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Positioning

Overview

Positioning is the process of creating a distinctive image of a product or service in the mind of the target consumer. It ensures that the differentiation created (product-based, price-based, place-based, etc.) is communicated effectively to consumers so they perceive the intended value.

Definition of Positioning

  • Positioning is the act of designing a company’s offering and image to occupy a unique and meaningful place in the mind of the target market.
  • The goal is to locate the brand in the consumer’s mind in a way that maximizes the benefit to the company.

Key Definitions

  1. Al Ries and Jack Trout (1969):
    • Positioning is not what you do to a product; it is what you do to the mind of the prospect.
    • The product is positioned in the consumer's mind.
  2. Levin and Gatti (1969):
    • Differentiation of brands by studying how consumer perceptions of various brands differ is termed product positioning.
  3. Philip Kotler:
    • Market positioning is arranging for a product to occupy a clear, distinctive, and desirable place in the target market's mind.

How to Achieve Positioning

1. Perceptual Mapping

  • A visual technique to understand consumer perceptions of products or brands in comparison to competitors.
  • Represents the differentiation and competitive positioning in the consumer’s mind.

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  • Process:
    1. Conduct surveys to gather consumer perceptions and preferences.
    2. Use statistical tools (e.g., factor analysis, cluster analysis, multidimensional scaling) to analyze data.
    3. Plot the results on a map:
      • 2D Map: Based on two parameters.
      • 3D or Multi-Dimensional Map: Based on three or more parameters.
    4. Visualize the position of your product compared to competitors.
  • Objective: Test if the differentiation created is recognized and valued by consumers.

2. POP (Point of Parity) and POD (Point of Difference) Analysis

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  • POP (Point of Parity):
    • Features or benefits that are shared with competitors.
    • Examples:
      • Refrigerators from different brands share basic cooling functionality.
      • Shampoo brands may all promise clean hair.
    • Establishes legitimacy and assures consumers that the product is comparable to alternatives.
  • POD (Point of Difference):
    • Features or benefits that are unique to the brand and highly desirable.
    • Examples:
      • Longer warranty periods.
      • Unique aroma or texture in FMCG products.
      • Superior fuel efficiency in a car.
    • Criteria for POD:
      1. Relevance: Desirable to consumers.
      2. Deliverability: Feasible for the company to provide.
      3. Differentiation: Must clearly stand out from competitors.

3. Crafting the Positioning Statement

  • Focus on 1-2 key differences for clarity and simplicity.
  • Guidelines:
    • Keep it simple and easy to understand.
    • Highlight value that resonates with the target market.
    • Address the specific problem the consumer is trying to solve.
  • Example:
    • MOVE: Positioned as a backache specialist rather than a general pain reliever.
    • Milkmaid: Repositioned multiple times to suit consumer needs:
      1. Whitener for tea and coffee.
      2. Substitute milk during shortages.
      3. Table topper for enhancing taste.
      4. Essential ingredient for desserts.

Positioning Strategy Steps

  1. Competitive Frame of Reference:
    • Identify competitors.
    • Analyze their offerings and compare with your product.
  2. POP and POD Analysis:
    • Define similarities (POP) to ensure consumer trust.
    • Highlight differences (POD) that make your product unique and desirable.
  3. Create a Perceptual Map:
    • Use data to visualize how your product is perceived relative to competitors.
    • Identify gaps in the market that your product can fill.
  4. Evaluate Positioning Strategy:
    • Ensure the proposed positioning is understandable, relevant, and sustainable.

3.2.2 Crafting an Impactful Positioning Statement

Components of a Positioning Statement

1. For Whom, For When, For Where

  • Description of the Target Segment:
    • Define who the product is intended for.
    • Specify the scenarios or contexts in which the product will be used.
    • Example: "For moms who want to preserve memories."

2. What is the Value?

  • Unique Value Proposition:
    • Highlight the primary value or benefit the brand provides to the target audience.
    • Example: "Pickdeck is a simple cell phone feature that automatically transfers photos to your desktop."

3. What and How?

  • Evidence of the Value Proposition:
    • Provide logical arguments, scientific data, testimonials, or other evidence to support the claims.
    • Show how the target segment can access and benefit from the value offered.
    • Example: "Pickdeck prevents photos from accumulating on your phone by seamlessly transferring them."

4. Relative to Whom?

  • Benchmark Against Competition:
    • Explicitly describe the competitors or alternatives available in the market.
    • Establish a frame of reference for consumers to understand how the product is different.
    • Example: "Unlike traditional USB card, Bluetooth, or MMS services."

5. Statement of Differentiation

  • Why it Stands Out:
    • Communicate why the product is unique or superior to competitors.
    • Example: "Voss offers the purest and most distinctive drinking experience because it derives from an artisan source in Southern Norway and is packaged in a stylish iconic glass bottle."

Examples of Positioning Statements

1. Pickdeck:

  • Target: "For moms who want to preserve memories."
  • Product/Service: "Pickdeck is a simple cell phone feature."
  • Value: "It automatically transfers photos to your desktop or laptop."
  • Competition: "Unlike traditional USB card, Bluetooth, or MMS services."
  • Benefit: "Your cell phone photos won’t accumulate for months."

3.2.3 Mastering Perceptual Mapping: A Guide to Strategic Positioning

Overview

Positioning involves creating a clear, distinctive image of a product or service in the consumer's mind. Perceptual mapping is a powerful tool that helps marketers visually understand consumer preferences, evaluate brand attributes, and define competitive positioning.

Steps in Positioning

1. Collecting Preference Data

  • Conduct surveys to gather consumer preferences for different brands.
  • Respondents rank brands on a scale (e.g., 1-10) based on their preferences.
  • Example:
    • Brand preferences (e.g., Saab, G20, BMW, Ford).
    • Respondent scores (e.g., Audi = 8, Toyota = 3 for Respondent 1).

2. Creating a Preference Map

  • Plot consumer preferences for various brands.
  • Visualization:
    • Blue squares represent consumers.
    • Red dots represent brands.
  • Insights:
    • Brands with clusters of consumers around them are preferred.
    • Brands with fewer consumers around them are less preferred.

3. Collecting Perceptual Data

  • Conduct surveys to gather consumer perceptions of brands based on attributes.
  • Attributes include factors like "attractive," "roomy," "prestige," "unreliable," etc.
  • Respondents rate brands on each attribute using a scale (e.g., 1-10).
  • Example:
    • G20 rated 5.6 for "attractive," 6.3 for "quiet."
    • Ford rated 4 for "attractive," 3.2 for "quiet."

4. Creating a Perceptual Map

  • Plot the brands based on their association with attributes.
  • Visualization:
    • Red dots represent brands.
    • Blue lines represent attributes.
  • Insights:
    • Positive attributes (e.g., "prestige," "roomy," "quiet") cluster around top brands like BMW, Audi, Toyota.
    • Negative attributes (e.g., "unreliable," "poorly built") cluster around less preferred brands like Ford, Mercury.

5. Combining Preference and Perception

  • Overlay consumer preferences, brand positions, and attributes on a single map.
  • Visualization:
    • Red dots = Brands.
    • Blue lines = Attributes.
    • Pink lines = Consumers.
  • Insights:
    • Consumers gravitate toward brands associated with positive attributes.
    • Brands with negative attributes attract fewer consumers.

Interpreting Perceptual Maps

  1. Understanding Current Market Dynamics:
    • Identify clusters of consumers and brands.
    • Recognize the attributes associated with preferred and less-preferred brands.
  2. Evaluating Market Opportunities:
    • Identify unoccupied spaces on the map (attribute gaps).
    • Evaluate whether your product can fill a niche or differentiate itself effectively.
  3. POP (Point of Parity) and POD (Point of Difference):
    • Use the map to identify:
      • POP: Attributes shared with competitors to ensure legitimacy.
      • POD: Unique attributes to differentiate the product.
  4. Making Strategic Decisions:
    • POP Strategy: Position your product as equivalent to a strong brand but with a price or value advantage.
    • POD Strategy: Focus on attributes not occupied by competitors (e.g., "easy service" if unaddressed).

Example Analysis

Scenario 1: New Brand in a Competitive Market

  • Map Insight: Most customers and positive attributes are clustered around brands like BMW and Audi.
  • Strategy: Focus on POD such as "easy service," an unoccupied attribute on the map.

Scenario 2: New Brand in an Underserved Market

  • Map Insight: Top brands occupy only 20% of the market, leaving room for new entrants.
  • Strategy: Use POP to align with established brands but offer a competitive edge, such as lower price or additional features.
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