What is a competitive positioning marketing strategy?
In the current climate, it can take more than merely starting a business for it to be successful. Successful businesses hire marketing professionals to use specific strategies to encourage more customers to buy more products or services from a company. Competitive positioning is one of many strategies that businesses use. This strategy enables its users to determine the value of a product or service and what sets it apart from its competitors. In this article, we discuss the meaning of this marketing strategy, its aims and how you can implement the strategy.
What is competitive positioning?
Competitive positioning is a strategy used by marketing professionals to distinguish a business or company from its competitors. To implement this strategy, marketing professionals examine different aspects of the company's market, such as current trends and customer needs to reach a more competitive position.
The main goal of this marketing strategy is to increase sales, by making the company more appealing to customers. This action might involve creating a specific segment for your company so that you can provide products or services that meet the particular needs of your customers. A specific niche reduces your competition and increases the likelihood of growing your loyal and regular customers.
Understanding a company's competitive position
It can be useful to use an analogy to understand a business' competitive position better. For instance, when watching competitive car racing. In this scenario, you're more likely to focus on the car that's performing better instead of a more efficient or attractive one.
You can also apply this logic to competitive positions. A company's competitive positioning may not necessarily relate to the quality of goods or services it offers. Instead, it describes the position of your products or services in comparison to your competitors. If your company provides more value than most of your competitors and consumers are aware of this, you're more likely to have a better competitive position.
Components of a positioning strategy
It's important to consider the essential components of a positioning strategy when looking to develop your own. These components include the following:
Your product market
Before entering any market, learn about its various elements and the space your product seeks to occupy. You may enhance your company's success if you determine the market size for your product, whether it's small or large. Also, find out how the market has grown and who your competitors are. For instance, if you're going into the clothing market, you may want to research how the clothing market works, including what sells more, the price range of clothing items and the most successful clothing brands.
By performing actions, such as this, you can make well-informed decisions and help to improve your company's performance.
Your product value
A key component of a positioning strategy is to outline how much value your product or service provides your customers at its current price. This can help determine whether the price of your product or service needs adjusting. Suppose the cost of your product is equal to the value it offers. In that case, you may occupy a better position than your competitors, especially those who sell less valuable products at a high cost. While making a profit is your goal, avoid deterring customers by selecting fair prices.
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Measuring the performance of your company may influence how successful your marketing strategy is. You can analyse how well your company is performing by using the SWOT technique, which stands for strengths, weaknesses, opportunities and threats. This analysis may help you determine where your company stands in the market. You may also discover which areas in your company require improvement by using this technique. Take the necessary steps once you've identified these areas.
Learn the specific needs of your potential customers by using social media and analytics to find out how to effectively market your products to these audiences. By using this information, you can create innovative marketing campaigns that position you above your competition. It's important to always consider your customers' needs since their response to your product may determine your success.
Tips for developing an effective competitive positioning strategy
Effective competitive positioning strategies are beneficial to businesses, improving a company's chances of success. Here are some tips that can help you to develop one:
1. Set your goals
Setting goals for your company's competitive position enables you to develop a better strategy. It's useful to outline the company's short and long-term goals in as much detail as possible, involving the decision-makers and the marketing team in the process. By clearly outlining the goals the company are working towards, the company can avoid complications that may arise in the future.
2. Learn about your market
It's unwise to enter a market without first learning about it. Find out how the market works and what your customers are looking for. By carrying out some research, you can make better business decisions. Find out what the market trends are, learn about your competitors, the latest products and, in particular, the products that sell well currently.
3. Observe your competitors
Analysing your competition allows you to discover what changes can benefit your company. By applying these changes to your company's strategy, such as by adopting more creative and innovative marketing ideas currently used by your competitors, you may attract more customers. Competitors may also provide insight into what products or services your customers are looking for. While it's important to learn about your market, it's equally useful to study your competition.
4. Determine price and value offered
When formulating this marketing strategy, it's important to consider the price and significance of the goods or services offered by your competitors and determine if they provide value to customers. After this analysis, you can determine the value of your company's products or services and adjust their price to provide more value to your customers than your competitors. Avoid selecting a price at random, it's far better to conduct thorough research and compare prices with your competitors first.
5. Set a timeline
An important step to developing this strategy is to set a timeline. A deadline can incentivise individuals or a team to complete tasks speedily and efficiently. By providing the marketing team with a deadline, they're more likely to help the company reach a more competitive position promptly.
6. Find your market niche
Finding your specific niche can be highly beneficial to your business. It may enable you to meet customers' specific needs by providing goods or services that other companies may not provide. You can also target your marketing towards these customers to tell them why your products offer more value than others, which may improve your company's competitive positioning further.
Related: How to define your target market: examples and types
How to create competitive value
Creating competitive value for your products is necessary to succeed in the marketplace. A higher competitive value increases the appeal of your products to prospective customers, leading to a rise in sales. Here are three ways to help create competitive value for your products:
1. Operational excellence
You can improve your company's competitive value by using the concept of operational excellence. This involves marketing your company's ability to produce a high amount of quality products at a low cost. A company may achieve this by efficiently manufacturing its goods in bulk, while also being able to quickly sell them. In most cases, this type of product doesn't require new designs so it's easy to produce them in large quantities.
2. Product leadership
The concept of product leadership involves looking at what differentiates your company's products from its competitors. By marketing the quality and uniqueness of your product, you can attract more interest and purchases from customers. Using this concept requires you to discover what gaps are in the market so that you can fill that space, either by creating new products or by discovering new features and improvements to make on your current products. Product leadership is particularly useful for products that constantly get new upgrades and features, such as electronic devices.
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3. Develop strong customer relationships
Maintaining a good and healthy connection with your customers may also help improve a company's competitive value. Regular customers are more likely to try out your new products and recommend them to friends, family and colleagues. Developing strong customer relationships may enhance your company's marketing efforts, such as by being active on social media. By creating and managing effective social media accounts, you can connect directly with your current customers and reach out to prospective customers.
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