Standing out from the crowd
Product positioning is an important part of a product marketing strategy. It helps buyers and users understand where a product ‘fits’ in terms what it offers, and how it compares with competing products.
Simple example: think of a major car manufacturer like Toyota. It has a number of distinct brands, each of which are designed with particular buyers in mind. Its utility vehicle Hilux is designed for guys that get their hands dirty; it’s small, zippy Yaris on the other hand is for urbanites who use their car for short trips.
Why does product positioning matter?
In this globalised world of ours, competition is strong and it is critical that marketers position their products effectively so as to ensure they appeal to buyers and users. Product positioning feeds into the development of marketing activities such as the channels through which it is sold and the messaging used in promotional activities. Done well, product positioning can help a product succeed. Done badly, even a strong product can fail.
Take note: Buyers will draw their own conclusions of where your products fit, and your competitors will be working away at positioning their own products and perhaps even trying to cast yours in a negative light. For all of these reasons, it’s worth your while to take active steps to position your products.
Easy as S-T-P
Product positioning should not be rushed, and if possible you should take the time to speak to customers, both existing and potential to make sure you’re focusing correctly. That said, the whole process can be broken down into three steps: Segmentation, Targeting and Positioning.
Step 1: Segment your market
Start off with a big-picture view. What’s the market in which your product or service will be sold? The fact is that few products appeal to all people so you will need to break the market down into smaller ‘segments’. Textbooks refer to these as homogeneous groupings of buyers with shared traits, characteristics and requirements. They will all have similar problems and be interested in products that solve these.
It can help to visualise things by putting together some simple 2 x 2 diagrams, putting one variable on the x-axis (e.g. price) and another on the y-axis (e.g. functionality). Even without hard data, it doesn’t take long to overlay the competing products onto this diagram. This gives you a ‘lay of the land’ and can reveal the spaces where competition is strong, or gaps that may signify an opportunity.
Read our “How to…” Segment your market guide for more information about this topic
Step 2: Pick your targets
Now that you’ve split your market up into a number of segments, you’ll need to decide which ones you should focus on. Ideally, this sort of thinking was used in the product development process. If it’s an existing product, look at who your customers are and find out why they like your product. How does it solve their problems? If it’s a new product, spend some time thinking through some buyer personas, to understand who you may be able to satisfy. Try to identify the segment which your product appeals to most. Why is that? What problems is it that your product solves that would make these buyers happy?
Step 3: Position your product
Once you’ve picked your target segment, the next step is to prioritise their requirements and wants and cross-check this with your product. What do they want most? What don’t they care about? If possible, try to quantify and prioritse these requirements so that you can determine which are most important.
Compare your product with those of your competitors – how does it stack up? If it has unique strengths or significant advantages then emphasise these. If you’re lacking in a dimension that’s of low importance then don’t pay it too much heed. If your product is significantly misaligned with your target market’s requirements, have a think about whether you can adapt or change your product, or if you need to refine your target.
Compelling products and services
Going through the above steps will allow you to develop a Product Positioning Statement – a one or two sentence description that articulates why your product is the absolute best solution to the target segments requirements.
This in turn should be used to develop three to four clear and simple marketing messages ideally backed up and validated by data.
Do this correctly and you’ll be better equipped to cut through the clutter and be perceived as relevant and of interest to your target buyers and users.
Share your thoughts
How do you go about product positioning in your organisation?