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POSITION IN THE MARKET • The location of a product or service alongside • key competitors in the mind of the consumer • The way customers perceive a product relative to competing products • Refers to the place the product occupies in the customer’s perceptual map of the market
A product’s position ultimately depends on the attitudes of people in the target market. • Firms will seek to position their products to increase sales
POSITIONING • The process of creating an image for the product in the minds of customers • Arranging for a brand or product to occupy a clear and distinctive place in the minds of target customers relative to competing products and brands
As we know, it is vital in business to offer a product or service that is both demanded by the customer and different than your competition • In 1980, Michael Porter created his “Generic Strategies” concept • Porter believes that for a business to position themselves as unique, they must either be: • Cost Leader • Different • Let’s take a look at each…….
1. DIFFERENTIATION • Be different / distinctive • Have a feature or benefit that nobody else has • If you’re the only business selling that particular product, the consumer has no option but to buy from you EXAMPLE: How is RIM’s “Blackberry” different from the competition ? What do they do that nobody else does?
2. COST LEADER / CHEAPER • The “me too” strategy….we offer the same product as everyone else, but we’re cheaper • Compete by being the lowest cost producer • If you can produce your product / service cheaper, you can sell it cheaper • As a result, if your product is similar to the competition’s yet it is cheaper, they will likely buy from you
Product Differences should be….. • Relevant / Important to the buyers • Distinctive • Clear • Visible • Communicable • Difficult to copy • Profitable • Possible for the company to produce / engineer
Positional Map • The visual representation of a brand within a specific market place showing its positioning relative to the competition
Defines the market in terms of the way buyers perceive key characteristics of competing products • Shows how products compete in the mind of the consumer and suggests how a product can be positioned to maximize sales
Constructing a Positional Map • Select key variables that differentiate products • Ie – price, quality, safety, design, durability, range of services, etc.. • Conduct market research to find out how brands are perceived • Plot information on a two dimensional diagram based upon the two key variables you feel position the industry competitors
Let’s create a “positional map” for the grocery industry in Kitchener / Waterloo……. The main players are: • Price Chopper • Sobey’s • Zehr’s • Food Basics
We need to decide on: • Relevant industry variables we can use to differentiate the competitors • Their position relative to each other………
A Positional Map of Car Manufacturers in North America
In order to successful, a business must position themselves with one of these strategies, otherwise they will be “caught in the middle” and not the best at what they are trying to do • By trying to be “everything to everyone”, they will ultimately fail • As a result, they will be “everything to nobody” • Successful marketers position their products with the above strategies in mind
As a result, a business can use the “map” to: 1. Understand its positioning relative to the competition • 2. Understand how a product can be positioned to maximize sales • By understanding its position in the marketplace, a business can then begin to create a marketing plan that optimizes its chance for success………