Introduction. 1. What is positioning? Topic 4 Position the product Market Pla ce Concept

Transcription

1 Topic 4 Position the product Market Pla ce Concept Introduction Having chosen the best market segment or segments to compete in, the marketer needs to position the product in a certain way. The idea behind positioning is to make sure that consumers see the product clearly and don t confuse it with the offerings of competitors. The ultimate goal of positioning is to create a perception of the product in the mind of its customers relative to competing brands and products. 1. What is positioning? Put simply, positioning is how your target market perceives your product, brand or image in relation to your competitors. It is therefore important to understand your product from the customer s point of view relative to the competition. Positioning is important because you are competing with many different products and services. If you offer a real or perceived unique benefit, you are more likely to be successful. For example, most people perceive Volvo cars as being very safe, but boring! The brand can claim the safety benefit as a tangible, or physical benefit. However the perception of boring is based on intangible factors. Think about the different department store style of shops that might be in a large shopping complex. In a very large centre, you might find Myer, David Jones, Big W, K-Mart and Target. Each of these stores sells similar types of goods and some are even owned by the same company, however the market perception of each store is very different. David Jones is generally perceived to be more expensive than other stores and a little more up market, even though it matches the prices of the competition and in many cases is quite competitive. Myer is usually considered as a direct competitor to David Jones, although the perception is that it s not quite as expensive. Compare this to Big W a store that promise lower prices everyday. Big W is known as a discount department store and it trades successfully on this position. Big W is usually considered as similar to K-Mart, with Target sitting somewhere in the middle. Another example to illustrate the different perceptions of brands in the same category is chocolate. Think about Nestle Kit Kat traditionally its advertising recommends you have a break have a Kit Kat. It is positioned as a snack for break times. Mars on the other hand supposedly gives you lots of energy to work rest and play! Dove chocolate is positioned as a very smooth and seductive chocolate aimed at women. It is positioned as an indulgence to be enjoyed and savoured. In both of the examples above (store names and chocolate brands) the market positioning is

2 based on perceptions of the brand. This is built up over time through advertising, promotion and the other elements of the marketing mix. Often the role of advertising is to reinforce a desired market position. In the above examples, you may recognise some of the advertising slogans that are actually used for the various brands. Slogans are often developed to reflect the positioning of a brand. The aim of a positioning strategy is to create a real or perceived difference between your product and competitors. Marketers use advertising and other elements of the marketing mix to establish a firm position in the minds of target audience members. The whole idea behind positioning is to be more competitive in the market place. When developing a positioning strategy, it is also important to be very sure of the needs of the target audience. A position should reflect the needs of the target audience so that it will appeal to that audience. For example, there is no point in positioning your brand of pet shampoo as being excellent value for money if it is environmentally unfriendly or irritates the skin. Clearly buyers of pet shampoo want value for money; however they also want a reliable product that cleans without any negative side effects. As you work through this topic you will learn about the different approaches to developing a positioning strategy. Reading You should now read the chapter on positioning from your recommended text: Marketing: A Practical Approach by Peter Rix McGraw Hill, Sydney. Pears is well known as a value for money family shampoo. It is an everyday family product. Palmolive Naturals is positioned as a natural product, using plant extracts to make the product somehow better. 2. Positioning strategies a) Criteria for selecting a positioning strategy Market information and research is critical for keeping up to date with changes in consumer tastes that may influence a product s position. For example, the makers of Lean Cuisine frozen meals noted a market opportunity to expand their range with Asian soup varieties. Market positioning will be driven by the organisation s marketing objectives. All elements of the marketing mix, including advertising, should reinforce and reflect the chosen market position. There are a number of questions that should be asked when determining what market position to aim for. These are discussed below.

3 What is the positioning of the products or services that are already competing in your segment of the market? It is often best to look for a unique position that your product can fill. For example, the company Roses Only has a unique position in the flower order and delivery market, selling (as the name suggests) roses only! This company has become quite successful. What product attributes are really important to customers in this segment? There is no point in trying to develop a position if customers aren t really interested in the benefits you are promoting. For example, a brand of shower cleaner might be promoted as environmentally friendly, however consumers may be more interested in the cleaning ability of the products in the market, or their value for money. What image does your company currently hold with customers in the market place? Your positioning will need to be consistent with this. If the market has an established idea of what your brand or service represents, it may take a very long time, and considerable investment to change that perception in fact, it may never happen! A good example of this is Volvo. In Australia, Volvo has an image of being an older person s car, but also very reliable and safe. A few years ago the company tried to attract younger buyers and attempted to build a more sporty image for some of its models, even sponsoring racing teams. This did not work. Volvo had a re-think and planned to capitalise on its already strong position. The company designed an advertising campaign it called Bloody Volvo driver. In this series of advertisements, the brand poked fun at itself, trying to evoke humour and positive emotions about the brand. This campaign worked to reinforce the brand image as reliable, yet more desirable to a younger market. Does your current positioning need to be changed (repositioned) due to changes in the target market behaviour? The Nestle product, Milo is an example of a product that was repositioned due to changes in the target market behaviour. Milo was originally positioned along side traditional cocoa as a bedtime drink. When the hot bedtime drink habit began to be viewed as uncool, Milo was repositioned as an energy/health drink for young people. This required a change of many aspects of the marketing mix including advertising and packaging. What are the implications of the current marketing mix? Do these support your positioning choices or will some elements of the marketing mix need to be adjusted? We mentioned the importance of the marketing mix earlier. Advertising can be used to help establish and reinforce an organisation s position. b) Differentiation and approaches to positioning The real of perceived differences that are promoted for a product are referred to as differentiation. Sometimes the terms positioning and differentiation are used to mean the same thing. For example, Panadol differentiates (or positions) itself on the basis of trust.

4 Prestige car brands often have a combination of physical luxury features (such as leather seats and trim) and the perceived superiority of a brand (such as BMW or Mercedes). Developing a differentiation strategy When developing a differentiation strategy, marketers must ensure that the approach is Personally significant The difference delivers a highly valued benefit to the target buyers. If it is only a minor or insignificant difference, consumers will not be compelled to try your offering. Unique and easy to protect Competitors do not offer the difference, or the company can offer it in a more distinctive way. Make sure what you are offering is unique and cannot be copied easily. This may include building trust in a brand. Superior to competitor offerings The difference is superior to other ways that the customer might obtain the same benefit. This is similar to the first point you have to be better than competitors. Easy to communicate The difference can be explained and communicated to the target buyers. There is no point having a scientific explanation that consumers don t understand. Worth the price You should ensure that a premium (even a small one) can be maintained as consumers are willing to pay a little more alternatively in some cases a product s positioning needs to be supported by a lower price. Profitable to the business It must be profitable for the business to support and sustain the difference. Positioning statements A positioning statement is a simple and succinct description of the positioning strategy a company is following in consumer terms. Often a company s positioning is built into its advertising tag line. While most companies keep their exact positioning statements highly confidential, it is relatively easy to work out, based on the position that company or product holds in the eyes of its customers. Positioning is commonly expressed in descriptive terms, or represented on a graphical diagram indicating positioning of competing brands. The written positioning statement will identify the unique benefit of the product and describe how the product is different. A graph, or positioning map, is a diagrammatical representation of the product s position relative to competitors. Each of these is explained in the following section.

5 Examples of differentiation and positioning statements McCain Healthy Choice meals (product) Offers busy, health conscious individuals (target market) A convenient and tasty alternative to take away foods (benefit) It s also low in fat and nutritious! (differentiation) Rexona deodorant (product) Offers active men and women (target market) Long lasting performance (benefit) That won t let you down! (differentiation) Huggies nappies (product) Offers mums (target market) Peace of mind knowing their baby is comfortable (benefit) Because they keep baby drier than other brands (differentiation) 3. Positioning maps The positioning map, sometimes referred to as a perceptual map, is a simple tool for marketers to: measure their current product position in the market place determine which direction it would like to move in the future. It visually shows how your current positioning compares to that of your main competitors. Below is an example of a positioning map.

6 Positioning map You can see that a positioning map consists of a square grid in quarters. The vertical line represents quality, moving from low to high and the horizontal line represents price, moving from low to high left to right. The companies on the map are represented by dots. Note that: A is in the high quality low price sector. Company B is in the high quality high price sector. Company Company C is in the low quality high price sector. Companies D, E and F are in the low quality low price sector. Customer perceptions are plotted on the map to show how a particular company is positioned in relation to others and what gaps might exist in the market. Sometimes many competitors occupy very similar spots and over time it will be necessary to move away from the cluster and develop different positioning that is unique to your product.

7 4. The role of positioning in the development of advertising messages The concept of positioning is important when developing strategies across all aspects of the marketing mix. This is particularly so when considering the development of advertising, and the firm s communications strategies. It is essential for the marketer to provide the advertising agency (or creative team) with a clear description of the positioning of the brand, service or idea being advertised. As we mentioned earlier, the positioning statement reflects the desired market position, including the key benefits that must be communicated. You should avoid using general words, such as the best, without referring to what it is about your brand, service or idea that makes it the best. For example, a furniture retailer might claim to be the best. However, the audience would be left wondering the best what? Another furniture store might claim to have the largest range which is much more meaningful to the audience. It is also important that your advertising does not promise in what you cannot deliver. For example, do not advertise excellent service and advice if your business does not have the staff to cope with the numerous enquiries that could flow from your advertising. The key lesson here is to ensure that your position is clearly communicated and reinforced in the day-to-day operations of the business. Summary In this topic, you have learned about various types of positioning strategies and how to choose the appropriate strategies in various marketing scenarios. Sometimes it is necessary to reposition a product in the market, and you have seen successful examples of this.