The Importance of Product Positioning to

the Marketing Plan

Product positioning is an important element of a marketing plan. Product positioning
is the process marketers use to determine how to best communicate their products'
attributes to their target customers based on customer needs, competitive pressures,
available communication channels and carefully crafted key messages. Effective
product positioning ensures that marketing messages resonate with target consumers
and compel them to take action.

Understanding Customer Needs

Effective product positioning requires a clear understanding of customer needs so
that the right communication channels are selected and key messages will resonate
with customers. Product positioning starts with identifying specific, niche market
segments to target – not just women over 25 but women from 25 to 30 who work in
senior-level management positions, make $X per year, are single and enjoy sporting
activities. The more specific, the better.

In addition to identifying the customer based on demographic and psychographic

(personality/lifestyle) attributes, marketers need to understand customer needs,
especially relative to the products and services they have to offer, to clearly convey
value as part of their marketing plan.

Weigh Competitive Pressures

Marketers must weigh competitive pressures when they are considering the
positioning elements of their marketing plans. Effective positioning conveys to
consumers why this company's product or service should be preferred over other
competitive options based on what the company knows about the target audience's
needs. Effective marketing plans clearly identify how the company's products or
services are different from competitors' offerings and in what ways.

There is no value in being a "me too" product offering and simply copying what
competitors are doing. Marketers must stand out from the crowd in ways that hold
value for their target markets.

Targeting Communication Channels

Product positioning helps marketers consider how their offerings are different from
others that consumers have to choose from. But it is not enough to know this from an
internal perspective – marketers must communicate this to the target audiences. To
do this effectively, they must choose communication channels that are designed to
connect with their identified target audiences at times when they will be most
receptive to these messages.

Consider how automobile manufacturers position their products through

communication via television commercials during sporting events, for instance, or
how cosmetics manufacturers run full-page, full-color ads in women's magazines.

Carefully Crafted Key Messages

The final challenge in effective product positioning is conveying the differentiating,
value-added aspects of your product or service to your target audience through the
communication channels you have selected. These messages are designed to convey
how your product is different (and better) than competitive offerings, as well as to
address the value-added attributes that are important to your audience. Product
positioning is at the foundation of any effective marketing plan because it impacts the
ultimate purchase decision.

Marketing plans enable businesses to deliver their messages with maximum impact
and minimal inefficiencies. Such plans allow business owners and marketers to
increase their understanding of price points, market shares, distribution channels and
competitive strategies. Without a structured marketing plan, almost every marketing
effort a business makes will end with higher costs, minimal impact and lost
opportunities. A standard marketing plan addresses the four components of
marketing: product, price, placement and promotion.

Product
The most vital justification for a structured marketing plan is how well it
communicates the virtues of its product. The plan must show how the company's
product satisfies the needs of its intended customers and how it meets those needs
differently from its competitors. The plan explains how the product will include
features that customers want and need and why the product should not retain
features that turn off customers.

Price
The marketing plan also includes strategies on product pricing. Marketers must know
if the product is to be sold as a luxury item or as an affordable alternative. Customers
often make decisions on product quality based on pricing, so marketers must
understand the product's pricing strategy as they develop their message. Pricing also
determines which distribution channels will make the product available for sale.

Placement
The marketing plan also includes a section on placement and distribution strategies
because the distribution channels determine where, when and how customers will
purchase the product. For instance, a software developer may choose to make its
latest release available through retail stores on DVD-ROM or via an online store as a
digital download. The marketing plans for each of these approaches require different
strategies and tactics, so marketers must understand the placement and distribution
models to communicate their messages with maximum effectiveness.

Promotion
The promotion section of the marketing plan answers the question of which channels
the marketers will use to deliver the product's message. Each channel has its own
structure for costs, timing and demographics, so marketers must know which options
will get the message to the most receptive audience. The software company may
choose to promote its newest release through Internet banner ads, commercials on
technically oriented TV and radio shows or through full-page glossy ads in computer
magazines.