Role of Strategic positioning

Strategic positioning is focused on how an organization sets itself apart from the competition and delivers a benefit to target customers.

Strategic positioning is concerned with the way in which a business as a whole distinguishes itself in a valuable way from its competitors and delivers value to specific customer segments

Successful startups initially focus on how they plan to position themselves in the market. Strategic positioning refers to how powerful the brand is in the customers’ minds, what the company’s message is, and how the organization sees itself in the market.

Selling a great product or service isn’t enough to ensure a company’s success. Many times, inferior companies sell more products/services due to the way they have positioned themselves.

Startups have to create a unique positioning strategy that influences the customers’ minds to choose the organization’s product or service which can solve a problem.

Positioning influences the pricing, marketing, and sales strategy. To be successful, the strategy needs to make sense to different target groups of customers.

Unsuccessful positioning strategies focus on proving a company is better than the competition, rather than different.

The organization needs to tell a story about their unique brand and find the most effective ways to share that information with others. It’s important to maintain consistency and not deviate from the original story, as that is what initially gained customer loyalty in the first place.

Good positioning allows consumers to know why the organization’s product/service is preferable to the competition. In a growing market where consumer needs change every day, it’s essential to find a way to stand out.

Creating a branding and marketing strategy by utilizing the best messaging channels are part of employing this positioning strategy.

For example, a cosmetic company may buy a slot to run ads on television, employ a social media marketing strategy, and run ads in women’s magazines to convey a positioning message.

Researching and using the correct channels to market a product/service is the primary way to maintain a competitive edge and remind customers of who the organization is.

As a startup evolves and becomes more mainstream, it will have to reevaluate its positioning message. Staying in tune with the competition, customers, and the market will help an organization rework an outdated strategy.

While it’s helpful to reassess an older strategy to maintain a competitive edge, it’s important to maintain the same underlying theme regardless of evolving markets or circumstances.

Reworking an entire brand is akin to starting over once a business has already established itself as legitimate. It’s best to tweak and add on to a positioning strategy to remain competitive, rather than revamp the entire message.

There is a reason why customers put their trust in the organization in the first place. Don’t lose that trust by abandoning the original strategic positioning message completely.

Ensuring Brand Awareness Through Strategic Positioning

Without regularly reminding customers of who the business is and what they do, it’s impossible to find new clients and maintain the current ones.

Utilizing a positioning message as a tool to remind customers why they need to act is one of the more consistent requirements of running a business. With the right message and the marketing strategies to convey it, businesses can build brand awareness over time.

Loyal customers tend to recommend a known brand to friends and family. Before long, an organization’s brand is not just built through marketing efforts, but through word-of-mouth.

However, continuing to remind customers of the organization’s value is essential to maintain this brand awareness. This is particularly true in an evolving market with a growing list of competitors.

Strategic positioning therefore reflects the choices that you make with respect to two things:

1) The kind of value that your products and services will offer to target consumers (the products’ “Value Proposition”), and

2) How that value will be created differently from other companies (which is characterized through your business’s “Value Chain”).

Strategic positioning makes choices about how a business will “deliberately” protect core profits from industry forces and retain a profitable position in the market.  Based on our discussions about business strategy, there are only three ways to do that:

• By offering differentiated value, that is, through products and services that are both unique and valuable to target consumers (a “Differentiation Strategy”).
• By lowering prices well below competing alternatives (a “Price Leadership” strategy).
• Striking an effective combination of both differentiation and low prices.

Notice that we say “Lower prices” and not “Lower costs” since they are, obviously, different things.

While costs are the result of choices that a company makes in its Value Chain, price on the other hand is a “Decision” that comes out of a positioning strategy and is usually established based on the relative price of a set of competing solutions.

The challenge for executives when it comes to a business’s strategic positioning is in continually finding a “Profitable” but “Defensible” position in a marketplace, either through a differentiated offer, lower prices or a combination of both, where the company can maximize returns to shareholders for every dollar they invested in that business.

As a result of the dynamics and complexity of markets and competition, this market position (which classic strategists call a “Competitive Advantage”) becomes a bit of a moving target (a fast-moving one in some industries), making strategic positioning more like a “Process” to continually adjust the perception of your business’s products and services in the minds of your target customers.

The process to find and defend a profitable market position can be described in four different steps:

Market segmentation: Find effective ways to classify customers and slice the market into groups that share common characteristics that make them approachable through the same value networks.

Choose target markets: Based on your segmentation of the market and your value proposition research, select the segments that you are going to target within those markets.

Craft your market positioning strategy: Make decisions about how you will position your products with the selected target consumers, which can be done through product features and benefits, pricing, sales, distribution and promotion efforts.

Monitor and adjust: Once your strategy has been deployed, measure the traction you get with your target consumers and the performance of your marketing efforts, validating previous assumptions and adjusting your market positioning preferences accordingly as new information becomes available.