PRODUCT POSITIONING

Product positioning involves tailoring an entire marketing program—including product attributes, image, and price, as well as packaging, distribution, and service—to best meet the needs of consumers within a particular market segment. In this way, product positioning is part of the overall process of market segmentation, but involves a narrowing of focus. "Segmentation analysis tells us how the market is defined and allows us to target one or more opportunities," Glen L. Urban and Steven H. Star wrote in their book Advanced Marketing Strategy. "Product positioning takes place within a target market segment and tells us how we can compete most effectively in that market segment."

The key to product positioning is understanding the dimensions consumers use to evaluate competing marketing programs and make purchase decisions. It may be helpful for small business managers to create a graph in order to map consumer perceptions along several different dimensions. Once consumer perceptions are understood, the next step is to select the best positioning for the product and take steps to align the marketing program behind this positioning choice. Some examples of possible positioning choices include quality, reliability, and unique features or benefits. Before delving into product positioning further, it may be helpful to understand the process and goals of market segmentation.

MARKET SEGMENTATION

Market segmentation is the science of dividing an overall market into key customer subsets, or segments, whose members share similar characteristics and needs. Because it involves significant market research, market segmentation can be costly. But it is particularly important for small businesses, which often lack the resources to target large aggregate markets or to maintain a wide range of differentiated products for varied markets. Market segmentation allows a small business to develop a product and a marketing mix that fit a relatively homogenous part of the total market. By focusing its resources on a specific customer base in this way, a small business may be able to carve out a market niche that it can serve better than its larger competitors.

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