What is Market Positioning and how important it is in your business?
Updated: Jan 3
The key to standing out in today’s competitive business climate is to embrace branding. For businesses that prioritise branding, profits can improve by as much as 23%, but it is not just about the revenue. Improved branding means a better market position while improving customer loyalty and reliability. Branding and market positioning are symbiotic, and for those companies that utilise a robust branding strategy combined with a strong focus on improving market positioning, growth is far easier to achieve. That alone makes it essential for new and established businesses to develop a deeper understanding of the importance of market positioning, how to align branding, and how to identify the right marketing positioning strategies. If you are not sure how to approach market positioning, here is what you need to know.
What is Market Positioning?
At its most basic, market positioning is when you firmly establish the identity of your company or product so that it has more immediate recognition and a specific perception. A clean example of this would be a brand like Mercedes, who have a brand image and market position that sees them immediately recognisable as a luxury car. With the world economy as it is right now, having the right market positioning strategies means knowing who your target audience is so that you can target your branding more accurately. No business model can afford to target everyone, which is why even small businesses that establish their positioning statement can compete with the largest companies in the world.
Identifying Your Target Market
All market positioning strategies will first require you to learn more about your target audience. If you are trying to target ‘everyone’ then you are being too vague, and your marketing budget will only earn itself a low Return On Investment. Even trying to narrow it down to general demographics such as ‘homeowners’ or ‘stay at home mums’ is not enough and is a waste of the resources that you have available. By focusing on a specific target audience, you can aim your marketing like a weapon at the people who are likely to buy from you or hire your services. As part of your positioning statement, you need to ensure that you are using the following steps to define that target market:
● Existing Customers: Learn as much as is feasible about your current customers and identify commonalities. Identify those customer groups that spend the most money and use your analytics to find out more about them.
● Competitor Research: Your competitors will be targeting their audience and trying to establish themselves with a more positive market positioning. Do not try to follow their market positioning strategies and look for a niche customer demographic not being served by a current brand.
● Know Your Product: Not every product or service is going to be of value to everyone, but you may have missed out on target audiences who will get that value. List the best features of every product and service and brainstorm the kinds of audiences who need and value those features. Often, the answers can surprise you and open up whole new revenue potential.
● Identifying Demographics: You have access to more data about your current and future customers than ever before, meaning that you can fine-tune your targeting. The value and importance of market positioning is that it allows you to choose very specific demographics and target them by:
Employment and occupation
You can even break down these demographics by personality traits, values, politics, lifestyle, and behaviours. When you break down your target demographic’s life, you can easily identify why people are buying your products, when, and how they are using them. That makes targeting your marketing significantly easier because you know when to communicate, the tone of voice, and how often.
Determining Your Current Market Position
Before you start fine-tuning your branding and your marketing, you need to identify exactly what your current market position is. As part of your positioning statement, you need to be able to understand what makes you different. Your unique selling point (USP) is what sets you apart from your competitors and is the key to your effective branding. You will attract more customers with the right USP, but it is not simply enough to be slightly different from your competitors. You will need to identify those USPs that attract customers because they want or need what you offer, and you should aim to be the only business that offers that exact solution. This can come down to everything from company culture to packaging decisions, so take the time to explore your USP as much as possible.
The Importance of Niche Audiences
When consumers do not understand your brand, it can take a lot of time, energy, and marketing budget to get them to change their minds. The goal of your positioning strategy should be to align the perception of your brand with what you want it to be. Remember, differentiating yourself from your competitors is crucial because trying to fill a gap that is already taken will simply make work harder for you. Find those niches and customers that are not getting what they need from your competitors and fill those gaps.
Positioning Your Business
Once you have identified your USP and finely tuned your branding, it is time to use those to work on improving your market position. Your marketing will be more effective because it will be more likely to resonate with your target audience, and you can even encourage them to take specific actions. To position your business, you will need to consider the best marketing channels. There are more ways to advertise a business than ever, but do not try and use all of them. Use your customer data to find out where and when your customers spend their time online, or what non-digital approaches will be seen more. Once identified, continue to fine-tune your marketing, reviewing impact and effectiveness, and making those changes that will improve your results. There are some key market positioning strategies to use:
● Product characteristics: What makes your product different?
● Pricing: Are you cheaper than your competitors, or more luxury/durable and so priced higher?
● Use/Application: This is very valuable if you have identified an audience segment that is not being serviced by existing competitors. Use your data to find out who, why, and how people are using your product, and identify common uses.
● Product Association: If you can establish your brand or product so that consumers associate it with you, then your sales will grow organically. Reposition your product for new audiences and uses, a tactic used by everyone from fashion brands and cosmetics companies.
Creating Your Positioning Statement
You can find a range of templates online for creating your positioning statement; however, the basics will remain the same. Break down your positioning statement into the following sections and make sure that you can answer them thoroughly:
● Who are your customers?
● What do you offer them?
● How do you offer your products or services?
● Why does your company do what it does?
● How do you compare to other companies in the same industry?
Never underestimate the importance of market positioning. It will ultimately determine how customers perceive you and what you offer. By taking advantage of consumer perception and fine-tuning your branding, USP, and marketing, you can take control of your revenue streams while dominating the competition. Schedule appointment with Cambridge Advantage today and find out how we can help position your brand exactly where you want it to be.