Product Positioning

POSITION IN THE MARKET The location of a product or service alongside key competitors in the mind of the consumer The way customers perceive a product relative to competing products Refers to the place the product occupies in the customer’s perceptual map of the market

A product’s position ultimately depends on the attitudes of people in the target market. Firms will seek to position their products to increase sales

POSITIONING The process of creating an image for the product in the minds of customers Arranging for a brand or product to occupy a clear and distinctive place in the minds of target customers relative to competing products and brands

As we know, it is vital in business to offer a product or service that is both demanded by the customer and different than your competition Porter believes that for a business to position themselves as unique, they must either be: »Different Let’s take a look at each……. In 1980, Michael Porter created his “Generic Strategies” concept »Cost Leader

1. DIFFERENTIATION Be different / distinctive Have a feature or benefit that nobody else has If you’re the only business selling that particular product, the consumer has no option but to buy from you EXAMPLE: How is RIM’s “Blackberry” different from the competition ? What do they do that nobody else does?

2. COST LEADER / CHEAPER As a result, if your product is similar to the competition’s yet it is cheaper, they will likely buy from you The “me too” strategy….we offer the same product as everyone else, but we’re cheaper Compete by being the lowest cost producer If you can produce your product / service cheaper, you can sell it cheaper

Product Differences should be….. Possible for the company to produce / engineer Distinctive Clear Visible Communicable Difficult to copy Profitable Relevant / Important to the buyers

Positional Map The visual representation of a brand within a specific market place showing its positioning relative to the competition

Shows how products compete in the mind of the consumer and suggests how a product can be positioned to maximize sales Defines the market in terms of the way buyers perceive key characteristics of competing products

Constructing a Positional Map Select key variables that differentiate products –Ie – price, quality, safety, design, durability, range of services, etc.. Conduct market research to find out how brands are perceived Plot information on a two dimensional diagram based upon the two key variables you feel position the industry competitors

Let’s create a “positional map” for the grocery industry in Kitchener / Waterloo……. The main players are: Price Chopper Sobey’s Zehr’s Food Basics

We need to decide on: Relevant industry variables we can use to differentiate the competitors Their position relative to each other………

A Positional Map of Grocery Stores in Kitchener / Waterloo

Let’s look at another one………

A Positional Map of Car Manufacturers in North America

In order to successful, a business must position themselves with one of these strategies, otherwise they will be “caught in the middle” and not the best at what they are trying to do Successful marketers position their products with the above strategies in mind By trying to be “everything to everyone”, they will ultimately fail As a result, they will be “everything to nobody”

As a result, a business can use the “map” to: 2. Understand how a product can be positioned to maximize sales 1. Understand its positioning relative to the competition By understanding its position in the marketplace, a business can then begin to create a marketing plan that optimizes its chance for success………

The End !!