Once you have determined your market segment(s), you must determine how you will position you products and services to make your customers aware of your offerings.
Positioning refers to how your potential customer views your product or service, often described as the image of the product or service. Your goal is to create an image that places your product/service top-of-mind for your intended customers. There are many ways a firm may position itself against the competition. (One company successfully positioned itself directly against its top competitor by using the slogan, “We’re number two, so we try harder.”)
To position you product or service, utilize the following:
1. Create a list of your competitive advantages.
Advantages may include higher quality for lower cost, or higher quality and more technical support.
2. Select the “right” competitive advantage for your product or service.
What you choose, or which “bundle of benefits” you choose, will depend on who else is offering the same position. Some competitive advantages may be too costly to develop, inconsistent with other services or products, or simply not strong enough in the marketplace. The key components to developing a competitive advantage are:
- Determine what is most important to your customers.
- Ensure your company has the resources to promote and deliver these benefits.
- Provide the greatest perceived advantage over your competitors.
- Promote benefits competitors will find hard to match.
Once you have documented your competitive advantages, you can determine which benefits you want to use to position your company.
3. Communicate and deliver your company’s position to the target market.
It is essential for all of your marketing materials to support the position or image you are creating. For example, if the company decides to build a position on better service, it must ensure excellent service is delivered. Along with hiring and training staff on the components of delivering superior customer service, the company’s advertising and sales messages would consistently communicate its commitment to providing superior service.
A company must know its present and potential competitors. Examine their strengths and weaknesses. Then, selecting a market position that provides a competitive advantage will be clearer. Your overall position should emphasize those factors that your customers value most, and those which make you stand out from your competition.