The Importance of Market Positioning
Market positioning is the process by which a brand establishes itself relative to the competition in its target customer’s mind. It involves creating a unique and compelling impression about the product or service in the minds of consumers, differentiating it from the competition. Effective market positioning can make a product or service sell faster and give the business a unique or competitive edge. Effective market positioning requires understanding your target audience, their needs, and the competitive landscape.
When customers are confused by too many options, effective market positioning can define your place. For example, positioning yourself as a luxury brand will target a specific audience (who enjoy buying expensive things), while budget-conscious clients will seek your business.
Invoking certain places such as Canada, Germany, or Japan can have a stereotypical effect on your product or service.
For example, being perceived as a luxury brand will allow you to rank yourself high (meaning you cannot compete as the cheapest gloves in town), while the positioning as handmade and quality may need to be “walked up.” Strong positioning can protect you against the adverse effects of a changing direction (i.e., loss of stature in the eyes of prospective clients due to moving away from perceived higher value).
Conducting Competitive Analysis
Several key areas to explore during your research include:
Identification of competitors: Who are your main competitors? Look for similar products or companies targeting the same audience. Competitors can be direct (i.e., targeting the exact audience you are) or indirect (i.e., they look at a customer’s needs differently).
Data gathering: Identify your competitors’ market share, offerings, and customers. You want to know what they’re good at and what they suck at. Product assortment and price are also important areas to focus on.
After you have gathered nearly all the data possible, it’s time to sift through the information. Search for trends that shape your marketing strategy. They might be something like:
Gaps: There might be gaps in the market that can help you identify your “personality” online.
What others do well: Are there opportunities to improve an inferior product based on the weaknesses of your competitor’s product?
Then, it’s time to use the information you have learned. Let it influence your content and messaging.
Market Segmentation and Target Market
Breaking down a larger consumer or business market into smaller sub-groups that a company identifies and targets is known as market segmentation. This strategy allows the company to understand what traits, needs, or behaviors each smaller group or segment may have in common.
This knowledge should also give company officials a better understanding of what advertising messages will likely resonate with each group.
Younger people, older people, women, men, the less affluent, the very rich, and so on may respond to different ads for the same product.
The four major types of market segmentation are:
Demographics: The most used method, as age, sex, education level, income, and other factors are easy to determine. When the demographic has been defined, a marketing campaign that caters to the exact characteristics of the identified group can be created.
Geographic: Another easy one is knowing the location, which can play a role in what should be offered. A franchisor wants to open a small restaurant in Munich, Tokyo, next to a college town. The food to be spotlighted, even in the case of a hamburger-focused restaurant, should be prepared in a way that will cater to the local patrons.
Psychographic Segmentation: Aiming for much more depth. It entails grasping what kinds of people might become customers, their personalities, values, thoughts, and feelings, and what types of things interest or concern them.
The art of good marketing is to touch potential customers in ways that elicit positive emotional responses while doing so in a way that’s also logically deducible. Otherwise, what one might call a successful sale might not be as successful as it could be when the company has a much clearer picture of the customer and what kind of potential customer would even contemplate walking into an REI or purchasing a similar product from the company’s plan.
Behavioral: This approach should inform the company about the interpretation and usage of the product by actual and potential customers. What is the product? What benefit does the customer think it provides?
Of course, you can’t position a product until you know who wants it. Unless you know the customer base, how do you know that the mythical person who will buy what you must sell even exists?
Once you can see that a budget campaign catering to pre-teens hitting movies is the right strategy, market positioning should come into focus. Positioning is just a broader “anti-alpha” way of looking at this, and it will center around who the actual buyers will be.
Every company needs to know how to speak to its customers, regardless of what it sells. What message will you provide in all areas of the business that the suggested buying group will identify with?
By knowing this and then using their products and messages in a way that they hope resonates well enough to create some chatter among customers, the assumption is that sales will increase, encouraging higher productivity and a better customer experience.
Crafting a Marketing Strategy
Marketing strategies are like roadmaps that assist you in aligning your marketing goals with the rest of your business strategy; it’s all about positioning. Here is what I mean:
Figuring out the knowns in your strategy will help you identify your target audience, who your product caters to, and your unique value-adds. This is critical for helping to enhance your overall positioning and strategy and ensuring you can deliver cohesive campaigns that effectively promote your product.
Product positioning helps to answer who will use your product (i.e., your target audience), the key benefits of using your product, and how your product is unique and positioned against your competitors. These are all core elements used to help inform your distinct narrative and market positioning.
Customer Acquisition Strategies
Every business looking to grow in a crowded market must have effective customer acquisition strategies. These should fit with your business goals and the marketing tactics you use. If your company has an eco-slant, your marketing channels and partnerships should reflect that. If you run a tech startup, your marketing should reflect that, too. Use the magic of the internet and get to know the digital platforms and online communities your customer base loves.
Knowing your market is standard advice for a reason: it’s Marketing 101. You must understand who your customers are to serve them properly. Please learn their age, gender, location, ethnographic data (i.e., social roles, connections, etc.), and psychographic data (i.e., goals, motivations, preferences). Groove plows forward when it comes to growth by simply serving more of the people who make their business successful.
Then, turn those insights into an actual marketing strategy and marketing messages. (We’ll get there soon, I promise!)
You can move further by breaking your market into segments and adapting and mixing your messaging, so it speaks more persuasively to each one.
You should be more capable of creating marketing that makes a more profound, longer impression on your buyers and prompts more of your lurkers, readers, followers, and subscribers to buy. This deep understanding of your customers will also help you nurture a steadier, longer, and more valuable relationship with each person on your list, however big or small that list may be. It should also reveal a few pockets of premium customers that wiggle less on price. Your customers buy earlier, more often, faster, and at higher prices simply because you spoke with a message that resonates more firmly.
In the business competition, aligning business strategy, market positioning, and customer acquisition is paramount. What is your business strategy? It is the predefined path and boundaries for the company’s operations/decisions congruent with achieving its strategic goals.
Your market position or your unique value proposition are those things that differentiate the company from the competition in terms of the company’s marketplace strategy. When the strategic business goals are organizational, and the value proposition (VP) is marketing, the attraction and retention of customers is the output of an [optimized] effective unified business strategy.
Companies must work with a good strategic analyst to work through an improved market position. Start with the internal analysis (bucket). What is your existing VP (bucket)? What are the VPs of the competition? What is the industry’s best practice? The strategic analyst will advise the client on exploring these questions. Let’s work with the market researcher and a partner in the strategy process. What needs/wants do customers have that are unmet? What are some unmet customer needs with significant (existing) customer needs? Strengthen the company’s product/service to reposition or entrench the existing marketing. What are some unmet needs? Reach out to existing customers. The market researcher can uncover these needs and more!
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