Market positioning is like a compass that guides businesses in the vast and competitive marketplace. It’s the art and science of defining how a brand or product stands out from the competition, occupies a distinct place in the minds of customers, and creates a unique value proposition. Just like a well-crafted story, market positioning tells customers what sets a brand apart and why they should choose it over others.
In this Review we will delve deep into various nuances of market positioning-discussing the importance of positioning, how a company should position themselves in the market, and also how to create a market positioning map for your business.
So, let’s understand market positioning first.
Market Positioning: What is it?
Market positioning is the method of defining how a company or brand is perceived in the minds of consumers relative to its competitors. It involves crafting a unique image of the company or brand in the target market and positioning it in a way that differentiates it from competitors and resonates with the needs and preferences of the target audience. In simple words positioning is identifying a pain point and then placing your solution (product/service) there.
Importance of Market Positioning
Market positioning is important for businesses for several key reasons:
1. Differentiation:
Market positioning enables a business or brand to differentiate itself from rivals and highlight its distinctive value proposition. In the minds of consumers, it helps establish a distinctive identity, which can promote greater customer loyalty and differentiation in a crowded market.
Let’s take the example of Decathlon. This French brand perfectly identified a space for a one-stop solution for every type of sports and fitness utilities in affordable prices. Before Decathlon, this segment was dominated by Nike, Adidas and Reebok but none of these companies provide a comprehensive range of sports products and their prices are also quite high.
2. Targeting:
Market positioning helps in perfectly identifying your target audience because your positioning is based on your understanding and determination of your target audience. And once you have identified your target audience, your marketing becomes laser focused. Market positioning enables a business to concentrate its marketing efforts on the specific customer segments most likely to be interested in its products or services.
A company can effectively reach and engage with its target audience by tailoring its marketing messages and tactics by first understanding their needs, preferences, and motivations.
For example: Stripe, the fintech giant, placed their payment solution to developers instead of businesses. Because businesses are simply beneficiaries of developers to build their payment gateways, but it’s the developers who actually decide which payment solution platform to recommend to businesses.
3. Brand Equity:
Market positioning aids in the growth of brand equity, which refers to the intangible value and perception that consumers have of a brand. It may sound similar to brand differentiation but there is a deference. Brand differentiation is simply the USP while brand equity is the value attached to it which ensures its long run in the market.
For example: Coca Cola brand’s USP is its unique taste, but to add value Coca Cola associated it with fun, happiness and good times, particularly targeting the young generation.
So, these are the benefits of market positioning, if it is perfectly done.
But how?
You need the perfect recipe with mindfully curated and efficiently executed steps.
The Recipe: Market Positioning
Step 1: Conduct Market Research:
Study the market trends, consumer perceptions, and competitive environment. To find gaps and opportunities you need to examine competitor positioning, market data and client feedback.
Step 2: Identify Target Market:
The target market or customer segments that your business wants to serve should be clearly defined. Understanding their needs, preferences, behaviors, and psychographics all are important aspects of target market identification.
Step 3: Define Unique Value Proposition:
Create a distinctive value proposition that expresses the advantages and benefits of the business or brand over rivals. This should emphasize the distinctive qualities, traits, or advantages that distinguish the business or brand in the marketplace.
Let’s take the example of Airbnb. It’s a platform that provides places to stay on rent but with a twist. While traditional hotel chains offer luxury stay options, Airbnb took the other way round and appealed to people to live like a local in homestays and have a unique experience. This idea readily hooked a lot of travelers who were looking for a unique community experience rather than traditional hotel chains making Airbnb a 73-billion-dollar venture.
Step 4: Craft Marketing Messages:
Create marketing messages that are in line with the chosen target audience and distinctive value proposition. These messages should effectively communicate the positioning of the company to the target audience and be consistent across all marketing channels and materials.
A good example will be Batzawaj matrimonial application which is specifically designed for Kuwaiti people. The company has positioned itself as Kuwait’s digital ‘Khattabah’ – a modern take on the traditional human matchmaker in the Kuwaiti society. By saying this they successfully anchored their product in the traditional value system in people’s mind.
Also, in their marketing they are consistent in their messaging- the application is only for people looking to get married and ensures safety and privacy of their users.
Step 5: Execute Marketing Tactics:
Your marketing strategies need to be in line with the established market positioning. Market positioning helps in identifying suitable platforms and how much effort will be required on each platform to achieve the desired output for your brand.
Once the platform is selected, market positioning will dictate target audiences, target location, content type and budget allocation in your campaign design for respective platforms. Thus, market positioning keeps your marketing effort in sync with overall brand strategy.
Step 6: Monitor and Adjust:
Always ensure that you set up measurement metrics for your market positioning and also measure the effectiveness of your marketing initiatives. Market positioning can change due to change in demands, internal goals and other dynamics. So, always set up feedback loops to learn from the changes in market and be open to adjust your positioning accordingly. This will include recalibrating marketing messages and strategies based on feedback and performance data to maintain the company’s or brand’s relevance and competitiveness in the market.
Successfully following this recipe will help you determine lead to a market positioning map. This map is a simple yet effective picture of your competitors’ positions in the market and how you stand in the competitive landscape.
Market Positioning Map
A market positioning map, also known as a perceptual map, is a visual representation of how different brands or companies are positioned in the minds of consumers relative to certain attributes. It helps illustrate the competitive landscape and the relative positioning of different brands in the eyes of consumers. It is a useful tool for businesses to identify opportunities for differentiation and develop marketing strategies that will resonate with consumers. Businesses can find growth prospects by using a market positioning map by spotting gaps and launching new products or services that cater to customers who aren’t already being served.
For example: let’s consider a market positioning map for the smartphone market with two dimensions: price (low to high) and features (basic to advanced). The map will have four quadrants: Low Price/Basic Features, Low Price/Advanced Features, High Price/Basic Features, and High Price/Advanced Features. Brands like Xiaomi and Realme may be positioned in the Low Price/Advanced Features quadrant, while Apple and Samsung may be positioned in the High Price/Advanced Features quadrant. This map visually illustrates how different brands are positioned in terms of price and features, and how they are perceived by consumers in the market.
Here’s a step-by-step guide to create your very own market positioning map:
1. Identify the key dimensions:
Start by determining the key dimensions or attributes that are important in your industry or market. These could be factors such as price, quality, convenience, luxury, eco-friendliness, innovation, customer service, or any other relevant attributes.
2. Collect data:
Gather data on how different competitors or brands are perceived by customers on these key dimensions. This can be done through market research, customer surveys, or by analyzing existing data and customer feedback.
3. Plot the data:
Use a graph or a matrix to visually plot the data on the selected dimensions. For example, you can create a two-dimensional graph with one dimension on the x-axis and another on the y-axis. Each competitor or brand can be represented as a point on the graph, with its position reflecting its perceived positioning on the selected dimensions.
4. Analyze the results:
Examine the plotted data and identify patterns or trends. Look for areas where competitors or brands are clustered, and areas where there are gaps or opportunities for differentiation. This analysis can help you understand the current market landscape and identify potential positioning strategies.
5. Define your positioning:
Based on the analysis, determine where you want your brand or product to be positioned on the map. This involves finding the gaps in the market that your product can fill up, identifying your target audience, and developing a unique value proposition that sets your brand apart from competitors.
Conclusion
Remember, market positioning is about creating a perception in the minds of your target audience, and it requires a deep understanding of your customers, competitors, and the market. It’s important to regularly review and update your market positioning map to stay competitive in the ever-changing business landscape.
Hope this will help you in your venture.
Let us know how you are planning to position your business in our comment section.
