Finding a distinctive space to occupy in the mind of consumers in today’ highly clustered markets is not an easy task. However, as difficult as the task is, it is an unavoidable task that must be accomplished for a guaranteed and sustainable competitive advantage.
Strategic Positioning goes beyond finding perceived gaps in existing markets and
bridging such gaps; it involves the deliberate creation and integration of a unique bundle of activities to deliver a unique mix of relevant values that will stand a brand apart and stand the test of time.
Most marketing managers describe strategic positioning in terms of meeting unsatisfied customers’ needs ; this is simple positioning (which though is laudable if it can be done, but still remains a short run marketing solution that might not withstand competition from imitators who are ready to clone products and services in no time).
Enduring strategic positioning is a function of internal practice; i.e. choosing to perform activities differently or perform activities from competitors that cannot be easily replicated across several levels. This is so because the incidence of dissatisfaction or gaps in a market is often, really not due to differences on the demand or customers’ side but mostly a function of inadequacy on the supply side.
Therefore, a customized set of activities that enforces these distinct characteristics, that adequately meets needs and delivers relevant wanted values will ensure lasting competitive advantages for a product or service brand.
BASIS OF POSITIONING:
Positioning could be based on any of the following traditional platforms of variety, needs or access.
A. Variety-based positioning
This positioning is based on the choice of an organization to produce a set or subset of an industry’s products or services rather than produce for customer segments. This is rational and appropriate when a firm can best produce particular products/services using distinctive sets of activities based on their core competencies or specialties.
- International Energy Insurance
For example, International Energy Insurance, IEI, and the provision of insurance cover only in the energy sector of the Nigerian economy. With quite substantial operating funds, IEI could have chosen to provide cover in other areas of insurance, but it opted for a niche market using its expertise in the energy industry as the basis for strategic positioning.
Furthermore, certain financial services organizations providing different types of financial services, such as mortgage financing, asset management, micro financing, etc based on their core competencies.
Needs and Wants
Also, variety based positioning can best be understood using the distinction between needs and wants. While needs are more basic and all encompassing, wants often are often about particular utilities or options that provide specific satisfaction to general needs, based on individual preferences and idiosyncrasies.
An individual may have to travel from Lagos to Abuja: his basic need is that of transportation; however, he has the options of going by air travel or by road. Furthermore, if he chose to go by road, he still has a variety of options that include traveling by regular bus or luxurious bus or by car, and so on.
Given this scenario, what will determine his choice is what he wants and what he wants is a subject of a number of factors chief of which is his preference among the varied options, while his preference is equally a function of a number of other factors.
B. Needs-based Positioning
This is the closest to contemporary thinking in brand management and market segmentation. It is appropriate where there is a large market with large subgroups of customers with a number of differing needs and tastes that can be served by a customized set of activities.
Needs-based positioning is often a function of social class. In this situation, some groups are more price-sensitive than others. Some are totally price-indifferent; some require different levels of quality, while others need varying amount of information support and service. E.g. Nigeria and the food/beverage industry ; some brands are positioned for the high class with uncompromising taste for high quality, while some service the culinary needs of the lower class.
Though, most managers position based on the customers’ needs they are meeting, differences in needs will not always translate to meaningful brand positioning, unless the best set of activities to satisfy those needs and customer groups also differ.
For example, the manner in which you satisfy a customer at the Pen Cinema, Agege will differ from that at the Silverbird Cinema in Victoria Island.
C. Access-based positioning
This could be due to geographical locations or other demographic variables bordering on accessibility, making the best configuration of activities to reach them differently. E.g operating in rural communities versus urban centers, or servicing a customer group strictly based on their locale.
A good example of this positioning is pure water manufacturing outfits that only supply those closest to their operating locations. This is a strategic option that a lot of newspapers that have gone into extinction in Nigeria ought to have exploited maximally.
But on the contrary, some newspapers are positioned as national papers even when readership and patronage of such newspapers outside their immediate environment is nothing to write home about.
Beyond those briefly discussed basis, there are other traditional positioning bases which we shall not examine so as not to turn this article into an academic treatise.
THE POINT FOR STRATEGIC POSITIONING
If you don’t position your brand strategically you will only end up contributing to making the market leaders strengthen their positions. Brands that do not stand out usually end up being generic such that when the consumers need the satisfaction from such commodity groups, what they remember are the market leaders who are often the first movers.
This way, you hear people ask for Coke when they need a soft drink, or call for ‘Ragolis’ when they need table water, and sometimes ago, people asked for Omo or Elephant when they needed detergent.
Thus, a brand well-positioned assumes a special reference point in the consumer’s mind for its particular category. Therefore, the imperative is for the brand manager to find out one or more characteristics from the onset, based on real or perceived needs that can be used to set his/her brand apart from numerous other brands in the highly clustered market.
POSITIONING PLATFORMS
To find an effective strategic positioning platform for a brand, the following strategic options can be explored:
Price and Quality
In most product categories, the ability to deliver value for money will most certainly differentiate a brand. This must be ensured because consumers want some considerable level
of quality at a price considered reasonable which to them is affordable, and any brand able to meet this expectation will benefit immensely.
However, essential to this ‘Value for money’ positioning is to have some advantages from the inside of the organization that may revolve around exclusive access to maybe raw materials, key technology, or unmatched productive/operational efficiency.
Mouka Foam’s claim of products that are affordable, reasonable and up to standard on quality was able to stand it apart in the foam market. Also, Globacom was able to compete favorably in the telecoms segment despite not being one of the first movers by positioning itself as a more economical and quality brand.
This differentiation was able to guaranty the brand strong and rapid market penetration; it has succeeded in availing it a huge share of the market as it consistently delivered on services that were comparable if not better than what competitors offer even at higher price.
Specific Use
The ability to create and position a brand for specific use(s) that are often different from the main use of its product class could be the bedrock of sustainable advantage over the competition , provided such uses are desirable and relevant to the target market.
A good example is LG and Haier Thermocool’s allergen buster air conditioning systems. These, Air Conditioners basically do more than cool the environment; they also ensure a cleaner air. This special use might guarantee a positioning that is difficult to imitate by the competition if these organization have the set of activities tailored to deliver on this value exclusively.
Such set of activities usually border on exclusive requisite technology for product brands or unique team of human resources or certain intangible benefits like ambience for service brands.
Positioning on special specific use usually arises at the product augmentation levels. Here, the challenge is for brand managers to look beyond the core and actual attributes of their products and provide augmentations that make sense to their target segments.
New product users
It is amazing how huge a new market can be created by repositioning a brand for new users. Smart managers should consistently endeavor to exploit other markets segment that their existing brands can serve to give the brands a new life.
A good example is taking Lucozade drinks from the sick and making it an energy giving drink for the energetic consumers as Lucozade Boost. Another good example of such positioning for new markets here in Nigeria is the subtle repositioning of Bournvita and Milo beverage drinks from the adult segment that I remember from a few decades ago, to that of children in recent times.
Against a competitor
A few years ago, Harp tried to position as a better alternative to its competitors with its strategy of ‘no-hangovers’. Although, this proposition seemed not to have gone very well perhaps due to the idiosyncrasies of the market here or a lack of an adequate supportive strategy, it was a good positioning platform as it was a solution for the problem of the next morning that usually comes with heavy drinking which was associated with the competition.
Pepsi also did this effectively when it was positioned as the ‘Un-Cola drink’. Although Legend Extra Stout tried it but could not get it right to effectively challenge Guinness stout, Gulder Lager Beer successfully positioned against the existing competitors at the time of its entry as it was not just offered as an alternative to other lagers, it was introduced on the platform of a more glamorous, elitist lager brand for the young that have style, compared to such beer brands as Skol, 33, Top, that either appealed to the older generation or were just unglamorous.
Product attributes
Creativity is an invaluable asset in finding and sustaining a strategic positioning. Brands that could incorporate certain attractive features or attributes into its values would benefit competitively in the market place.
Example is the Samsung brand of mobile phones: at a time when most competitors were concerned with offering phones with basic features, Samsung introduced top-notch mobile phones like the true i (T100) and the free i, more upscale masterpieces in terms of design with a lot of appeal and color which brought with it some sort of aesthetic prestige to its users.
And before competition could straddle, Samsung’s internal cultures and activities had ensured its strategic position in terms of design and innovation.
The use of product attributes for sustainable positioning is also highly prevalent in the car manufacturing industry. However, it is worth noting that any product attribute that does not translate to benefits or value offering to the consumer is not likely to ensure sustainability of that brand or its positioning.
Benefits and problem solution
A good example of this is Amstel Malta’s positioning as the healthy choice based on its sugar-free composition which has gone a long way in creating that special place for it in the minds of consumers.
STEPS TO POSITIONING
Whichever platform a brand intends to use in positioning, the most difficult task is the development of a positioning strategy. But the imperative is for the brand managers to know the market place and ensure the following:
- Determine relevant product market or segment and identify existing gaps.
- Determine the competition and how the market perceives them.
- Determine consumers’ process for evaluation and adoption of options.
- Develop positioning tactics.
- Integrate positioning tactics into a good strategy
- And make clear Trade-offs.
Market Segmentation
Market Segmentation process identifies the segment that the market may choose to address, based on the evaluation of possible segments using profitability and response sensitivity as yardstick for choice.
Also, marketers often use the number of consumers in a segment for target marketing (mostly), thereby aiming at the largest market segment. But the best choice is that section that has been neglected by the competition. One in which the consumers are more likely to be dissatisfied with the existing products and brands, or one where there currently exists a gap i.e. unmet needs and wants.
Knowledge as most essential
Given these, the most important requirement for strategic positioning is knowledge. Hence, the need for market research.
The development of a positioning strategy is mostly dependent on the techniques, authenticity, and direction of marketing research. The resultant strategy identifies the target market to be served. It discovers the gaps and inadequacies subsisting. It notes the amount of emphasis to be placed on each element of the marketing mix, as well as the necessary tactics to be deployed and integrated into a strategic systematic unit for competitive advantage.
Some strategic positioning in the Nigerian market
It is imperative that target segments not only need the product or service identified as gaps, the market must be able to realize that need, and at the same time desire it, while the organization must have the ability to meet such needs.
Innovations in the Banking Sector
Banks like GTB and Zenith’s positioning in the 80s/90s cash in on service delivery shortcomings in the sector. The target segment members were exposed and enlightened and so could tell the difference between ordinary inefficient banking, hitherto prevalent before now, and qualitative customer–focused banking.
That way, not only was the gap adequately filled, it was profitably filled. It is instructive to note that a decade or two earlier, their positioning might have been out of place due to low level of exposure of the market place.
The detergent market segment
Another worthy example is the positioning of Klin and Ariel in the detergent market segment as against the big packs of Omo and Elephant that were the hitherto market leaders, but which were unfortunately getting out of reach of the masses in the mass market they served.
The promoters of Klin and Ariel sure did their homework well: knowing the Nigerian mass-market segment, under the weight of harsh economic conditions was highly price-sensitive; they introduced the very affordably priced 30g sachets while delivering on quality at the same time.
By reducing the size and logically the price, these new brands that are now the market leaders (including omo which also succeeded in successfully repositioning on this platform), succeeded beyond merely offering cheaper detergents which were not really cheaper, but also more affordable.
Cowbell and Three Crowns in the milk/diary food market.
Similar to the detergent market, the target market in this sector was also highly price-sensitive and unenlightened. Thus, they could not tell the difference between merely taking milk products and meeting the required daily average RDA, which the newly introduced small powdered milk sachets hardly meet.
What this group needed was more affordably priced and packaged milk product, not the benefits accruable from meeting RDA on consumption.
Broadcasting Industry
When Cool FM stepped into the broadcasting industry in Nigeria, it was positioned to sell friendship and entertainment and put a face to radio broadcasting. The target market includes young and old who are desirous of a more humane form of broadcasting. This segment has as members, discerning Nigerians as well (and to a large extent) foreigners with a different taste from what we had back then.
This target segment was also highly enlightened and thus was receptive of this idea of interactive radio journalism. To make their value offerings really distinct, cool fm had in place an integrated system of activities that spans programming, personnel, choice of music, and delivery, among others that reinforces the friendliness of the brand.
PROTECTING STRATEGIC POSITIONING ADVANTAGES
To secure, appropriate and protect a favorable positioning for sustainable competitive advantage, a brand manager must ensure the creation of fit among a firm’s activities as well as make necessary Trade-Offs.
- Ensuring Strategic Fit across internal activities
Fitting strategy to positioning is essential because a brand does not benefit competitively for much long if its positioning cannot be sustained; and the safest way to avoid this is to achieve fit.
Different positioning require different customized set of activities, and those further require different product/service arrangements, different personnel, employee behavior, facilities, skills, management systems; and all these need to be aligned strategically to fit together and achieve improved productivity and operational efficiency.
Here, everything matters as it involves having a whole system of activities, not a collection of parts. It creates pressures and incentives to improve operational efficiency. Firms with strong fits are rarely inviting targets. Their superiority in strategy and in execution only compounds their advantage and raises the hurdle for imitators.
By choosing a particular positioning, and adopting requisite tactics and strategy, senior management makes organizational priorities and directions clear, and day to day operating decisions become easy to make for employees across all levels, within this clear framework. Then, competitive advantage comes from the way these activities fit and reinforce one another, complementing one another in ways that create more economic values and superior profitability.
Accomplishing strategic fit among many processes is fundamental, not only for competitive advantage, but also to the sustainability of that advantage. With fit, it is tougher for rivals to match an agreement of interconnected activities than to merely copy a particular approach, technology, or replicate a set of product or service features.
The Cool fm example earlier is very apt in driving home this point. Its operational efficiency draws from its interlocking set of activities that strategically fit together, making the station rightly fit into the perceived gap they set out to fill. All its activities, structures and procedures support the unconventional light-hearted interactive, friendly broadcasting approach that can only be Cool fm. Put in another way, Only Cool fm can replicate Cool fm.
Fit Sustains Positioning
Positionings built on a system of activities are far more sustainable than those built on individual activities. Fit locks out imitators by creating a formidable chain and those who try to imitate or straddle will have to reconfigure many activities which most often, they find impossible or unaffordable.
As difficult as it seems to be, strategic fit can be easily attained when firms leverage their positioning strategy on their core competencies which could be key raw materials or other critical resources, special skills, personnel, technology, etc. to best fill perceived gaps.
These set of core competencies will not only stand a firm or brand out, but do so for the long run.
- Making clear Trade-Offs
The last sufficient condition to arriving at the unassailable status of inimitable competitive advantage through strategic positioning is making clear Trade-Offs.
A management school of thought posits that Trade-Offs is needed only by existing companies or brands to survive the onslaught of competition from new entrants for more visible and meaningful positioning; but it is my view that this defining tactic is required by new comers as well, for stronger and more focused positioning from the word go.
It is easy for organizations to fall into the snare of wanting to be too many things at the same time, but the harmful risk that this portends is that they may fail to be nothing worthwhile at the end of the day. Remember the old saying about ‘Jack of all trade, but a master of none’. The lure of operating across numerous fronts or delivering values in more than one area is highly tempting whichever situation or scenario a firm or brand finds itself.
Whether succeeding or struggling in its existing particular position, or the attraction of perceived booms in another market segment, firms are often tempted to stretch their brands too thin and lose the power of focus. A brand known for delivering a particular value may lose credibility or confuse customers, while undermining its equity if it is seen as delivering or attempting to deliver two or more incompatible values at the same time.
The imperative therefore is for management to develop appropriate strategies that are internally incorporated to suit target markets, while being bold enough to make unambiguous, focus-driven, direction-giving Trade-Offs.
The Advantage of Focus
The universal truth about ‘people that have clear directions in their lives going a lot farther and faster and getting a lot more done in all areas of their lives than those who do not’ surely holds true also for brands and organizations.
This fact was reinforced in the 2005 BusinessWeek/Interbrand ranking of global brands, where the biggest increases in brand values were recorded by those operating as single brands or in single categories, such as Ebay (21%), HSBC (20%), UBS (16%), Yahoo (16%), Nissan (13%), Audi (12%), Canon (12%), Motorola (11%), Toyota (10%), Nokia (10%), among others.
This development is instructive: the best brands (that hold precious positions and appropriate sustainable success from the market place over a long period) represent one thing and represent that thing well.
In the Nigerian environment, pertinent examples abound:
IEI and Energy insurance; the former IBTC and Investment Banking; Cool 96.9fm and interactive friendly radio broadcasting; Rhythm 93.7fm and more music; Brila FM and Sports Broadcasting; Channels TV and News reporting; the Silverbird Group and wholesome entertainment; Ovation International magazine and Celebrity Lifestyle reporting; Nigerian Breweries and beers; Zinox Computers; Nestle Foods plc; Nokia; ABC Transport,;among numerous others.
Finally
In conclusion, sustainability of competitive advantage can only derive from the commonwealth of getting it right on the choice of positioning, formulation of suitable strategy, ensuring requisite internal fit, and making clear Trade-Offs.