How Market Positioning Will Help You Connect With the Right Customers

Proper Market Positioning Will Boost Your Sales

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Market positioning is a strategic process that businesses use to accentuate their brand and differentiate it from the competition in the minds of their customers in the chosen target market. In this article we will examine how to use market positioning to help you connect with the right customers and increase your sales.

What Is the Importance of Positioning in Marketing?

The goal of market positioning is to have your customers perceive your brand as distinct and superior.

For example, when shopping for laundry detergent many people think of Tide as "simply the best at cleaning clothes". Given that many people tend to stick with particular brands for years or even decades, establishing this impression of your brand is one of the keys to business success.

A market positioning strategy should be an essential part of the marketing section of your business plan when starting a business. For existing businesses market positioning may need to be refined and optimized on an ongoing basis to respond to changes in the marketplace. On average, the lifespan of a market positioning statement is approximately five years. 

What Are the Steps to Achieve Successful Market Positioning?

1. Examine Your Existing or Intended Position in the Marketplace:

  • What are the key attributes of your brand that sets it apart from your competitors? (e.g. price, quality, customer service, etc.)
  • What is your target market, e.g. which customers are best served by your products/services?This may involve demographic, geographic, and psychographic analysis. 
  • How will you serve the needs of your target market on a consistent basis?

2. Analyze Your Competitors

Gather as much information as possible about your competitors so you have a comprehensive view of their strengths and weaknesses.

It may be helpful to organize the information in the form of a matrix so you can compare your desired brand against the competition. The following example uses a fictional company called "Java Jones" that intends to enter the local coffee shop marketplace: 

Competitive Matrix Analysis Example
CriteriaCompany ACompany BCompany CCompany DJava Jones
PriceHighAverageAverageLowHigh
QualityMediumAverageAverageLowHigh
Hours8-5 Mon.-Sat.8-5 Mon.-Fri.8-5 Mon.-Fri.8-5 Mon.-Fri.8-8 Mon.-Sun.
ServiceExcellentGoodFairFairExcellent
Customer LoyaltyMediumFairFairLowHigh
AdvertisingNoneFairFairNilGood
WebsiteYesYesNoNoYes
FacebookNoNoNoNoYes

Competitive analysis can clearly demonstrate:

  • Segments of the market you may wish to avoid, such as those where there is already significant competition, where one competitor has established a dominant position, or where larger competitors exist that have the advantage of economies of scale
  • Areas of the market that are not currently being addressed (or not adequately addressed) by any of the competitors

3. Decide on Your Positioning Strategy

The goal of competitive analysis is to reveal gaps in the marketplace that you can exploit and use to focus your positioning strategy.

Typical strategies include:

  • Value Positioning: Targeting cost-conscious consumers by competing on price.
  • Service Positioning: Catering to the market segment that demands a high level of customer service. This approach is commonly used by smaller businesses who are competing with larger chains or big-box stores.
  • Quality Positioning: For the upper segment of the market that is willing to pay for a higher quality product.
  • Demographic Positioning: Targeting a particular demographic strata (gender, age, income level, education, etc.) 

Most likely your positioning strategy will be a combination of the above. For instance, in the competitive matrix example, "Java Jones" obviously intends to cater to the more affluent coffee drinker that is willing to spend more for quality and excellent customer service.

Given that none of the competitors are open from 5 to 8 pm or on Sunday "Java Jones" also intends to try to lure the evening and weekend coffee consumer.

Issues to be aware of when deciding on your strategy:

  • Your positioning may need to take into account other factors, such as the general (or local) state of the economy, consumer trends, etc.
  • Consider how the competition might react to your entry into the marketplace. In the above example, "Company A" could respond by extending their hours into the evening and opening for business on weekends. 

Once you have decided on the segment of the market you wish to target you should be able to clearly articulate your brand, your target market, the needs of the target market and how you will address them, and how you will back up your promises.

4. Draft a Market Positioning Statement

Using the above information, you are now ready to craft a market positioning statement. A market positioning statement is a simple one paragraph summary that describes:

  • your target market, and
  • how you want your brand to be perceived by your target market.

Keep in mind that the positioning statement should be the reference point for all subsequent product decisions and marketing efforts.

The market positioning statement should include the following elements:

  1. The target market
  2. Your brand
  3. How your brand sets you apart from your competitors
  4. Frame of reference
  5. Reason(s) why customers should believe in your claims

Example: Java Jones' Market Positioning Statement: For sophisticated coffee lovers, Java Jones is the place to go for the best specialty coffees and snacks in town.  Unlike other coffee shops, we use only the highest quality beans, top of the line equipment, and trained, certified baristas.

Breaking It Down: 

  1. The target market = sophisticated coffee lovers
  2. Your brand = Java Jones
  3. How your brand sets you apart from your competitors = the best specialty coffees and snacks
  4. Frame of reference = local (town)
  5. Reason(s) why customers should believe in your claims = we use only the highest quality beans, top of the line equipment, and trained, certified baristas

While a market positioning statement is mainly for internal use, it should resonate with the customer.

Examples of Market Positioning Statements

The City of Whitehorse: "The City of Whitehorse is a municipal government focused on creating the conditions necessary to sustain a unique standard of living for citizens who expect a balance of robust recreation and cultural opportunities to fortify them in body, spirit and mind and who demand comfort, safety and civil amenities without foregoing independence. The City accomplishes this with strong and reliable revenue streams, uncommonly extensive community infrastructure, an independent, problem-solving culture and virtually unlimited access to wilderness spaces and corresponding values."

Amazon (2001): For World Wide Web users who enjoy books, Amazon.com is a retail bookseller that provides instant access to over 1.1 million books. Unlike traditional book retailers, Amazon.com provides a combination of extraordinary convenience, low prices, and comprehensive selection.

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