Competitive Positioning – What It Is And Why It’s Important
July 27, 2023 5 min readUnderstanding Competitive Positioning and Its Pivotal Role
In the pulsating world of business, competitive positioning is a term that holds a world of significance. It is a strategic manoeuvre, a critical element that has the potential to set a company apart in the crowded market landscape. Let’s explore this concept in-depth, and shed light on why it plays such an essential role in the success of any business.
Unravelling the Concept of Competitive Positioning
Competitive positioning is the unique position a brand chooses to occupy in a discerning customer’s mind. It’s the way a brand distinguishes itself from the competitors and clarifies what it stands for. It’s a strategy that revolves around portraying a brand’s unique value to customers compared to its competitors.
Take, for instance, Apple Inc. The tech behemoth has positioned itself as a producer of high-quality, innovative, and sleek products. Their competitive positioning strategy has helped them attract customers who value these specific attributes, setting Apple apart from the competition.
The Anatomy of a Robust Competitive Positioning Strategy
An effective competitive positioning strategy doesn’t manifest overnight. It requires a keen understanding of the brand, its offerings, target audience, and the competition. Here’s how one can go about developing it:
- Identify Unique Selling Proposition (USP): The first step in competitive positioning involves identifying your USP. It’s about determining what sets your offerings apart from the competitors. A USP could be anything from superior quality, lower price, better customer service, or a unique feature.
For instance, TOMS Shoes has positioned itself uniquely with its “One for One” policy. For every pair of shoes sold, the company donates a pair to a child in need. This social cause became their USP, differentiating them from other footwear brands.
- Know Your Target Market: The next step is to understand your target market thoroughly. Who are they? What are their needs, aspirations, and pain points? The more you understand your target audience, the better you can position your brand to resonate with them.
Consider the luxury car manufacturer, Lexus. They’ve positioned themselves in the minds of affluent, comfort-seeking customers who desire luxury, high performance, and top-notch safety.
- Analyze Your Competition: Finally, you need to scrutinize your competition. What are they offering? How are they positioning themselves? An in-depth competitor analysis can provide invaluable insights to carve out a unique position for your brand.
Think about how Spotify, the music streaming service, positions itself against rivals like Apple Music. They highlight their algorithm-based personalized playlists, an aspect where they outshine their competitors.
Why Competitive Positioning Holds the Key
Now that we understand what competitive positioning is and how to establish it, let’s delve into why it’s so important:
Customer Clarity: Effective competitive positioning simplifies the decision-making process for the customer. It provides clear differentiation from competitors, highlighting why the brand is a better choice. This, in turn, makes it easier for customers to choose your brand over others.
Value Communication: Competitive positioning is a powerful way to communicate the value your brand brings to the table. It tells customers why your product or service is worth the price and why it’s superior to other options available in the market.
Guided Marketing Efforts: A well-defined competitive positioning strategy can guide all marketing and branding efforts. It informs the brand voice, marketing messages, and channels of communication. In essence, it becomes the cornerstone of the brand’s marketing strategy.
Profit Margins: A successful competitive positioning strategy can command higher prices for your products or services. When customers perceive your brand as superior or unique in some way, they’re often willing to pay a premium. As a result, this increases profit margins.
Brand Loyalty: Effective positioning helps foster brand loyalty. When customers identify strongly with your brand’s position, they’re more likely to stay loyal, even in the face of competitive offerings. It promotes repeat business and reduces customer churn.
Whether you’re a startup trying to make a mark or an established business looking to maintain its lead, competitive positioning is crucial. It’s the compass that points your brand in the right direction, guiding every aspect of your marketing strategy. With competitive positioning, you’re not just another player in the game; you become the game-changer.
Carving a Niche with Competitive Positioning
Developing a unique competitive positioning is akin to carving out a niche for your brand in the saturated marketplace. This niche becomes your sanctuary, a space that belongs only to your brand in the customer’s mind. You make it yours not by barricading others out, but by demonstrating value that is uniquely yours.
Take the case of the Dollar Shave Club, a direct-to-consumer grooming brand. They’ve positioned themselves as the affordable yet high-quality alternative to big-name razor brands. Their humorous marketing and subscription model has resonated with the budget-conscious, practical consumer. Despite operating in a market dominated by giants, they’ve carved a niche for themselves through their distinct competitive positioning.
Competitive Positioning and Customer Perceptions
One of the key aspects of competitive positioning is managing customer perceptions. How your customer perceives your brand largely influences their purchasing decisions. Competitive positioning steers these perceptions, crafting an image that’s compelling and attractive.
Consider Tesla, a brand that’s synonymous with electric vehicles. They’ve positioned themselves as the pioneer of sustainable luxury mobility. Through their unique position, they’ve managed to alter customer perceptions about electric cars, presenting them not just as an environmentally friendly choice but also a desirable status symbol.
Staying Dynamic with Competitive Positioning
As essential as it is to have a well-defined competitive positioning, it’s equally important to remember that positioning isn’t a one-time exercise. It’s a dynamic strategy that should evolve with changing market trends, customer preferences, and competitive scenarios. Competitive positioning isn’t about being static; it’s about being nimble and adaptable.
Netflix is an excellent example of a brand that has continuously evolved its competitive positioning. Initially, they positioned themselves as a convenient DVD rental-by-mail service, a unique proposition at that time. As technology and consumer behavior changed, they swiftly transitioned to streaming, positioning themselves as a vast library of on-demand content. Today, they’re positioned as a producer of high-quality original content, constantly evolving to stay ahead of the curve.
The Future of Competitive Positioning
In the digital age, competitive positioning is more critical than ever. The explosion of brands, products, and services has made the market more cluttered and competitive. The rise of online platforms has empowered customers with more information and choices. In this environment, standing out and capturing the customer’s attention requires a strong competitive position.
To conclude, competitive positioning is a strategic necessity in today’s business landscape. It’s the beacon that guides your brand towards market success. By defining what sets your brand apart, understanding your target audience, and keeping a keen eye on the competition, you can create a competitive positioning strategy that’s not just unique but also sustainable.
As the marketplace evolves and competition intensifies, remember that your competitive positioning should evolve too. After all, it’s not just about where you stand today, but also where you’re heading tomorrow.