DEVELOPING AND COMMUNICATING A POSITIONING STRATEGY
All marketing strategy is built on STPâ€”Segmentation, Targeting, and Positioning. A company that discovers different needs and groups in the marketplace, targets those needs and groups that it can satisfy in a superior way, and then positions its offering so that the target market recognizes the companyâ€™s distinctive offering and image. If a company does a poor job of positioning, the market will be confused. This happened when National Car Company and Alamo Rent-a-Car were combined by their former parent, ANC Rental Corp, following its bankruptcy.
Premium brand National traditionally catered to business travelers, whereas Alamo Rent-a-Car has been getting 90% of its business from travelers. After two merged, the dual Alamo/National logos were plastered on everything from airport shuttle buses to workersâ€™ polo shirts. Customers of both Alamo and National had problems distinguishing between the brands, even though Nationalâ€™s cars typically rent for 10 to 20% more than Alamoâ€™s. After all, the customers had to stand in the same line behind the same airport counter, receive from the same rental agents, ride the same shuttle buses, and drive cars from the same fleet. National was most hurt by the lack of differentiation at these key touch points, and its market share fell 5 to 10%.
Interestingly, after consolidation of the brands, shuttle bus frequency improved 38% and business travelers were given even more options to bypass the rental counter entirely. Still, in surveys, National renters perceived the buses to be slower, the lines longer, and customer service poorer. The clear implication was that in order for the two brands to maintain their integrity and their positioning with their respective market segments, they had to be separated.
If a company does an excellent job of positioning then it can work out the rest of its marketing planning and differentiation from its positioning strategy.
We define positioning as follows: Positioning is the act of designing the companyâ€™s offering and image to occupy a distinctive place in the mind of the target market. The goal is to locate the brand in the minds of consumers to maximize the potential the potential benefit to the firm. A good positioning helps guide marketing strategy by clarifying the brandâ€™s essence, what goals it helps the consumer achieve, and how it does so in a unique way. The result of positioning is the successful creation of a customer-focused value proposition, a cogent reason why the target market should buy the product.
The word â€œpositioningâ€? was popularized by two advertising executives. They see positioning as a creative exercise done with an existing product.
Positioning starts with a product. A piece of merchandise, a service, a company, an institution, or even a personâ€¦â€¦ But positioning is not what you do to a product. Positioning is what you do to the mind of the prospect. That is, you position the product in the mind of the prospect.
Marketing Insight: Value Disciplines Positioning offers another point of view about positioning. According to virtually all approaches, positioning requires that similarities and differences between brands be defined and communicated. Specifically, deciding on a 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.
Competitive Frame Of Reference:
A starting point in defining competitive frame of reference for a brand positioning is determining category membership â€“the products or sets of products with which a brand competes and which function as close substitutes.
Target market decisions are often a key determinant of the competitive frame of reference. Deciding to target a certain type of consumer can define the nature of competition because certain firms have decided to target that segment in the past or plan to do so in the future, or consumers in that segment already may look to certain brands in their purchase decisions.
Determining the proper competitive frame of reference requires understanding consumer behavior and the consideration sets consumers use in making brand choices. In the United Kingdom, for example, the Automobile Association has positioned itself as the fourth â€œemergency serviceâ€? â€“ along with police, fire, and ambulanceâ€”to convey greater credibility and urgency.
Kotler and Keller’s “A Framework for Marketing Management.”