I'm again relying on the article by Miklos Sarvary to provide the definition. He states that, "positioning is defined as the marketer's effort to identify a unique selling proposition for the product". At this point in the marketers journey, s/he has already segmented the market and targeted the particular segment the company decided to pursue.
Creating a Positioning Statement
One of the tools that Sarvary comments on is the positioning statement. There are three questions that the statement must address.
1. Who are the customers?
2. What is the set of needs that the product fulfills?
3. Why is the product the best option to satisfy those needs?
To effectively answer the questions above, the statement will be formed in a way that is directed towards the potential customers. The third question being addressed by the positioning statement really helps align the company behind one of the 4 P's. The element that stands out will help the company determine its primary point of differentiation.
Simplifying Marketing-Mix
As stated above, the company can determine any one of the four P's as its primary. The key is that the company clearly determines its position in the market and ensures its products are differentiated from competitor's products. An example of this positioning and marketing-mix simplicity is Trader Joes. Trader Joe's has made a niche for themselves in the grocery market by differentiated themselves through price. There are no gimmicks, coupons, or clubs at Trader Joes. They offer their own labeled, cost competitive products to the consumer.
Trader Joe's and companies like them succeed because they have made strategic decisions on the companies positioning in the market. It is important to remember that before a positioning statement can be made and further honed through branding and differentiation, the company must complete the other steps in the marketing process. Market segmentation and target market selection need to be completed to allow a proper positioning to be done. This will allow the company to focus on the right customers through the correct marketing-mix element.
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