Positioning Concept, Positioning Importance, Positioning Strategie, Marketing
Positioning Concept
The concept of positioning has several elements, which we will examine as the ABC of positioning.
(A) The A- the target audience
1. Effective positioning begins with effective market segmentation and selection of target markets; positioning after all is done in the mind of a target customer. If market segmentation is ineffective, or target market selection is incorrect, the position too will be ineffective.
2. Selecting a target market in whose mind the marketing mix is to be positioned. No brand can be everything to everybody; because then the brand ends up being nothing to nobody. The “mass market” approach works in the absence of competition; but in a competitive environment, the segmentation, targeting and positioning is the most beneficial marketing strategy. It is possible to position the same brand in the minds of two different target markets differently, but it requires appropriate marketing mix modification. For example Hajmola is positioned as a tangy candy in the minds of kids, and as a digestive in the minds of adults. The marketing mix for each target segment is different- in the kids segment, the product formulation is a candy in different flavours, with a pillow packaging, pricing on par with other candies and communicated as a fun, tangy product. To the adult market segment, the product formulation is like tablets, packed in a glass bottle, sold through grocers and chemists, pricing on par with other similar digestive formulations and communicated as a formulation to relieve digestive stress. In this example, even though the brand name is the same, several elements of the marketing mix have changed. Hence technically no brand can have two different positions in the minds of two different target markets, because some element of the marketing mix will have to be modified. Even the smallest modification, tantamount to creating and managing yet another marketing mix.
3. A fundamental concept in positioning is the understanding the “slot” or category where the marketing mix is to be placed. Understanding the slot means understanding how customers define categories, which is very different from the way companies define categories. Customers define a category as a group of products, irrespective of physical form, that satisfy the same need. Marketers and companies very often make the mistake of defining a category as group of products with similar physical forms, manufacturing process, raw materials or even distribution channels. Developing a customer centric category perspective is vital to the positioning exercise.
4. Kevin Keller in his September 2002 HBR article “three questions you need to ask about your brand” further emphasized the importance of categories from the customer perspective as a frame of reference or point of parity in the consumer’s mind. The frame of reference signals to consumers the goal they can expect to achieve by using a product and thus includes all substitutes that satisfy the same need. Establishing a frame of reference becomes particularly critical when the product concept itself is very new.
5. Understanding the mind of the target market implies understanding all the perceptions, attitudes, beliefs, values surrounding the need and its importance. In depth and insightful consumer research is the foundation of the market segmentation and positioning exercise.
Positioning Importance
Before we elaborate the concept of positioning, it is important to understand, why positioning is such an important concept.
In a free society, a consumer is faced with innumerable choices and is therefore constantly making decisions about which products are most suitable for him. We live in an over communicated society, where our minds are constantly being bombarded with information about everything from everybody. We learnt how humans are selectively attentive to marketing communications and selectively retain information. Because our mind’s ability to cope with information is limited, this is the customer’s coping mechanism with the overload information. Contrary to popular belief, too much choice actually causes stress and anxiety to the customer, and makes his decision making much more difficult. He has so many alternatives to compare and may not have the time to or even the ability compare the alternatives. Whilst its obvious that customers will select the “best” alternative, the factors used to judge better are numerous, vary from person to person and many a times not even completely known to the customer.
Positioning a brand actually in a sense simplifies the decision making for the customer, by placing the brand in the appropriate “slot” in the customers’ mind so that when the need is felt, the relevant brand simply “pops up” in his mind, without any great effort on the customer’s part. This is reassuring for the customer as it relieves him of a lot of decision making stress and anxiety every time he is faced with a consumption choice. The most powerful positions are the ones where the brand’s promise can be distilled down to a word or just a few words.
For example: Dettol-“the best germ protection”, Disney- “magical family entertainment”; Hutch- “the network follows you wherever you go”; Coca Cola- “refreshing cool” and particularly in India, “thanda matlab Coca Cola”. Not surprisingly, if you look at the market share of these brands in their relevant target markets, you will find that these brands are the market leaders in their target markets.
So a clear and distinct position not only simplifies the consumers’ life, it rewards marketers with market share, mind share and heart share; all three being very important elements of a brand’s position. Those brands that make a very powerful emotional connect with the target market are rewarded with a long lasting position.
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PLC Concept
In an article written in HBR (Jan-Feb 1976), by Nariman Dhalla and Sonia Yuspeh, called “Forget the product life cycle”, the authors argued that the concept was essentially descriptive and if management used it as a predictive tool they would commit grievous mistakes. Their key criticisms of the concept are summarized as under:
(i) Products do not have fixed life cycles stages, and fixed length of the lifecycle stage unlike biological organisms.
(ii) Nobody can really tell with certainty what stage of the life cycle the product is in.
(iii) The PLC concept is essentially a “reactive” concept, whereas firms need to be more proactive in their strategic approach.
(iv) In reality the PLC can be reversed. Firms can “scallop” the curve, by giving products a fresh lease of life, through infusion of newer technologies.
Philip Kotler, renowned marketing guru, argues that the PLC concept focuses too much on what is happening to products. Companies need to look at how markets are evolving too. A product could be at different stages of the life cycle in different markets. Moreover firms need to visualize a market’s evolutionary path as it is affected by new needs, competitors, technologies, channels and other developments.
Like products, markets evolve through four stages: emerging, growth, maturity and decline.
(i) Emerging markets: before a market materializes it exists as a latent market. When pioneers develop products to satisfy latent needs and the product gains a certain level of market acceptance, latent markets evolve to become emerging markets.
(ii) Growth markets: the market growth stage is ushered in when competition enters the market.
(iii) Market maturity: eventually competition covers and serves all major market segments and the market enters maturity stage. Market growth slows; competition intensifies as firms invade each other territories to achieve sales growth, reducing everyone’s profits in the process. Firms carve out smaller and smaller market segments hence market fragmentation occurs. Market fragmentation is followed by market consolidation. However a consolidated market condition also will not as mature markets swing between fragmentation and consolidation. The fragmentation is brought about by competition and consolidation is brought by innovation.
Decline: eventually, demand for the present products will begin to decrease and the market will enter decline stage.
The aforementioned concepts on market evolution are actually very similar to the market conditions that change as the product evolves through the different stages of the life cycle.
The criticisms of the PLC concept are nevertheless valid. Despite its draw backs, companies have recognized the real utility of the PLC concept and use it as an effective strategic tool.
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Posted by Lavena | Posted Date: 11/14/2011 6:01:11 AM
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