Market Positioning is a crucial aspect of designing your approach to marketing, particularly as it pertains to competition. B2B Companies have to be especially conscious of this aspect as they have to demonstrate the best value for their clients with fewer approaches than B2C companies.
This article will discuss some important aspects of branding, differentiation, and positioning.
What is Market Positioning?
In the simplest terms, market positioning is the act of influencing consumer perception with regard to a brand or product compared to one’s competitors. Market positioning allows companies to control the conversation around their brand and set it apart from the competition. We see this in daily life all the time:
- Apple positions itself against Microsoft as a more luxurious OS.
- Tesla positions itself as cutting-edge while Mercedes positions itself as classical, playing on its prestige legacy.
- Supermarkets like Lidl will try to be cost-effective against local stores.
Positioning & Marketing Strategy Models
There a many types of positioning strategies in marketing. These can be based on various elements of the marketing mix or external factors:
- Product attributes and benefits: Building on the core USP of your product and using it as a marketing strategy.
- Product price: Differentiating yourself using pricing.
- Product quality: Emphasizing the value your products can provide or the status the brand conveys.
- Product use and application: Associating your brand/product with a specific use.
- Competitors: Competitive positioning puts two companies head-to-head against each other and compares them (think of the Mac vs PC ads or Coke vs Pepsi feud).
Strategic positioning attempts to achieve a sustainable competitive advantage by carving out specific niches within the overall market with minimal overlap. It helps in not butting heads with another brand while competitive positioning does the opposite.
B2B businesses are often going to find themselves in a competitive space, vying for the attention of clients and emphasizing USPs/value to the prospect vs that of their competition. The exception to this is if they operate in a blue ocean and provide a product that no one else can (e.g., an industry-specific software package or something so thoroughly trademarked that no company can provide a substitute).
It’s best illustrated by the Brand positioning framework:
B2B Brand Positioning
Marketing Strategy & Competitive Positioning
B2B positioning is similar to B2C in theory but, in practice, it can be fairly distinct. For example, when it comes to B2B, you will likely have competitors with very similar products trying to fulfil rational needs for a company. This often means that B2B companies have to compete on price even more than the average B2C market since their end result has to either increase efficiency or decrease prices.
Therefore, one of the first ways we think of price, quality, and strategic advantage is with a brand positioning map:
Brand C has lower prices but also lower quality, so they can certainly reap the advantages of competitive pricing using price penetration or cognitive marketing such as offering deals to companies priced out by competitors. Brand A has a higher advantage over Brand B in that it is of higher quality while lower in price. In this case, Brand B would be at a disadvantage but there are other ways to set yourself apart from the competition aside from price.
How to Perform a Competitive Pricing Analysis
With these steps in mind, here are a few tips:
The lowest price is not always the best option. One of the disadvantages of competitive pricing is that it can lead to lower profits by crowding the market. As we’ll cover in the case at the end, a higher price can boost sales depending on audience expectations.
Pricing goods and services should take into consideration more than pure price. Some companies can provide a wider range with better equipment or processes. Factoring this in is part of positioning and being able to counter with a proper message.
You can also read our comprehensive article about competitor analyses for further information.
Differentiation requires a lot of specific market segmentation targeting and positioning. Find and research your target audience, create a buyer persona, identify what their existing B2B partners are missing out on, and create a plan that sets you apart from the competition. Here are a few categories to consider when looking for non-price areas to differentiate your product from a competitor’s:
- Design or features.
If you can’t alter your product, you can provide a smoother process (this is particularly useful for developing positioning strategies in service marketing):
- Order processing speeds or efficiency.
- Availability can be particularly useful for companies with tight or irregular deadlines.
- Distribution methods.
- After-sale services and support.
Differentiation positioning requires a product to be able to define itself against the competition in such a way it cannot be substituted for or easily replaced. In this sense, companies with such a position can seek out companies with special needs in their workflow.
Practical Market Positioning Cases
Microsoft vs Apple
Among the famous brand positioning examples, one can look at Microsoft and Apple as great examples of communicating brand positioning while being in the same sector.
Apple’s positioning statement is as follows:
On the other hand, Microsoft has stayed dominant by playing into its everyman legacy:
Looking at the two statements a few thematic differences become clear:
- Apple focuses on individualism, while Microsoft focuses on collaborative, corporate synergy.
- Microsoft is talking about bringing out the full potential of people and businesses.
- Apple is focusing on innovation and advancement.
- Microsoft talks about its products as tools for better work.
- Apple talks about its products as revolutionary, innovative, and even world-changing.
Chivas Regal’s Brand De-Positioning & Repositioning Market Strategy
Price positioning under a competitive framework is not always a race to the lowest price. Oftentimes, a company can position itself with a higher price to stake out a place as a more “up-market” alternative. They can also employ differentiation positioning. Case in point: Chivas Regal (while not a B2B company, the case makes a good point about price perception).
Originally devised as a cheaper whiskey with a smoother taste than its price bracket would usually permit, the original run of the liquor giant was not stellar by any means. The problem here was not in the product or the brand’s marketing efforts but rather in the expectations of the customers.
Whiskey drinkers prefer something in the mid-market or up-market range because it is a drink with a particular image: classy, formal, a signifier of success, and often used as a gift for an erudite gentleman. With these peculiar traits, something marketed on cheapness can be at a disadvantage. The solution: increase the price with no changes to the product.
The increase in price brought with it a new impression of the brand. A sort of cost-based placebo effect made the customer-base uplift the brand as liquor for the refined pallet.