MARKETING INTELLIGENCE & PLANNING 12,4
The theory and practice of marketing positioning strategy.
A Definition of Positioning Strategy
In the words of Doyle (1983):
Positioning strategy refers to the choice of target market segment which describes the customers a business will seek to serve and the choice of differential advantage which defines how it will compete with rivals in the segment.
The Anatomy of Marketing Positioning Strategy
Marketing Intelligence & Planning, Vol. 12 No. 4, 1994, pp. 10-14 © MCB University Press Limited, 0263-4503
This definition shows that a positioning strategy only applies at the level of a particular product and/or service operating within a particular market, and that it should not be confused with the broader concept of “corporate” strategy, or with the more specific concepts of strategy as it relates to each individual element of the marketing mix, such as a “promotional” or “pricing” strategy. The above definition also shows that a positioning strategy may be broken down into three interrelated subcomponents: (1) customer targets; (2) competitor targets; and (3) competitive advantage. In addition this process of positioning strategy formulation demands the ability to build-up a picture of the marketplace and think creatively about the interrelationships between these three sub-components. The idea is to go for a segment of the market where, by virtue of the company’s distinctive strengths, it is able to satisfy customer needs better than (or at least as well as) its competitors. This necessitates a thorough understanding of the strengths, weaknesses, opportunities, and threats profile (SWOTS) facing the firm – something which can only be achieved by a dedicated internal (company), competitor, and customer/ market analysis. Once a positioning plan has been finalized it is translated into action by assembling an appropriate marketing mix. The popular four P’s definition of the marketing mix is: Product, Price, Promotion and Place (distribution), with each “P” comprising a set of decision elements which together defines the firm’s offer to its target market. The mix should be tailored so that target customers regard it as being superior to those offered by competitors – by reflecting the firm’s choice of competitive advantage. Figure 1 provides a diagrammatic representation of how the three sub-components of the positioning strategy decision interrelate with each other, the SWOT analysis, and the marketing mix. Table I shows the main elements of the mix which, when properly coordinated, provide the means to activate the plan. The article now goes on to look in more detail at each of the three sub-components of positioning strategy fomulation. In so doing however, it should be remembered that this is a theoretical exercise, since, as emphasized earlier, in practice they cannot be considered independently of each other.
Research into the differences between higher and lower performing UK companies in terms of their marketing practices (e.g. Brooksbank, 1990) has served to confirm the central principle of textbook marketing strategy; that to be successful over the long term a firm’s products and services must be well “positioned” in the marketplace. At the same time, however, it has also revealed that many marketing managers are unfamiliar with either the term, or the concept, of marketing positioning strategy. Consequently, this article aims to de-mystify the concept by outlining the basic decision components, or “anatomy”, of positioning strategy formulation and isolating the key ingredients thought to be critical to success. In order to put some “flesh on the bones” the article proceeds to examine how the theory translates into practice. This is achieved by explaining how a small UKbased company put these principles successfully to work in the retail computer market. The article concludes with a six- point checklist for developing a...
References: Brooksbank, R.W. (1990), This is Successful Marketing!, Horton Publishing, Bradford. Doyle, P. (1983), “Marketing Management”, unpublished paper, Bradford University Management Centre. Chaganti, R. and Chaganti, R. (1983), “A Profile of the Profitable and Not So Profitable Small Business”, Journal of Small Business, pp. 43-51. Cavanagh, R.E. and Clifford D.K. (1986), The Winning Performance, Sidgwick and Jackson, London. Hanson, F. (1972), “Backwards Segmentation Using Hierarchical Clustering and Q-Factor Analysis”, ESOMAR Seminar. Hooley, G.J. and Saunders, J. (1993), Competitive Positioning: The Key to Market Success, Prentice Hall, Englewood Cliffs, NJ. Kotler, P. (1980), Marketing Management: Analysis, Planning and Control, Prentice Hall, Englewood Cliffs, NJ. Ries, A. and Trout, J. (1986), Marketing Warfare, McGraw Hill, New York, NY, p. 44.
There are, however, a few commonsense principles to bear in mind, and the purpose of this article has been to filter them out, and show how they can be applied. These are summarized in the form of a six-point checklist: (1) Is it based on a comprehensive situation analysis – of yourselves, your competitors and your market? (2) Is it, as far as possible, built around your company’s particular strengths? (3) Does it precisely define your customer targets – with a thorough understanding of their requirements? (4) Does it precisely define your competitor targets, reflecting a coherent competitive strategy? (5) Does it precisely define a sustainable competitive advantage?
Roger Brooksbank is Senior Lecturer in Marketing at the Department of Marketing and International Management, University of Waikato, Hamilton, New Zealand.
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