Product positioning

What Is Product Positioning?

Product positioning is a fundamental aspect of marketing strategy that defines how a product is perceived by consumers relative to competing products in the market. It involves creating a distinct image and identity for a product in the minds of the target market. This perception is built upon the product's unique features, benefits, price, and overall quality, aiming to establish a competitive advantage. Effective product positioning ensures that consumers understand what makes a product different and why it is the superior choice for their needs, influencing their customer perception and ultimately their purchasing decisions. It falls under the broader category of Marketing Strategy and is crucial for a product's success throughout its product lifecycle.

History and Origin

The concept of "positioning" in marketing gained significant prominence through the work of advertising executives Al Ries and Jack Trout in the early 1970s. They introduced the idea in a series of articles for Advertising Age in 1972, later expanding on it in their influential book, "Positioning: The Battle for Your Mind" (1981).¹³ Their core argument was that in an increasingly cluttered and "overcommunicated" society, the key to successful marketing was not to create something new and different, but to manipulate what was already in the prospect's mind.¹²

Before this era, marketing often focused on the "product era," emphasizing features, or the "image era," focusing on corporate reputation.¹¹ Ries and Trout shifted this focus, asserting that effective communication required finding a unique "position" in the consumer's mind.¹⁰ This marked a turning point, emphasizing the importance of perception over objective reality in marketing.⁹ Their work underscored that product positioning is about how a product is placed in the mind of the prospect, rather than just what is done to the product itself.⁸

Key Takeaways

• Product positioning defines how a product is perceived by its target audience relative to competitors.
• It focuses on creating a unique and desirable image in the consumer's mind.
• Effective positioning highlights key differentiators such as features, benefits, quality, or price.
• The goal is to establish a strong value proposition that resonates with the consumer.
• Successful product positioning is vital for market acceptance, market share, and long-term profitability.

Interpreting Product Positioning

Interpreting product positioning involves understanding the consumer's perception of a product and its place within the competitive landscape. It's not about what the company says the product is, but rather what the consumer thinks it is. A well-positioned product occupies a clear, distinctive, and desirable space in the consumer's mind. This space is often defined by attributes like being the "most affordable," "most luxurious," "most reliable," or "most innovative" in its category.

For instance, a company aiming for a "premium" product positioning would expect consumers to associate its offerings with high quality, superior performance, and exclusivity, even if it comes at a higher price. Conversely, a "value" product positioning would aim for perceptions of affordability, practicality, and accessibility. The effectiveness of product positioning is assessed by how closely the consumer's actual perception aligns with the company's intended perception. This requires ongoing market research and an understanding of consumer behavior to gauge whether the desired mental space has been secured.

Hypothetical Example

Consider "EcoClean," a hypothetical new brand of household cleaning products entering a crowded market. EcoClean's marketing team decides on a product positioning strategy centered around being the "safest and most environmentally friendly cleaning solution for families."

1. Identify Target Audience: Young families with children, health-conscious individuals, and environmentally aware consumers who prioritize safety and sustainability. This represents a specific niche market.
2. Define Differentiators: EcoClean will use plant-based ingredients, biodegradable packaging, and avoid harsh chemicals. These attributes offer clear differentiation from conventional cleaners.
3. Craft Messaging: All advertising and packaging emphasize "non-toxic," "kid-safe," "pet-friendly," and "planet-loving." The brand name itself, "EcoClean," reinforces this message.
4. Pricing Strategy: Positioned at a slightly higher price point than conventional cleaners, but competitive with other "eco-friendly" brands, reflecting the perceived premium for safety and sustainability.
5. Distribution: Initially sold in organic grocery stores, specialty health shops, and online platforms frequented by the target audience, rather than mass-market retailers.

Through these steps, EcoClean actively shapes its product positioning, aiming to carve out a specific mental space in the consumer's mind as the trustworthy choice for safe and sustainable home cleaning.

Practical Applications

Product positioning is a critical element across various business functions and industries, directly influencing a company's success.

• Product Development: Understanding desired product positioning guides research and development efforts, ensuring new products are designed with features and benefits that support the intended market perception.
• Branding and Advertising: Positioning directly informs the creative direction of advertising campaigns and brand messaging. The choice of words, images, and channels used in the marketing mix are all tailored to reinforce the desired position.
• Competitive Strategy: Companies use product positioning to identify and leverage their unique selling propositions against rivals. By clearly defining what makes a product superior or distinct, businesses can defend their market space or attack competitors' weaknesses. For example, brands are exploring the metaverse as a new arena for positioning their offerings and engaging with consumers.
• Market Entry: When launching new products, strategic product positioning helps determine the optimal point of entry into the market. This involves deciding whether to compete head-on with established players or carve out a new category, as explored in frameworks like those from the MIT Sloan Management Review.⁷
• Pricing: The perceived value created by product positioning supports a product's pricing strategy. A premium position allows for higher prices, while a value-oriented position necessitates competitive pricing.

Effective product positioning is an ongoing process that requires continuous monitoring of market trends and competitor activities to maintain relevance and appeal.

Limitations and Criticisms

While product positioning is a powerful strategic planning tool, it faces several limitations and criticisms. One primary challenge is the "overcommunicated society" itself; consumers are bombarded with messages, making it difficult for any single product's positioning to cut through the noise and establish a lasting impression.⁶

Furthermore, companies can fall into the trap of "inside-out thinking," where they focus on what they want to say about their product rather than understanding what the customer already believes or needs. This disconnect can lead to positioning strategies that fail to resonate with the customer perception and market reality.⁵

Another significant concern relates to ethical considerations. Aggressive product positioning can sometimes lead to exaggerated claims or misleading advertising, creating a perception that does not align with the product's actual capabilities or benefits. Regulatory bodies, such as the Federal Trade Commission (FTC), enforce laws requiring advertising to be truthful and not misleading, with claims backed by evidence.³, ⁴ Failure to comply can result in severe penalties.¹, ² Therefore, while creating a strong mental position is key, it must be grounded in verifiable truth to maintain consumer trust and avoid legal repercussions.

Product Positioning vs. Brand Positioning

While closely related and often confused, product positioning and brand positioning refer to distinct concepts within marketing.

Product positioning zeros in on the specific attributes and benefits that set a particular product apart from others in its category. It's about how a consumer views a laptop model, a specific car, or a particular type of coffee. In contrast, brand positioning encompasses the broader reputation, values, and emotional connections associated with the entire company or its family of products. It's about the feeling consumers get from a tech giant, an automotive manufacturer, or a coffeehouse chain, irrespective of a single product. Product positioning is a tactical element that supports the overarching brand positioning, contributing to the overall brand equity.

FAQs

What are the main types of product positioning strategies?

Common strategies for product positioning include: positioning by attribute (focusing on a specific feature), by benefit (emphasizing what the product does for the consumer), by price/quality (offering either premium quality at a high price or good value at a low price), by use or application (targeting specific scenarios or functions), by user (targeting a specific demographic or lifestyle), and by competitor (positioning directly against a rival). The choice depends heavily on the market segmentation and competitive landscape.

Why is product positioning important for a business?

Product positioning is crucial because it helps a product stand out in a crowded market, communicate its unique value proposition to the target audience, and differentiate it from competitors. Effective positioning can lead to increased sales, higher profitability, stronger brand equity, and greater customer loyalty. Without clear positioning, a product risks being perceived as generic or irrelevant.

Can product positioning change over time?

Yes, product positioning can and often does evolve. As markets shift, consumer preferences change, new competitors emerge, or a product moves through its product lifecycle, companies may need to adjust their product positioning. This repositioning can involve changing the product's features, price, target audience, or even its messaging, to maintain relevance and competitive advantage. It's a dynamic process that requires continuous monitoring and adaptation.