What are the steps of developing a positioning strategy?
Answer: Positioning plays a pivotal role in marketing strategy, because it links market analysis and competitive analysis to internal competitive analysis. From these, there, a position statement can be developed that enables the service organization to answer the questions. “What is our product (or service concept), what do we want it to become, and what actions must we take to get there?”
Principal uses of positioning in marketing management:
1. Provide a useful diagnostic tool for defining and understanding the relationships between products and markets.
- How does the product compare with competitive offerings on specific attributes?
- How well does product performance meet consumer needs and expectations on specific performance criteria?
- What is the predicted consumption level for a product with given set of performance characteristics offered at a given price?
2. Identify market opportunities for;
Introducing new products:
- What segments to target?
- What attributes to offer relative to the competition?
Redesigning (repositioning) existing products:
- Appeal to the same segments or to new ones?
- What attributes to add, drop or change?
- What attributes to emphasize in advertising?
Eliminate product that
- Do not satisfy consumer needs
- Face excessive competition
3. Making other marketing mix decisions to pre-empt, or respond to, competitive moves;
- What to offer the product (locations, types of outlet)?
- When to make the product available?
- How much to charge?
- What billing and payment procedures to employ?
- What target audience(s) are most easily convinced that the product offers a competitive advantage on attributes that are important to them?
- What message(s)? Which attributes should be emphasized and which competitors—if any—should be mentioned as the basis for comparison on these attributes?
- Which communication channels—personal selling versus different advertising media? (Selected not only for their ability to convey the chosen message(s) to the target audience(s), but also for their ability to reinforce the desired image of the product.)
Developing a positioning strategy can take place at several different levels, depending on the nature of the organization involved. Among multisite, multiproduct, service businesses, a position might be established for the entire organization, for a given service outlet, or for a specific offered at the outlet. It’s particularly important that there be some consistency between the positions held by different services offered at the same location, since the image of one may spill over onto the others. For instance, if a hospital has an excellent reputation for obstetrical services, this may enhance perception of its services in gynecology, pediatrics, surgery and so forth.
Because of the intangible, experimental nature of many services, an explicit positioning strategy is valuable in helping prospective customers to get a mental ‘fix’ on a product that would otherwise be rather amorphous. Failure to select a desired position in the marketplace—and to develop a marketing action plan designed to achieve and hold this position—may result in one of several possible outcomes, all undesirable:
- The organization (or one of its products) is pushed into position where it faces head-on competition from stronger competitors.
- The organization (product) is pushed into a position which nobody else wants because there is little customer demand there.
- The organization’s (product’s) position is so fuzzy that nobody knows what its distinctive competence really is.
- The organization (product) has no position at all in the market place because nobody has ever heard of it.
Steps in developing a positioning strategy:
Competitive strategy is often narrowly focused at direct competitors—firms which market products that offer customer a similar way of achieving the same benefits (e.g. in the case of education, another college offering similar classes). However, there may also be a serious threat from generic competitors, which offer customers a different way of achieving similar benefits. The steps which is involves in developing positioning strategy;
- Market analysis: Market analysis is needed to determine such factors as the overall level and trend of demand and the geographic location of this demand. Is demand increasing or decreasing for the benefits offered by this type of service? Are there regional or international variations in the level of demand? Research may be needed to gain a better understanding not only of customer needs and preferences within each of the different segments, but also of how each perceives the competition.
- Internal corporate analysis: Internal corporate analysis requires the organization to identify its resources (financial, human labor and know-how and physical assets), any limitations or constraints and the values and goals (profitability, growth, professional preference etc.) of its management.
- Competitive analysis: Identification and analysis of competitors can provide marketing strategies a sense of their strengths and weakness, which, in turn, may suggest opportunities for differentiation.
The outcome of integrating these three forms of analysis is a position statement that articulates the planned position of the organization in the marketplace (and, if desired, that of each of the component services that it offers).