Market & Competitive Positioning | KLynn Business Consulting Toronto Montreal Northumberland

Market & Competitive Positioning

What is "Positioning"?


"Positioning" is a way of looking at your markets through the eyes of the consumer to determine the strengths and weaknesses of your product or service. While it was first developed as a methodology to guide advertising, it is (or should be) the foundation of any proactive product marketing or business development program. Unfortunately, in my experience, positioning is a marketing concept often talked about, but all too rarely applied.

The concept of positioning is not new. It was first articulated in 1969 by veteran marketers Al Ries and Jack Trout in an article in Industrial Marketing magazine and then, later, became the subject of their first book "Positioning: The Battle for Your Mind." The methodology has been expanded considerably over the years, most notably by MIT's Glen Urban and John Hauser in "Design And Marketing of New Products" published by Prentice Hall.

To understand how positioning works, let's walk though a simplified positioning exercise focused on the marketing of, say, a bicycle that we already have on the market. Our bicycle, the Platinum Zephyr, is a 3-speed, racing-style, bicycle that costs $300, weighs 25 pounds and comes with a tire pump, water bottle, bell, night light, and reflectors. Our bicycle is distributed throughout North America in bike shops and in a few of the larger retail chains.

Market Dimensions
The first task of our positioning exercise is to determine what the decision dimensions are for our market. This involves understanding what criteria are used by the consumer to determine their choice of bicycle. We consider four market segments as follows:

(a) recreational bikers - adults
(b) recreational bikers - children
(c) sport bikers (e.g. mountain bikers)
(d) racers)

In each segment we want to determine what the decision dimensions are for purchasing a bicycle. This will involve some form of market research. To keep it simple, we might interview 10-15 members of each segment. Alternatively, we might use a focus group for each segment although this is more expensive and may or may not yield better data. In these interviews, or focus groups, we will ask participants to identify the reasons they choose a particular bicycle for their use. In the case of the children's market we might interview both parents and children.

What we're likely to find from this research is something like this:

Segment: Recreational Bikers -Adults

  • Comfort
  • Price
  • Safety
  • Easy maintenance
  • Available accessories
Segment: Recreational Bikers - Children
  • Safety
  • Price
  • Style (is it 'cool'?)

Segment: Sports Bikers

  • All-terrain tires
  • Weight
  • Price
  • Speed of Maintenance
  • Available accessories

Segment: Racers

  • Weight
  • Tires
  • Reputation among racers
  • Price

Note that we might want to have our survey participants rank these factors in order of importance to each segment (We'll assume that order shown is the ranking received).

In examining these various factors we can see that several segments have the same factors mentioned (e.g. price, weight, safety) but we can also see that different segments rank those factors differently.

Now we'll set that information aside for a moment and examine our competitors. We can do this by company and/or by product. In the bicycle world we might identify our chief competitors by first talking with bike shop owners or our own salespeople. From them we might learn that General Bike, People's Bicycles, and Acme Biking are the three competitors we face regularly.

But other companies are not the only competitors we face. We might also realize that the competition includes skateboards and scooters! So we'll consider all five sources as competition.

Now, with our list of dimensions and our lists of competitors, in each market segment we'll score each competitor - and ourselves -- against the decision dimensions we have learned from our market research. To keep it simple, we'll score using a rating of 1 to 5 where 5 is "goodness" and 1 is "not-goodness."

For the Recreational - Adult market segment, as an example, we will see a matrix that looks like that shown below:

If we then examine our "position" on this chart - versus our competitors - it will tell us a lot about where we are in the recreational bicycle market for adults and what we need to do to improve my position. Consider:

What we see from the chart above is that out strong points are our "comfort" and our "available accessories". We have a relative weakness in price (as the price leader) and maintainability. It also shows us that "safety" is not a distinguishable dimension for us at all insofar as all my principal competitors have equal ratings. In all respects, in the adult market, I am perceived as better than skateboards and scooters.

Now, as a responsible product marketer, how do we act on this "position"?

There are several ways we can act:

(1) We focus our marketing communications efforts on "comfort" and our rich "accessories". We tell our creative people to also focus on "value" because the richness of our accessories is so much more valuable than the bikes of our competitors.

(2) Then we focus our product development people on cleaning up our maintainability and looking for a way to distinguish our products in the "safety" category (Maybe we include a helmet as part of our accessorizing).

(3) Lastly, we put pressure on our manufacturing folks and our purchasing department to reduce the cost of our bikes so that eventually we can price lower.

There it is: one "positioning" chart that outlines our market, product, communications, and costing strategies quite succinctly.

Of course, ultimately, we would do this exercise with each market segment we target and we would make sure that each of our advertisements, each brochure, our web site, etc. all echo the basic positioning strengths that we identified above.

The example we've discussed here illustrates the power of positioning. This technique, working hand-in-hand with market research, allows us to pinpoint how strong or weak we are with respect to the decision dimensions of our prospective buyer. And then it shows us exactly what we have to do to improve our competitive posture.

Yet, too few companies will use this approach. That's their perogative but those that do will always have a decided competitive advantage over those that don't -- they'll know what the landscape looks like while the others are flying blind.

KLynn Inc. offers Positioning Workshops for companies seeking to establish a clear position in their market or product space. These workshops are focused on senior management, are quick, and invariably yield important and actionable results. For more information on these workshops