In marketing, a product's target market is a set of consumers with similar characteristics and needs who might be interested in buying the product. Marketers "position" their product within the target market to gain new customers and succeed in securing more customers than competing products. Positioning requires marketers to research their customers so they understand the point of view of target members. Once marketers see the product from the customer perspective, they can use advertising to persuade target market members to buy the product.
Good positioning cements the product in the customer’s awareness. It gives the customer information about the product in unique way that resonates and states their mind forever. If executed correctly, positing creates value, ensuring that customer will pay more for the product because they understand and agree with the product’s position. This execution requires using advertising to explain to consumers the similarities and differences between the product and competing products so that customers understand why they should pay a premium.
Companies can choose to extend their positioning to create a brand. A brand is a company name that labels a product or family of products and carries a distinct position in the minds of customers. Brands that customers see as positive command premium prices. Brands can extend their market position to new products that the parent company introduces. This an advantage over companies who don’t have brand positioning because unbranded new offerings can’t command a premium.
Marketers use advertising to makes claims about the category that the product belongs to and describe the product’s position in the category. Category claims describe how the product is better than competitors. For example, an advertisement for a pen could make the category claim that it runs out of ink less often than other pens. Category claims help define and strengthen the product position and overall brand.
If customers see enough positive differences between a product position and its competitors position the product becomes differentiated. This means that the product has the competitive advantage and many customers believe that the product performs better and in ways that competing products cannot perform. The customer may feel that they have an advantage over other people who don’t use the product. Customers who tell others about this advantage further differentiate by making word-of-mouth category claims, enhancing the product’s position and spreading favorable information about the brand.