You must realize that your product or service cannot be all things to all people. Very few items on the market today have universal appeal. Even when dealing in basic commodities like table salt or aspirin, marketing people have gone to all sorts of extremes to create brand awareness and product differentiation. If your product or service is properly positioned, prospective purchasers or users should immediately recognize its unique benefits or advantages and be better able to assess it in comparison to your competition’s offering. Positioning is how you give your product or service brand identification.

Positioning involves analyzing each market segment as defined by your research activities and developing a distinct position for each segment. Ask yourself how you want to appear to that segment, or what you must do for that segment to ensure that it buys your product or service. This will dictate different media and advertising appeals for each segment. For example, you may sell the same product in a range of packages or sizes, or make cosmetic changes in the product, producing private labels or selecting separate distribution channels to reach the various segments. Beer, for example, is sold on tap and in seven-ounce bottles, twelve-ounce cans and bottles, six-packs, twelve-packs, cases, and quart bottles and kegs of several sizes. The beer is the same, but each package size may appeal to a separate market segment and have to be sold with a totally different appeal and through different retail outlets.

Remember that your marketing position can, and should, change to meet the current conditions of the market for your product. The ability of your company to adjust will be enhanced greatly by an up-to-date knowledge of the marketplace gained through continual monitoring. By having good data about your customers, the segments they fit into and the buying motives of those segments, you can select the position that makes the most sense. While there are many possible marketing positions, most would fit into one of the following categories:

Positioning on specific product features

A very common approach, especially for industrial products. If your product or service has some unique features that have obvious value this may be the way to go.

Positioning on benefits

Strongly related to positioning on product features. Generally, this is more effective because you can communicate to your customers about what your product or service can do for them. The features may be nice, but unless customers can be made to understand why the product will benefit them, you may not get the sale.

Positioning for a specific use

Related to benefit positioning. Consider Campbell’s positioning of soups for cooking. An interesting extension is mood positioning: “Have a Coke and a smile.” This works best when you can teach your customers how to use your product or when you use a promotional medium that allows a demonstration.

Positioning for user category

A few examples: “You’ve Come a Long Way Baby,” “The Pepsi Generation” and “Breakfast of Champions.” Be sure you show your product being used by models with whom your customers can identify.

Positioning against another product or a competing business

A strategy that ranges from implicit to explicit comparison. Implicit comparisons can be quite pointed; for example, Avis never mentions Hertz, but the message is clear. Explicit comparisons can take two major forms. The first form makes a comparison with a direct competitor and is aimed at attracting customers from the compared brand, which is usually the category leader. The second type does not attempt to attract the customers of the compared product, but rather uses the comparison as a reference point. Consider, for example, the positioning of the Volkswagen Dasher, which picks up speed faster than a Mercedes and has a bigger trunk than a Rolls Royce. This usually works to the advantage of the smaller business if you can capitalize on the American tradition of cheering for the underdog. You can gain stature by comparing yourself to a larger competitor just as long as your customers remain convinced that you are trying harder.

Product class disassociation

A less common type of positioning. It is particularly effective when used to introduce a new product that differs from traditional products. Lead-free gasoline and tubeless tires were new product classes positioned against older products. Space-age technology may help you here. People have become accustomed to change and new products and are more willing to

experiment than was true ten years ago. Even so, some people are more adventuresome and trusting than others and more apt to try a revolutionary product. The trick is to find out who are the potential brand switchers or experimenters and find out what it would take to get them to try your product or service. The obvious disadvantage of dealing with those who try new products is that they may move on to another brand just as easily. Brand loyalty is great as long as it is to your brand.

Hybrid bases

Incorporates elements from several types of positioning. Given the variety of possible bases for positioning, small business owners should consider the possibility of a hybrid approach. This is particularly true in smaller towns where there aren’t enough customers in any segment to justify the expense of separate marketing approaches.

As you continue to expand your business in the months and years ahead, use the tips presented here. Prepare a budget and review it frequently. Select your items for advertising to help solve consumer problems and then present your advertising message as a form of planned communication to strengthen your market positioning.

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I have a friendly piece of advice for those who create their own marketing and to those who sponsor it. Often, the ad that generates record-breaking volume for a business one month is repeated the following month and fails.

A campaign designed by the best ad professionals may elicit a mediocre response, yet, the same item skyrockets in sales after a 20-word classified ad with abominable grammar appears on the rear pages of a shopper magazine. It’s rolled up and tossed to homes during a rainstorm! The mystery eludes solution but demands attention.

If we look a little closer at our current economic issue, it seems corporate strength was built on price skimming. This refers to the practice of charging high prices for the purpose of maximizing profit in the short run.

It only works best when the product is unique and people are willing to pay extra just to have it. There are trend setters in society who always are looking for something new and are willing to pay the price. A larger number are followers. They will buy your product if it is accepted by the leaders. The followers however, will not pay the higher price.

It only works when the cost of development is high and there is a chance of early obsolescence or imitation by competitors. Or, you may have a strong patent position, or your product would be difficult to copy.

The real disadvantage of skimming is that it attracts competition. Your competitors will soon figure out what you are up to, and the high profit potential will encourage them to copy you. They may produce cheaper versions of your product or style, referred to as knockoffs in the market.

Once you have meaningful competition on price, your skimming days are over and you run the risk of ending up with an enormous stock of products that cannot be sold at any price. Sound familiar?

The solution is penetration pricing. This is the opposite of skimming. It is made to introduce your product at such a low price that you will quickly gain a large share of the market. The purpose is to discourage competition. However, eventually you will have to raise your prices to start making some profit, and when you do, you will learn much about customer loyalty!

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Your marketing plan should recognize the various segments of the market for your product or service and indicate how to adjust your product to reach those distinct markets. Instead of marketing a product in one way to everyone, you must recognize that some segments are not only different, but better than others for your product.

This approach can be helpful in penetrating markets that would be too broad and undefined without segmentation. No matter what you are making or selling, take the total market and divide it up like a pie chart. The divisions can be based on various criteria.

Demographics- This is the study of the distribution, density and vital statistics of a population, and includes such characteristics as:

Sex.
Age.
Education.
Geographic location.
Home ownership versus rental.
Marital status.
Size of family unit.
Total income of family unit.
Ethnic or religious background.
Job classification, blue collar versus salaried or professional.

Psychographics- This is the study of how the human characteristics of consumers may have a bearing on their response to products, packaging, advertising and public relations efforts. Behavior may be measured as it involves an interplay among these broad sets of variables:

Predisposition- What is there about a person’s past culture, heredity or upbringing that may influence his or her ability to consider purchasing one new product or service versus another?

Influences- What are the roles of social forces such as education, peer pressure or group acceptance in dictating a person’s consumption patterns?

Product Attributes- What the product is or can be made to represent in the minds of consumers has a significant bearing on whether certain segments will accept the concept. These attributes may be suggested by the marketer or perceived by the customer.

Some typical ways of describing a product include:

1. Price/value perception- Is the item worth the price being asked?

2. Taste- Does it have the right amount of sweetness or lightness?

3. Texture- Does it have the accepted consistency or feel?

4. Quality- What can be said about the quality of the ingredients or lack of artificial ingredients?

5. Benefits- How does the consumer feel after using the product?

6. Trust- Can the consumer rely on this particular brand? What about the reputation of the manufacturer in standing behind the product?

In conclusion- Life Style. Statements consumers make about themselves through conspicuous consumption can be put to good use by research people who read the signals correctly. By studying behavioral variables, such as a person’s use of time, services and products, researchers can identify some common factors that can predict future behavior determining which marketing segment relates directly towards the products or services being sold.

The real key to successful marketing is to identify the market segments you wish to reach and then tabulate the results of your marketing efforts until you find out what works best for you, and then keep repeating your successes.

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Market research doesn’t have to be sophisticated and expensive. While money can be spent to collect research data, there are many inexpensive ways to collect this data that are easily accessible to the small business owner. Several of these methods are:

Employees

This is one of the best sources of information about customer likes and dislikes. Usually employees work more directly with customers and hear complaints that may not make it to the owner. They are also aware of the items customers request that the business doesn’t offer. They can probably also give a pretty good customer profile from their day-to-day contacts.

Customers

Talk to the customers to get a feel for your clientele, and ask them where improvements can be made. Encouraging and collecting customer comments and suggestions is an effective form of research. By asking the customers to explain how the product could improve to fill their needs, constructive market research is done, as well as instilling customer confidence in the product.

Competition

Monitoring the competition can be a valuable source of information. Their activities may provide important information about customer demand that were overlooked, and they may be capturing part of the market by offering something unique. Likewise, small business owners can capitalize on unique points of their products that the competition does not offer.

Company records and files

Looking at company records and files can be very informative. Look at sales records, complaints, receipts, or any other records that can show you where your customers live or work or how and what they buy. One small business owner found that addresses on cash receipts allowed the pinpointing of customers in his market area. With this kind of information he could cross reference his customers’ address and the products they purchased. From this information he was able to check the effectiveness of his advertising placement. However, realize that this information represents the past. Present or future trends may mean that past information is too obsolete to be effective.

Your customers’ addresses alone can tell you a lot about them. You can pretty closely guess your customers’ life-style by knowing what the neighborhoods they live in are like.  Knowing how they live can give you solid hints on what they can be expected to buy.

In addition, check returned items to see if there is a pattern. Check company files to determine which items sell best, and which sell poorly.

Use creative methods to collect information. All market research doesn’t have to be done with numbers and surveys. It can be done with peanuts, as one creative discount merchandiser discovered. During a three-day promotion the merchant gave away free to customers…” all the roasted peanuts you can eat while shopping our store.” By the end of the promotion the merchant had litter trails that provided information on the traffic pattern within the store. Trampled peanut hulls were littering the most heavily traveled store aisles and even heaping up in front of displays of merchandise of special interest to customers. In short, the merchant learned how they acted in the store and what they wanted and observed their behavior.

The key to effective marketing research is neither technique nor data – it’s useful information. Customers likes and dislikes are shifting constantly so this information must be timely. It’s much better to get there on time with a little than too late with a lot.

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Customers like to deal directly with the owner of a business whenever they can. If you can make an effort to be as visible as you can to your customers, this will help, This doesn’t mean your customers necessarily need to see you at your place of business at all times, but only that maybe you need to maintain a presence at your business. You need to be there often enough that customers actually see you from time to time. Or you communicate with them in other ways such as a newsletter.

This is true for product and service-oriented businesses.

It is particularly critical for customers of service businesses who sometimes select your business and remain loyal to a large degree due to the strength of that owner’s word, working style and reputation.

This also goes for online businesses as well. If your web site visitor can see a picture of you located somewhere on your site, this gives them a warm feeling just by seeing who it is they are going to be doing business with.

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