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So far, you’ve segmented the market by dividing the market into distinct groups of customers using the segmentation process, and you’ve determined which customer group(s) you want to focus your marketing efforts on—the target marketing process. Product positioning is the process of deciding and communicating how an organization wants its market to think and feel about a product or service.
IN CONTEXT
This third and final step is contained in what’s known as the segmenting, targeting, and positioning model, the STP model. With the STP model, a company segments the market, selects the target market, and positions its products and services into the existing marketplace. In their book Positioning: The Battle for Your Mind, marketing gurus Al Ries and Jack Trout write, “The basic approach of positioning is not to create something new and different, but to manipulate what’s already up there in the mind.” The STP model is helpful in identifying your most valuable customers and developing products and marketing messages that are targeted specifically toward those customers. This allows you to interact with each market segment in a more meaningful way by personalizing your messages (and hopefully selling more of your product!).
EXAMPLE
Marriott International owns several different hotel chains that target specific consumer groups. Courtyard by Marriott focuses on over-the-road travelers who aren’t looking for luxury and all the amenities; they just want a basic, clean hotel in which to stay during their trip. Ritz-Carlton hotels are by their nature more luxurious and target those travelers who don’t mind paying a premium price for more luxury and amenities. Marriott ExecuStay hotels are aimed at professionals who need a longer-term place to stay (i.e., an extended stay hotel). Since these target groups are seeking vastly different things from a hotel stay, Marriott tailors its marketing messages (and hotels) to appeal to the unique wants and needs of each specific group.As you can see, in this last step of the STP process, you want to first identify how you can most effectively position your product to target the customer segments that you’ve determined to be most valuable and then tailor the marketing mix that will be most effective in reaching them. There are two main types of product positioning in marketing: head-to-head and differentiation. Let’s take a look at both.
Head-to-head positioning focuses on comparison. It involves directly competing with competitors on similar product attributes in the same market. For instance, let’s imagine that you have a small kiosk in a shopping mall where you serve freshly baked pretzels. If your kiosk makes different flavors of dough from scratch and your competitors use only processed frozen dough, you can set your pretzel business apart from your competitors in your customers’ minds by emphasizing that selling point.
IN CONTEXT
A classic example is when Avis (the car rental company) launched an advertising campaign that went head-to-head with Hertz, the market leader. Avis made a point of comparing itself to Hertz and made its position in the market a selling point using the slogan “When you’re only No. 2, you try harder. Or else.” This campaign positioned Avis as a direct competitor of Hertz and also did something unique: It highlighted its underdog status, turning it from a liability into an asset. The results? Prior to the ads, Avis was losing $3.2 million a year; after the ads, Avis improved its performance and earned $1.2 million. Remarkably, that was the first time in over a decade that Avis had been profitable.
Differentiation positioning is all about emphasizing your product’s or service’s unique qualities vis-à-vis the competition.
For instance, Curves, the largest women’s fitness franchise in the world, succeeded by offering a fitness alternative to both home-based exercise routines and traditional health clubs. The experience of a Curves facility was entirely different from that of a typical health club. Instead of machines arranged in rows facing a TV, Curves arranged its machines in a circle to facilitate interaction among members. There were few (if any) mirrors and no men staring. The result was that Curves did not compete head-to-head with other health and exercise concepts; rather, it created new demand.
Essentially, a positioning statement briefly describes your brand, product, service, and target market. Not only does it define how your brand meets the customer’s needs, but it also tries to clarify why it does so better than your competition. It answers the question, “What experience do you want your customers to have with this product or service?”
Templates for writing your positioning statement abound. Here are just a few examples:
A perceptual map is a visual diagram that shows how the average target market consumer perceives your product versus those of your competitors. A perceptual map uses two determinant attributes on a graph. Determinant attributes are those attributes that a customer uses in making their purchase decision. In other words, what do you believe consumers’ “hot buttons” are with respect to your product or service offering? You’ve got a vast array of determinant attributes to use. You could use price versus quality, sugar versus protein, or any number of other attributes. The bottom line is that these attributes should reflect what customers are looking for in the product or service. Once you’ve established the determinant attributes, you plot your product offering onto the map.
EXAMPLE
Let’s imagine that your company is getting ready to introduce a new nutritional drink for seniors. You might start out with determinant attributes like high/low sugar and high/low protein (although you could use other determinant attributes like price, taste, etc.). Now it’s time to map your offering as well as the competitors’ offerings on the perceptual map. The simple combination of these two scores places the product offering onto the map. It’s not necessary to list every single competitor on this perceptual map, but you should try for a list of at least 5 to 10 competitors.
Once you have developed the perceptual map, you will have a clearer idea of where your product or service offering stands vis-à-vis your competition. You will look at which brands occupy the same space as your offering (or a nearly identical space) based on consumer attitudes. Things to look for on your perceptual map include:
Source: THIS TUTORIAL HAS BEEN ADAPTED FROM OPEN STAX’S PRINCIPLES OF MARKETING COURSE. ACCESS FOR FREE AT https://openstax.org/details/books/principles-marketing. LICENSE: CREATIVE COMMONS ATTRIBUTION 4.0 INTERNATIONAL.
