Product Positioning

POSITION IN THE MARKET

 The location of a product or service alongside

key competitors in the mind of the consumer

 The way customers perceive a product relative to competing products

 Refers to the place the product occupies in the customer’s perceptual

map of the market
 A product’s position ultimately depends on the attitudes of people in
the target market.

 Firms will seek to position their products to increase sales

POSITIONING

 The process of creating an image for the product in the minds of

customers

 Arranging for a brand or product to occupy a clear and distinctive

place in the minds of target customers relative to competing
products and brands
 As we know, it is vital in business to offer a product or service that
is both demanded by the customer and different than your
competition

 In 1980, Michael Porter created his “Generic Strategies” concept

 Porter believes that for a business to position themselves as unique,

they must either be:
• Cost Leader

• Different

 Let’s take a look at each…….

 1. DIFFERENTIATION

 Be different / distinctive

 Have a feature or benefit that nobody else has

 If you’re the only business selling that particular product, the

consumer has no option but to buy from you

EXAMPLE: How is RIM’s “Blackberry” different from the

competition ? What do they do that nobody else does?
2. COST LEADER / CHEAPER

• The “me too” strategy….we offer the same product as

everyone else, but we’re cheaper

• Compete by being the lowest cost producer

• If you can produce your product / service cheaper, you can

sell it cheaper

• As a result, if your product is similar to the competition’s

yet it is cheaper, they will likely buy from you
Product Differences should be…..

 Relevant / Important to the buyers

 Distinctive
 Clear

 Visible

 Communicable

 Difficult to copy

 Profitable

 Possible for the company to produce / engineer

 Positional Map

 The visual representation of a brand within a specific market place

showing its positioning relative to the competition
 Defines the market in terms of the way buyers perceive key
characteristics of competing products

 Shows how products compete in the mind of the consumer and

suggests how a product can be positioned to maximize sales
Constructing a Positional Map

 Select key variables that differentiate products

 Ie – price, quality, safety, design, durability, range of services, etc..

 Conduct market research to find out how brands are perceived

 Plot information on a two dimensional diagram based upon the two key
variables you feel position the industry competitors
 Let’s create a “positional map” for the grocery industry in Kitchener /
Waterloo…….

The main players are:

 Price Chopper

 Sobey’s

• Zehr’s

• Food Basics
We need to decide on:

 Relevant industry variables we can use to differentiate the

competitors

 Their position relative to each other………

A Positional Map of Grocery Stores in Kitchener / Waterloo
 Let’s look at another one………
A Positional Map of Car Manufacturers
in North America
 In order to successful, a business must position themselves with one of these strategies,
otherwise they will be “caught in the middle” and not the best at what they are trying to
do

 By trying to be “everything to everyone”, they will ultimately fail

 As a result, they will be “everything to nobody”

 Successful marketers position their products with the above

strategies in mind
 As a result, a business can use the “map” to:

1. Understand its positioning relative to the competition

2. Understand how a product can be positioned to maximize sales

 By understanding its position in the marketplace, a business can

then begin to create a marketing plan that optimizes its chance for
success………
 The End !!