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Two Types of Product Positioning

  Reviewed by: Michelle Seidel, B.Sc., LL.B., MBA
  Written by: Devra Gartenstein      Updated February 05, 2019
Two Types of Product Positioning

To attract attention, your product must stake out territory relative to the competition. This part of your marketing strategy highlights the unique strengths and features that will motivate customers to choose your offerings over other available options. The more effectively you narrow down your product's positioning and marketing message, the better you'll be able to reach the customers most likely to buy.

Tips

  • Product positioning is the process of carving out a niche for your product and identifying your specific target market.

Types of Positioning

There are a wealth of ways to tell your product's story to potential customers. As you communicate what you offer and how it can be useful, you emphasize both its uniqueness and the ways that it compares to other available options that can meet the same need.

There are two main types of product positioning in marketing:

  • Head-to-head positioning focuses on comparison. If you make ice cream from scratch and all of the competitors in your neighborhood use a processed starter base, you can set your ice cream apart in customers' minds by emphasizing this selling point which makes it superior. Head-to-head positioning aims at attracting the same customers as your competitors by showing how your offerings compare.
  • Differentiation is a marketing strategy that emphasizes your product's unique qualities. Like head-to-head positioning, it focuses on what you offer and why customers should want to buy your offerings rather than other available options. Unlike head-to-head positioning, differentiation seeks new markets by identifying and seeking out customers who aren't necessarily interested in what the market typically offers but could be interested in your offerings because of their innovative qualities.

Head-to-Head Positioning Examples

In 1962, the Avis car rental company launched a legendary advertising campaign going head to head with Hertz, the most successful company in the sector. Avis compared itself with the leader and made its secondary status into a selling point using the slogan, "We try harder." Avis positioned itself as a direct competitor but turned its secondary status into an asset rather than a liability.

In 2015, Burger King publicly approached its rival, McDonald's, with the idea of creating a burger for World Peace Day, which would combine qualities from the two rivals' signature products. McDonald's rejected the proposal to create a "McWhopper," but even this rejection helped Burger King to position itself as a more creative and collaborative alternative to the leading brand. Burger King's campaign to launch the joint venture showcased the similarities between the two companies as well as their differences.

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Differentiation Positioning Examples

The Cirque du Soleil company differentiated itself from other options in the field of circus entertainment by simplifying the viewing experience, using humans rather than animals and appealing to a theater crowd as well as a circus audience. By substituting a single stage for the traditional simultaneous three rings and eliminating the high cost (and controversial ethical questions) associated with animal training, the company saved money and was able to pay talented actors and gymnasts. By appealing to a theater as well as a circus audience, the company was able to set itself apart and broaden its target market.

The Australian Yellow Tail wine company entered the scene when wine sales were shrinking and most industry marketing focused on buzzwords that targeted aficionados and connoisseurs. Yellow Tail used a playful, colorful and eye-catching design, selling their wine at a price point that could also attract the target market for beer and wine coolers. They also created a wine whose flavor was more accessible than complex, expanding the target market by reaching customers who wouldn't ordinarily choose wine over beer or wine coolers.

Curves became the largest women's fitness franchise in the world by creating an alternative to both traditional health clubs – with mirrors, coed clientele, and expensive lineups of equipment – and home-based exercise routines, which were isolating and difficult to follow on a regular basis. The franchise lowered startup costs by simplifying equipment setups and lessening space requirements and improved the user experience for women seeking a community of exercise companions and a routine that was neither isolating nor intimidating.

Benefits of Positioning in Marketing

Developing a positioning strategy is an opportunity for your business to truly understand the benefits its products provide for customers. This understanding can provide focus for an integrated marketing plan geared towards reaching the customers who want and need what you have to offer and crafting a message that successfully tells your brand's story. Creating a cohesive message helps you to make effective strategic marketing decisions and design marketing materials that support each other across diverse platforms.

Product positioning is also an opportunity to identify the different clientele who are most likely to buy your products. Identifying your audience involves demographics, such as age, race and geographic locations, and also psychographics, such as whether they see themselves as rebels or traditionalists. Once you understand these characteristics of your audience, you can use greater precision in trying to reach them, such as advertising on appropriate websites and even at the most strategic times of the day.

Market Segmentation

It's entirely possible that your product may appeal to different groups of customers, and your positioning strategy should take these different target markets into account. For example, the Mr. Clean Magic Eraser cleans both kitchen appliances and athletic shoes. There are large numbers of potential customers in both of these groups, but they probably won't respond to the same marketing messages. Homeowners and families might be most concerned with cleaning their homes, while fashion-conscious teenagers might be most concerned with keeping their athletic shoes as pristine as possible.

You can develop different approaches to positioning your products in each of these markets by developing profiles of the customers you hope to reach in each area. Use this information to identify the other elements of your advertising strategy and marketing plan, such as showing a house with a neatly tailored lawn for people who use the Magic Eraser to clean their homes and showing a fun, noisy party for people who use it to clean their shoes. Segmenting your market will probably require producing multiple versions of marketing materials, but it will increase your reach and effectiveness.

Types of Positioning Marketing

Although your positioning strategy will require crafting multiple marketing messages, you can find inexpensive ways to reach your different target markets.

Online advertising offers ongoing opportunities for cost-effective market segmentation. Because many online advertising venues only charge you when someone actually clicks on your ad, it makes financial sense to place your marketing materials on different sites catering to your diverse groups of potential clientele.

Social media has marketing segmentation built into its structure because people with similar interests and tastes follow the same people and brands. Targeting marketing messages and content towards these different groups increases the odds that your material will be widely shared, garnering invaluable grassroots momentum.

Price is an important marketing tool for positioning your products. You can use a head-to-head pricing strategy by charging a price that's comparable to the competition. Alternately, you can use a differentiation strategy by charging considerably less and showing that your product is a better value, or you can charge more to communicate that it's superior and worth the extra cost.

About the Author

Devra Gartenstein founded her first food business in 1987. In 2013 she transformed her most recent venture, a farmers market concession and catering company, into a worker-owned cooperative. She does one-on-one mentoring and consulting focused on entrepreneurship and practical business skills.

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