Market & Brand Positioning

Positioning is a marketing concept that enables buyers and sellers to gain from being both effective and efficient. An effective buying experience is realized when sellers provide the right market offering at an acceptable price. The seller gains as the right market offering is supplied cost efficiently. It requires that similarities and differences between brands be defined and communicated.

Specifically, deciding on positioning requires determining a frame of reference by identifying the target market and the competition, and identifying the ideal points-of-parity and points-of-difference brand associations.

A frame of reference provides the context for positioning, and is a way of describing the market or context in which you choose to position your brand.

A starting point in defining a competitive frame of reference for a brand positioning is to determine category membership – the market offerings with which a brand competes and that function as close substitutes.

Target customers are aware that Chanel is a leading brand of cosmetics, Nestlé is a leading brand of cereal, and so on. Often, however, marketers must inform consumers of a brand’s category membership.

There are also situations where consumers know a brand’s category membership, but may not be convinced that the brand is a valid member of the category; for example, consumers may be aware that Swatch produces watches, but they may not be certain whether they are in the same class as Seiko and Tissot.

With this approach, however, it is important not to be trapped between categories. Consumers should understand what the brand stands for, and what it does not.

The typical approach to positioning is to inform consumers of a brand’s membership before stating its point-of-difference. 

Thus, marketers of Dove soap can talk about its attribute of one-quarter cleansing cream, or its benefit of softer skin, or its value of being more attractive.

Attributes are typically the least desirable level to position.
– First, the buyer is more interested in benefits.
– Second, competitors can easily copy attributes.
– Third, current attributes may become less desirable over time.

These are attributes or benefits consumers strongly associate with a brand, positively evaluate, and believe they could not find to the same extent with a competitive brand. Associations that make up points-of-difference may be based on virtually any type of attribute or benefit.

Examples are IKEA (affordable design), Michelin (performance) and Bosch (quality). Creating associations that are strong and unique is a real challenge, but essential in terms of competitive brand positioning.

Points-of-parity, on the other hand, are associations that are not necessarily unique to the brand but may in fact be shared with other brands. These types of associations come in two basic forms: category and competitive. 

Category points-of-parity are associations consumers view as essential to a legitimate and credible offering within a certain product or service category. In other words, they represent necessary – but not sufficient – conditions for brand choice.

Category points-of-parity may change over time due to technological advances, legal developments or consumer trends, but they are the essential factors for marketers.

Competitive points-of-parity are associations designed to negate competitors’ points-of-difference. If, in the eyes of consumers, a brand can ‘break even’ in those areas where the competitors are trying to find an advantage and achieve advantages in other areas, the brand should be in a strong – and perhaps unbeatable – competitive position.

Today’s markets are highly competitive and volatile so companies need to be prepared to make both proactive and reactive positioning decisions as market conditions dictate. Repositioning can become necessary for the following reasons:

– A competitor launches a market offering that is as good as or better than the existing company’s brand. For example, Honda and Toyota have a well-earned reputation for continually updating their vehicles by such market-perceived value attributes as design, performance and technological innovation.

– There is a marked consumer change in preference, for example for quality beers.

– New market categories appear, for example the market for energy drinks caused Lucozade marketers to reposition the brand from a drink for people recovering from illness to a high-energy sports drink for young people.

Professional positioning is of benefit to a supplier as it enables a company to invest its resources and skills in the right marketplace. As such it is both an effective and efficient strategy.

The right market offering is being placed on the market and professional know-how is applied to achieving this cost effectively. This is also an activity that results in advantages for customers as market offerings are effective in satisfying their requirements in dynamic market conditions when they have a choice of suppliers. Additionally they enjoy an efficient buying experience in the marketplace as they select the branded purchase that they perceive as representing the best value.