Ed's Ink: Using Positioning Strategies To Gain Market Share
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Product position refers to the way a consumer/buyer perceives a product, a service, or company.
Marketing experts tell us careful product positioning is perhaps the most important element of strategy formulation. Classic examples of psychological positioning abound.
Avis gave the appearance (years ago) of competing directly with Hertz. Indeed, their advertising stressed that they were #2 in the marketplace and had to try harder in order to compete with their well entrenched rival (i.e., Hertz).
However, marketing strategists claim Avis' real target was not Hertz but rather Budget Rent-A-Car, National, and other rental companies who, at the beginning of the campaign, approximated Avis' market share.
Avis implanted in the consumer's mind if they didn't rent from Hertz, they should rent from "Number Two" because their lines were shorter and they tried harder. By so doing, they took away valuable market share from their secondary/real competitors.
7-Up adapted a similar strategy to Avis with its "Uncola" advertising campaign. If a consumer decided not drink Coca-Cola, it was hoped he/she would think of the "Uncola" rather than Pepsi, RC Cola, or Dr Pepper.
A leading diet drink manufacturer advertised a "lose weight" theme. At one point, they virtually "owned" the market.
An aggressive competitor decided to position its product offering (which was nearly identical to the market leader) as a "stay slim" drink.
Psychologically people prefer to think of themselves as staying fit rather than losing weight. As a result of this psychological positioning strategy, the small-fry newcomer took valuable market share from the market leader.
A major men's shirt manufacturer once advertised "Would you pay $60 for this label?"The reader of the advertisement was then shown a label bearing the name of a supposedly famous shirt designer. The point is then made that their shirts are equal in quality and styling to famous designer shirts but much less expensive.
Clever positioning? Yes, because the primary objective was not to compete with famous designer shirts but rather with other established national brands that directly competed with the manufacturer.
If the consumer decides not to buy a famous designer shirt, he, hopefully, will purchase the manufacturer's quality product – not the brands with which it directly competes.
Summary & Conclusions
The right product position requires careful and deliberate thought. Above all, it requires you thoroughly analyze "Who is the customer?" and "What does the customer really value?"
To be clear: there are other kinds of positioning strategies that enable organizations to differentiate their product and win customers.
The type of positioning we have just discussed is just one kind of positioning strategy. (We will discuss in the weeks to come other ways to differentiate product/service offerings through proper positioning).