We regularly talk with Business to Business companies about the importance of a positioning strategy as an element of the marketing plan. Positioning is used as a marketing communications tool to reach customers in a crowded marketplace. It doesn't matter if a company chooses to compete with a superior value strategy or a lowest cost approach, what does matter is the company develops a realistic and sustainable way to differentiate itself from the competition, and give the customer a reason to buy their product.
Many years ago, Michael Porter identified three positioning alternatives; product differentiation, low cost leadership, or niche strategy. Later Treacy and Wiersema called these value disciplines and defined them as product leadership, operational excellence, and customer intimacy. What they agreed upon was that different managerial systems, processes, and cultures were needed for each value discipline and that it is difficult to be the best at any one of these, let alone multiple positions. Even the largest and most exceptional companies had difficulty making multiple positions for the same product work successfully. Smaller business to business companies do not have the resources and reach to pursue multiple positioning strategies. Select one area to be the best and focus on being good in the other areas.
A product or service may be positioned in several categories including: a feature or benefit, use or application, target user, competitive position, price, or level of quality. The product is positioned for specific market segments with defined product needs at specific prices.
Steps to Positioning
Develop possible positioning themes based on knowledge of markets, customer needs and company capabilities.
Screen these themes on
- Relevance to target customers
- Feasibility based on firms abilities and customer's perception of the firm
- Competitive: The firms unique advantages over the competition that would be difficult for the competitors to match
- Support of company's long term sales and profitability objectives
Reasons for Positioning Failure
- The position taken is meaningless to the customer. A key marketing rule is to understand the customer.
- It is confusing irrelevant or doubtful and is not supported by the firm's capabilities, brand and reputation. Core competency, customer knowledge, market research, and competitive analysis can help identify the correct positioning
- The differentiation has no economic value to the customer. The position must be meaningful and add value to the offer (ie lowest lifecycle cost).
- The differentiation is invisible. The company may be superior to its competition, but if the customer is not aware of, or does not understand the value of the differences, then the positioning will not be successful. A well designed integrated marketing communications program (internet, public relations, advertising, etc) is an important factor in good positioning.
The best positioning strategies emphasize your company's and product's strengths and away from weaknesses. Position your product to reach the target buyers and decision makers whose profiles match the solutions you provide, in the distribution channels you serve, and at the prices that achieve your goals.