In simple terms, market positioning strategies dictate where consumers’ position companies based on their pricing, brand and of course, product.
Effective market positioning places your brand exactly where you want it to in the target market. Companies typically use perceptual or positioning maps to create market positioning strategies.
What is a Positioning Map?
A positioning map is used to create a marketing positioning strategy for products and services. Since most of this is based on the perception of the consumer, it is often referred to as a perceptual map.
With the help of this map, companies are able to determine what position existing products and services currently hold in the market. This information is then used to help companies decide where they’d like to position new products and services.
Once a firm has a mapped out a positioning map, they typically have two options to choose from. They can either choose to fill a gap in the current market or position their product to compete with other existing products in the market.
What is Brand Positioning?
Similar to market positioning, brand positioning is the conceptual place you want your target audience to position your brand in. Basically, the goal here is to create a distinct image so that consumers are able to distinguish your brand from others in the market.
How to Develop a Market Positioning Strategy
Developing a market positioning strategy may seem complicated at first but it’s in the best interest of your company. Here are some steps that you ought to follow:
Conduct Market Research
Now, this is perhaps the most crucial step of all. Start by gathering information about your buyers and figure out what features they would like to see in your product. Understand that this research phase deals with product features in general. So you don’t have to focus on features that are offered by other brands.
Make a List
After highlighting the best product features, it’s time you figure out how customers rank each product. This’ll become much easier once you have compiled of those features.
Create a Positioning Map
The next step is to develop a positioning map displaying the best product features. Keep in mind that you also have to list down the names of competitors that offer these features. For better clarity, we advise you also place your product on the map. This’ll allow you to compare how well your products will do as opposed to your competitor’s
Once you have positioned competitor products, it’s time you start looking for ways to position your product now.
Figure out a Price Point
The price point greatly impacts how consumers view your products and services. Sure, a more expensive product is typically viewed as high-quality but that strategy might not always work. Especially if you try to trick consumers into paying a higher price for low quality.
The best strategy would be to decide a price based on its feature, the brand’s overall strength, and other benefits.
Cost Leadership and Differentiation
When it comes to market positioning, companies can choose between two broad categories. This includes cost leadership and differentiation strategies. A company can choose from either of these strategies for optimal results according to the products and services they offer.
Cost Leader Strategy
A cost leader strategy is better suited for companies that offer products at a lower price point compared to their competitors. Because of the low price, consumers don’t hold very high expectations and expect a basic product.
With no bells and whistles, consumers are only concerned about the product meeting their basic needs and requirements.
Differentiation Business Strategy
On the other hand, a differentiation business strategy is when a company sets its mind to introduce unique products. By doing so, it aims to create a distinct place in the market. Since the company is working to introduce something that’s new, consumers will hopefully be willing to pay a higher price for it.
Market Positioning Examples
Here are a couple of great market positioning examples that will provide you a clearer idea on the subject:
A couple of years ago, Tesla was one of the first automobile companies to break into the electric vehicle marketplace with luxury sports cars. You see, Tesla could have chosen to compete with brands such as Toyota and Chevy but instead, it decided to go after a high-end market instead.
For several decades now, Taco Bell had retained itself as the cheapest fast food joint for Mexican cuisine. Because of this, consumers sought out to Taco Bell for cheap takeaways. Then entered Chipotle that focused on quality instead. From its great marketing approach to its quality menu, Chipotle has managed to build stellar brand equity.
Wrapping it Up: Market Positioning Strategies
All in all, developing a positioning map is vital for creating a market positioning strategies. Have something to add, tell us about it in the comment section below!
Picture Credits: Industrial Brand