Market positioning refers to create distinct position in the consumer’s mind through proper promotional activities. After dividing the market into different segments and finalizing the target segments to be in, companies prepares strategy or promotional activities to position its product into the consumer’s mind.
The two main steps involved in market positioning are
First the company does the product differentiation based on different attributes which separates the particular product from the other products available in the market place. The main product differentiators are
Features: It indicates the basic characteristics of a product. Superior and higher number of features ensure increasing consumer market base. Companies also use different versions of products to add more features into it.
Performance Quality: Products can be differentiated based on the performance quality. Superior quality comes with superior price and there is a separate market for products with different qualities. If we consider the example of passenger cars, there are different types of cars available based on the performance and each one has a specific market. Higher performance cars cost more and the target market is high net worth people.
Durability: Durability refers to products’ expected life under different circumstances. Companies charge higher prices for more durable products due to higher existence level. Also it is very important in the competitive market, which prompts the companies to spend in R&D to develop products with higher durability. Like for Paints, Asian paints portray itself as higher durable product which prompts customer to use the same for longer lasting.
Reliability: Reliability refers to delivering the same as promised and it is an important parameter to build image and trust of a high quality company. High reliability gives confidence to the customers in using the product without worrying about any side effect or malfunction and for this reason, companies also charge higher prices for high reliability. There are many brands available for geyser in the market place but Bajaj brand is more reliable than the local brands. That is the reason Bajaj Geyser is costly compared to other local brands.
Warranty & Support: Warranty or service support is also an important product differentiators which customers check while taking the buying decision. Customers want the product to be repaired or replaced properly in case of any malfunction or defect. Proper warranty helps to boost the sales of a particular product as it gives more confidence to the customers. That’s the main reason Chinese product has a very less market share due to no warranty and support services.
Design, Look and feel: Product design or the look and feel of the product has a prolonged effect in the mind of the customers which also influences the buying decision. Customers look for product with superior design and better look and feel. This is a very important product differentiators for furniture and apparels where design or look and feel drives the sales higher.
Brand and Image: Brand and image of the company is an important product differentiator which creates a trust level among the consumers. Consumers easily trust in the product with high brand name and image. Like products developed by Apple like iPhone, iPad, iPod etc. It has its own market among the huge brand loyal customers and the customer trust these brands the most.
Service differentiation refers to the different types of differentiators which the customers use for different service related products. The main service differentiators are
Communicate the Positioning Strategy
After differentiating a product from the other products based on different product differentiators, companies have to communicate the proper differentiators to the consumers to create a distinct position for its products in the consumer’s mind. The successful selection of a product differentiator depends on the following seven criteria
After finalizing the product differentiators, the positioning is carried considering one or multiple differentiators at the same time.
If we consider only one differentiator then it has to be the best in the whole product category. If we consider two differentiators, then the combination should provide the best available services/offering to the consumer base. In a rare case, we can consider more than two differentiators which are best in the particular product category. Apple did the last thing when they have launched their iPhone as it contains higher number of product differentiators which are best in the smart phone category.
After finalizing the differentiator, companies focus on different positioning strategies based on the selected differentiators. The strategies can be anyone of the following
a) Attribute Positioning: iPhone with so many distinct attributes in one product
b) Benefit Positioning: Fair & lovely in the beauty segment
c) User/Application Positioning: Cisco in the router category
d) Competition Positioning: Thumps Up -not a sweet cold drink, positioning itself against Pepsi
e) Product category positioning: Amul Butter puts itself as the leader in the category
f) Quality/price Positioning: Hero Moto Corp’s Splendour as a offering best value for money
All the promotional and advertising activities are designed considering the market positioning strategies.