Overview
- Introduction
- What is a product positioning strategy?
- The role Of competitive intelligence in product positioning
- Key components of successful product positioning
- Effective differentiation & messaging
- Real-time adaptations & positioning strategy
- Measuring the success of product positioning
- Benefits of using competitive intelligence in product positioning
Introduction
Successful product positioning presents an array of complex challenges. Whether you’ve recently launched or have been generating consistent sales for years, clearly and persuasively differentiating yourself is an essential and ongoing task.
What’s more, positioning isn’t solely about the intrinsic quality of what you offer. At its core, it’s about conveying your product’s value to those who matter most.
Your positioning strategy can profoundly impact your long-term sales, customer loyalty and market share. A successful approach demands that you draw insights from multiple sources, including competitor intelligence, in-depth market research, and a range of performance metrics.
In this article, you’ll learn about the nuances of product positioning strategy. We’ll cover the specific methods you can use to elevate your positioning and track your results, from leveraging competitive insights to thorough data analysis.
What Is A Product Positioning Strategy?
In a nutshell, product positioning is the process of establishing and maintaining a distinct image of your product in your consumer’s mind.
Various frameworks and tools are employed by marketers to achieve this end. For example, product positioning maps, also known as perceptual mapping, visually plot consumer perceptions of a product against competitors, highlighting market gaps and competitive standings.
Another influential model is the STP (Segmentation, Targeting, Positioning) process, which centres on segmenting the market, targeting specific groups and positioning the product to appeal to these groups.
Many studies demonstrate the importance of product positioning, with recent research from BENlabs showing that thought-out placement can drive significant sales.
Despite this, a literature review published in the PSU Research Review concluded that product positioning is still a poorly understood concept in marketing, highlighting the need for companies to seriously devote time and resources to understanding and developing a robust plan.
The Role Of Competitive Intelligence In Product Positioning
Competitive intelligence gathering is a core part of product positioning. It involves systematically collecting and analysing information about competitors, which can then be used to develop a practical differentiation and targeting plan.
Consider using competitive intelligence in the following areas:
A) Competitor benchmarking
Use analytics tools for in-depth benchmarking of competitors. Focus on performance metrics, feature comparison, market share and pricing strategies.
B) Market trend forecasting
Employ predictive analytics and trend analysis to anticipate future market shifts and emerging consumer preferences.
C) Sentiment analysis
Both qualitative and quantitative techniques can be used to gauge consumer sentiment and perception of competitor products, highlighting opportunities for differentiation. Methods include manual customer feedback analysis and the more automated use of natural language processing (NLP).
D) Cross-industry competitive analysis
Analyse competitive strategies and trends in adjacent industries for cross-applicable insights into innovative positioning strategies.
E) Positioning adaptation
Use real-time insights to quickly adjust positioning strategies, ensuring alignment with market changes and competitor activities.
One of the most striking examples of the use of competitive intelligence to drive positioning in recent years comes from Netflix. It conducted extensive competitor analysis to understand the unique strengths and weaknesses of its rivals.
For example, Amazon was concerned primarily with offering large quantities of content, while Disney+ was geared towards family audiences. Netflix took this information, along with research into consumer trends, and heavily invested in original shows like The Crown and Stranger Things. It is now the most successful streaming service in the world.
Key Components Of Successful Product Positioning
Every product positioning strategy will be different, adjusted for a specific product’s features, market and competitors. That said, most approaches follow a shared framework.
Consider the following stages when building your positioning strategy:
1) Target market segmentation
This stage involves implementing demographic, psychographic and behavioural segmentation strategies to identify and profile your intended audience precisely.
2) Competitive positioning analysis
You should conduct a thorough benchmarking of competitors’ products, focusing on their market positioning, feature set, pricing strategy, and target demographics. One of the biggest causes of poor positioning is failure to account for competitors.
3) Distinctive feature evaluation
An indispensable tool during this stage is a features-gap analysis, which will identify and quantify your product’s unique attributes or capabilities in relation to competitors.
4) Consumer needs assessment
Employ market research techniques such as consumer surveys, focus groups, and usage data analysis to gain a deep understanding of customer preferences, pain points, and unmet needs. Many successful companies like Amazon, Google and Apple are well known for their ongoing investment in customer needs assessment.
5) Consistent omni-channel communication
Ensure your messaging aligns across all platforms. Omni-channel approaches are heavily favoured by marketers nowadays, making the need for consistency even greater.
In addition to all of these points, it is also crucial to implement analytics infrastructure. This will allow you to track results and make future adjustments. While the initial launch period is important, it is useful to view positioning as a long-term process.
Effective Differentiation & Messaging
Your messaging should not only highlight the unique features of your product but also address consumer pain points, articulate benefits clearly, and be both memorable and engaging.
Here are some of the most common strategies used to ensure differentiation:
Analysis of competitor messaging: Analyse and categorise competitor messaging to identify gaps for unique communication, especially in the context of unmet market needs.
A/B testing of marketing messages: Use A/B and multivariate testing to refine messaging.
Consumer perception mapping: Perceptual mapping based on consumer feedback allows you to position your features distinctly from competitors.
Predictive analytics for trend forecasting: Utilise predictive analytics to anticipate emerging messaging trends and pre-empt your competitors.
Sentiment analysis for emotional differentiation: Employ sentiment analysis to evaluate the emotional “tone” of competitor messaging and create unique emotional appeal. Emotions are one of the biggest drivers of engagement with product messages.
Real-Time Adaptations & Positioning Strategy
Markets move quickly. This demands real-time adaptations in your positioning strategy.
And an effective strategy typically involves monitoring consumer feedback, tracking competitors, staying up to date with industry trends, and swiftly adjusting your messaging and strategy in response to these dynamics.
Here are four strategies you can use to respond quickly to market and competitor movements:
1) Real-time social media monitoring
Implement advanced social listening tools to track real-time competitor activity on social platforms.
2) Automated market alert systems
Set up AI-driven and automated alert systems for instant notifications on competitor price changes, product launches, and promotional campaigns.
3) Dynamic SWOT analysis
Continuously update your SWOT analysis (strengths, weaknesses, opportunities, and threats) using real-time data feeds.
4) Predictive analytics for market shifts
Utilise predictive analytics models to forecast market changes, allowing for proactive positioning adjustments.
Measuring The Success Of Product Positioning
The success of product positioning can be gauged through various measures. Well-organised analytics infrastructure is vital for knowing when to make improvements and when to maintain existing processes.
Here are the main data points you should consider tracking:
Brand recognition: This is arguably the most important metric in product positioning and is typically measured by consumer surveys assessing brand recall.
Brand equity: Related to brand recognition, equity is the value attributed to your brand by consumers when compared to generic alternatives.
Market share: Percentage of total sales in your industry captured by your product when evaluated against all competitor sales.
Net promoter score (NPS): Measures customer loyalty and satisfaction levels.
Customer acquisition cost (CAC): Cost to acquire a new customer. Well-positioned products usually have comparatively lower acquisition costs and, as such, decreasing CAC indicates successful positioning.
Customer satisfaction score (CSAT): Score derived from consumer surveys on product satisfaction. This metric is helpful in gauging your positioning as a market leader.
Conversion rate: Ratio of visitors to conversions, indicating messaging effectiveness.
Benefits of Using Competitive Intelligence In Product Positioning
Incorporating competitive intelligence into your product positioning strategy offers a myriad of benefits over both the short and long term. Here is an overview of the main ones:
A differentiated product position
By understanding the strengths and weaknesses of your competitors, particularly in regard to features, you can position your product in a unique way.
A stronger value proposition
With an understanding of what consumers are looking for in a product, you can develop a value proposition that is more compelling than that of your competitors.
More effective targeting
By clearly defining your competitors’ target audiences, you can identify segments that are not catered for while tailoring your messaging to speak to unmet needs in others.
Faster time to market
By identifying competitor mistakes and challenges, you can address potential roadblocks to market entry early on.
Reduced risk of disruption
By staying ahead of the competition, you can reduce the risk of being disrupted by new entrants or changing customer preferences.
Concluding Thoughts
A well-crafted product positioning strategy, informed by competitive intelligence, will have long-term, measurable effects on your sales, market share, and customer satisfaction.
Competitive intelligence helps you achieve two main outcomes. First, it enables you to differentiate your product so that it speaks to the unmet needs of your target market. Second, it gives you the data you need to create messaging in a manner that sets you apart from your competitors.
Finally, it is important to reiterate that positioning is not a short-term task. Refining messaging, understanding changing customer needs, and building unique features and functionality are all ongoing priorities. However, establishing a thorough and multifaceted strategy in the early stages gives you the best possible chance of long-term success.
