Market positioning, as opposed to brand awareness, refers to the place that a brand occupies in the minds of customers and how it differs from competitors’ products. Companies may highlight their brand’s unique characteristics (what is it, what does it do, how does it do it, etc.) to market products or brands; or they may create an appropriate image (low-cost or high-cost, utilitarian or luxury, low-cost or luxury, etc.) via the marketing mix. It can be difficult to reposition a brand once it has established a strong position.
Market positioning affects consumer perception of a brand or product in comparison to competitors. The ability to influence consumer perception of a brand or product in comparison to competitors is referred to as market positioning. Establishing a brand’s or product’s identity or image with the intention of influencing consumers’ perceptions is the aim of market positioning.
Market Positioning is one of the most powerful marketing concepts. Initially focused on the product, positioning expanded with Al Ries and Jack Trout to include building a product’s reputation and ranking among competitors’ products. Schaefer and Kuehlwein broaden the concept to include ‘ meaning’ carried by a brand’s mission or myth.
Market Positioning is primarily concerned with “the place a brand occupies in the minds of its target audience.” Market Positioning has become a common marketing activity or strategy. A national positioning strategy can frequently be used, or slightly modified, as a tool to accommodate entering foreign markets.
For example:
- A handbag designer may position themselves as a luxury status symbol.
- A television manufacturer may position its product as the most innovative and cutting-edge.
- A fast-food restaurant chain may position itself as a source of low-cost meals.
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Definitions of Market Positioning
While there was no real agreement among marketing experts on what Market positioning meant, David Ogilvy defined it as “what a product does and who it is for.” For example, Dove has successfully positioned itself as a bar of soap for women with dry hands rather than a product for men with dirty hands. Jack Trout stated in an article published in 1969, Industrial Marketing, that Market positioning is a mental device used by consumers to simplify information inputs and store new information in a logical place.
He believes this is significant because the average consumer is bombarded with unwanted advertising and has a natural tendency to dismiss all information that does not immediately find a comfortable (and empty) slot in their mind. Al Ries and Jack Trout expanded the definition In Positioning: The Battle for Your Mind “an organized system for finding a window in the mind. It is based on the idea that communication can only occur at the right time and under the right conditions “.
Market Positioning is inextricably linked to the concept of perceived value. In marketing, value is defined as the difference between a prospective customer’s assessment of a product’s benefits and costs when compared to others. Product benefits, features, style, and value for money are all ways to express value.
DEVELOPING THE MARKET POSITIONING STATEMENT
Market Positioning is a component of a larger marketing strategy that includes three basic decision levels: segmentation, targeting, and positioning, also known as the S-T-P approach:
Segmentation: The process of dividing a large consumer or business market, typically consisting of existing and potential customers, into sub-groups of consumers is referred to as segmentation (known as segments).
Targeting: Targeting is the selection of a segment or segments to be the focus of special attention (known as target markets).
Positioning: It refers to an overall strategy that “aims to make a brand occupy a distinct position in the mind of the customer, relative to competing brands.”
In general, there are three kinds of market positioning: functional, symbolic, and experiential. Functional positions solve problems, benefit customers, or gain favor with investors (stock profile) and lenders. Self-image enhancement, ego identification, belongingness and social meaningfulness, and affective fulfillment are all addressed by symbolic positions. Experiential positions stimulate both the senses and the mind.
Market Positioning statement
Both theory and practice agree on the need for the positioning statement to be structured in such a way that the target market is identified, the market need is addressed, the product name and the category, the key benefit delivered and the reason for the product’s difference from the competition.
The following is a basic template for writing positioning statements: “The (product name) is a (product category) that is suitable for (target customer) who (statement of need or opportunity) (key benefit statement – that is, compelling reason to buy). In contrast to (primary competitor), our product (statement of primary differentiation).”
- How to Create an Effective Market Positioning Strategy?
- Create a positioning statement to identify your company and how you want consumers to perceive the brand.
Determine company uniqueness by comparing to competitors: To identify opportunities, compare and contrast differences between your company and competitors. Concentrate on your strengths and how they can be used to capitalize on these opportunities.
Identify current market position: Determine your current market position and how the new positioning will help you stand out from competitors.
Competitor positioning analysis: Determine the market conditions and the amount of influence each competitor has over the others.
Develop a positioning strategy: Through the preceding steps, you should have a better understanding of what your company is, how it differs from competitors, the market conditions, market opportunities, and how your company can position itself.
MARKET REPOSITIONING
Market repositioning occurs when a company changes the status of its existing brand or product in the marketplace. Repositioning is typically done in response to poor performance or significant environmental changes. Because of the high cost and effort required to successfully reposition a brand or product, many companies choose to launch a new product or brand instead of repositioning.
The right positioning strategy implemented at the right time can assist a brand in developing a strong image in the minds of consumers. The current positioning strategy occasionally fails to resonate.
This could be because of new market entrants, changing customer preferences, structural changes within the target market (such as ageing and segment creep), or simply because customers have forgotten about a brand and its position. When this occurs, the company may need to consider several options:
- Strengthen current positioning by reinforcing the concepts of features that initially swayed customers’ opinions.
- Create a new position: seek out and occupy suitable niches where customers are underserved.
- Repositioning (or de-positioning): changing the way customers perceive a product or brand, typically through comparative advertising.
Repositioning is a deliberate attempt to change how consumers perceive a product or brand. Repositioning can be a high-risk strategy, but it is sometimes the only option. According to Fishbein and Rosenberg’s attitude models, a company can influence and change the brand’s positioning by manipulating various factors that influence a consumer’s attitude.
Consumers place significant weights on each of these product characteristics, and through promotional efforts, it is possible to realign the weights of price, quality, durability, reliability, color, and flavor. This can then help adjust a brand’s position in the mind of a prospective consumer. Research on people’s attitudes indicates that a brand’s position in the mind of a prospective consumer is likely to be determined by the “combined total of a number of product characteristics such as price, quality, durability, reliability, color, and flavor.”
Companies that are repositioning themselves can choose to emphasize some points of differentiation while downplaying others.
Repositioning a company
In volatile markets, repositioning an entire company, rather than just a product line or brand, may be necessary – even urgent. When Goldman Sachs and Morgan Stanley abruptly transitioned from investment banks to commercial banks, for example, the expectations of investors, employees, clients, and regulators all had to shift, and each company had to influence how these perceptions changed.
This entails repositioning the entire company. This is especially true for small and medium-sized businesses, which frequently lack strong brand identities for individual product lines. During a prolonged recession, business approaches that were effective in healthy economies often become ineffective, necessitating a shift in a firm’s positioning. For the first time, upscale restaurants, which previously thrived on expense account dinners and corporate events, may need to emphasize value as a sales tool.
Repositioning a business entails more than just a marketing challenge. It entails making difficult decisions about how a market is shifting and how competitors will react. Frequently, these decisions must be made without adequate information because the definition of “volatility” is that change becomes difficult or impossible to predict.
Example of Market Repositioning
The following is an example of Coca-repositioning Cola’s of Mother Energy Drinks:
- The Coca-Cola Company launched Mother Energy Drinks in Australia in 2006. The launch campaign was professionally executed, and Coca-Cola was able to get the product into major retailers by leveraging its distribution channels. Mother Energy Drink’s taste, on the other hand, was subpar, and repeat purchases were extremely low.
- Coca-Cola had to decide whether to improve and reposition the product or to discontinue it and introduce a new brand and product. Due to the already high brand awareness, the company ultimately decided to reposition the product.
- Coca-Cola’s most difficult challenge was convincing consumers to try the product again. The company altered the packaging, increased the size of the can, and improved the product’s taste. The product was reintroduced under a new slogan: “New Mother, tastes nothing like the old one.”
- Finally, Coca-Cola was able to successfully reposition Mother Energy Drinks, and the brand now competes with the market’s two leading energy drinks, V and Red Bull.