BUS203: Principles of Marketing

The Concept of Positioning

Both product differentiation and market segmentation result in a perceived position for the company or organization. From the intelligent marketing organization, there should be an attempt to create the desired position, rather than wait for it to be created by customers, the public, or even competitors. Positioning is defined as the act of designing the company's offering and image to occupy a distinctive place in the target market's mind. The end result of positioning is the successful creation of a market-focused value proposition, a cogent reason why the target market should buy the product.

Since positioning is a strategy that starts with the product, we expand our discussion of positioning in the Product chapter.

The Future of the Marketplace

As the spread of the global marketplace continues , aided by satellites, the World Wide Web, and universal problems, it will also become increasingly difficult to effectively assess the market. In fact, there is solid evidence that the market will often consist of a single person or company. Customized product design, relationship marketing, and one-on-one marketing suggests that marketing has gone full circle. Like the first half of the twentieth century, when the comer grocer knew all of his customers personally, marketing in the rest of the twenty-first century may look very similar.

Product positioning is a strategic management decision that determines the place a product should occupy in a given market-its market niche. Given this context, the word "positioning" includes several of the common meanings of position: a place (what place does the product occupy in its market?), a rank (how does the product fare against its competitors in various evaluative dimensions?), a mental attitude (what are consumer attitudes?), and a strategic process (what activities must be attempted in order to create the optimal product position?). Thus, positioning is both a concept and a process. The positioning process produces a position for the product, just as the segmentation process produces alternative market segments. Positioning can be applied to any type of product at any stage of the lifecycle. Approaches to positioning range from gathering sophisticated market research information on consumers' preferences and perceptions of brands to the intuition of the product manager or a member of his staff.

Aaker and Shansby suggest several positioning strategies employed by marketers. A product or idea can be positioned

1. By attributes- Crest is a cavity fighter
2. By price-Sears is the "value" store
3. By competitors-Avis positions itself against Hertz
4. By application-Gatorade is for after exercising
5. By product user- Miller is for the blue-collar, heavy beer drinker
6. By product class- Carnation Instant Breakfast is a breakfast food
7. By services provided-Circuit City backs up all its products

Products and brands are constantly being repositioned as a result of changes in competitive and market situations. Repositioning involves changing the market's perceptions of a product or brand so that the product or brand can compete more effectively in its present market or in other market segments. Changing market perceptions may require changes in the tangible product or in its selling price. Often, however, the new differentiation is accomplished through a change in the promotional message. To evaluate the position and to generate diagnostic information about the future positioning strategies, it is necessary to monitor the position over time. A product position, like sports heroes, may change readily; keeping track and making necessary adjustments is very important.

Position A strategic management decision that determines the place a product should occupy in a given market.

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