Why is Defining the Positioning So Important?

The famous ‘5 p’s’ of marketing folklore (product, place, price, promotion & packaging) were fine tools for implementing packaged goods brand positioning – and the basic formula still has its role in FMCG assignments. But today we are entering the era of customer brands where ‘company’ and ‘brand’ are one and the same. In this scenario the company culture & values become a crucial factor in the solution – finding and harnessing what’s there already or setting out to create values and practices which support and manifest the positioning.

Running a brand is like conducting an orchestra. Positioning is the heart of competitive strategy. The messages transmitted by everything from the advertising to phone calls with your customer care department all need to be kept in harmony and on-brief. Without a clear, single-minded definition of what the brand is about the messages rapidly become discordant and confusing. The positioning statement is therefore a focusing device which helps brand management to keep everything sharp and relevant.

Identifying where a specific brand is placed within the market- place and its relationship to competitive brands, brand positioning is determined by defining the brand’s benefits to the consumer, opportunities for which the brand is best suited, the brand’s target audience, and who its main competitors are.

In realizing the benefits of brand positioning, it is important to understand that not all brands are competitors. A consumer may be presented with six brands of one product and only consider three out of the six as a purchasing choice. The consumer may have encountered a negative experience with a specific brand and may never consider purchasing it again, or there may be a brand that simply does not stand out to the consumer and it is passed up.

Position Or Perish!!!

The concept of positioning was introduced by Al Ries and Jack Trout in 1969 and was elaborated in 1972. To understand the concept of positioning we can consider the human mind as consisting of a perceptual map with various brands occupying different positions in it. This concept of perceptual space forms the theoretical basis for brand positioning. What this leads to is the perception of the consumer, which decides the positioning of any brand. It is important to note that what a marketer does is to find a position for its brand in the perceptual space of the consumer and place it at the most lucrative point. Hence, Positioning is not what you do to the product; it is what you do to the mind of the prospect. It is a new approach to communication and has changed the nature of advertising. It can be of a product, service, company or oneself.

The perception of a consumer is a function of consumer’s values, beliefs, needs, experience and environment. Thus as per Subroto Sengupta “the core thought behind brand positioning -the idea that each brand (if at all noticed) occupies a particular point or space in the individual’s mind, a point which is determined by that consumer’s perception of the brand in question and in its relation to other brands”.

Thus, in the perceptual map, the spatial distance between the points on which brands are located reflects the subject’s perception of similarity or dissimilarity between products or brands.

The easy way to get into a person’s mind is to be first in a particular category. If you are not the first then you have a positioning problem.

The product era – The product features and customer benefits were of importance. With technology being easily available, the product was no longer the Unique Selling Proposition.

The image era – In this phase the reputation and image of the company became more important than the product. But the similar companies sprung up and this advantage was no longer a distinct one.

The positioning era – – To succeed in today’s over communicated society a company must create a position in the prospect’s mind, a position takes into consideration not only the companies own strengths and weakness, but those of competitors as well. In the positioning era as stated earlier, you must be the first to get into the prospect’s mind.

The ladders in the mind – – In a particular category, people have learned to rank the products and brands in the minds e.g. In soft drinks, we generally have Coke followed by Pepsi followed by Thumsup. Thus if a new soft drink is to be introduced, the company must decide upon the way it will position itself viz. the product ladder position.

Positioning a company – – You can also apply Positioning to an organization in general The companies who have a high position in the minds of the prospect i.e. the students mind absorb the cream of the crop from institutes. Similarly companies visit only that campus that has a high position in the mind of the company (the company becomes the prospect in this case.)

The whole concept now boils down to creating a perception for your brand in the prospect’s mind so that your brand stands apart from the competing brands and provides the consumer with what he wants. Thus speaking comprehensively, positioning is a function of

• Perception it brings about in the mind of target consumer.
• Functional and non-functional benefits associated with the product.
• Perception of the competing brands held by the target consumer.

Now let us see an example of how company studies the market left, right and centre before introducing a brand. Maggi noodles define the strategy, which clearly shows how far can position help in making a brand a success. The brand was introduced in Delhi in 1983. The brand was a big success. Annual target for that market was increased from 50 to 600 tons and it was no less than a battle for Nestle.