Market Position

Positioning: How People Think About Your Business

“Today’s top retailers all have one thing in common"they establish defined market positions for themselves, and carve out a particular place in the customer’s mind.” Ander and Stern, Winning At Retail: Developing a Sustained Model for Retail Success

Positioning is how a business differentiates itself from its competitors. Positioning involves creating a link in the minds of consumers between an idea and the business so that when consumers think of a particular desire or need, they also think of the business.

For example, what if you have a small package that you must have delivered somewhere by the next morning? What company do you think of? Most people in the first world will think of FedEx “when it absolutely, positively has to be there overnight.” FedEx has a powerful market position because the mental connection between overnight delivery and the company is strong, automatic, and nearly universal.

Developing a market position requires a lot of thought and study, but when your business has defined the right position, you will know which types of customers you want, which ones you don’t, what your customers want from you, and how to give it to them. In short, your market position statement will guide your entire business.

But defining the position is not the end. “Positioning” is not creating and writing down a market position statement, it’s creating a mental association between the ideas in the market position statement and the company in the minds of the customers. Once a company creates a position statement, the hard work of marketing begins"getting the customers to know that market position as well.

Establishing a position is the most important thing you can do in marketing because it affects everything else. If you have the wrong position, you might waste money advertising in the wrong magazines, you might buy junior sizes when your best customers are plus-sized women, or you might lower prices when your customers actually want you to keep the store open later.

Every business has a position because every customer has some thoughts about the businesses they interact with. However, customers may have negative ideas about a business, or they may have inconsistent ideas. If customers think about a business in a very different way than the business owners think about the business, the business is likely to have an expensive, and potentially fatal, disconnect between what the business offers customers and what the customers expect.

You can see the positioning of major companies in their taglines:

  • “Great taste, less filling.” – A light beer that doesn’t taste light.
  • “Just do it.” – Nike is for people who are active and dedicated.
  • “Can you hear me now?” – Verizon never stops improving its network.

The market position is not the tagline"it is the idea behind the tagline, the idea that customers associate with the company.

Some other notable corporate market positions are:

  • FedEx: Guaranteed overnight delivery.
  • Southwest Airlines: Low-cost air travel that’s also fun.
  • Target: Fashion at a great price.

Positioning is critical for the really large corporations, but it is also valuable for independent retailers, because a strong market position is the guide for your entire business. The position helps you know if and when you are buying the right clothes, hiring the right people, and attracting the right customers.

The most important, and also most accessible, book on the subject is the Al Ries and Jack Trout bestseller Positioning: The Battle for Your Mind.

Defining your market position

The most basic market position is a statement that answers the question that all customers implicitly ask of your business: “Why should I buy from you and not from your competition?” Because the market position statement is so important and so common, there are a few well-defined forms of the statement that we can use to make developing a statement easier.

One common form of the market position statement is:

For (customer) who needs or desires (what they want) our (product or service category) offers (key benefit).

Here is another common form:

(Product or service) is the one (category) that provides (customers) who want (need or want) with (key benefit).

So Southwest Airlines might write:

For budget-conscious travelers who want air travel with less aggravation, our airline offers air travel that is both inexpensive and fun.

Or Torrid.com might have as their position statement:

Torrid.com is the one apparel e-commerce website that provides confident, style-conscious, plus-sized young women who want sexy, flattering clothing with a broad selection and excellent customer service online.

Although the market position statement is only one short sentence, it is packed with meaning and can take the management team of a new business months to write. However, because this one sentence is the guiding star for the business and will influence all of the company’s marketing discussions, it is critical to get it right.

To summarize, the components of the market position statement are:

  • The product category.
  • A description of the customer.
  • What the customer wants; a need or desire that the product can deliver.
  • The product name.
  • What key benefit the product gives the customer.

Developing Your Market Position

Developing a market position statement takes more effort and rigor than just writing the statement itself: there is preparation that should be done first. We suggest a process that involves identifying each of several components individually, then combining them into the final market position statement. Along the way, we will illustrate the process using a fictional line of sun-protection clothing created by an apparel designer and entrepreneur named Mary.

The steps of the process are:

  1. Identify the product category.
  2. Describe the customers.
  3. Name the product.
  4. Identify the competition.
  5. Explain what makes the company special or unique.
  6. Write the market position statement.

1) Identify the product category.

The first step is to describe the product category, the general type of product you will be selling. You might later change specific features or benefits of your product, or try to aim the product at a different customer, but the product category is usually fixed. For instance, you might start making clothing for urban teens but end up selling to suburban moms who want to emulate the style of urban teens, but you will always be making clothing with an urban style.

Within the product category, you should also describe the general problem that the product solves. This form of the product description should be something that is not likely to change, or would only change if you were to end the current business and start an entirely new one.

  • Name the product category.
  • Identify the general problem the product category solves.

It might seem like you should describe the customer first, then describe the customer’s problem, and then identify the product category, but it usually happens that an entrepreneur starts with the problem first and then finds the set of customers that have that problem. This is because most entrepreneurs get into a business by solving their own problems, and then identify a larger set of customers to make the business viable. So don’t worry about starting with the product.

Example

Mary is starting a company, Shade Tree Apparel, to sell the sun protection clothing that she has been making for friends. She started making the clothing because she didn’t like the idea of applying a lot of chemicals to her skin, and many of her friends had the same concern.

  • Product Category: Sun protection clothing.
  • General Problem: Light-skinned people want to be outdoors without applying a lot of chemicals to their skin.

2) Describe the Customers

An excellent understanding of your customers is the crux of marketing. Because there are a lot of types of people that have a relationship to a business, we’ll define the customers to be the people that pay for the product. They are not necessarily the ones that use the product. The customers of a toy company, for instance, are adults, but the users of the toys are children. If you are selling office supplies, your customer may be a person in the procurement department of a major company, not the company staff that uses the supplies.

You may have to complete this section multiple times if you have several different types of customers. For example, Mary may consider a wide range of customers, including mothers of young children, people who have recently had skin cancer surgery, redheads, or medical facilities that cater to people with very sensitive skin. If you are unsure of which customers to pursue, you might create a market position statement for several types of customers and see which statement seems the most realistic.

Understanding the difference between the user and the customer is important for describing the customer. When you are developing the product, you may have to study the user instead of the customer, but for basic marketing you will focus on the customer.

To develop a profile of your customer, answer a few questions that describe attributes of your customers, such as:

  • What are they generally like?
  • What are their ages?
  • What is their income range?
  • What is their lifestyle?
  • What is abundant in their lives?
  • What is scarce?
  • What to they want more of?
  • What to they want less of?
  • How to they spend their discretionary time?
  • How do they spend their discretionary money?
  • What do they worry about?
  • Where or how do they buy the product?

You may think of many other valuable questions to answer about your customers.

You should also think about how the customer relates to the product. One important question is: Is the product a “must have” or a “nice to have”? For most American families, a car is a “must have” but a vacation home is “nice to have.”

A related question is: What are the customer’s substitutes for the product? What can the customer do or use instead of your product? Answering this question gives you a sense of which other products your product is competing against.

Example

Since most of Mary’s sales so far have been to friends who want sun protection for their children, Mary decides to focus on mothers.

  • General description: Concerned mothers of young children.
  • Age range: 30-45 years old.
  • Income: Upper middle class incomes.
  • Lifestyle: The mothers typically are or have been professionals and have husbands who are professionals. They have 1-3 children and are very concerned about their health and education. They often change their family’s diet when the first child arrives, incorporating more organic foods. They buy their kids educational toys and are frequent visitors to museums. They want to have the kids experience the outdoors.
  • Abundance: They are relatively affluent, usually upper middle class.
  • Scarcity: They do not have much unallocated time.
  • Want more: Time, sense of security.
  • Want less: Worry about things that could harm their children.
  • Spend their time: Many work part-time, volunteer, and spend a lot of time on enriching activities with kids.
  • Spend their money: Maintaining their lifestyle and on the children.
  • Worry about: All of the things that could adversely affect their children, like poor nutrition, chemicals, not getting the right educational experiences, bullies, etc.
  • Where they buy: They will frequently buy sun protection products through online retailers, but also buy a lot of sun protection products while traveling with their children.

From all of those points we can condense a few wants that are relevant to our analysis:

  • The customers are affluent mothers who are willing to spend to get the best for their children.
  • They want simple, time-efficient solutions for letting their kids get out of the house without worrying about skin cancer or dangerous chemicals.
  • Online channels and tourist shops are likely places to distribute the product.

3) Name the product

This step does not require much analysis, but a lot of creativity: it is just the product name.

Example

Mary named her company Shade Tree Apparel, and her products are named “Shade Tree Shorts,” etc.

4) Identify the Competition

Your competitors are any of the alternatives for your customers to satisfy the needs or desires that your product satisfies. These competitors may be other businesses, or they could be other options. For instance, if you run a produce stand you may be competing with the fruit trees that people have in their backyards rather than other produce stands.

For products that are “nice to have” the most significant competitor is “non-use”: The customer doesn’t buy anything to satisfy a particular desire because the desire is not very strong.

Develop your list of competitors not by thinking about other companies that sell a similar product, but by thinking of the other ways that customers can satisfy the same needs or desires that your product satisfies.

Examples

Mary’s competitors include products in the same category, products in other similar categories, and non-use:

  • Sun Protection vendors: Coolibar.com, Solumbra.com.
  • Sunblock and sunscreen lotions and creams.
  • Non-use: Staying out of the sun.

5) What Makes You Special?

Since customers nearly always have alternatives to your product, it is important to differentiate your product from the competitors. The ways you can differentiate a product are very similar to the elements of the Marketing Mix, so see the article on marketing mix for more details. Generally that means that to be different you may have to alter:

  • The Product: Change the features and benefits of the product.
  • The Price: Lower the price to be more economical, or raise it to be more exclusive.
  • The Placement: Distribute the product through different channels.
  • The Promotion: Do more or different promotions to attract customers.

The most important differentiators are the ones that are aligned with the needs and desires of the customers that you identified in Step 2. So review your customer description and match up what differentiates your offering with the needs and desires of your customers.

Example

Finding a differentiator for Mary’s product will be difficult because the sun protection market has many well-established vendors, and except for the style, the products are very similar. So Mary would have to differentiate on some other point, such as price or distribution channels.

Since the customers are affluent and not very price-sensitive, and she can’t afford a lot of promotion, Mary will differentiate the product on distribution channels, trying to solve the customer’s lack of time by making the distribution more convenient. Mary could try to distribute the product through:

  • Tourist destinations that attract children.
  • Pediatrician’s offices.
  • School fundraisers.
  • Kiosks near beaches, museums, and parks.

Mary notices that several of these places are very similar"they are all places that parents take their children and are likely to realize they have neglected sun protection. So Mary’s differentiator is that her products are sold where parents most need to use the product.

6) Wrap it Up!

Now we have enough information to complete the market position statement; just plug in the information we’ve uncovered into one of the two templates.

Example

Unlike sun protection clothing that that is sold online or in stores, Shade Tree Apparel provides busy parents who are concerned about the hazards of chemicals and sun exposure to their children’s skin with a line of safe sun protection apparel that is sold in the places they need it most.

Now What?

Now that you’ve done all of that work, be sure to use it in the appropriate places. Whenever you do any marketing work, compare the message that you are sending with your market position statement. For instance:

  • Does your website emphasize the target customer, the problems, or the benefits on the home page?
  • Is your advertising in a medium that your target customers will see or hear?
  • Do the stores that sell your product have traffic from the customers you are targeting?

You put a lot of work into your market position statement, so use it! With the market position clearly defined, you are ready to identify the methods of promotion you can use to firmly establish the position in the minds of your customers.

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Positioning: The Battle For Your Mind | Retailing Together
August 9, 2009 at 8:58 pm

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