Product Strategy: Understanding Product Positioning
Product positioning is a marketing effort to improve sales by targeting a product to a specific group by channelling a message that highlights its benefits and unique features. Essentially, it can be defined as how a product appears in the minds of potential customers, comparing to its competition. Positioning products can be the difference between a product succeeding or failing in the market.
What is Product Positioning?
Product positioning aims to make your product occupy not only a distinct place in the market but also the mind of the customer. It’s basically how consumers understand what your product has to offer and how it differs from the main competitors. It’s a battle for the mind of the consumer, where the goal is to become the ‘top of mind’ product for a specific target market.
Positioning is critical to product strategy because it’s responsible for how a product is projected and perceived in people’s minds. This is accomplished by designing marketing messages that resonate with the target group in a way that compels them to take action.
Aside from these messages, it is important to understand that a successful product position is so much more than communication, it’s achieved by a combined effort of the entire marketing mix. And in the end, the customer is the one that has the final saying about the value (perceived or not) of your product. It’s all about perception, the way consumers perceive a product is even more significant that its design or value.
But before you can position your product, you must first analyze and define your target market and understand their needs and priorities.
Segmentation, Targeting and Positioning
Product positioning is a part of a marketing framework known as the SPT model, which stands for Segmentation, Targeting, and Positioning. This process helps you identify your target customer and develop successful product positioning.
Through market research and segmentation process, you can determine which are the best audiences that have the potential to generate sales. In this phase, it’s up to you to decide how advance you want to segment the market to better position your product, from simply identifying a target customer based on demographic and psychographic attributes, to study their purchasing behaviours and needs.
Developing detailed personas can give you a better understanding of the market and the groups you eventually want to target. By the time the product positioning is defined, you should have a clear perception of the customer needs.
Product positioning is an important component of any marketing plan because it has a great impact on the ultimate decision: the purchase of the product. This part of the process refers to the strategic part concerned with how you are going to market your product to your target customer. Effective positioning sends a message to consumers of why your product should be considered over the competition based on their needs. Essentially you are developing your brand's Tone of Voice to communicate your product value.
By understanding the target audience and how to communicate your product’s benefits compellingly, you can develop key messages and choose the right communication channels.
Craft your Statement
After a complex and detailed market study, the result should be a cohesive vision of the product positioning consolidated in a one to two sentence statement. This statement should define your target audience, what sets your product apart from the competition, and how it cares for the customers’ needs. It’s your product positioning sum up in a sentence.
A statement conveys how your product is different (and better) than the competition while addressing the features and benefits that are important to your target market. It can emphasize the unique value proposition of your product, by stating what your product stands for and it’s message.
A well-crafted statement can help you reinforce your product positioning, identify effective marketing channels, and improve your product design.
Once an effective product positioning has been developed, you now have a solid foundation to start creating the Whole Product. Building a product has many different dimensions, and to have a whole product, you need to approach every facet in the best way possible, from development to launch. Product positioning will give you the information you need to develop and present your product in a way that will entice your target customers to buy it, use it, and eventually recommend it.
Whole product strategy begins with defining and prioritizing your target market segments. Therefore, product positioning is, alongside product values, the obvious first step because it helps you to know your target customer. By understanding which of your product’s benefits and features are the most appealing and can meet with the customer’s needs, you have the tools to create and launch a successful product.