- One of the key things to understand as a business owner is why anyone would give their hard-earned cash to you instead of your competitors.
- Your market positioning is at the very heart of how you compete as a business. Being the 'best' is not enough; you need to define what it is that gives your business a competitive edge and plants the seed in your customers' minds.
- In this article, we delve into what market positioning is, why it's so important and how to create a market positioning strategy for your business.
It’s tough being a business owner. There are often no guideposts and you’ve jumped in feet first to try and build something you believe in, often to give you and your family the life you’ve always wanted.
Time is precious, and knowing where to focus your efforts is a challenge in itself. There is also the struggle of attracting the right customers who will trust you and buy your products or services to solve their problems. Where do you start?
One of the key things to understand is why anyone would hand over their hard-earned cash to you instead of your competitors. This is also known as your 'market positioning'.
What is market positioning?
Ultimately, your market positioning is where your business best fits in the minds of your customers - why should they buy from you?
Your market position is the crux of how you compete as a business. What is the hook that’s going to stick in the minds of your customers? People have problems every day, and the problem you’ve chosen to solve is - how do you do it better than anyone else?
Are you the cheapest? Do you offer the most comprehensive service? Are you the most accessible?
If you know the answer to this, then great! Put everything you have into living up to those ideals. If not, there are a few things you can do.
How do you create a market positioning strategy?
The trap a lot of businesses fall into is thinking of themselves as ‘the best’. Ok cool, that’s nice and all but you’ll need to break down exactly what ‘best’ means.
Does 'best' mean the highest quality, sturdy or handcrafted? Does 'best' mean most efficient service due to experience? Does 'best' mean a level of flexibility or diversity which leads to a highly tailored solution?
The 'best' just isn’t good enough, and you'll need to dig deeper into what that word actually means.
There are two ways to develop a market positioning strategy:
- Swot Analysis
The method you choose will depend on your industry.
One way is by mapping your competitive position. Draw an axis, vertical and horizontal lines and give each a value - price vs quality is usually a good one. Then you literally look at all of your competitors and put them somewhere within the axes on the map.
For example, McDonald’s ain’t gonna win a Michelin Star, but it sure is accessible to fill a growling tummy for a lot of the population at their price point. That’s why you see so many ads for their cheap deals.
2. SWOT Analysis
If you don’t want to go down the mapping path, a simple SWOT analysis is good, too. Focus on the strengths and weaknesses of your business with regards to your competitors. What can you do really well? What will you struggle to deliver on?
The key is to be honest with yourself - and yes, that might mean embracing a grudging appreciation of what your competitors are doing better than you!
Why is market positioning important?
Now, why would any of this matter? You know you’re really bloody good at what you do and all of this talk is just a distraction for getting on with your business.
But here's the thing - your market positioning is just that. Getting on with your business relies on finding your place in the ecosystem which you can dominate and completely own. It also means knowing where you can commit your limited resources so they have the most impact in whatever you do.
Your market position is the starting point. Once you know how you’re going to compete, you use this position to inform everything you do with your customers. You’ve decided you’re the cheapest - ok so how do you *show* that to your potential customers?
Look at a business like Bunnings - you can probably recall the gist of one of their ads, either on TV or online. What springs to mind?
"Lowest prices, guaranteed."
That’s the culmination of their position as the cheapest option for your home and hardware needs, which they achieve through economies of scale. Plus, how delicious are their sausage sizzles. But ultimately, they can solve your problem of needing that planking for your new deck by giving you exactly what you need at a great price.
Price isn’t the only way to compete and can often be difficult, so think beyond the dollar number. What do your customers care about? If you'd pay more for a Tesla than a Hyundai, why is that?
What are the types of positioning in marketing?
Some common types of positioning in marketing include:
- Price - paying for something based on affordability
- Quality - you know it will last longer
- Accessibility - you might pay more for something next door rather than shipping it in
- Specific needs - e.g. tax solutions for SMEs in the construction industry
- Service levels - instant quotes or unparalleled support.
Once you have found the positioning which is going to sky rocket your business into the stratosphere, you need to live up to that expectation.
Something else you need to be aware of when positioning your brand is ‘transference of expectation’. Alright Shakespeare, but what does that mean?
What is transference of expectation?
Essentially, transference of expectation means that the experience your customers have anywhere is the experience they expect everywhere.
So if you’re going to position yourself on unrivalled service, you need to make sure you’re providing a better service than any business out there, regardless of category or niche.
That outstanding concierge at the hotel? Better service than them. Setting up a booking system? Needs to be easy as Uber.
So knowing what you can do really, really well is why market positioning is so vital to get right. It informs everything you do as a business.
It’s a lot to think about, isn’t it? But a little bit of heavy lifting now will make sure that every dollar you spend in your business is spent efficiently and pushing towards the most effective goal.
Have you created a market positioning strategy? Share your thoughts in the comments below.
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