How To Design Your Positioning Strategy?
In the previo previous us articl articlee "Posit "Position ion,, Aim, Aim, Shoot" Shoot" we touched touched upon the import importanc ancee of positioning your product in the mind of your customer, and how to choose your target market. Now is time to learn how to craft a positioning strategy that works for your specific product. Before we go on explaining the process of crafting a positioning strategy for your product or service, let me remind you of this: "A Positioning Strategy results in the image you want to draw in the mind of your customers, the picture you want him/her to visualize of you what you offer, in relation to the market situation, and any competition you may have". With this said, let us design your positioning strategy. You will be faced with three main options:
1. Positioning your product against your competitors, " Our prices are half of that you may find else where for similar products" 2. Emphasizing a distinctive unique benefit "the only book keeping system that instantly calculates your taxes" 3. Affiliating your product with something the customer knows and values "the same archiving system used by the library of congress"
Of course these are just examples to help you better grasp the concept, but I am sure you get the point, and you can come up with far more attractive messages to better suite your product. Your marketing strategy should act more like a guideline, the driving force of your marketing program, so you should always keep it before your eyes, and the eyes of all those who work with you. Writing a positioning statement should not be a difficult task. For starting off, first you must decide the following:
Your customer: The type of customer you target. The benefits: What you can do for your customers. The method: How you do it. The USP: Why you do it better than the competitors. (As you may know, USP stands for "unique selling proposition".)
Now you will need to write down the following: (fill in the blanks):
Our product offers the following benefits: --------------To the following customers (your target market_: ---------Our product is better than the competitors in the following manner: ---------------We can prove our product is the best because (evidence, differences, testimonials..etc) --------------------
ow you have a positioning strategy, So What? You can't use it to sell your product, which requires a far more complex process, so what is the strategy for? You will use your positioning strategy to design all your marketing communications, and integrate it with every aspect of your marketing program. Any and everything you will do as part of your marketing program, from web site design to product packaging and advertising, should aim mainly at convincing customers of the points contained in your positioning statement. So, put the statement where you can always see it, and always get back to it whenever you are marketing the specific product for which it was crafted. Your positioning statement reflects what you need to communicate about a specific product, and to whom, so you will always hit the right button, communicating the right message to the right customer at the right time. I must stress here, the most significant purpose for having a positioning statement, is to make sure that all your communications are consistent with its content. There is no point in having so many different messages for the same product, that lake consistency. That is what I meant by saying, you must integrate your positioning statement with your marketing program, in all aspects. Every marketing program should cover only one product, hence must not reflect more than one clearly stated positioning strategy, So: 1 product = 1 marketing program = 1 positioning statement.
One last point to ensure the effectiveness of your strategy, which may seem too obvious yet often ignored: Your Customer must also get the message you are conveying, the way you meant it to be. Does your message make sense? Is it clearly understood by your customers? If you answer yes for both, good luck, you are on your way to big success. Retailer Positioning: Strategy is in Detail Positioning in retail is the basis of how one store competes with another retail store; it starts by defining target consumers in terms of ‘distinctive’ needs, and ends when
‘unique’ set of executable action steps are identified to achieve an ‘identity’ in the minds of customers, an identity that customers’ experience in the store and distinguish in their minds. A retail identity could be like Wal-Mart’s “Every Day Low Price” (note not the lowest price) or Whole Food Supermarket’s (the fastest growing grocer in USA) “World’s Leading Natural and Organic Foods Supermarket.” I am a believer that positioning is best based upon ‘value provided to customers’ and not on ‘price.’ Price is a positioning option only and only if a retailer has an innovative approach to being the lowest cost operator. Wal-Mart’s pricing is based upon the competitive landscape. Where it has head-to-head competition in geographic proximity, it avoids price discounting versus competition, a potentially mutually destructive strategy But where it has low competition, pricing often is above average. And where it has somewhat distant competition, it discounts to attract consumers within the proximate geography. Note, however, that it defines competition very carefully – K-Mart or Target. Wal-Mart is always cheaper than the traditional supermarkets, an option it can exercise based upon its low-cost structure. Retailing looks very different when viewed from the perspective of a manufacturer or a consumer. For manufacturers retailers are a link in the distribution chain that takes goods to consumers; channel members who ‘need’ to stock ‘what manufacturers’ make,’ and who are ‘managed’ using economic incentives like margins, incentives, and promotions. Consumers’ usually don’t articulate what they want from retailers but vote with their feet through store loyalty, making some stores more successful than others. Retailers, ‘sandwiched’ between consumers and manufacturers, continuously strive to ensure that the goods they stock are liked by their customers, and successful retailers are more adept at selecting ‘correct’ stocks. A retailer adds economic value by matching diversity of consumer demand with appropriately priced and quality suppliers. Retailers are agents of consumers’ whom they serve by first understanding their needs, and then searching for products to stock. Not only are consumer needs are very diverse, but consumers’ exhibit different purchase behaviors even for purchasing the same product; a consumer buys milk from a hypermarket, a convenience store, and also a neighborhood grocery. It is this diversity that gives an opportunity to retailers to create different retail environments to serve different consumer needs; retail formats that range from hypermarkets to specialized niche stores like exclusive shirt or tie or socks shops or even coffee cafes all serving a single product, albeit in different manifestations. Achieving retail differentiation
Creating a distinctive store has two goals – one, to attract customers to visit the store, and second, to create an image and experience of the store visit in the minds of customers so that the memory of the store (and the products) is aroused when the need for similar products is aroused. Traditional retailing talks of product assortment and location as few of the means of differentiation amongst stores. In an over-retailed environment the role of
distinctive product assortments and location as a differentiator has weakened; products (and brands) can be rapidly copied (e.g. Zara), and are easily available on the net (e.g. eBay, Amazon). Newer choices of achieving retail differentiation have emerged based upon a deeper understanding of consumer behavior; how consumers shop, understand and evaluate products on display, and make product / brand choices. Each step of consumer evaluation and choice-making offers an opportunity to retailers to ‘influence’ purchase behavior. Research suggests that product (and often brand) choice is ‘constructed’ in the store, rather than retrieved from memory based upon prior experience and / or a priori evaluation of alternatives. A critical first step in developing a differentiating plan is to understand what happens when a customer interacts with the product assortment. Three potential levels of influence exist - assortment width / diversity / quality / price, assortment presentation (static - as visual merchandising, and dynamic - as staff-customer interactions) impacting how consumers’ experience products in the store, and marketing mix variables like price and promotions (see inset). This emphasizes the need of assortment ‘management’ as different from assortment ‘planning.’ Assortment management is based upon planning assortments recognizing that consumers usually make product choice decisions on the shop floor, and the behavior and choice process they manifest lends itself to influence. Presented hereunder are a series of steps that guide the creation of a differentiation plan. The steps are based upon a differentiation of products into two categories – functional (products that fulfill a functional need e.g. kitchen tools, appliances, luggage) and symbolic (products that consumers use to express themselves in their social circle e.g. fashion clothing, Cartier watch, Tiffany jewelry, Prada handbag). To locate a position on the quadrant reflect upon the consumer behavior of the targeted consumer - what do customers want when they buy the product, how do they shop for it, and what do they expect from the product (and store) in terms of added features, benefits, and services. A consumer buying Giordano fashion is purchasing a basic functional product, and does not use the brand to express a lifestyle statement, whereas a consumer purchasing a Gucci handbag is willing to pay a premium. Step 1: In table 1 identify which quadrant you are in (for an existing retailer) or desire to be (for a new retailer searching for market space). Examples of the different products that lie in the different quadrants are identified. Key thoughts to be borne in mind – high margin businesses are an exception and not the rule, customers concern for value doesn’t imply that customers will not be willing to pay a higher price for quality, and opportunities exist in creating value through services in both low-margin and high margin businesses. Step 2: If we have a idea about the quadrant we wish to be in, we can use table 2 to detail how retail differentiation will be implemented in practice using – differentiation at the product level, in-store (and post purchase) services, lifestyle and price strategies. The basis of this analysis will be an understanding consumers based u pon research (or intuitive insight) and analysis of competition. Step 3:
If the quadrant and positioning options does not conform to being the best (cost-effective) option, alternatives need to be developed by changing position or fine-tuning implementation options. Table 3 identifies examples of retailers and their location in the quadrants. Step 4: Retail is detail, and stage 4 requires detailing the implementation of the positioning strategy by developing an assortment plan and an assortment management strategy.
