Strategic Marketing Basics

Effective positioning should : 

 Be in line with the company’s mission and strategy 
 Differ from competitors' positioning and, if possible, be unique 
 Correspond to the needs, expectations and personality of the target customer

 

In short, the main steps in the positioning process can be summarized as follows :

 

1. Understand the decision criteria of the target customers and select the most decisive criteria

 

This should have been done prior to segmenting the market and selecting the target segment. Here, you will go further in the behavioral analysis and look in detail in what make your target customers make their decisions to buy. It will be based on market research and marketing information systems.

 

2. Describe and localize competition

 

This step can be carried out based on a reliable competitive analysis, itself based on market research and marketing information systems. Again this should have been done already before selecting the target segment but you will focus here on the positioning concepts chosen by your most serious competitors.

 

3. Choose a differenciation philosophy

 

Firstly, a choice should be made between two main alternatives :

 

 Value based positioning vs Price based positioning 

 

Value based positioning means that you want to increase the value of the  product-service-image-client emotion  package so as to maximize the perceived value of the whole

 

This strategy is possible working on:

 

•  quality of the product/higher technology 

•  superiority of the service 

•  appearance of the product or packaging 

•  brand image/company reputation 

•  quality of relationship with staff/customer care

•  point of sales decoration or configuration

etc....

 Price based positioning  means proposing a price systematically lower than competition for a comparable product/image package or for one of lesser value. This approach should hold over the long term and is only possible if the company has developed a long lasting definite  cost advantage due to (for example) :

 

•  a best position on the experience curve 

•  better use of economies of scale 

•  an operation system based on a proprietary technology / process  

•  a more efficient organization of the business value chain

 

4. Look for uniqueness and differentiation

 

In the context of mature markets where demand dominates, of global markets and of frequent crises and recessions, the intensity of competition entails a vital need to distinguish oneself, to be unique or perceived as such (see sheet 3)