How do you make your product stand out among its competitors, and make your value propositioning clear to your customers? Brand and marketing expert Abhishek Sareen discusses the importance of positioning in marketing and the 3 ways of positioning a brand.
Product (or service) positioning is how a brand would take stand in the customer’s mind and how it would deliver value, especially in comparison to its competitors. There are three distinct ways in which a brand can position their product or product portfolio:
- By being a cost leader
- By being an innovation leader
- Having a customer-centric approach
All of the above positioning approaches seem like the strategies that a marketing department needs to focus on simultaneously. However, to seriously penetrate a customer’s mind, brands need to prioritize only one approach. It’s unlikely to find a company or brand that provides the most innovative product at the cheapest price and always keeps the customer in mind.
Let’s go over each of these ways of positioning in detail, and with examples.
An Innovation Leader
As the name suggests, an innovation leader is the brand that disrupts the market with an innovative or unique solution to a customer’s problem.
An innovation leader is usually a smaller brand or company in a market. This is because the smaller player is ready to take more risk, as they need to differentiate to survive and create a name for themselves. Bigger brands or companies are much more conservative as they are more focused towards preserving their market shares and keeping their old customers happy.
For example, in the mobile phone industry, new brands like “Nothing” try to innovate as much as possible to make themselves be seen and make headlines. New EV car companies like Tesla, Rimac, and Rivian try all new innovative things to challenge the status quo in the automotive industry.
You would notice that these companies are not the best when it comes to providing a cost-effective product or customer service. Apple seems to be an exception, as it’s a big company known for innovation. However, they too have been treading cautiously for many years now.
To be an innovative company, there is always a trade-off between cost and customer centricity. To innovate, one cannot listen too much to their customers or consumer research reports and avoid new product research & development costs. Products from innovative companies thus are more expensive in the market.
Being a Cost-Leader
A cost leader need not necessarily be a brand that produces cheap products. It’s just that the products have the best quality with respect to their price. Generally, a cost leader is not very innovative, as their main focus is to create a reliable product at a low cost.
Toyota is considered a cost leader, as their cars are known for reliability and delivering a high lifecycle mileage. Toyota is often the brand of choice by taxi drivers, as their cars deliver maximum value to their commercial operations. In India for example, Toyota Innova & Etios are the vehicles of choice for Taxi fleet owners.
Maruti-Suzuki could also be considered a cost leader in the eyes of retail/ individual customers in India, as they promise the best in class fuel efficiency and the widest service network across India. Brands like Toyota & Maruti-Suzuki are not known for cool designs or futuristic features, as they have positioned themselves as brands that provide a cost-effective option to their customers.
Being Customer Centric
In a market where the product is a commodity, meaning there is not much differentiation between the product’s quality, brands try to build their strength through customer service. For example, if you are selling commodities like petrol, sugar or steel, where the product is more or less standard, brands need to focus on customer service, by ensuring quick & timely delivery, flexible payment terms, timely warranty resolution, etc.
In retail, where the competition is intense, brands offer no-questions-asked replacement of their product or merchandise. For example, retail chain brands like Kovai Pazhamudir Nilayam (a popular grocery chain based in Chennai), and Starbucks (a popular international coffee chain), provide no-questions-asked replacement service for their product.
These kinds of customer-centric approaches create high customer-centric brand positioning in the minds of customers. These retail brands, however, are not the cheapest compared to their competitors, but their relentless focus on their consumers have established them as highly customer-centric retail brands and allowed them to differentiate in a cluttered market.
Is Brand Positioning a Way to Create Stereotypes?
Brand positioning is a marketing perception based on which a consumer makes their decision. Toyota and Suzuki do make cool cars, but that’s not their strong point. In other words, market positioning is a stereotype that consumers create in their mind for a particular attribute, which could be cost-effectiveness, innovation, or customer centricity.
How to Decide Your Brand’s Positioning
Positioning as a Marketing Strategy
A brand or company’s positioning is related to its overall strategy. This means that prioritizing one of the three values is not just a part of your marketing communication, but it defines your whole business based on your core competency & philosophy.
According to Simon Sinek, most companies know what value they are delivering to their customers, few know how they deliver this value, and even fewer know why they do it. Brand positioning is the “how” that a brand needs to communicate to its customer.
Positioning as a Communication Strategy
All brands try to be innovative, and cost-leaders in their own way and aim to provide the best customer experience. But communicating all these values to a customer at the same time is a challenge, as the customer’s mind is able to attribute only one primary quality to a brand.
Knowing your brand’s positioning will help you sharpen your communication message. For example, during Apple’s new season product presentation, design and aesthetics are communicated with a lot of emphasis. However, this is always backed by how they are going to deliver it. The performance is never left behind.
For this to be effective, a brand should communicate the same value consistently over a long period of time. This will help strengthen the idea in the minds of the consumer.
A very common example is that BMW is known for its performance, Mercedes is known for its luxury, and Volvo for its safety. These are the stereotypes that have developed over time in the minds of customers in the automotive space. These may not be true, but such attributes are hard to shrug off.
Customers Use Brands as a Medium of Self Expression
Depending on the product, brands play a very important role for consumers as a medium of self-expression. We believe that customers make rational decisions, that is a customer will choose a product for its “function” over its “form”. However, this is far from the truth. While the purpose of the product is of utmost importance, but ask yourself if this is genuinely true.
If that would have been the case we wouldn’t have been driving SUVs and riding mountain bikes in the city.
More and more brands are now positioning their products as a lifestyle product. In the age of social media, the need for self-expression is highly desired by millennials and Gen Z. So it’s important for brands, where product functionality is not of primary importance (in categories like apparel, motorbikes, footwear, eyewear, etc.) to go beyond the conventional theory and explore to position the brand with an emotion or lifestyle.
For example, Nike tries to communicate the winning spirit of an athlete, Oakley tries to stand out with its provocative design and being an outlier, Asics tries to portray itself as a subtle technically reliable brand, etc.
Royal Enfield (RE), a popular Indian brand known for ruggedness, but it used to be known as a brand for functional delivery in the 90s. It positioned itself as an old-school workhorse bike for the no-nonsense hardworking Indian males. Around early 2000s, it then started re-positioning itself and positioned itself as a lifestyle brand, a touring bike for a traveler.
Royal Enfield is one brand that completely transformed itself. However, it didn’t forget it’s original customer base, which it still caters to.
Raymond, a popular formal suiting brand, also tried to shred its image. Originally targeting senior men, it went on to reposition itself to target youngsters, but I’m not sure how successful they have been.
These are my interpretations of brands, however, many brands have evolved and created a brand positioning for themselves in such a way, either by sticking to their original brand positioning or focusing on a new one.
How Companies Approach Brand Positioning Nowadays
Companies that sell products to individual customers understand these positioning concepts very well. In order to maximize sales, companies try to create a portfolio of brands that appeal to different customer segments.
For example, the VW automotive group has multiple brands in their portfolio like Lamborghini, Porsche, Audi, VW, and Skoda to name a few. Brands like Lamborghini & Porsche aim to tap the high performance luxury customers, Audi taps into the executive segment, VW the middle class and Skoda the cost-conscious.
Another example is the apparel brands from Aditya Birla Fashion, like Louis Philippe, Van Heusen, Allen Solly and Peter England to name a few in formal clothing and smart dressing. Companies position their brands in such a way that they can give their customers a choice, or an illusion of choice, for their products, so as to maximize their market share.
Understanding the customer’s mind share is a complex thing and marketers are constantly trying to alter their product offerings in different ways using various psychological benefits like:
- Association with a lifestyle or sport, by providing some unique features
- Standing out using some unique or provocative design
- Exclusivity by providing some limited edition colors, features, models, co-branding etc.
Abhishek Sareen is a sales & marketing professional with over 16 years of experience. He started his career as a management consultant and currently works in international business. He has set up businesses like Track & Trail, BrooksBicycles.com and created consumer brands like Montra, Machcity and Roadeo.
Prior to this, he has also worked in sports retail as department manager. He’s is a passionate cyclist and participated in several endurance competitive events like MTB Himalaya.
His interests are in behavioral psychology, economics and chess. He is a graduate in Computer Science and an MBA in Marketing. He completed his executive education from IIM-A in 2016 focusing on business strategy.