Identifying which customer groups can be served best is an issue of strategic importance to business organisations.  As it is quite hard, if not impossible, to satisfy the too-many-different requests of customers, companies that segment their markets are in a position to serve their customers better than the competition.

The three stages involved in carrying out a market segmentation strategy are:

  • Segmenting the market – dividing customers into groups or clusters of buyers with different behaviours, characteristics and needs;
  • Targeting strategy – evaluating the attractiveness of the segment and selecting which segments to enter;
  • Market positioning – once a decision has been made as to which market segments are to be targeted, it is crucial to establish a position in the market which gives a distinctive and clear brand identity so that consumers can differentiate the organisation’s product(s) and/or service(s) from those of the competition.

Market positioning is defined as the process of “arranging for a product to occupy a clear, distinctive and desirable place relative to competing products in the minds of target consumers”.

– Definition by Kotler et al. (2005).

It is important to formulate a clear market positioning strategy because it helps influence customers’ perception of a product or service offering and to distinguish a brand or an organisation’s products relative to the various market offerings by the competition.  Well- formulated positioning strategies will permit your organisation to occupy the first place in the hearts and minds of target consumers thereby ensuring brand loyalty within specific segments. Given that market positioning essentially deals with how an organisation positions its product with respect to price and quality features, relative to the competition on the market, market positioning goes hand in hand with pricing and market segmentation and has to be seen as being part of a larger process.

Some organisations are well-distinguished in the market.  The customers of these organisations will not be easily swayed to buy new products since well-positioned brands and products are considered by such customers to be superior to and to offer better value for money (even if they are more expensive) relative to the rest of the competition.  On the other hand, many organisations do not differentiate themselves from other suppliers and as a result lose out on brand loyalty and the positive effects of favourable brand perception since they are not considered to be unique. It is worth noting that many organisations that were perceived badly in specific markets have subsequently managed to reposition their products and services and to bring out the true value of the underlying brand very successfully. It is also true that many others have failed. Looking at success and failure stories enables us to draw inferences on the basis of operating circumstances and corporate actions on which market positioning strategies are likely to be most successful under given circumstances.

A product’s position can be defined as “the place the product occupies in consumers’ hearts and minds”.

– Definition by Equinox Advisory.

Although the mind is important in market positioning as an appeal has to be made to target clients’ logic, thereby convincing clients that they stand to gain by purchasing a product or service, a concomitant emotional appeal (symbolised by the heart) can strengthen the logical appeal by making clients identify more closely with a particular brand, thereby ensuring long-term brand loyalty.

If consumers do not perceive a product to be different from other products, then there is no reason why they should purchase your product / service rather than anyone else’s.  The product / service must stand out from the crowd for the right reasons.  In fact, marketers argue that successful marketing is achieved through product differentiation.

Marketers, nevertheless, only have partial control on the positioning variables since these heavily depend on customers’ perceptions.  Positioning variables include price, quality of service, ease of use, reliability and potential uses, among other things.  An organisation can differentiate its products along one or more dimensions, but there is a possibility of creating confusion or disbelief in the consumer’s mind if a new product is uniquely positioned on too many dimensions. Well-designed and well-executed marketing research is therefore required in order to fully understand customer motivations and expectations for an organisation to be able to clearly position its products in the market.

In today’s competitive arena it is crucial for an organisation to build, communicate and deliver on a unique value proposition.  It is therefore extremely important to know where your product / service stands in relation to the competition.  Our extensive experience in this area will help you define the particular market segments and guide you as to which ones to target.  Perceptual mapping will enable our market research team to identify and understand the perceptions of the target consumers in order to select an image that will differentiate your products or services from the competition.

For more information about our Product & Market Positioning services, please contact us here.