In today’s increasingly competitiveindustrial scenario, a key challenge for marketers is to cut through the noiseof competing and substitute products to attract the attention of the consumer.
With thousands of Multinational Companies (MNC’s) now competing for attention,brands are becoming substitutable. From the demand perspective, the explosionin brand choice and brand publicity material has increased the confusion amongpotential consumers. Every brand has to have a strategic platform. One half ofthat platform is created by carefully formulating a distinct brand personality,which makes the identity of the brand unique. The other half of the strategicbrand platform is positioned. Positioning is critical to brand building becauseit is responsible for projecting the brand identity and creating the perceptionand image of the brand in people’s minds. In other words, positioning is theprocess of offering the brand to the consumer.
It is positioning that makes thebrand appear to be different and better than all competing brands. Positioning is a marketingconcept that outlines what a business should do to market its product orservice to its customers. In positioning, the marketing department creates animage for the product based on its intended audience. This is created throughthe use of promotion, price, place and product. The more intense a positioningstrategy, typically the more effective the marketing strategy is for a company.A good positioning strategy elevates the marketing efforts and helps a buyermove from knowledge of a product or service to its purchase.
Positioning defines where yourproduct (item or service) stands in relation to others offering similarproducts and services in the marketplace as well as the mind of the consumer. A good positioning makes aproduct unique and makes the users consider using it as a distinct benefit tothem. A good position gives the product a USP (Unique selling proposition). Ina marketplace cluttered with lots of products and brands offering similarbenefits, a good positioning makes a brand or product stand out from the rest,confers it the ability to charge a higher price and stave off competition fromthe others.
A good position in the market also allows a product and its companyto ride out bad times more easily. A good position is also one which allowsflexibility to the brand or product in extensions, changes, distribution andadvertising. Thebrand identity and positioning is central to developing strong customer baseand brand equity. The target market and the perceived differentiation fromcompetitors are core concepts of positioning. Keller, Sternthal and Tybout propose7 possible positioning strategies which could be used by an organization. Thesestrategies are centred on the following aspects: 1. Attributes of the product,such as: size, taste, weight; 2.
Benefits offered by theorganization or product, such as: fast delivery, fast remedy; 3. Use/application, such as:products/services used on special occasions; 4. User, such as products orservices used mainly by the teenagers (e.
g. Cosmetics for pimples); 5. Competitors: very effectivebut very difficult to be used due to legal constraints. For example, onecompany could emphasize its strengths in comparison to anothercompetitor (e.g. Better endurance or better taste); 6. Productor service category: an organization can position itself in a product categorynot usually associated with it.
For example, a soccer stadium could positionitself as a tourist attraction; 7. Quality/price:usually used when the offers are not very cheap or of a top quality. LiteratureReviewTheorigins of positioning go back to firm’s communication or advertising strategy.It is postulated that the buyer’s mind, with a limited capability to retaininformation, contains “slots” or “positions” for eachcompetitive product, ranked by sales volume. New products, with communication,fight to outperform the leader to take over the top slot, or the positionrelative to the top slot, or settle for a lower slot, or significantlydifferentiate the product to create a new slot.
The earlier concept ofpositioning conceived its application only within the product promotion andcommunication strategy, as a vehicle to influence the consumer’s mind. The eminent authors, Trout and Ries in (1972) heralded the introductionof a new era in marketing process “the era of positioning”. In the later periodof marketing process for the marketers, positioning described by the Houstonand Hanieski (1976) “positioning is more than any promotional strategies”.During the period from 1969 to 1979 positioning concept revolves around theenhancement of product attributes and features to attract the consumers. In thenext ten years from 1979 to 1989, the theory of positioning slightly changedit’s mainly focus on the needs and prefers of the consumers.
From the year 1989to 1999 it entirely changed, according to Dibb and Simkin (1993) “positioningis not what is done by product or brands; it is what is created in the minds oftarget consumers”. A merit discipline, the perceptive of positioning wasclearly explained by Michael and Fred (1993), which are product leadership,operational superiority and customer intimacy. Further to this Ries and Trout(2001) emphasized the need to focus on one key positioning concept so as tocreate a distinct image that will stay in the recipient’s mind and provide anadded value which is improved through a remarkable differentiation fromcompetitors.
The years continued to find out the effectiveness of positioning in themarket for a product’s growth and development. Pham and Muthukrishan (2002),classified positioning into two aspects – abstract and attribute (specific). Anabstract positioning is general and summarizes the product’s features.
Incontrast, an attribute (specific) positioning specifies and details theproduct’s features through specific performance claims. In above, all theseperceptions, Al Ries and Jack Trout (2001) in their book Positioning: The Battlefor Your Mind, introduce the subject by saying “Positioning is not whatyou do to a product. Positioning is what you do to the mind of the prospect”.That is, you position the product in the mind of the prospect. So thepositioning strategy should be effective and efficient, so that the productcould be retained in the minds of consumers for a longer period, which could inturn benefit the company.
The Pursuit of Differential Advantage Positioning is the pursuit ofdifferential advantage. Brands can create franchises of loyal consumers onlywhen they are seen to be different in some way which is persuasive for thetarget segment. Positioning puts in the hands of the brand manager an entirearray of differentiating strategies. He must judge which of these strategiescan help him locate a niche in the market where his brand may be perceived byhis target segment as unique and where it will hold a competitive advantage.These strategies revolve around different aspects of the brand which can beexpressed as four questions posed on its behalf. The four strategic questionsare:1.Who am I?2.
What am I?3.For Whom am I?4.Why Me? Winning business strategies are grounded in sustainablecompetitive advantage. A company has competitive advantage whenever it has anedge over rivals in securing customers and defending against competitiveforces. There are many sources of competitive advantage: making thehighest-quality product, providing superior customer service, achieving lowercosts than rivals, having a more convenient geographic location, designing aproduct that performs better than competing brands, making a more reliable andlonger-lasting product, and providing buyers more value for the money (acombination of good quality, good service, and acceptable price).
To succeed inbuilding a competitive advantage, a firm must try to provide what buyers willperceive as “superior value”-either a good product at a low price ora “better” product that is worth paying more for. The Three Generic Types ofCompetitive Strategy Competitive strategy consistsof all the moves and approaches a firm has taken and is taking to attractbuyers, withstand competitive pressures, and improve its market position. Inplainer terms, competitive strategy concerns what a firm is doing to try toknock the socks off rival companies and gain competitive advantage. A firm’sstrategy can be mostly offensive or mostly defensive, shifting from one to theother as market conditions warrant. Companies the world over have tried everyconceivable approach to outcompeting rivals and winning an edge in themarketplace.
In this sense, there are as many competitive strategies as thereare companies trying to compete. However, beneath all the nuances, theapproaches to competitive strategy fall into three categories: 1.Striving to be the overall low-cost producer in the industry (a low-costleadership strategy): v Abroad cross-section of the market. v Lowercosts than competitors. v Agood basic product with few frills (acceptable quality and limited selection). v Acontinuous search for cost reduction without sacrificing acceptable qualityand essential features. v Tryto make a virtue out of product features that lead to low cost. v Economicalprices/good value v Allelements of strategy aim at contributing to a sustainable cost advantage 2.
Seeking to differentiate one’s product offering from rivals’ products (a differentiation Strategy):v Abroad cross-section of the market. v Anability to offer buyers something different from competitors. v Manyproduct variations, wide selection, strong emphasis on the chosendifferentiating features.
v Inventways to create value for buyers. v Buildin whatever features buyers are willing to pay for. v Charginga premium price to cover the extra costs of differentiating features. v Communicatethe points of difference in credible ways. v Stressconstant improvement and use innovation to stay ahead of imitative competitors.v Concentrateon a few key differentiating features; use them to create a reputation andbrand image.
3. Focusing on a narrow portion of the marketrather than the whole market (a focus or niche Strategy):v Anarrow market niche where buyer needs and preferences are distinctivelydifferent from the rest of the market. v Lowercost in serving the niche or an ability to offer niche buyers somethingcustomized to their requirements and tastes. v Customizedto fit the specialized needs of the target segment. v Communicatethe focuser’s unique ability to satisfy the buyer’s specialized requirements. v Remain totally dedicated to serving the nichebetter than other competitors; don’t blunt the firm’s image and efforts byentering other segments and adding other product categories to widen marketappeal. Using Offensive Strategies to SecureCompetitive Advantage An offensive strategy, ifsuccessful, can open up a competitive advantage over rivals how long thisprocess takes depend on the industry’s competitive characteristics.
The buildup period, can be short as in service businesses which need little in the wayof equipment and distribution support to implement a new offensive move. Or thebuild up can take much longer, as in capital intensive and technologicallysophisticated industries where firms may need several years to debug a new technology,bring new capacity online, and win consumer acceptance of a new product. Ideally,an offensive move builds competitive advantage quickly; the longer it takes,the more likely rivals will spot the move, see its potential, and beginresponding.
The size of the advantage can be large (as in pharmaceuticals wherepatents on new drugs produce a substantial advantage) or small (as in apparelwhere popular new designs can be imitated quickly). As competitors respond with counteroffensives, theerosion period begins. Any competitive advantage a firm currently holds willeventually be eroded by the actions of competent, resourceful competitors.
Thus, to sustain its initial advantage, a firm must devise a second strategicoffensive. The groundwork for the second offensive needs to be laid during thebenefit period so that the firm is ready for launch when competitors respond tothe earlier offensive. To successfully sustain a competitive advantage, a firmmust stay a step ahead of rivals by mounting one creative strategic offensiveafter another. There are six basic ways to mount strategic offensives ü Attackson competitor strengths. ü Attackson competitor weaknesses. ü Simultaneousattack on many fronts.