Understanding Positioning

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What is Positioning in Marketing?

Positioning is a key part of modern marketing and a fundamental concept in all marketing textbooks.

In simple terms, positioning is the way a brand or product is perceived in the minds of consumers relative to competing offerings.

Here are Some Definitions of Product Positioning

  • Product positioning is the process of creating a distinct image and perception of a product or brand in the minds of consumers relative to competing offerings
  • Product positioning is the process of crafting a compelling and differentiated position for a product or brand in the marketplace
  • Product positioning is creating consumer perceptions and preferences by highlighting a product’s unique features, benefits, or value proposition

As we can see from these definitions of positioning, they all agree upon:

  • Positioning is a process = it’s ongoing
  • Positioning has the goal of creating a distinct image (perception) for brand/product
  • Positioning is relative to competing offerings
  • A key task of positioning is to create differentiation in the market place
  • Positioning occurs in the mind of the consumer = which is then known as perception

Positioning is Part of the STP Process

It is important to remember that positioning is a “team player” in the overall STP process, and it is the prime driver of the brand’s marketing mix design.

As you may know, STP stands for:

  • Segmentation = the process of dividing the market into distinct groups based on similar characteristics, needs, and/or behaviors, in order to create and define market segments
  • Targeting = evaluating and choosing which market segments to focus on = to target
  • Positioning = the brand’s desired competitive image through the design and implementation of a suitable marketing mix

So, when you think about it, positioning is the bridge (connection) between the needs of the target market and the design and execution of the brand’s marketing mix to meet those needs.

This statement highlights the key and very important role of positioning in marketing – which is to create and guide the consumer’s understanding (perceptions) of our brand benefits and differentiated offering in meeting their needs in a better/different way that other competitive offerings.

And it is important to note that product positioning is executed through all the marketing mix elements, not just the promotional mix. That is, product positioning needs to be delivered through the product design, pricing and the place mix as well.

Positioning is a key component of the overall STP process (that is, segmentation, targeting and positioning), as highlighted in the following diagram…

 

The Importance of Positioning

So why is positioning important and fundamental in marketing?

Successful positioning can lead to various benefits for a brand or product. It can generate customer loyalty and preference, command premium pricing, and create a sustainable competitive advantage.

Here are some more of the key reasons:

  • It is a key component of our overall marketing strategy, as it is our strategic decision of “how to compete” in the market
  • It helps create clear differentiation between our brand and competing brands – giving consumers reasons to buy our brand
  • It helps communicate our brand’s benefits and unique value
  • It aligns our brand (and its product line and features) to the needs of our target market
  • It helps create and build brand equity – leading to longer term and more stable profit streams
  • It builds up a competitive barrier
  • It should de3liver better sales, sales stability, and enhance customer loyalty
  • It should help grow positive word of mouth and consumer advocates
  • It will allow us to expand our product lines without cannibalizing sales
  • With a clear position (and set of benefits), we will compete on benefits rather than price – enabling us to charge a premium price
  • It is ideal for obtaining low-involvement and habitual purchases, as these products are often chosen on the basis of one or two key attribute

Why is Positioning More Important for Low-involvement Purchases?

While it is generally important in most industries, positioning is typically more important in FMCG (fast-moving consumer goods) industries.

Positioning is more important in FMCG’s because there are often multiple competing brands, often with similar offerings, sitting side-by-side on a supermarket shelf.

Therefore, by constructing an appropriate positioning that highlights key benefits to the target market consumer, these brands are able to win market share and loyal consumers.

Why is Positioning More Important for Reducing Sales Cannibalization?

As an example, the Pepsi NEXT product would be perceived as having less sugar than Pepsi, but more sugar than Diet Pepsi. In this case, the goal of PepsiCo is to position Pepsi NEXT between their other two product offerings.

Positioning and Perceptual Maps

Positioning and perceptual maps are interrelated as they both involve understanding and influencing consumer perceptions of a brand or product relative to competitors.

Positioning defines the desired position of a brand or product in the market, highlighting its unique attributes and benefits. Perceptual maps visually represent consumers’ perceptions of brands in relation to specific attributes or dimensions.

The insights gained from perceptual maps help inform our positioning strategies, helping marketers adjust or refine their brand’s position to align with consumer perceptions or to occupy a desired position in the market.

Find out more:

Quick Recap FAQs for Positioning

What is positioning in marketing?

Positioning refers to the way a brand or product is perceived by consumers compared to competing offerings.

How does positioning fit into the STP process?

Positioning is the final phase of the segmentation, targeting, and positioning (STP) process. After segmenting the market and selecting target segments, positioning involves creating a clear and differentiated market position for the brand or product.

Why is positioning important in marketing?

Positioning plays a crucial role in a company’s marketing strategy. It supports the overall strategy by creating a clear brand position, differentiating offerings from competitors, increasing sales and customer loyalty, and reducing price sensitivity.

How does positioning help with differentiation?

Clear positioning helps consumers differentiate between competitive offerings, enabling them to make informed choices based on the distinct features and benefits of a brand or product.

How does positioning influence customer loyalty?

Well-understood brands that are properly positioned generate higher sales and foster customer loyalty. When a brand is perceived as the ideal solution for specific consumer needs, customers are less likely to switch to competitors.

How does positioning reduce price sensitivity?

When a product or brand is clearly positioned with distinct advantages over competitors, consumers perceive greater value. This reduces their sensitivity to price fluctuations and makes them less responsive to competitive sales promotions.

Why is positioning more important for low-involvement purchases?

Positioning is crucial for low-involvement purchases because consumers often rely on memory and impulse when making quick decisions. Clear positioning helps consumers select a brand or product without considering competitive offerings.

How does positioning help with reducing sales cannibalization?

Positioning allows a company to introduce multiple products in a related category without cannibalizing sales. By positioning each product with clear differentiation, consumers perceive the differences, reducing the risk of viewing them generically.

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