It’s All Relative

Remember that positioning doesn’t just mean what your target market thinks about your product. Rather, it’s about how she thinks about it relative to competitors’ products—your product is less expensive, performs better, or fits better with the customer’s lifestyle. Positioning often relates to a brand’s strategic objectives. Looking back at our previous discussion of behavioral segmentation, the advertiser might think about potential customers in terms like these:

• Does not use the advertised product category—the company wants to convert nonusers to users (grow the market).
• Uses a competitor’s version of the advertised product category—the company wants to gain market share at the expense of competitors by creating or capturing brand switchers.
• Uses an alternative version of your product in the advertised product category—the company wants to upsellStrategy companies use to get customers to buy a more expensive version of its product. customers (get them to buy a more expensive version of its product) or migrate them to future product variants.
• Uses the advertised product—the company wants to increase the frequency or volume of purchases or reinforce brand loyalty.

Positioning Dimensions

• Value: The product reaches price-sensitive customers by being low cost. An example would be Wal-Mart’s “Every Day Low Prices.” Companies often create subbrands to create distinctive positioning for the brand based on price. The Gap, for example, is a mid-price clothing store, while its sister company Banana Republic is a higher-priced clothing store, and Old Navy is the value-priced offering. Similarly, Volkswagen’s Skoda brand is known as the low-cost car brand.

Figure 6.10

Whether you pay $9 or $99 for a pair of jeans depends upon the positioning dimensions of the product.

© 2010 Jupiterimages Corporation

• Performance: The product is high performing on one or more dimensions that the target audience seeks. For example, if you focus on a lifestyle or design positionAppealing to the customer who values the social or aesthetic statement a brand makes—and often what others will think about him or her after the purchase., you appeal to the customer who values the social or aesthetic statement a brand makes—and often what others will think about him or her after the purchase. For example, Chanel is a designer-led luxury brand. The company has identified a new group of customers it wants to target. Chanel calls the group “new wealth”—women who have acquired a significant amount of money at an earlier age than previous generations. These women, with a net worth of over $1 million, have more cutting-edge fashion tastes. When Chanel CEO Maureen Chiquet strategizes about launching a new perfume to appeal to this customer segment, her watchword is exclusivity. “Let’s not be thinking about how big we can make this,” she tells her team, “but how exclusive and special you can keep it.”Robert Berner, “Chanel’s American in Paris,” BusinessWeek, January 21, 2007, 70–71.
• Functional: Solves a specific problem or accomplishes a specific goal for the customer. Tide-to-Go®, for example, solves the problem of removing a stain when there’s no time to launder the garment.