Product positioning refers to the strategic process of establishing a distinct and favorable perception of a product in the minds of consumers relative to its competitors. It involves creating a unique and compelling position in the market that differentiates the product from others and resonates with the target customers.
It is also a strategic marketing process that of identifying and communicating a product’s or service’s key attributes, differentiators and positioning statements to target customers.
To effectively position a new product, it is important to have a deep understanding of the factors that influence its adoption within a specific market segment. This involves gathering and analyzing facts, as well as formulating hypotheses and incorporating them into a dynamic model.
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The goal of product positioning is to create a favorable perception of the product in the minds of consumers, giving it a competitive advantage in the market and driving customer preference and loyalty.
Let’s dig deeper into the importance of product positioning and what it entails.
The right strategy will help private equity firms and their portfolio companies, as well as public or private companies, to position their products and services as favorably as possible.
This can be done by conducting voice of the customer interviews, as well as other market research. By speaking with existing customers, organizations can better understand why people use their product or service.
Speaking to non-customers, however, can be just as important as it sheds light on why people are not using your product or service.
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This information can then be used to determine current perceptions, and assess growth opportunities and requirements for deeper market penetration.
Customers – existing and potential – can also be segmented in a way that allows the company to understand which group would be most valuable. Future strategies could then be geared toward those segments.
Many companies seek outside expertise for their particular industry in these situations. Whether healthcare, manufacturing, industrial, technology or more, there are niche-specific third-party service providers that do this on a regular basis.
Indications are important considerations in product positioning as they help define the target market and communicate the value proposition of a product. They provide information about the specific problems, needs or desires that a product is designed to address or fulfill. They can be based on various factors, such as the product’s functional attributes, performance characteristics, intended user demographics or usage scenarios.
For example, in the healthcare industry, product positioning for a pharmaceutical drug may involve indicating the specific medical conditions or diseases for which the drug is approved, the recommended dosage, patient age groups or other relevant factors.
In the consumer goods industry, product positioning for a household cleaning product may include indicating the types of surfaces or stains the product is effective on, the recommended usage instructions, or the target market segment, such as families with young children or pet owners.
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Indications help guide consumers in understanding how a product can fulfill their needs or solve their problems, and they can also help differentiate a product from competitors by highlighting its specific use cases or advantages.
Clear and accurate indications are crucial in marketing and branding strategies to ensure that the product is positioned effectively in the market and resonates with the needs and preferences of the target customers.
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Effectively marketing your product’s features and benefits is crucial to a product positioning strategy. Here are some of the more important elements:
A price analysis is conducted to assess and determine the optimal strategy for a product or service based on its intended market positioning.
Pricing is a critical element of a positioning strategy as it affects how a product or service is perceived by consumers in terms of its value proposition and competitive positioning. It can affect the perceived value of a product, influence customer perception of quality, impact customer willingness to pay and affect overall market positioning.
For example, if a product is priced too low, it may be perceived as of low quality or lacking premium features. On the other hand, if a product is priced too high, it may be perceived as overpriced and not providing adequate value.
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Here are three examples of pricing strategies:
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Competitive analysis is a critical component of positioning strategy as it provides insights into the competitive landscape, helps identify market opportunities and threats, and guides the development of an effective positioning strategy.
Some key aspects include:
Proven marketing strategy firms know exactly how to position products and services like yours in a competitive market. As margins become tighter and the economy more uncertain, getting the best value for what your business offers is paramount.
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When you’re ready to launch or refine your positioning framework template, contact our research and operations team to start your project.
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