Destroy the Competition With Positioning Strategy

Last Updated Jun 5, 2009 7:23 PM EDT

An exasperated CEO stood up in the board meeting and exclaimed, "Is that all you marketing &#*$s know how to do, compete on price?!"

Before you get too excited, that CEO was cursing at me. And no, that wasn't all I knew how to do. But he did have a point, and it's even more relevant now than it was back then. In today's marketplace where everybody's competing for the same shrinking budget and differentiation is hard to come by, marketers often think of price as their only lever.

That's just incompetent marketing, plain and simple.

There are lots of ways to differentiate a product. You can even create the perception of differentiation, if you're creative enough. It's called product positioning and it's something of an art.

Here are Five fundamental product positioning principles that will help you destroy the competition:
  1. Find a product attribute that captures the customer's imagination. It's so easy to get trapped in the same old box of features and benefits. If you can't differentiate that way, look at the problem with fresh eyes and fresh data. Find a new attribute that can get customers excited and focus your positioning around it.
  2. Market share gains are expensive. There's simply no way around this. Market share comes at a heavy cost and your product planning and positioning must reflect that or your P&L will suffer and you'll end up back at the drawing board. The cost is a function of how entrenched the leaders are and the perceived "switching cost" for customers.
  3. Reinvent the "customer experience." Nothing matters more, and it's not just for Internet and B2B. Just as with product attributes, you can shake up the competitive landscape by rethinking the customer experience in new terms. What's important to customers changes as a function of time and market conditions. Take advantage of it.
  4. Only target up, not down the totem pole. Publicly and to customers, always position your product relative to the market leader. It elevates your product in terms of customer perception. That said, train your sales force (and other internal groups) on features - benefits versus all competitors. That's a whole different story.
  5. Infrastructure (or ecosystem) as a competitive barrier. This is an important and often ignored aspect of product planning and positioning. Many products and services, especially in technology, require related companies and industries to support them in some way. If you get enough support for your product, it can be an extraordinarily effective competitive barrier that you can use in positioning.
Here's a great example that utilized four of the five principals. When Toyota entered the luxury automotive sector with the Lexus brand, it 1) made "ergonomics" and "quality" the new "performance" and "luxury," 2) initially undercut the competition to gain entry and early market share, 3) created a low-stress and more respectful showroom experience, and 4) targeted Mercedes and BMW - up the totem pole.

Apple also uses positioning strategy extraordinarily well. Can you think of other examples?

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