Product strategies and business development

PRODUCT-POSITIONING STRATEGY
The term positioning refers to placing a brand in that part of the market where it will receive a favorable reception compared to competing products. Because the market is heterogeneous, one brand cannot make an impact on the entire market. As a matter of strategy, therefore, a product should be matched with that segment of the market in which it is most likely to succeed. The product should be positioned so that it stands apart from competing brands. Positioning tells what the product stands for, what it is, and how customers should evaluate it. Positioning is achieved by using marketing mix variables, especially design and communication. Although differentiation through positioning is more visible in consumer goods, it is equally true of industrial goods. With some products, positioning can be achieved on the basis of tangible differences (e.g., product features); with many others, intangibles are used to differentiate and position products. As Levitt has observed: Fabricators of consumer and industrial goods seek competitive distinction via product features some visually or measurably identifiable, some cosmetically implied, and some rhetorically claimed by reference to real or suggested hidden attributes that promise results or values different from those of competitors’ products. So too with consumer and industrial services what I call, to be accurate, “intangibles.” On the commodities exchanges, for example, dealers in metals, grains, and pork bellies trade in totally undifferentiated generic products. But what they “sell” is the claimed distinction of their execution the efficiency of their transactions in their client’s behalf, their responsiveness to inquiries, the clarity and speed of their confirmations, and the like. In short, the offered product is differentiated, though the generic product is identical. The desired position for a product may be determined using the following procedure:
1. Analyze product attributes that are salient to customers.
2. Examine the distribution of these attributes among different market segments.
3. Determine the optimal position for the product in regard to each attribute, taking into consideration the positions occupied by existing brands.
4. Choose an overall position for the product (based on the overall match between product attributes and their distribution in the population and the positions of existing brands). For example, cosmetics for the career woman may be positioned as “natural,” cosmetics that supposedly make the user appear as if she were wearing no makeup at all. An alternate position could be “fast” cosmetics, cosmetics to give the user a mysterious aura in the evenings. A third position might be “light” cosmetics, cosmetics to be worn for tennis and other leisure activities. Consider the positioning of beer. Two positioning decisions for beer are light versus heavy and bitter versus mild. The desired position for a new brand of beer can be determined by discovering its rating on these attributes and by considering the size of the beer market. The beer market is divided into segments according to these attributes and the positions of other brands. It may be found that the heavy and mild beer market is large and that Stroh and Budweiser compete in it. In the light and mild beer market, another big segment, Miller and Anheuser- Busch are the dominant competitors. Management may decide to position a new brand in competition with Miller Lite and Bud Light. Disney stores demonstrate how adequate positioning can lead to instant success. 3 Disney stores earn more than three times what other specialty stores earn per every square foot of floor space. Disney has created retail environments with entertainment as their chief motif.
As a customer enters the store, he/she sees the Magic Kingdom, a land of bright lights and merry sounds packed full of Mickey Mouse merchandise. From a phone at the front of each store, a customer can get the Disney channel or article a room in a Disney World hotel. Disney designers got down on their hands and knees when they laid out the stores to be sure that their sight lines would work for a three-year-old. The back wall, normally a prime display area, is given over to a large video screen that continuously plays clips from Disney’s animated movies and cartoons. Below the screen, at kid level, sit tiers of stuffed animals that toddlers are encouraged to play with. Adult apparel hangs at the front of the stores to announce that they are for shoppers of all ages. Floor fixtures that hold the merchandise angle inward to steer shoppers deeper into this flashy money trap. Managers spend six weeks in intensive preparatory classes and training before being assigned to a store. Garnished with theatrical lighting and elaborate ceiling displays, the stores have relatively high start-up and fixed costs, but once up and running, they earn high margins. Six different approaches to positioning may be distinguished:
1. Positioning by attribute (i.e., associating a product with an attribute, feature, or customer benefit).
2. Positioning by price/quality (i.e., the price/quality attribute is so pervasive that it can be considered a separate approach to promotion).
3. Positioning with respect to use or application (i.e., associating the product with a use or application).
4. Positioning by the product user (i.e., associating a product with a user or a class of users).
5. Positioning with respect to a product class (e.g., positioning Caress soap as a bath oil product rather than as soap).
6. Positioning with respect to a competitor (i.e., making a reference to competition, as in Avis’s now-famous campaign: “We’re number two, so we try harder.”). Two types of positioning strategy are discussed here: single-brand strategy and multiple-brand strategy. A company may have just one brand that it may place in one or more chosen market segments, or, alternatively, it may have several brands positioned in different segments.