Strategic Positioning

Defining the value proposition and competitive positioning in the industry.

Identifying your competitive positioning in an industry involves determining how your company or product is perceived in relation to competitors. This positioning defines your unique value proposition and helps you differentiate yourself in the market. Here's how to identify and define your competitive positioning, along with some examples:

1. Understand Your Target Audience:

• Identify your target customer segments and understand their needs, preferences, and pain points. What are they looking for in a product or service, and how do they make purchasing decisions?

2. Analyze Competitors:

• Who are the other companies that offer similar products or services to yours?

  • Conduct a competitive analysis to understand the strengths and weaknesses of your competitors.

  • Identify gaps or areas where you can outperform them. This analysis can include assessing their product offerings, pricing strategies, marketing tactics, and customer reviews.

  • Evaluate relative cost position - Budget airlines like Southwest, JetBlue and Ryanair competed on low cost base rather than amenities.

3. Define Your Unique Selling Proposition (USP):

• Determine what makes your product or service unique and valuable to your target audience. Your USP should be a clear, concise statement that sets you apart from competitors.

• Recognize brand associations - Starbucks built a premium brand around the coffee experience rather than just selling a commodity.

• Assess operational strengths - Walmart leveraged superior logistics and distribution efficiency to offer lower prices than small retailers.

• Identify niche focus - Datadog gained share by specifically targeting cloud-native monitoring tools for technical teams rather than general IT systems.

• Consider breadth of offering - Full line department stores like Macy's appeal to a wider demographic compared to specialty apparel retailers.

• Determine pace of innovation - Apple and Samsung compete intensely on bringing the latest phone innovations like 5G, foldable screens, advanced cameras to market first.

• For example:

  • Apple: "The iPhone offers a seamless ecosystem of hardware, software, and services, providing an intuitive and user-friendly experience that no other smartphone can match." Apple's competitive positioning is based on its innovative products, high-quality design, and strong brand reputation. Apple's target market is consumers who are willing to pay a premium for high-quality products and services.

  • Tesla: "Tesla's electric vehicles combine cutting-edge technology, long-range capabilities, and a commitment to sustainability, offering an unparalleled driving experience." Tesla's competitive positioning is based on its electric vehicles, which are more environmentally friendly and efficient than traditional gasoline-powered vehicles. Tesla's target market is consumers who are concerned about the environment and who are looking for high-performance vehicles.

  • Amazon's competitive positioning is based on its wide selection of products, competitive prices, and convenient shopping experience. Amazon's target market is consumers who are looking for a one-stop shop for all of their shopping needs.

4. Choose Your Competitive Strategy:

• There are different competitive strategies to consider, including:

  • Cost Leadership: Competing on price by offering products or services at a lower cost than competitors.

  • Product Differentiation: Focusing on unique features, design, or quality to distinguish your offering.

  • Niche or Focus Strategy: Concentrating on a specific market segment or niche and tailoring your product or service to their needs.

  • Innovation Leadership: Leading through continuous innovation and being the first to introduce new technologies or solutions.

  • Customer Intimacy: Building strong relationships with customers through personalized service and support.

5. Communicate Your Positioning:

• Effectively communicate your competitive positioning through branding, marketing, and messaging. Ensure that your target audience understands why your product or service is superior. Use consistent and compelling messaging across all touchpoints.

  • Example (Coca-Cola vs. Pepsi): Coca-Cola positions itself as the original and timeless cola, while Pepsi often focuses on being the choice of the new generation, emphasizing its "Pepsi Generation" campaign.

6. Monitor and Adjust:

• Continuously monitor the competitive landscape, customer feedback, and market trends. Be prepared to adjust your positioning as the industry evolves or customer preferences change. Flexibility is crucial to maintaining a strong competitive position.

7. Develop a Value Proposition:

• Your value proposition should succinctly explain what you offer, the benefits you provide, and why customers should choose you over competitors.

  • Example (Amazon): "Amazon offers a vast selection, fast delivery, and competitive prices, making it the one-stop shop for all your shopping needs."

The goal is to objectively map competitive landscape on dimensions like features, price, brand image, selection, innovation, ease of use, reliability etc. This reveals unoccupied spaces to differentiate. Regularly reassess your positioning and define and maintain a strong competitive position in your industry. Your competitive position should align with your company's strengths and the evolving needs of your target audience.

Sash Barige

Oct/08/2019

References:

• Strategic Marketing (John A. Pearce and Robert B. Robinson, 2017)

• Competitive Marketing Strategy (Graeme Hooley, Nigel Piercy, Bernard Nicoulaud, and Julie Rudd, 2017)

• Competitive Strategy: Theory and Cases (Michael E. Porter, 2008)