Positioning

Definition of Positioning:- Philip Kotler says that positioning is the act of designing the companies offering and image to occupy a distinctive place in the minds of the target market. Another definition given by Al Ries and Jack Trout in their book “Positioning: The Battle for your Mind”, says, “Positioning is what you do to the mind of the prospect; you position the product in the prospects mind”. Al Ries and Jack Trout said that to develop a positioning program, six critical questions must be answered. They are; • What position do you own in the mind of the prospect, now? • What position do you want to own? • Whom must you outgun to achieve that position? • Do you have enough money? • Can you stick it out? • Does your communication match your position? POSITIONING: Having chosen an approach for reaching the firm’s target segment, marketers must then decide how best to position the product in the market. The positioning gurus, Al Ries and Jack Trout define positioning as: Positioning is … your product as the customer thinks of it. Positioning is not what you do to your product, but what you do to the mind of your customer. Every product must have a positioning statement. A general form of such a statement is given below: Product X is positioned as offering (benefit) to (target market) with the competitive advantage of (competitive advantage) based on (basis for competitive advantage) For example, the positioning statement of toothpaste X may read as follows: Toothpaste X is positioned as offering to kids a toothpaste made especially for those kids who don’t like to brush with the competitive advantage of a mild fruit taste and lower foaming. Positioning can be done along different possibilities. Attribute positioning is when the positioning is based on some attribute of the product. Benefit positioning is when a derived benefit is highlighted as the unique selling propositioning. Competitor positioning is when a comparison is drawn with the competitor and a differentiation from the competitor is emphasized. Product category positioning is when a product is positioned to belong to a particular category and not another category which probably is crowded. Quality/price positioning is when the product is positioned as the best value for money. For example, a Pizza may be positioned on its taste or it’s natural contents or as an easy meal or with a thicker topping or as the lowest priced offering the best value for money. Each one of them offers a distinct positioning possibility for a pizza. Quality/price positioning is when the product is positioned as the best value for money. For example, a Pizza may be positioned on its taste or it’s natural contents or as an easy meal or with a thicker topping or as the lowest priced offering the best value for money. Each one of them offers a distinct positioning possibility for a pizza. In the positioning decision, caution must be taken to avoid certain positioning errors: Under-positioning is done when a unique, but not so important attribute is highlighted. As a result, the customer does not see any value in such a position. Over-positioning is done when the product performance does not justify the tall claims of positioning. Confused-positioning is when the customer fails to categorize the product correctly and the product ends up being perceived differently from what was intended. Doubtful positioning is when the customer finds it difficult to believe the positioning claims. Example:- The original positioning as ‘sweetened condensed milk as a milk substitute’ became obsolete when India attained self-sufficiency in milk production and milk products. So Milkmaid was repositioned as a ‘ready ingredient’ in preparing home-made sweets. Recipes started appearing on the labels. It succeeded for a certain period of time. Soon the Indian households were no longer making home-made sweets, but rather consuming ready-made, packaged sweets If it was an economic environment factor that necessitated a repositioning earlier, it was now the changing demographic of the Indian homes. Milkmaid took another successful attempt at repositioning. Milkmaid was then repositioned as a ‘central ingredient’ in making the deserts at home. The recipes naturally changed. Repositioning helps a firm to tide over the environmental changes and the changes in consumers’ preferences. It extends the life of a brand. Positioning Identities Positioning is creating an identity to your product. This identity is a cumulative of the following four positioning identities. 1. Who am I? It refers to the corporate credentials like the origin, family tree and the ‘stable’ from which it comes from. For instance, think of the mental associations when a buyer buys a Japanese car and it is a Honda! 2. What am I? It refers to the functional capabilities. The perceived brand differentiation is formed using the brand’s capabilities and benefits. For instance, the Japanese cars are known for their fuel-efficiency, reasonable-price and utility-value. 3. For whom am I? It refers to the target segment for the brand. It identifies the that market segment for which his brand seems to be just right and has competitive advantage. For instance, the Japanese car makers have traditionally focused on the quality conscious, value-seeking and rather-serious car buyer 4. Why me? It highlights the differential advantage of the brand when compared to the competing brands. It gives reasons as to why the customer should select this brand in preference to any other brand. For instance, Japanese car makers have tried to score a competitive advantage on the lines of quality and technology Differentiation Across the Consumption Chain:- A research finding suggests that there are one million branded products in the world today. As a result, the market is increasingly competitive and confusingly crowded. For the customers, it means more choices than they know how to handle and less time than they need to decide. For the marketers, it is hyper-competition and continuous struggle to win the attention and interest of choice-rich, price-prone customers. The tyranny of choice for the buyers are represented by the following facts: 1. An average hypermarket stocks 40,000 brand items (SKUs) 2. An average family gets 80% of its needs met from only 150 SKUs 3. That means there’s a good chance that the other 39,850 items in the store will be ignored 3. The implication is that those that don’t stand out will get lost in the pack! The average customer makes decisions in more than 100 product/service categories in a given month. 4. He/she is exposed to more than 1600 commercials a day. Of this, 80 are consciously noticed and about 12 provoke some reaction. The challenge for marketers is: how to get noticed (i.e. differentiation) and be preferred (i.e. positioning) Most profitable strategies are built on differentiation (i.e.) offering customers something they value that competitors don’t have. A close look at consumer behaviour reveals that people buy on the differences. An ability to create compelling differences remains at the heart of a firm’s competitive advantage. The battle has always been (and still is) about differentiation - create winning differences in customers’ minds. People pay attention to differences (though at different levels) and tend to ignore undifferentiated products. Here is an example of how Nike (the top-dog sports shoe brand) creates winning differences at cognitive, normative and wired-in levels in the buyer. 1. Cognitive (conscious decisions) Level § ‘I buy Nike because it’s made of engineered materials which enable higher athletic performance’ 2. Normative (semiconscious feelings) level § ‘I buy Nike because it’s “in” with my crowd’ 3. Wired-in (subconscious determinants) level § (‘Nike appeals to my desire to be cool, fashionable, strong, aggressive …’) Organizations use several differentiation dimensions. The most popular are product differentiation, service differentiation, personnel differentiation, channel differentiation and image differentiation. Match the following brands with their chosen differentiation dimensions. 1. Apple’s iMac (with an innovative product design) 2. Honda’s bikes (In the US market, they did an image make-over for bike riders to differentiate from the image created by Harley-Davidson bike riders) 3. Singapore airlines (highlighting the ‘Singapore airlines girl’ is its campaign) 4. Dell computers (Dell becoming synonymous with Direct (channels) selling) 5. Cemex cement (using GPS to deliver ready-mix concrete just-in-time) Most firms while seeking to differentiate themselves from the competition focus their energy only on their products and services.