Position, Position, Position!  

30th October 2002

Position, Position, Position!

How you position your business within the target market will be one of the critical factors in your success.As we all know, in real estate the vital mantra is position, position, position. The same applies to businesses.

In Jack Trout’s book on “The New Positioning”, he includes the following quotes to emphasise the importance of good market positioning:

“For those who thought the Mercedes’ target audience consisted solely of blue-haired CEOs, times have changed. With repricing and repositioning, Germany’s luxury leader is on the offensive.” Brandweek.

“The shift of focus from hardware to software and the success of companies like Microsoft have undermined IBM’s positioning as the leading computer company.” Computer World Sweden.

The above quotes came from a book which was published in 1996, so we can see with the hindsight of a few years, how true these statements are, and the affect of repositioning on Mercedes and IBM in particular.

So, how do you go about positioning your business the right way within your target market? In simple terms, positioning is about perception and strategy. How your customers perceive you will dictate where they position you against your competitors and similar suppliers of your product or service.

First of all, you must determine your strategy, and ask yourself the following (whether you are a small business or an individual, the same questions apply):

 What is it that I am selling/providing to my customers?

 Am I well equipped to do that?

 Is it based on my core competency?

 Is it what my customers/some segment of the market wants?

 Do I know where my customers are?

 Do I know how to find them?

 Have I analysed all of my main competitors?

 How do I stack up against my competitors?

 What advantages do I have?

 What do I do or offer that is different?

 Do I, or could I, add more value to my target market?

 In simple terms, are we a budget/low end supplier, a mid tier or mid market supplier, or a premium supplier?

 Which segment of the market will we compete in?

Once these questions have an answer, the next step is to determine how you will position yourself within your target market.

If you are a budget supplier, you will need to compete on price, and have cost advantages over your competitors. Your target market will need to perceive that you are a budget supplier by how you present yourself to the market:

 ‘no frills’ product or service

 low key/cost location for your offices

 marketing materials and sales literature which are inexpensive to produce

 low prices

 a basic service at a base price

 a business model with a low cost structure

 large budget suppliers have brands which reinforce the company’s positioning, for example, the logo for the Big W brand is ‘We sell for less’. The positioning is very clear!

 typically, customers would buy from you over others because you are cheaper, or more convenient for them to access

If you are a mid-market supplier, you will most likely have a lot of competitors, and possibly be offering a ‘me too’ product (that is, others are offering pretty much the same and you’re in the market as well). Differentiation and positioning is more difficult and just as important in this case. Some of the ways you could position yourself effectively within your target market:

 Make your business location and presentation relevant to your target market. If you are a full-service local dentist, don’t have expensive rooms with marble entrances and plush surroundings. Your position will be presenting you as offering a premium service with a premium service fee, and will alienate your potential patients.

 Make sure your marketing materials and website reinforce your positioning

 Identify what makes you different, and communicate that to your target market. The differences may not be unique but they need to position you where you want to be. Factors which help define this include:

- Your existing customer base (it needs to be representative of the new customers you want to acquire – like attracts like)

- Your demonstrated understanding of the needs of your target market

- Your association or affiliation with relevant industry groups (whose members you may wish to target)

- Your price or fee structure – not the cheapest, not the most expensive, but the key is value for money

If you are a premium supplier, then make sure you offer the best quality products and services, which are obviously better than anything else on the market. Suppliers which state that they are the best, or only offer the highest quality, will fail miserably when the market they are trying to reach discovers that they are not, in fact, a quality or premium supplier. Premium products need premium service to support them, very high quality presentation (written, visual, people), and premium quality. The suppliers of luxury cars fall into this category, with beautiful 'lifestyle' showrooms complete with cafes and customised car configurations, superior service where they'll deliver a test car for you to drive all weekend and pick it up on Monday morning, at your convenience. The advertising is expensive, the sales approach is more low key, and the positioning is very clear - the best!

One last example, I was running a marketing seminar some years ago for a group of plastic surgeons, and reinforcing the importance of positioning and quality presentation for their target market. One surgeon, in a rather shabby looking suit, and in need of a haircut, said he thought it was wasn’t necessary, as he had plenty of patients. I then showed the group a set of marketing literature from a well-known plastic surgeon (who did not need to attend my marketing seminar). The brochures explaining his practice, his procedures, and testimonials from other patients were of the absolute highest quality and set him apart from everyone else. He understood that in the main, his business was about aesthetics, and he had to be perceived the same way, and positioned as the highest quality provider to his patients. This point was lost on the ‘shabby one’, who I daresay has not grown his practice much since then…

So, let’s summarise the key points:

 Positioning is all-important in attracting and retaining the right type of customers for your business

 Positioning is about perception – how you are perceived is the ‘reality’ for your customers

 Don’t position yourself in a market or a segment of the market if you can’t deliver

 Understand your strengths and where you can deliver benefits to your target market, and focus on those attributes to position you in the minds of your prospective customers

 Be brutally honest with yourself, if you’re not the cheapest, or you don’t have the best service, or you have no experience in a particular market segment, or you really do have a quality service or product that just has to have a high price tag, then recognise that and position it accordingly.

 Your positioning is always compared with someone else. You can’t be the best if there aren’t others to be compared to.

 If you want to be different, then know what you can do to be really different. Do it, don’t just say it.

 First impressions are everything. Your customers’ first impressions of your business could be from a phone call, a brochure, a website, a presentation someone in your company has made, your office or shop, your clothes and personal presentation, and your conversation, amongst other things.

 Positioning is about perceptions, and perception is reality. Once your ‘reality’ is defined in the mind of the customer it is extremely difficult to change. So think long and hard about your positioning so you end up in the right place.

 I'll leave you with two more quotes, just to make sure I've positioned this article correctly in your minds:

“The key to any marketing plan is positioning.” Ron Zarrella, Vice President, General Motors.

“Positioning is the spearhead in strategic thinking.” Nieuws Tribune (Holland)