product-positioning

What is product positioning?

Product positioning is a strategy that defines where a product or service sits in the marketplace compared to those offered by a competitor.

AspectExplanation
Concept OverviewProduct Positioning is a strategic marketing process that involves defining and establishing a distinct and desirable place for a product or brand in the minds of target customers within a competitive marketplace. The goal of product positioning is to create a clear and favorable perception of a product relative to competitors, making it more attractive and relevant to the target audience. Effective positioning helps a product stand out, communicate its unique value, and fulfill customer needs.
Key ElementsProduct positioning comprises several key elements:
1. Target Audience: Identifying the specific customer segment or audience that the product aims to serve.
2. Competitive Analysis: Understanding the strengths and weaknesses of competitors in the same market.
3. Unique Value Proposition (UVP): Defining what makes the product unique and valuable to customers.
4. Branding and Messaging: Crafting compelling messaging and branding that resonates with the target audience.
5. Perceptual Map: Visualizing the product’s position relative to competitors on a perceptual map.
6. Communication Strategy: Planning how to communicate the positioning to the target market through various marketing channels.
Positioning StrategiesThere are several positioning strategies that companies can employ:
1. Value-Based Positioning: Emphasizing the product’s value and cost-effectiveness compared to competitors.
2. Quality Positioning: Highlighting the product’s superior quality or premium features.
3. Differentiation Positioning: Focusing on what sets the product apart from competitors in terms of features, design, or benefits.
4. Benefit Positioning: Emphasizing the specific benefits or solutions the product provides to customers.
5. User-Based Positioning: Positioning the product based on the user’s lifestyle, preferences, or demographics.
6. Competitive Positioning: Positioning the product as a direct alternative or superior choice to a specific competitor.
ProcessThe product positioning process typically involves the following steps:
1. Market Research: Conduct research to understand customer needs, preferences, and the competitive landscape.
2. Identify Unique Attributes: Determine what makes the product unique or superior.
3. Define Positioning Strategy: Choose a positioning strategy that aligns with the product’s strengths and customer preferences.
4. Develop Messaging: Craft compelling messaging and branding that conveys the chosen positioning.
5. Test and Refine: Test the positioning with target customers and refine it based on feedback.
6. Implement and Monitor: Execute the positioning strategy across marketing channels and monitor its effectiveness over time.
BenefitsEffective product positioning offers several benefits:
1. Competitive Advantage: Helps the product stand out in a crowded marketplace.
2. Brand Recognition: Builds brand recognition and loyalty among customers.
3. Customer Engagement: Resonates with customers and increases their engagement with the product.
4. Increased Sales: Attracts more customers and drives sales growth.
5. Clarity: Provides clarity in marketing and messaging efforts.
ChallengesChallenges in product positioning include accurately identifying customer preferences, staying ahead of changing market dynamics, and maintaining consistency in branding and messaging across different channels and regions.

Understanding product positioning

In essence, product positioning clarifies the features that make a product unique and how those features contrast with a competitor’s offering.

The strategy considers the needs and wants of the target audience and endeavors to make a lasting impression in customers’ minds. 

Product positioning requires that the business first determine how it wants its brand and products to be perceived.

To differentiate their brand from the competition, the marketing team must be able to describe the product benefits and connect them to customer needs, mission, vision, brand essence, and the market more generally.

Product positioning must also be sensitive to the most effective communication channels and competitor product alternatives.

Effective product positioning meets customer expectations, reinforces the brand, and secures customer loyalty. It can also be used to attract different customers, launch a new product, or promote the new features of an existing product.

Product positioning types

There are five main types of product positioning, with each having a different focus:

  1. Characteristics-based โ€“ some companies attribute certain characteristics to their products to create associations. Most consumers associate Volvo with safety and Toyota with reliability, for example.
  2. Use or application-based โ€“ a company that sells nutritional supplements may promote their products to customers who are active and want to increase their performance during exercise.
  3. Price-based โ€“ where companies associate themselves with competitive prices. Supermarkets and other retailers with access to economies of scale position their many of their products in this way.
  4. Quality or prestige-based โ€“ instead of focusing on price, some brands positions their products based on quality and prestige. Watch brand Rolex is one example.
  5. Competitor-based โ€“ some product-positioning strategies are based on the competition. To promote its razor blades, Dollar Shave Club indirectly referenced Gillette’s expensive, feature-rich razors, showed it understood the pain points, and then offered an alternative.

Product positioning statements

Product positioning can be clarified using the follow statement template: For a [group of users] who [want/need], [product/brand/company] is a [solution/category] that solves this in a unique way by [benefit].

Consider a fictitious company that builds a running app for those entering the sport to improve their fitness.

For the sake of the example, letโ€™s call the company Swift. Market and customer research shows that the target audience is concerned with their physical condition but has trouble consistently exercising.

The research also showed that runners in the 18-29 age group are social, competitive, data-driven, and enjoy sharing their wins with a community of like-minded individuals.

With that in mind, the product positioning statement may read something like this: For runners in the 18-29 age group who want to connect with others, Swift offers the leading social, data-driven running performance app that provides a space for the running community to foster a healthy competitive spirit and celebrate wins.

Key takeaways:

  • Product positioning is a strategy that defines where a product or service sits in the marketplace compared to those offered by a competitor.
  • There are five main types of product positioning based on the following: characteristics, use or application, price, quality or prestige, and the competition.
  • Product position statements clarify the company’s target audience, what makes its product unique, and most importantly, why customers should care about it.

Key Highlights

  • Definition and Purpose:
    • Product positioning is a strategic approach that determines where a product or service stands in the market relative to competitors.
    • It focuses on highlighting unique features and contrasting them with competitors to make a lasting impression on customers.
  • Elements of Product Positioning:
    • Product positioning considers customer needs and desires, aiming to create a distinct brand image.
    • The strategy aligns with the brand’s mission, vision, and values.
    • Effective communication channels and competitor offerings are important considerations.
  • Benefits and Objectives:
    • Successful product positioning meets customer expectations, reinforces the brand, and cultivates customer loyalty.
    • It can attract new customers, introduce new products, or promote new features.
  • Types of Product Positioning:
    • Characteristics-Based: Associating certain attributes with a product to create specific consumer perceptions. E.g., Volvo’s safety image.
    • Use or Application-Based: Positioning products based on how they fulfill customer needs in specific scenarios. E.g., nutritional supplements for active individuals.
    • Price-Based: Aligning the brand with competitive pricing. Often used by retailers with economies of scale.
    • Quality or Prestige-Based: Positioning products based on their superior quality or prestige. E.g., Rolex watches.
    • Competitor-Based: Leveraging competition by addressing pain points and offering alternatives. E.g., Dollar Shave Club vs. Gillette.
  • Product Positioning Statements:
    • Product positioning can be summarized in statements using a template: “For [target audience] who [need], [product/brand] is a [solution] that uniquely [benefit].”
    • An example: “For runners aged 18-29 seeking community engagement, Swift provides a leading social, data-driven running app that fosters a healthy competitive spirit and celebrates wins.”

Case Studies

CompanyProduct Positioning StrategyTarget AudienceUnique Selling Proposition (USP)Marketing and Communication Tactics
ApplePremium and user-friendly technologyCreative professionals, tech enthusiastsSleek design, intuitive interfaces, and ecosystemAesthetic-focused advertising, product showcases
AmazonConvenience and vast product selectionOnline shoppers of all demographicsFast shipping, extensive product range, and Prime membershipPersonalized recommendations, Prime Day sales events
GoogleSearch engine dominance and informationInternet users seeking informationAccurate and fast search results, simple interfaceMinimalistic homepage, sponsored search results
MicrosoftSoftware and productivity tools expertiseBusinesses, professionals, and individualsWidely used operating systems and productivity softwareBusiness partnerships, developer community engagement
FacebookSocial connection and personal networksSocial media users of all agesConnect with friends and share life momentsNews Feed algorithms, targeted advertising, user engagement
NetflixOn-demand streaming entertainmentEntertainment enthusiasts of all agesExtensive content library, original programmingPersonalized recommendations, binge-watching culture
AirbnbUnique and affordable lodging optionsTravelers and hosts worldwideStay in local homes, unique experiencesUser reviews, host profiles, travel inspiration content
UberOn-demand transportation and deliveryUrban commuters and food delivery usersConvenient and affordable rides, quick food deliverySurge pricing, driver and rider ratings, referral programs
StarbucksPremium coffee and community experienceCoffee enthusiasts and communitiesHigh-quality coffee, inviting ambiance, and loyalty rewardsCustomizable drinks, seasonal promotions, social gatherings
AirbnbUnique and affordable lodging optionsTravelers and hosts worldwideStay in local homes, unique experiencesUser reviews, host profiles, travel inspiration content
UberOn-demand transportation and deliveryUrban commuters and food delivery usersConvenient and affordable rides, quick food deliverySurge pricing, driver and rider ratings, referral programs
StarbucksPremium coffee and community experienceCoffee enthusiasts and communitiesHigh-quality coffee, inviting ambiance, and loyalty rewardsCustomizable drinks, seasonal promotions, social gatherings
AirbnbUnique and affordable lodging optionsTravelers and hosts worldwideStay in local homes, unique experiencesUser reviews, host profiles, travel inspiration content
UberOn-demand transportation and deliveryUrban commuters and food delivery usersConvenient and affordable rides, quick food deliverySurge pricing, driver and rider ratings, referral programs
StarbucksPremium coffee and community experienceCoffee enthusiasts and communitiesHigh-quality coffee, inviting ambiance, and loyalty rewardsCustomizable drinks, seasonal promotions, social gatherings

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