User:BronHiggs/Positioning (marketing)

Positioning refers to the place that a brand occupies in the mind of the customer. It is particularly concerned with the distinctive place relative to competitors. In order to position products or brands, companies may emphasize the distinguishing features of their brand (what it is, what it does and how, etc.) or they may try to create a suitable image (inexpensive or premium, utilitarian or luxurious, entry-level or high-end, etc.) through the marketing mix. Once a brand has achieved a strong position, it can become difficult to reposition it. Positioning is also known as product positioning.

Positioning is one of the most powerful marketing concepts and the meaning of positioning was rather limited in the earlier years when marketing was just getting started which focused on the concept of reputation. Positioning then became “the place a brand occupies in the mind of its target audience”. Under this meaning many companies now use the concept of positioning as a part of their everyday marketing activities or strategies and is also used as a tool for explaining how consumers can relate to foreign markets easier.

Positioning is the final step in the S-T-P approach which highlights three areas of marketing planning

Positioning is the final step in the S-T-P planning approach ; Segmentation→ Targeting → Positioning; a core framework for developing marketing plans and setting objectives. In the STP approach, a market is segmented, one or more segments are selected to become targets of the marketing activity, and a marketing program is developed with the needs and wants of the core targets in mind. Products or services are positioned in a way that resonates with the selected target market or markets.

Origins of the positioning concept

Al Ries and Jack Trout are often credited with developing the concept of product or brand positioning. However, in their early writing, Ries and Trout show that the positioning concept was widely used in the advertising industry in the 1950s and 1960s. Advertising guru, David Ogilvy, believed that “the most important decision is how to position your product” and drilled his creative team with this idea. Both Ries and Trout would have become familiar with the positioning concept in their work as advertising executives. By the late 1960s and early 1970s, the concept of positioning began to spread out of the advertising community and into the marketing community following the publication of a series of articles published by Ries and Trout in Industrial Marketing in 1969 and Advertising Age in 1972. These articles were to become highly influential. By the early 1970s, positioning became a popular word with marketers, especially those that were working in the area of advertising and promotion and in 1981 Ries and Trout published their classic book, Positioning - The Battle for Your Mind. (McGraw-Hill 1981) The concept enjoys ongoing currency among both advertisers and marketers as suggested by Maggard who notes that positioning provides planners with a valuable conceptual vehicle, which is effectively used to make various strategy techniques more meaningful and more productive.

Definitions and conceptualisations

David Ogilvy noted that there was no real consensus as to the meaning of positioning. On the subject of definitions, he wrote, "The [term] has found great favor among marketing experts, but no two or them agree what it means. My own definition is that [positioning] is what a ' product does, and who it is for'."

Ries and Trout advanced several definitions of positioning. In an article Industrial Marketing, published in 1969, Jack Trout pointed out that the typical consumer is overwhelmed with unwanted advertising, and has a natural tendency to discard all information that does not immediately find a comfortable (and empty) slot in the consumer's mind. Positioning a mental device used by consumers to simplify information inputs and store new information in a logical place.

Into their landmark book, Positioning: The Battle for Your Mind, Ries and Trout expanded the definition and defined it as "an organized system for finding a window in the mind. It is based on the concept that communication can only take place at the right time and under the right circumstances" (p. 19 of 2001 paperback edition).

Positioning is something (perception) that happens in the minds of the target market. It is the aggregate perception the market has of a particular company, product or service in relation to their perceptions of the competitors in the same category. An important concept in positioning is that it expects that consumers compare and analyze products in the marketplace, whether based on features of the product itself (quality, multiple uses, etc.), price, and/or packaging and image. It will happen whether or not a company's management is proactive, reactive or passive about the ongoing process of evolving a position. But a company can positively influence the perceptions through enlightened strategic actions.

A company, a product or a brand must have positioning concept in order to survive in the competitive marketplace. Many individuals confuse a core idea concept with a positioning concept. A Core Idea Concept simply describes the product or service. Its purpose is merely to determine whether the idea has any interest to the end buyer. In contrast, a Positioning Concept attempts to sell the benefits of the product or service to a potential buyer. The positioning concepts focus on the rational or emotional benefits that buyer will receive or feel by using the product/service. A successful positioning concept must be developed and qualified before a "positioning statement" can be created. The positioning concept is shared with the target audience for feedback and optimization; the Positioning Statement (as defined below) is a business person's articulation of the target audience qualified idea that would be used to develop a creative brief for an agency to develop advertising or a communications strategy.

Developing the positioning statement

Positioning Statement

As written in the book Crossing the Chasm (1991, by Geoffrey Moore, HarperCollins Publishers), the position statement is a phrase should include a statement of the target market, the market need, the product name and category, the key benefit delivered and the basis of the product's differentiation from any competing alternatives. Positioning statements should be written in the following format:

1. For (target customer),

2. who (statement of the need or opportunity),

3. the (product name) is a (product category),

4. that (statement of key benefit – that is, compelling reason to buy).

5. Unlike (primary competitive alternative), our product (statement of primary differentiation).

An annotated example of how this positioning statement template is translated for advertising purposes in the prestige car market appears below.

Volvo positioning statement

Volvo positions itself within the prestige vehicle category as a car offering superior safety and performance

An example of a position statement is one developed by Volvo. Its target audience is upper income, other brand switcher car buyers. The marketing strategy is: Volvo is a differentiated brand of prestige automobiles. That offers the benefits of safety [problem removal] as well as prestige [social approval] The advertising for Volvo, should emphasize safety and performance [message strategy] [Must mention prestige as an entry ticket to the category] And will downplay its previous family-car orientation in the interest of appealing to a broader range of users.

Differentiation

Differentiation in the context of business is what a company can hang its hat on that no other business can. For example, for some companies this is being the least expensive. Other companies credit themselves with being the first or the fastest. Whatever it is a business can use to stand out from the rest is called differentiation. Differentiation in today’s over-crowded marketplace is a business imperative, not only in terms of a company’s success, but also for its continuing survival.

Product positioning process

To be successful in a particular market a product must occupy an “explicit, distinct and proper place in the minds of all potential and existing consumers”. It has to also be relative to other rival products on the market of which is has to compete with.

Visibility and recognition is what product positioning is all about as the positioning of a product is what the product represents for a buyer the business is targeting. In this day and age markets are showing an increase in the intensity of rivalries and competition, which gives the buyer a greater choice and identification of the products certain intrinsic values that then become critical for the company to gain customer purchase of their products. It is vital that a product or service needs to have a clear identity and placement to the needs of the consumers targeted as they will not only purchase the product, but can warrant a larger margin for the company through increased added value.

Generally, the brand positioning process involves:

Segmentation

It is the process of identifying variables that allow someone to divide the market into distinct subsets that can be selected as a marketing target to be researched using the Marketing Mix. Segmentation is essential because without it, the best thing a firm could do is to deliver average value.

A central point to a marketing strategy is market segmentation, this makes segmentation a key decision area for organisations in all sectors. Segmentation involves using groups of customers together that have similar preferences in products and buying behaviour which helps the business’ in dealing with market heterogeneity, this then goes on to help the business’ focus resources on relatively homogeneous customer segments and so ensuring there is efficient allocation of resources.

A segmentation-driven marketing strategy can help companies design products that are responsive, promotional tactics and campaigns developments that are effective, scale of competitive positions and fine-tune current marketing plans or ideas. Marketers must also recognize that a segmentation-driven strategy is generally more costly than mass marketing and brings a major commitment by management for “customer-oriented planning, research, implementation, and control”.

Segmentation Methods

• Characteristics of the customers (male, female, rich, poor, etc.)
• Benefits sought
• Systematic Product Related Behavior (by purchasing behavior or by channel)
• Cohort Analysis
• Geographic Segmentation

Targeting

Targeting is the process of evaluating the attractiveness of each segment and choose a target. In order to select a target segment, firms must first balance attractiveness with capability and monitor whether actual buyers match the target segment.

One of the core parts of marketing is targeting. In the marketing strategy targeting represents a particular stage in the process that is based on the selection of the specific segment to enter engagement with. Different customers have a variety of desires and interests in terms of buying behaviour, their needs, and benefits it can be sometimes near impossible to satisfy all customer segments with a unique value proposition.

The process through which a company engages in seeking and defining the desired customer and then develops its value proposition to reach the mind of customers is all apart of segmentation, targeting and positioning (STP) process. The foundation of positioning theory is made of one of the most important postulates of the science of marketing. Scholars Groucutt, Leanly, & Forsyth, (2004) state that “people are extremely diverse and that a product can not be liked equally by everyone” (p. 98). Referring to the postulate it is simple to define what the STP model is all about. The STP model states that for a customer to like the product we have to present the product to those consumers, who want it and are able to actually acquire that product. The STP models first two steps help us to find and define the desired consumer and correct positioning plays for us to place the product in the minds of the targeted consumers, putting it in a more desirable position.

Characteristics that make a segment attractive

• Segment Size
• Growth of Segments
• Value of Segments
• Stability
• Current Company position within the segment
• Ease of entry
• Ease of competitive entry
• Number and strengths of competitors

Positioning

Positioning is the process of identifying concepts for each target segment, select the best and communicate it.

Positioning strategies help shape a consumers preferences which is a major source in guiding them towards a particular brand. It is essential to assess and analyse the consumers behaviour and psyche of how they will or already do perceive the offered brand by recalling the company’s communications with them such as advertising or any marketing campaigns. The right positioning strategy at right time is what can help a brand build the right image of itself in the mind of consumer(s). Fishbein and Rosenberg’s attitude models would be good examples of what is called, quantitative approaches. These models indicate that it is possible for a business to influence and likely change the positioning of the brand by manipulating various factors that will affect a consumer’s attitude with the brand or company. Research on persons’ attitudes suggests that a brand's position in a prospective consumer’s mind is likely to be determined by the “combined total of a number of product characteristics such as the price, quality, durability, reliability, colour, and flavour”. The consumer places important weights on each of these product characteristics and it can be possible by using things such as promotional efforts to realign the weights of price, quality, durability, reliability, colour and flavour of which can then help adjust the position of a brand in the mind of the prospective consumer.

Elaboration Likelihood Model (ELM)

To position a brand, candidate, or idea/ideology you must communicate messages which resonate to the forefront of a receptor’s mind. Communication of the brand relies on occupying the niche which appeals to the conviction of a receptor’s narrative. A model in which we use to cater these messages is best known as The Elaboration Likelihood Model (ELM). This works alongside with Psychology, to deduce that there are two pathways of persuasive messages: Central, and Peripheral.

Traditional persuasion modelling assumes that persuasion occurs when receptors learn a message. Learning isn’t always part of persuasion, in that a receptor may dislike or disagree with a message, detest the brand/product/service, and may only receive the beginning of the message in which the receptor associates other memories as they were distracted, and don’t participate in the absorption of the initially intended message. The model indicates that prior to purchasing a high-involvement product, or engaging with a brand consciously, a receptor must process all given content, and carefully constructed a perception.

Cognitive Response Model (CRM)

States that receivers can be conscious reactive members in the persuasion process. The main theme of the CRM, is that persuasion isn’t directly caused by messages; but by thoughts which agree with the message – to align attitude of recipient, is to provide messages which build up their intuitional belief system; the receiver requires both motivation and competency to process the information centrally. “If the listener is distracted or has trouble understanding the message, he or she will lack the ability to do the central processing.”. There are two elementary renditions of CRM: Chaiken, and Heuristic and Systemic Processing Theory.

Peripheral Response Model (PRM)

Communicating the brand’s messages/ideas to the receptors involves a complex methodology of persuasion. A Peripheral route to persuasion is when a receptor’s attitude is adjusted and/or aligned by other cues (such as emotionally appealing music) rather than the message itself. The Peripheral Response Model (PRM), is formed when recipients elect an assumption with lesser active processing than the CRM.

Criticisms for ELM

Some criticisms for ELM exist for brand positioning and has adapted since 1968, in that traditional methods of communication revolve around the theory that consumers require deliberate intervention with the brand. It assumes that to communicate and persuade a receptor, is to communicate through the two designated routes. It fails to take into account that communication isn’t something that is done to the receptor, rather, the receptor co-created within reality – abstract to customer centrality perceived by salespeople.

Positioning concepts

More generally, there are three types of positioning concepts:

1. Functional positions
   • Problems
   • Provide benefits to customers
   • Get favorable perception by investors (stock profile) and lenders
2. Symbolic positions
   • Self-image enhancement
   • Ego identification
   • Belongingness and social meaningfulness
   • Affective fulfillment
3. Experiential positions
   • Provide sensory stimulation
   • Provide cognitive stimulation

Persuasive techniques

Delivery of the aforementioned routes of persuasion is catered to the rendering and unique qualities which make up groups of persuasive powers. There are 5 main groups: Primary, Secondary, Aspirational, Dissociative, and Formal. The strongest primary band to shape the attitude of individuals is the family, but other groups can doctrine a belief system too. This group is most responsible for developing societal conform, shaping attitudes, and at its most elemental – forms the systemic institution in which an individual’s perception of the world exists. A secondary class of individuals or group are those whose influences aren’t as severely impacting to the individual’s narrative, and mostly align with their predisposed ideas - such as sports groups, political parties, charities, education facilities, etc. The third group is known as the aspirational group, where the individual aspires/desires to join this group, so shapes their perceptions to increase the likelihood on being accepted as a member. This can be observed closer in the behaviours of adolescent youths, in that they shape their opinions in favour of becoming a member of a peer group, and is lead on the ambition of becoming more endowed; financial and power. The fourth group – the Dissociative class – are the groups in which the individuals do not partake, or wish to involve themselves with. This can take many forms, but a common example is a stereotype; a person will go to great lengths to avoid being grouped with others under this segregated opinion. Previous studies have confirmed, that in the case of minority groups, members may avoid behaviours or clothing which reinforce the image of their perceived stereotype, which in turn may lead to reverse stereotype confirmation.

Repositioning a company

Main article: Turnaround management

In volatile markets, it can be necessary - even urgent - to reposition an entire company, rather than just a product line or brand. When Goldman Sachs and Morgan Stanley suddenly shifted from investment to commercial banks, for example, the expectations of investors, employees, clients and regulators all needed to shift, and each company needed to influence how these perceptions changed. Doing so involves repositioning the entire firm.

This is especially true of small and medium-sized firms, many of which often lack strong brands for individual product lines. In a prolonged recession, business approaches that were effective during healthy economies often become ineffective and it becomes necessary to change a firm's positioning. Upscale restaurants, for example, which previously flourished on expense account dinners and corporate events, may for the first time need to stress value as a sale tool.

Repositioning a company involves more than a marketing challenge. It involves making hard decisions about how a market is shifting and how a firm's competitors will react. Often these decisions must be made without the benefit of sufficient information, simply because the definition of "volatility" is that change becomes difficult or impossible to predict.

Positioning is however difficult to measure, in the sense that customer perception of a product may not have been tested on quantitative measures.

See also

• Brand management
• Brand community
• Competitive advantage
• Customer engagement
• Market segmentation
• Marketing
• Marketing management
• Marketing plan
• Marketing strategy
• Point of difference
• Product differentiation
• Product management
• Renamed products list
• Right-time marketing
• Strategic management
• Target market

Sources

• Business Dictionary. (n.d.) Definition of Position.ing. Retrieved from http://www.businessdictionary.com
• Lamb, C. (2013). e-Study Guide for MKTG 7.
• Trout, J., (1969). ""Positioning" is a game people play in today’s me-too market place", Industrial Marketing, Vol.54, No.6, (June 1969), pp. 51–55.
• Ries, A. and Trout, J. (1981). Positioning, The battle for your mind, Warner Books - McGraw-Hill Inc., New York, 1981, ISBN 0-446-34794-9
• Trout, J. and Rivkin, S. (1996). The New Positioning : The latest on the worlds #1 business strategy, McGraw Hill, New York, 1996, ISBN 0-07-065291-0
• Moore, G. (1991). Crossing the Chasm, HarperCollins Publishers, 1991.
• Levi, K. (2007). "Differentiate or Diminish: The Art and Necessity of Business Positioning", (March 2007), p. 9

Category:Marketing strategy