Positioning

Having selected a target market or markets, the organisation then has to decide on what basis it will compete in the chosen segment or segments. How best can it combine its assets and competencies to create a distinctive offering in the market? This must be done in such a way that consumers can allocate a specific position to the company’s product or service within the market, relative to other products. Consumers must cope with a huge amount of product information. Customers will position a product in their mind in relation to other products on the market based on their belief of the key attributes it holds. Consumers will see the key attributes of Volvo as safety and durability. BMW’s main attributes are based on performance, hence the ‘The Ultimate Driving Machine’ advertising slogan. When consumers consider the car market, these two companies’ products will be positioned compared to each other, based on these beliefs.

Companies can try to associate various qualities to their product as a way to help shape consumers perceptions of their position in the market. A brand can be positioned using a range of associations such as (Kotler et al., 1996):

Product attributes: Heinz positions its products on the attributes of no artificial colouring, flavouring or preservatives.

Product benefits: Volvo positions itself using the product benefits of safety and durability.

Usage occasions: The convenience store SPAR’s eight-till-late shops are positioned on the usage occasion. Customers use the shops when they need to shop out of normal hours or close their home.

Activities: Lucozade is positioned as an isotonic drink for sporting activities.

Personality: Harley Davidson motorbikes are positioned as macho product with a free spirit.

Origin: Audi clearly illustrates it German origins in the market using the ‘Vorsprung Durch Technik’ slogan. The hope is the product will be linked to the German reputation for quality engineering.

Competitors: Pepsi-Cola are positioned as the choice of the next generation, reflecting the fact that in blind tasting tests younger people preferred Pepsi to competitors’ offerings.

Product class: Kellogg’s Nutrigrain bars are positioned as ‘morning bars’, a substitute for the traditional breakfast.

Symbol: John Deere uses the symbol of the deer to position itself in the market.

These are the various elements/components that can be used by an organisation endeavouring to influence consumer’s perceptions of the product offering. Companies must decide which of these they can use and more importantly, how they wish to position their product in the market vis-à-vis the competing options.

Four factors of critical importance for successful positioning (Jobber, 1995) are:

Credence: The attributes used to position the product have to be perceived to be credible. It would be very difficult for a nuclear power generator to position itself as environmentally friendly.

Competitiveness: The product should offer benefits which competitors are not providing. Clairol launched the new ‘Herbal Essences’ shampoo in the USA in 1995 which emphasised the brand’s wholesome ingredients. By 1997, this was the fastest growing brand on the market and ranked number two behind Pantene.

Consistency: A consistent and prolonged message is invaluable in helping to establish a position against all the other products and services fighting for a share in the consumer’s mind. An organisation that changes its positioning on a regular basis causes confusion in the consumer’s mind. This will mean they have an unclear perception of exactly what the key characteristics are of the product.

Clarity: The positioning statement an organisation chooses must create a clearly-differentiated position for the product in the minds of the target market.