In the United States, paid media ad spending will total more than $206 billion in 2017. This is a 6.1 percent increase from 2016.

To stand out from competitors, companies must rely on market positioning. This refers to establishing and defending a valuable position for products and services compared to the competition. It solidifies the identity of a company and influences the way that its target audience perceives the organization, according to business translation company Smartling.

Using market positioning utilizes messaging strategies, communication channels and competitor analyses to determine the company’s current and ideal market positioning. Then, the company should test the effectiveness of the positioning by gathering qualitative and quantitative data. The results can reveal what types of positioning in marketing will be most effective.

Types of Market Positioning With Examples

Researchers in the Journal of Business & Industrial Marketing found that market positioning is predominantly determined by hard criteria (e.g., product quality) and relationship building factors (e.g., personal contact). Other considerations like company structures (i.e., geographical coverage), breadth of offerings and degree of integration (e.g., location in the distribution chain) also play an important part. The researchers also noted that level of familiarity with a specific company is a contributing factor to perceptions of the pursued market positioning strategies.

Here are some common types of positioning in marketing.

Pricing

Pricing is an important, if not the most important, factor for customers. The company with the lowest-priced products at a reasonable level of quality often wins in many product areas.

  • Example: Gillette vs. Dollar Shave Club. Lower-priced alternatives to high-quality brands like Gillette have altered the landscape of razors and refill blades. The Washington Post reported on Gillette’s eroding market share due to Dollar Shave Club’s low prices. The latter’s cheapest refill razor cartridge was 20 cents, compared to $2 to $6 a cartridge for Gillette.

Quality

Quality can help rebuff pricing wars. In some markets such as luxury cars, quality can define who the competitors are.

  • Example: Taco Bell vs. Chipotle. Now ranked 14 in the top 50 fast food restaurants in America, Chipotle has gained a large market share over the years by competing on quality instead of price.

Convenience

Convenience helps make customers’ lives easier. From location to usability, convenience can incorporate something like e-commerce and free returns.

  • Example: Bank of America vs. Simple. Traditional banks have been slow to create mobile apps, but online-only banks like Simple have capitalized on this to appeal to younger, more internet-savvy customers. Simple also charges no fees and has built-in budgeting and savings tools.

Customer Service

Customer service concentrates on creating helpful, friendly interactions. This can be especially important in certain industries, such as the previously mentioned restaurant and banking industries.

  • Example: State Farm vs. Allstate. Insurance companies recognize the importance of customer service in this industry, where contact with customers is integral. State Farm and Allstate both use customer service-based messages in their marketing to focus on this position.

Differentiation

Differentiation is what sets a product or service apart from competitors. If the product or service is dramatically different, then competitors may not pose as much of a threat.

  • Example: Prius vs. Tesla. Tesla entered the electric vehicle market with a luxury sports model, sidestepping economy cars like the Toyota Prius. Tesla targeted the high-end market with the Model S.

Pursuing a Career in Business

Start or advance your career with an online business degree from the University of West Alabama. Develop the skills and knowledge needed for management and specialty roles in business, in a convenient online format from one of Alabama’s oldest and most prestigious universities.

Search