and its particular characteristics.

Inbound Marketing

Inbound marketing is a marketing strategy designed to attract customers to a brand with content and experiences that they derive value from. Inbound marketing utilizes blogs, events, SEO, and social media to create brand awareness and attract targeted consumers. By attracting or “drawing in” a targeted audience, inbound marketing differs from outbound marketing which actively pushes a brand onto consumers who may have no interest in what is being offered.

Integrated Marketing

Integrated marketing describes the process of delivering consistent and relevant content to a target audience across all marketing channels. It is a cohesive, unified, and immersive marketing strategy that is cost-effective and relies on brand identity and storytelling to amplify the brand to a wider and wider audience.

Marketing Mix

The marketing mix is a term to describe the multi-faceted approach to a complete and effective marketing plan. Traditionally, this plan included the four Ps of marketing: price, product, promotion, and place. But the exact makeup of a marketing mix has undergone various changes in response to new technologies and ways of thinking. Additions to the four Ps include physical evidence, people, process, and even politics.

Marketing Personas

Marketing personas give businesses a general overview of key segments of their target audience and how these segments interact with their brand. Marketing personas are based on the data of an ideal, fictional customer whose characteristics, needs, and motivations are representative of a broader market segment.

Multi-Channel Marketing

Multichannel marketing executes a marketing strategy across multiple platforms to reach as many consumers as possible. Here, a platform may refer to product packaging, word-of-mouth advertising, mobile apps, email, websites, or promotional events, and all the other channels that can help amplify the brand to reach as many consumers as possible.

Multi-Level Marketing

Multi-level marketing (MLM), otherwise known as network or referral marketing, is a strategy in which businesses sell their products through person-to-person sales. When consumers join MLM programs, they act as distributors. Distributors make money by selling the product directly to other consumers. They earn a small percentage of sales from those that they recruit to do the same – often referred to as their “downline”.

Niche Marketing

A microniche is a subset of potential customers within a niche. In the era of dominating digital super-platforms, identifying a microniche can kick off the strategy of digital businesses to prevent competition against large platforms. As the microniche becomes a niche, then a market, scale becomes an option.

Relationship Marketing

Relationship marketing involves businesses and their brands forming long-term relationships with customers. The focus of relationship marketing is to increase customer loyalty and engagement through high-quality products and services. It differs from short-term processes focused solely on customer acquisition and individual sales.

Sustainable Marketing

Sustainable marketing describes how a business will invest in social and environmental initiatives as part of its marketing strategy. Also known as green marketing, it is often used to counteract public criticism around wastage, misleading advertising, and poor quality or unsafe products.

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