Position is the way the product is defined by the customer relative to other products
It is important to understand your product from the customers point of view relative to the competition.
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- In order to begin positioning a product, two questions need to be answered:
- What is our marketing environment?
- What is our competitive advantage?
- The marketing environment is the external environment. Some things to consider:
How is the market now satisfying the need your software satisfies?What are the switching costs for potential users for your market?
What are the positions of the competition?
- The competitive advantage is an internal question. What do you have that gives you advantage over your competitors. Some things to consider:
Is your company small and flexibility?Positioning StrategiesDo you offer low cost and high quality?
Does your product offer unique benefits?
Are you the first on the market with this product (First mover advantage)?
- There are seven positioning strategies that can be pursued:
Product Attributes: What are the specific product attributes?
Benefits: What are the benefits to the customers?
Usage Occasions: When / how can the product be used?
Users: Identify a class of users.
Against a Competitor: Positioned directly against a competitor.
Away from a Competitor: Positioned away from competitor.
Product Classes: Compared to different classes of products.Segmentation
- There are three types of segmentation:
Mass Marketing or Undifferentiated Marketing: Go after the whole market with one offer and focus on common needs rather than differences
Product-variety Marketing or Differentiated Marketing: target several market segments and design separate offers for each
Target Marketing or Concentrated Marketing: Large share of one or a few sub-markets. Good when company’s resources are limited
- To identify a niche market, a series of 2 by 2 matrixes can be used to identify an area that is being overlooked by larger competitors. The competitors are mapped on this matrix and you can see where there may be some opportunities.
- The differences that are promoted for a product must be:
Important: The difference delivers a highly valued benefit to the target buyers
Distinctive: Competitors do not offer the difference, or the company can offer it in a more distinctive way
Superior: The difference is superior to other ways that the customer might obtain the same benefit
Communicable: The difference can be explained and communicated to the target buyers
Preemptive: Competitors cannot easily copy the difference
Affordable: Buyers can afford to pay the difference
Profitable: Company can introduce the difference profitably
Sample Matrix of Features by Target Market
Target Market Features Lemonade entrepreneurs – kids Retailers – convenient stores Restaurants Low Cost High Medium Medium Compatible with other business software Low Very High Medium Stand alone High Low Low
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©1997, 1998, 1999 Michele Determan