In today’s increasingly competitive
industrial scenario, a key challenge for marketers is to cut through the noise
of competing and substitute products to attract the attention of the consumer.
With thousands of Multinational Companies (MNC’s) now competing for attention,
brands are becoming substitutable. From the demand perspective, the explosion
in brand choice and brand publicity material has increased the confusion among
potential consumers. Every brand has to have a strategic platform. One half of
that platform is created by carefully formulating a distinct brand personality,
which makes the identity of the brand unique. The other half of the strategic
brand platform is positioned. Positioning is critical to brand building because
it is responsible for projecting the brand identity and creating the perception
and image of the brand in people’s minds. In other words, positioning is the
process of offering the brand to the consumer. It is positioning that makes the
brand appear to be different and better than all competing brands.
Positioning is a marketing
concept that outlines what a business should do to market its product or
service to its customers. In positioning, the marketing department creates an
image for the product based on its intended audience. This is created through
the use of promotion, price, place and product. The more intense a positioning
strategy, typically the more effective the marketing strategy is for a company.
A good positioning strategy elevates the marketing efforts and helps a buyer
move from knowledge of a product or service to its purchase. Positioning defines where your
product (item or service) stands in relation to others offering similar
products and services in the marketplace as well as the mind of the consumer. A good positioning makes a
product unique and makes the users consider using it as a distinct benefit to
them. A good position gives the product a USP (Unique selling proposition). In
a marketplace cluttered with lots of products and brands offering similar
benefits, a good positioning makes a brand or product stand out from the rest,
confers it the ability to charge a higher price and stave off competition from
the others. A good position in the market also allows a product and its company
to ride out bad times more easily. A good position is also one which allows
flexibility to the brand or product in extensions, changes, distribution and
brand identity and positioning is central to developing strong customer base
and brand equity. The target market and the perceived differentiation from
competitors are core concepts of positioning. Keller, Sternthal and Tybout propose
7 possible positioning strategies which could be used by an organization. These
strategies are centred on the following aspects:
Attributes of the product,
such as: size, taste, weight;
Benefits offered by the
organization or product, such as: fast delivery, fast remedy;
Use/application, such as:
products/services used on special occasions;
User, such as products or
services used mainly by the teenagers (e.g. Cosmetics for pimples);
Competitors: very effective
but very difficult to be used due to legal constraints. For example, one
company could emphasize its strengths in comparison to another
competitor (e.g. Better endurance or better taste);
or service category: an organization can position itself in a product category
not usually associated with it. For example, a soccer stadium could position
itself as a tourist attraction;
usually used when the offers are not very cheap or of a top quality.
origins of positioning go back to firm’s communication or advertising strategy.
It is postulated that the buyer’s mind, with a limited capability to retain
information, contains “slots” or “positions” for each
competitive product, ranked by sales volume. New products, with communication,
fight to outperform the leader to take over the top slot, or the position
relative to the top slot, or settle for a lower slot, or significantly
differentiate the product to create a new slot. The earlier concept of
positioning conceived its application only within the product promotion and
communication strategy, as a vehicle to influence the consumer’s mind.
The eminent authors, Trout and Ries in (1972) heralded the introduction
of a new era in marketing process “the era of positioning”. In the later period
of marketing process for the marketers, positioning described by the Houston
and Hanieski (1976) “positioning is more than any promotional strategies”.
During the period from 1969 to 1979 positioning concept revolves around the
enhancement of product attributes and features to attract the consumers. In the
next ten years from 1979 to 1989, the theory of positioning slightly changed
it’s mainly focus on the needs and prefers of the consumers. From the year 1989
to 1999 it entirely changed, according to Dibb and Simkin (1993) “positioning
is not what is done by product or brands; it is what is created in the minds of
target consumers”. A merit discipline, the perceptive of positioning was
clearly explained by Michael and Fred (1993), which are product leadership,
operational superiority and customer intimacy. Further to this Ries and Trout
(2001) emphasized the need to focus on one key positioning concept so as to
create a distinct image that will stay in the recipient’s mind and provide an
added value which is improved through a remarkable differentiation from
The years continued to find out the effectiveness of positioning in the
market for a product’s growth and development. Pham and Muthukrishan (2002),
classified positioning into two aspects – abstract and attribute (specific). An
abstract positioning is general and summarizes the product’s features. In
contrast, an attribute (specific) positioning specifies and details the
product’s features through specific performance claims. In above, all these
perceptions, Al Ries and Jack Trout (2001) in their book Positioning: The Battle
for Your Mind, introduce the subject by saying “Positioning is not what
you do to a product. Positioning is what you do to the mind of the prospect”.
That is, you position the product in the mind of the prospect. So the
positioning strategy should be effective and efficient, so that the product
could be retained in the minds of consumers for a longer period, which could in
turn benefit the company.
The Pursuit of Differential Advantage
Positioning is the pursuit of
differential advantage. Brands can create franchises of loyal consumers only
when they are seen to be different in some way which is persuasive for the
target segment. Positioning puts in the hands of the brand manager an entire
array of differentiating strategies. He must judge which of these strategies
can help him locate a niche in the market where his brand may be perceived by
his target segment as unique and where it will hold a competitive advantage.
These strategies revolve around different aspects of the brand which can be
expressed as four questions posed on its behalf. The four strategic questions
Who am I?
What am I?
For Whom am I?
Winning business strategies are grounded in sustainable
competitive advantage. A company has competitive advantage whenever it has an
edge over rivals in securing customers and defending against competitive
forces. There are many sources of competitive advantage: making the
highest-quality product, providing superior customer service, achieving lower
costs than rivals, having a more convenient geographic location, designing a
product that performs better than competing brands, making a more reliable and
longer-lasting product, and providing buyers more value for the money (a
combination of good quality, good service, and acceptable price). To succeed in
building a competitive advantage, a firm must try to provide what buyers will
perceive as “superior value”-either a good product at a low price or
a “better” product that is worth paying more for.
The Three Generic Types of
Competitive strategy consists
of all the moves and approaches a firm has taken and is taking to attract
buyers, withstand competitive pressures, and improve its market position. In
plainer terms, competitive strategy concerns what a firm is doing to try to
knock the socks off rival companies and gain competitive advantage. A firm’s
strategy can be mostly offensive or mostly defensive, shifting from one to the
other as market conditions warrant. Companies the world over have tried every
conceivable approach to outcompeting rivals and winning an edge in the
marketplace. In this sense, there are as many competitive strategies as there
are companies trying to compete. However, beneath all the nuances, the
approaches to competitive strategy fall into three categories:
Striving to be the overall low-cost producer in the industry (a low-cost
broad cross-section of the market.
costs than competitors.
good basic product with few frills (acceptable quality and limited selection).
continuous search for cost reduction without sacrificing acceptable quality
to make a virtue out of product features that lead to low cost.
elements of strategy aim at contributing to a sustainable cost advantage
Seeking to differentiate one’s product offering from rivals’ products (a differentiation
broad cross-section of the market.
ability to offer buyers something different from competitors.
product variations, wide selection, strong emphasis on the chosen
ways to create value for buyers.
in whatever features buyers are willing to pay for.
a premium price to cover the extra costs of differentiating features.
the points of difference in credible ways.
constant improvement and use innovation to stay ahead of imitative competitors.
on a few key differentiating features; use them to create a reputation and
3. Focusing on a narrow portion of the market
rather than the whole market (a focus or niche
narrow market niche where buyer needs and preferences are distinctively
different from the rest of the market.
cost in serving the niche or an ability to offer niche buyers something
customized to their requirements and tastes.
to fit the specialized needs of the target segment.
the focuser’s unique ability to satisfy the buyer’s specialized requirements.
v Remain totally dedicated to serving the niche
better than other competitors; don’t blunt the firm’s image and efforts by
entering other segments and adding other product categories to widen market
Using Offensive Strategies to Secure
An offensive strategy, if
successful, can open up a competitive advantage over rivals how long this
process takes depend on the industry’s competitive characteristics. The build
up period, can be short as in service businesses which need little in the way
of equipment and distribution support to implement a new offensive move. Or the
build up can take much longer, as in capital intensive and technologically
sophisticated industries where firms may need several years to debug a new technology,
bring new capacity online, and win consumer acceptance of a new product. Ideally,
an offensive move builds competitive advantage quickly; the longer it takes,
the more likely rivals will spot the move, see its potential, and begin
responding. The size of the advantage can be large (as in pharmaceuticals where
patents on new drugs produce a substantial advantage) or small (as in apparel
where popular new designs can be imitated quickly).
As competitors respond with counteroffensives, the
erosion period begins. Any competitive advantage a firm currently holds will
eventually be eroded by the actions of competent, resourceful competitors.
Thus, to sustain its initial advantage, a firm must devise a second strategic
offensive. The groundwork for the second offensive needs to be laid during the
benefit period so that the firm is ready for launch when competitors respond to
the earlier offensive. To successfully sustain a competitive advantage, a firm
must stay a step ahead of rivals by mounting one creative strategic offensive
after another. There are six basic ways to mount strategic offensives
on competitor strengths.
on competitor weaknesses.
attack on many fronts.