Have you ever looked at an advert for a product and scratched your head? You wonder what message the marketing team was trying to impart and why they chose to advertise it this way. Marketers at times don’t think about customer perception of a product and don’t spend enough time on that angle.
Organizations have many things to consider before launching a new product. Does the product fulfill needs or solve problems? Is the price point competitive compared to similar products? Product positioning should be considered—here’s how it can be used to benefit your business.
Understanding product positioning
Marketers must be aware of the many different things that contribute to a product’s—and a brand’s—success. As the infographic above shows, product positioning is seen as a major responsibility of marketing teams.
In essence, product positioning is about identifying who your marketing should be speaking to. By defining a target audience, you can market the product (and its key benefits) to people who want to hear your message. You may have identified that audience through product analysis, market research, or by knowing your existing customer base.
Image sourced from productmarketingalliance.com
Having a solid product positioning strategy allows you to know which product features and benefits are most relevant to the group you have identified. By knowing where your product should be positioned, you can improve your messaging and marketing efforts so that your product stands out from the crowd.
However, you shouldn’t think of product positioning as a one-trick pony. You could have more than one target market who sees a product in different ways. For example, one group may see the product as being of the best quality, while another group may see it as being great value for money. Knowing where your product sits allows you to apply the best sales methodologies to achieve results.
The main types of positioning
Let’s say your organization has just developed a new product. Your marketing team has three main types of positioning to think about when planning a launch and campaigns.
Image sourced from linearity.io
1. Brand positioning
Your brand positioning is likely already well-established. It’s all about how different parts of your brand interact with your customers, and it defines what your brand stands for, your core values, and how it differs from other businesses in your sector.
Your brand positioning defines your brand’s storytelling in many ways. For example, Apple positions its brand as innovative and forward-thinking, exemplified by the “Think different” slogan it used for almost 20 years.
2. Market positioning
Market positioning takes a broader look at how you engage with your sector and customers. It can help influence product development and vice versa.
By knowing where you sit in the market, you may decide on particular products, price points, and partnerships, as well as the channels and platforms such as social media you might use to reach prospective customers and grow your business.
If you monitor social media, it will help your understanding of how your product is being perceived and discussed among consumers, providing real-time feedback for refining your marketing strategies.
Why product positioning is important
At the end of the day, you want to sell the products you develop. Knowing your customers, what they want, and what they need means you can position your product and craft messages that resonate with those needs and desires. It also means you can focus on the benefits that the product will bring and/or the problems it will solve.
Image sourced from influencermarketinghub.com
Using brand and market positioning, you will already have that ‘bridge’ and connection to groups of consumers. Positioning your product well is the final step in building initial engagement.
You think your product serves customer needs, but where does it sit in terms of competitiveness, pricing, etc.? With product positioning, you can create marketing strategies and campaigns that communicate the product’s different attributes and encourage people to buy it.
Additionally, utilizing tools like a marketing report template can provide valuable insights into the effectiveness of your positioning efforts, helping you refine your strategies for even greater impact. By analyzing data such as customer feedback, market trends, and sales performance compiled in the report, you can make informed decisions on adjustments to your product positioning, ensuring alignment with customer preferences and market demands.
Product positioning benefits
If you’re already successfully conducting brand and market positioning, what is product positioning going to add to the mix? Knowing the main benefits of a good product positioning strategy can help you realize that using three types of positioning is better than two.
Product positioning:
- Gives you a competitive edge over other similar products.
- Helps you identify the benefits your product offers and how those benefits match customers’ wants/needs.
- Allows you to continue meeting your customers’ expectations, thereby boosting sales and fostering customer loyalty and retention.
- Reinforces the brand and market positioning strategies already in place.
- Makes it easier to create a promotional strategy for that product.
- Helps you attract potential customers.
- Can help you add new strengths to existing products.
How to approach product positioning
Product positioning is not something reserved for large brands and corporations. In fact, it is a strategy smaller businesses can use to their advantage when competing in saturated markets. There are three main steps when it comes to product positioning before you decide on a strategy (or strategies).
1. Know your customers
If you are developing a new product, there are several ways to understand what your customers want and where to position that product. You can access analytics from your website or your CRM (customer relationship management) system, or from customer feedback. You may even employ customer behavior prediction to identify possible patterns.
You may want to build a buyer persona (or several) for what you view as your ideal customer for your product. These can help you better understand your target audience.
2. Know the market
You may already be well-established within your chosen market(s). Does your new product comfortably fit within those previous parameters or are you entering new territory? It’s not just a case of knowing your customers and product, but knowing what already exists in the market and how similar products compare to yours.
Good market research can guide you as to what competing products there are and how they compare to yours. What benefits do the other products offer, and where do they fall short?
Beyond knowing about similar products and how they’re performing, you should also learn how your competitors undertake marketing and messaging. Identify what’s working for them through competitor analysis and what isn’t so you can avoid any mistakes they made.
3. Know your product
Effective product positioning requires that you need to know exactly what it does (and can do). The best way to do this is to undertake an in-depth SWOT (strengths, weaknesses, opportunities, and threats) analysis. This can highlight product qualities that you want to focus on as well as any weaknesses or threats you will want to overcome or mitigate for.
Types of product positioning
Image sourced from blog.hubspot.com
Any decision on strategy will impact everything you do with the product. Will it be suited to soft close sales, or will you need a more direct approach? By knowing your customers, your market, and your product, you can decide on a product positioning strategy.
- Pricing-based. Where does your product’s pricing sit in comparison to competitors? If you feel you are offering more competitive price points than those of other businesses, then you may want to consider this strategy. A good example of this can be seen with supermarkets who seem to be in a constant ‘war’ with competitors in claiming their pricing is best.
- Characteristics-based. Many consumers associate product characteristics with a brand image. If this applies to you, then this is a good strategy. For example, many customers associate Volvo with high safety levels, so this makes ‘safety’ a characteristic that can be highlighted.
- Quality-based. Some people—and brands—focus more on the quality of a product than on pricing. When you hear a certain brand name, such as Rolls Royce, your immediate thought is of high quality and finishing. Positioning your product based on quality can attract high-value customers.
- Use-based. For many people, products are functional and fulfill a need. For example, people who need cleaning products will look for one that best suits their needs. A SWOT analysis can help focus on what uses your product has and how it compares to its competitors.
- Competitor-based. Many businesses develop products because they feel they can do better than what’s already available. If you have achieved this and feel your product outperforms its competitors, then this strategy may work well for you.
Moreover, leveraging tools like Clearout’s LinkedIn Chrome Extension can provide valuable insights into competitors’ strategies and help refine your product positioning by extracting comprehensive data from Sales Navigator profile URLs, enabling a more informed approach to market positioning.
Incorporating omnichannel loyalty programs into your product positioning strategy can enhance customer engagement and retention, fostering lasting relationships across various touchpoints.
When crafting your product positioning statement, focus on highlighting key attributes and benefits. After establishing your positioning, consider incorporating email marketing strategies to effectively communicate your message and engage with your target audience.
4. Write your product positioning statement
Your ultimate goals with any form of positioning are to retain existing customers, attract new ones, and boost sales and revenue. There’s a good chance that when going through the process, you identify different demographic targets and more than one potential positioning strategy. If you’re working in a specialist sector such as SaaS, you may want to define high velocity sales and see how it aligns with your positioning strategy.
Let’s assume you have identified a positioning strategy that is a perfect fit for your product. Identify the points that made you decide on that strategy and outline them in your statement.
For example, for quality-based positioning, you could highlight the materials used, the craftsmanship, the durability, and even the kudos of owning a product from your brand.
Taking everything together, you can build a marketing plan based on those points that will engage with new and existing customers and lead to success for your sales team.
The takeaway
One of the great things about product positioning is that you don’t need a substantial budget to execute effective marketing based on the chosen position. As with other aspects of your business, it’s all about knowing and understanding your customers and how your product will meet their needs and/or desires.
Once you have positioned your product, you will find it easier to formulate a marketing plan and craft messaging that connects with your customers. Better positioning means better marketing, which in turn leads to improvements in your conversion and retention rates.
