18.4 Positioning strategies based on market research
3 min read•july 23, 2024
Market positioning is crucial for creating a unique identity and for products or services. It influences the entire marketing mix and helps establish a consistent brand image across all touchpoints.
Effective positioning requires analyzing product attributes, pricing, target customers, brand personality, and emotional benefits. Competitor analysis and market research insights are essential for developing differentiated positioning strategies that resonate with the target audience and can be sustained over time.
Market Positioning Fundamentals
Role of market positioning
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Creates distinct image or identity for product, service, or brand in minds of target customers
Differentiates offering from competitors establishes unique value proposition
Brand equity: Brand equity refers to the value that a brand adds to a product or service, based on consumer perceptions, experiences, and loyalty. This value can manifest in various ways, including customer preference, price premium, and overall brand strength in the marketplace. Strong brand equity often leads to competitive advantages, making it essential for effective positioning strategies.
Brand loyalty: Brand loyalty refers to the tendency of consumers to consistently choose one brand over others due to a strong emotional connection or perceived value. This commitment can significantly influence purchasing decisions and shape market dynamics, as loyal customers often exhibit repeat buying behavior, even in the face of competitive options or price changes.
Buyer persona: A buyer persona is a semi-fictional representation of a company's ideal customer, based on market research and real data about existing customers. It helps businesses understand their target audience's needs, behaviors, and motivations, which in turn shapes marketing strategies and communication. By defining buyer personas, companies can create more tailored marketing campaigns that resonate with their audience, leading to better positioning in the market.
Cost Leadership: Cost leadership is a competitive strategy where a company aims to become the lowest-cost producer in its industry. This approach allows businesses to attract a broad customer base by offering products or services at lower prices than competitors while still maintaining acceptable quality. By achieving economies of scale, efficient production processes, and cost-effective supply chain management, firms can position themselves favorably in the market.
Customer perception: Customer perception refers to the way consumers view and interpret a brand, product, or service based on their experiences, beliefs, and interactions. This perception is shaped by various factors such as marketing messages, customer service, product quality, and social influences. Understanding customer perception is vital for creating effective positioning strategies that resonate with target audiences and differentiate a brand in a competitive market.
Differentiation: Differentiation refers to the process of distinguishing a product or service from others in the market to make it more attractive to a specific target audience. This can involve emphasizing unique features, benefits, or values that set it apart from competitors. By successfully differentiating, businesses can create a strong brand identity and foster customer loyalty, ultimately leading to better market positioning and a clearer understanding of competitive advantages.
Focus Groups: Focus groups are a qualitative research method where a small group of participants engages in a guided discussion about a specific topic, product, or service. This method allows researchers to gather in-depth insights and perceptions from consumers, helping to understand their attitudes, motivations, and preferences.
Interviews: Interviews are a qualitative research method used to gather detailed information from participants through direct interaction. This approach allows researchers to explore participants' thoughts, feelings, and motivations in-depth, making it a valuable tool in various research contexts.
Market Share: Market share refers to the portion of a market controlled by a particular company or product, expressed as a percentage of total sales in that market. Understanding market share is crucial because it helps businesses evaluate their competitive position and informs strategic decisions regarding research, segmentation, and positioning.
Mass market: The mass market refers to a large, general consumer base that is targeted by businesses with products and services designed for broad appeal. This concept emphasizes the importance of reaching a wide audience with standardized offerings, rather than catering to niche markets with specialized needs. It relies on extensive market research to identify common preferences and behaviors among consumers, which helps in shaping effective positioning strategies.
Niche market: A niche market is a specific, defined segment of a larger market that has its own unique needs, preferences, or identity. Businesses often target niche markets to cater to specialized demands that larger companies might overlook, leading to less competition and the opportunity for higher profit margins. Understanding the characteristics of a niche market helps businesses develop tailored products and marketing strategies that resonate with these distinct consumer groups.
Perceptual Mapping: Perceptual mapping is a visual representation technique used to display the perceptions of consumers or potential customers about different products or brands in relation to various attributes. This method helps identify how consumers view competing offerings in the marketplace, which is crucial for understanding consumer preferences, influencing buying decisions, and guiding marketing strategies.
Porter's Generic Strategies: Porter's Generic Strategies refer to the three primary methods a company can use to gain a competitive advantage in its industry: cost leadership, differentiation, and focus. These strategies help firms determine how to position themselves in the market and cater to their target audience effectively, influencing their overall business model and marketing approach.
Questionnaires: Questionnaires are structured tools used for gathering information from respondents, typically consisting of a series of questions aimed at collecting data on specific topics. They play a crucial role in the research process by providing a systematic method for collecting quantitative and qualitative data, which can then be analyzed to inform decision-making and strategy development.
STP Model - Segmentation, Targeting, Positioning: The STP model is a strategic framework used in marketing that involves dividing a market into distinct groups of consumers (segmentation), selecting the most appropriate group(s) to serve (targeting), and creating a unique image or identity for a product or brand in the minds of those target consumers (positioning). This approach allows marketers to tailor their strategies based on consumer needs and preferences, ensuring more effective communication and product offerings.
Surveys: Surveys are systematic methods for collecting data from respondents to gather insights about their opinions, behaviors, and characteristics. They are crucial in understanding market trends, customer satisfaction, and demographic information, which can influence various research designs and methodologies.
SWOT Analysis: SWOT analysis is a strategic planning tool used to identify and evaluate the Strengths, Weaknesses, Opportunities, and Threats related to a business or project. It helps organizations understand their internal capabilities and external environment, allowing for informed decision-making and strategic planning.
Value proposition: A value proposition is a clear statement that explains how a product or service meets the needs of customers, highlighting its unique benefits and distinguishing it from competitors. It serves as a promise of value to be delivered and reflects what makes a brand or offering compelling to consumers. Understanding a strong value proposition helps businesses position themselves effectively in the market and identify opportunities for differentiation.