Product Positioning in the Market

ISSN 1392-2785 ENGINEERING ECONOMICS. 2008. No 1 (56) COMMERCE OF ENGINEERING DECISIONS Theoretical Aspects of Product Positioning in the Market R ta Ostasevi i t Kauno technologijos universitetas K. Donelai io g. 73, LT-44029, Kaunas The article consists of fourteen parts, starting with the introduction where the novelty, the problem of the research, the object of the research, the purpose of the research and the research methods are described.The purpose of the article is systemization and thorough description of the knowledge and information (found in a large number of sources) about the positioning concept, its position in the STP model, coherent description of the product positioning process steps as recommendations for successful product positioning process accomplishment. It is obvious that to be successful a product must occupy an explicit, distinct, and proper place, in the minds of potential and existing consumers, relative to other rival products on the market. Product pos itioning is the tool to achieve the above mentioned result.The article analyses how the product should be positioned on the market. The second part of the artic conceptions of product positioning in the market. Those include: Etzel, Walker, Stanton (1997), Ries and Trout (1986), Kotler (2006), Armstrong (2006), Bhat (1998), Fill (2006), Ferrel (1997), Lamb, Hair, McDaniel (2004), Boone and Kurz (2001). The third part defines the basement of product following parts: segmentation, targeting and positioning. The fourth part describes product positioning steps, interpreted by different scholars.There are two samples of product positioning process given (by Hooley (2004) and Hutt, Spech (2004)) and a model created by the authors of this article. The seventh part, identification and analysis of competitive products in the market, describes the best means how to distinguish competitive products, different levels of competition. The eighth part, identification of determinant attributes and measuring their significance to the user, reveals the techniques for selection of determinant attributes and criteria for successful determinant attributes.The ninth part, identification of current position of the product and other competing products according to determinant attributes, shows possible ways of carrying out this product positioning process stage. The tenth part, composition of the positioning map, reveals the process of their creation and provides reasons why it is such a powerful tool for examining the positions of products. The eleventh part, the determination of the desired position of the product, speaks about the ideal position of a product and where companies want to position their products (the desired position).The twelfth paragraph, called the selection of positioning or repositioning strategy, reveals possible positioning strategies proposed by various authors, repositioning strategies, presented by Doyle, Stern (2006), possible reasons of inadequate positio ning. The thirteenth part, creation of the positioning statement, discusses the three models of creation of product positioning statement: X-Y-Z model, I-D-U model, and a-b-e model. The last part consists of conclusions on theoretical studies of product positioning process. Keywords: product positioning, product positioning teps, determinant attributes, positioning map, positioning and repositioning strategy, positioning statement. Introduction There is no product in the world that does not have a position. Product positioning is about visibility and recognition and what product represents for a buyer. In markets where the intensiveness of rivalry and competition are increasing and buyers have a greater intrinsic values become critical. An offering with a clear identity and orientation to a needs will not only be purchased, but can warrant a larger margin through increased added value.Numerous organizations are trying to manage their positions occupied by their products and are usin g different positioning strategies to move to new positions in consumers minds and so generate an advantage over their competitors. Earlier positioning was very important in markets that are very competitive and where mobility barriers are relatively low. Nowadays these market characteristics can be applied almost to every industry or business, and to any economy. No product, of those which have survived, can be imagined without clear, distinct and intensive positioning.It is vivid, that for a successful product in the market good quality and well known brand are not enough. The product must occupy an explicit, distinct, and proper place, in the minds of potential and existing consumers, relative to other rival products on the market. Reaching (or not reaching) that desirable position in the minds of consumers is the result of successful (or not successful) positioning. The article analyses how the product should be positioned on the market. The object of the research: product posit ioning in the market.Purpose of the research: to systemize and thoroughly describe the knowledge and information (found in a large number of sources) about the positioning concept, its position in the STP model, coherently describe the product positioning process steps as recommendations for successful product positioning process accomplishment. Research methods used: Conducting theoretical studies of positioning in the market, the method of comparative analysis and systematization of scientific literature were used.Concept of product positioning There is a great number of different definitions of positioning in scientific literature of marketing. The concept of positioning seeks to place a product in a certain rspective buyers. Marketers offerings from those of competitors and to create promotions that communicate the desired position. Boone and Kurz (2001) Scientists Etzel, Walker and Stanton (1997) refer to a product and to differentiate (position) it in a favorable way from simi lar products. Ries and Trout (1986) distinguish from all other marketing theoretics, stating that positioning is not what is done to a product.Positioning is what you do to the mind of the prospect. The same authors indicate that positioning starts with a product. A piece of merchandise, a service, a company, an institution, or even a person. However, Kotler (2006) defines positioning as the act of designing the upies a distinct and valued position in the target consumers mind. Scholars Kotler, Armstrong (2006) verify that market positioning is arranging for a product to occupy a clear, distinctive, and desirable place, in the minds of target consumers, relative to competing products.Thus, marketers plan positions that distinguish their products from competing products and give them the greatest strategic advantage in their target markets. The purpose of positioning is to create a unique and favorable image in the minds of target customers, Bhat (1998). The author Fill (2006) states , that positioning, therefore, is the natural conclusion to the sequence of activities that constitute a core part of the marketing strategy. Market segmentation and target marketing are prerequisites to successful positioning.Product positioning refers to the decisions and activities intended to create and maintain a certain concept 1997). Positioning is developing a specific marketing mix to brand, product line, or organization in general (Lamb, Hair, McDaniel 2004) perceptions of a products attributes relative to the attributes of competitive products. Buyers make a large number of purchase decisions every day. To avoid constant reevaluation of numerous products, buyers tend to group, decisions. Rather than allowing customers to position products independently, marketers must try to influenceThe steps of STP model The foundation of positioning theory is made of one of the most important postulates of the science of marketing. extremely diverse and that a the postulate it is simpl e to define the essence of the STP model: to present the product to those consumers, who want it and are able to acquire it. The first two steps of the STP model serve to find and define the desired consumer, and positioning serves for placing the product in the desirable position in the minds of target consumers.Scholars Grancutt, Leadley and Forsyth (2004) thoroughly describe the STP model steps in the table below Table 1 The STP model steps Segmentation * Choose variables for segmenting market * Build a profile of the segments (sub-segments) * Validate emerging segments Targeting * Decide on targeting strategy * Identify which and how many segments should be targeted Positioning * Understand consumer perceptions * Position products in the mind of the consumer * Design appropriate marketing mix to communicate positioning Source: Grancutt, Leadley, Forsyth (2004)Product positioning steps Scholar Winner (2007) has a distinct view on product positioning decisions; he emphasizes custo mer decision making process as the most important issue in product positioning steps. According to the scientist, marketers have to answer the following questions when positioning the product What dimensions do consumers use to evaluate product offerings in the industry or category? How important is each of these dimensions is in the decision making process? How do you and competition compare on the dimensions? What decision processes do the customers use?The author Hooley (2001) determines these stages of product positioning process: Table 2 Product positioning steps Identification of competitors Singling out decision making attributes Evaluation out of decision making attribute significance Identify the determinant attributes and measure their significance to the user Product positioning steps Identify and analyze competitive products in the market Table 4 Identification of competitor position according to the most important attributes Identify the current position of the product and other competing products according to determinant attributesIdentification of consumer needs Preparation of a consumer map Selection of the desired position Selection of positioning strategy Source: Grancutt, Leadley, Forsyth (2004) Compose the positioning map Determine the desired position of the product Select positioning or repositioning strategy Create the positioning statement Scientists Hutt, Spech (2004) suggest the following steps in the product positioning process: Table 3 Product positioning steps Identify the relevant set of competitive products Identify the set of determinant attributes that customers use to differentiate among options and determine the preferred choiceIdentification and analysis of competitive products in the market Drawing positioning frames for a product, category membership should be determined first, i. e. other products that compete in the same market and can serve as substitutes. The best considered means for determination is allows collecting a large amount of useful data, which is easily systemized, adapted, processed statistically. One of the main advantages of consumer survey is the anonymousness. Deep interview can be also used to determine the rival products in the market, but due to larger time and financial costs is used seldom.Scientists Hooley, Saunders, Piercy (2006) state that competition can take place in the following levels: Competition with products with analogous qualities Competition in the same product group Competition with other products that satisfy the same or very similar consumer demand Competition in the same consumer demand level As mentioned above it is vitally important not only to determine all products on the same shelf, but also determine the rivals to the whole shelf. Identification of determinant attributes and measuring their significance to the userCollect information from a sample of existing and potential customers concerning their ratings of each product on the determinant attribute s offerings for each market segment Examine the fit between preferences of market segments and current position of product Select positioning or repositioning strategy Source: Hutt, Spech (2004) Concentrating all discussed product positioning models the authors of this article propose the following algorithm of positioning process steps.After the identification and analysis of competitive products in the market, determinant attributes should be identified and their significance to the user should be measured. According to Aaker, (2005) determinant attributes define not only the products benefits and value to the user, but also associations with the product consuming process and with the consumer himself. The authors Hooley, Saunders, Piery (2006) consider a qualitative Determination of the desired position of the productIdentification of the current position of the product and other competing products according to determinant attributes Selection of positioning or repositioning stra tegy Composition of the positioning map It is important to mention, that the above mentioned strategies are not discrete and usually are just pats of complex hybrid strategies, used by marketers. Sometimes, changes in the competitive environment force marketers to repositi position it holds in the minds of consumers relative to the positions of competing products.Scientists Doyle, Stern (2006) suggest the following repositioning options (the first two are real repositioning strategies, the rest can be considered psychological): Introduce a new brand Change existing brand Alter beliefs about the brand Alter beliefs about competitive brands Alter attribute importance weights Introduce new or neglected attributes Find a new market segment Not only changes on the market lead to a demand for a new repositioning strategy.Very often the product fails because of marketers initial positioning mistakes. Brooke (1994) states that a product may be inadequately positioned for three reasons: The segment in which it is targeted might have become unattractive because it is too small, declining, too competitive or otherwise unprofitable. Positioning might be inadequate because the quality and features that the product offers do not appeal to the segment to which it is targeted. igh to allow it to be priced competitively. Scientists Grancutt, Leadley, Forsyth (2004), Kotler (2006) indicate four main risky product positions on the market: underpositioning, overpositioning, confused positioning and doubtful positioning: Table 5 Risky positions Potential risk Underpositioning Comment Some companies discover that buyers have only a vague idea of the brand and the features/benefits of that brand.Customers may not be aware of anything particularly special about the brand Customers may have too narrow a view of the brand. Therefore a consumer might think that a particular glass company, for example, only produces luxury items that retail at high prices. However, it may produce a varie ty of cheaper standard glassware. Customers could be confused about the position of the brand within the marketplace. This confusion may result from the company making too many positioning too frequently.Customers may find it hard to believe the claims made by the company about its brand in view of benefits, the price and the name of the manufacturer. Source: Grancutt, Leadley, Forsyth (2004) This process is probably the most laborious and difficult element positioning implementation steps. Scholars Capon, Hulbert (2001) define the creation of positioning statement as a complex, creative, and highly interactive process, often involving many cut-and-try attempts, before the satisfactory result is achieved.Clear positioning statements have major value. For example, one of the most common complaints advertising companies make about their clients is that they have not clarified their strategies. Although positioning statements are not advertising messages, they provide excellent difficu lty. According to Kalafatis, Tsogas, Blankson (2000) positioning statements play a vital role in helping to guide rts in the marketplace, they are both crucial internally and externally.Scientists Rossiter, Piercy (1997) define the following models for product positioning statement creation: X-YZ macromodel I-D-U mezomodel A-b-e micromodel Creating positioning statement according to the X-YZ model, a marketer should decide on the following issues: nded target audience (Y) product category (X) what benefit (benefits) does the product bring to consumer (Z) Any kind of advertising attempts should emphasize: the benefit to the consumer, which should be unique emotions. he emphasized benefit must be important to the whole product category (I) not mention at all or forewarn consumer of possible product weaknesses (D). Conclusions Having completed the theoretical studies of product positioning in the market the following conclusions can be made: Positioning plays a key role when reaching t he desired place in the mindsets of potential and existing consumers. Most scientists of the field of marketing define product positioning as arrangements for a product to occupy a clear, distinctive, and desirable place in the minds of target consumers, relative to competing products in the market.The position of a product is formed by products attributes relative to the attributes of competitive products Product positioning is an inseparable and most important part of the STP model. If the first two steps (segmentation and targeting) contain flaws or are inadequately or incompletely performed, successful product positioning is doomed to fail. Summarizing the opinion of various scholars, it is obvious that product positioning is a complex, Overpositioning Confused positioning Doubtful positioningCreation of the positioning statement From the research data obtained in the first steps of product positioning process and the marketing strategy developed, it is necessary to formulate a positioning statement that is in tune with the promotional objectives. continuing and chain process. While positioning a product marketers should at least (there can be more) go through the following steps: 1. identify and analyze competitive products in the market, 2. identify the determinant attributes and measure their significance to the user, 3. select positioning or repositioning strategy, 4. ompose the positioning map, 5. determine the desired position of the product, 6. identify the current position of the product and other competing products according to determinant attributes, 7. create positioning statement. References 1. 2. Aaker, D. 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Dauguma organizacij bando valdyti savo preki vairias pozicionavimo strategijas, kad patekt naujas (norimas) pozicijas potenciali ar esam pirk j galvosenose ir taip susikurt ias prekes. Anks iau pozicionavimas buvo laba jimo barjer charakteristikos gali b verslui. N ti ir gana intensyvaus pozicionavimo.Tyrimo problema: savaime suprantama, kad s kmingai prekei rinkoje geros kokyb turi ir tinkam viet esam ir potenciali vartotoj galvosenoje. Norimos pozicijos vartotoj galvosenoje pasiekimas (arb a nepasiekimas) yra s kmingo (ar nes kmingo) pozicionavimo rezultatas. tur t b ti pozicionuojama rinkoje. Tyrimo objektas: prek s pozicionavimas rinkoje. Tyrimo tikslas: iai informacij apie prek s pozicionavimo koncepcij viet s rinkoje, kaip rekomendacijas s kmingai gyvendinti prek s pozicionavim rinkoje. Tyrimo metodai: atliekant teorin prek s pozicionavimo rinkoje tyrim , naudota sistemin bei lyginamoji mokslin s literat ros analiz .Prek s pozicionavimo koncepcija: Mokslin je marketingo literat roje galima rasti labai daug skirting prek s pozicionavimo rinkoje apibr . Boone ir Kurtz (2001) pozicionavimo koncepcij apib dina kaip prek s traukim tam tikr viet potenciali pirk j galvose. Autoriai Etzel, Walker ir Stanton (1997) marketing apib dina kaip vadybinink sugeb jim atkreipti vartotoj d mes prek ir palankiai diferencijuoti (pozicionuoti) j tarp kit preki . Jungtini Amerikos Valstij mokslininkai Ries ir Trout (1986) kit marketingo teoretik , teigdami, kad pozicionavimas vertinti ir suprasti savo ir konkurent preki pozicij prek s rinkoje.Pozicionavimas n ra tai, k darome prekei, tai – kaip veikiate potencialaus pirk laiko ir k rybiniu s, paslaugos, mon s ar iau pozicionuojant nedaroma Tuo tarpu Kotler (2006) teigia pinimas, kad prek , atskir ir norim viet i preki tikslini vartotoj mintyse. Apibendrinant – prek s pozicija rinkoje yra vartotojo suvokimas apie prek s atributus, palyginant juos su konkuruojan ios prek s atributais. Kiekvienas pirk jas kasdien daro daug ir vairi apsisprendim pirkti. nuolatinio preki jai paprastai prekes grupuoja, arba pozicionuoja savo m stysenoje, tam, kad supaprastint ir sutrumpint savo sprendimo pirkti pri mimo proces .Kad pirk jai nepozicionuot preki bandyti veikti pirk j suvokim apie prek . 3. 4. 5. 6. 7. 8. 9. 10. Ferrel, P. Marketing 10th edition / Boston, 1997. 11. Fill, Ch. Marketing communications: engagement, strategies and practice / Harlow, 2006. 12. Grancutt, J. Marketing: essential principles, new rea lities / J. Grancutt, P. Leadley, P. Forsyth. London, 2004. 13. Holley, G. Market -Focused resources, competitive positioning and firm performance / G. Holley, G. Greenley, J. Fahy and J. Cadogan //Journal of Marketing Management,2001, No 5/6, p 503-520. 14. Hooley, G. Marketing strategy and competitive positioning / G. Hooley, J.Saunders, F. N. Piercy. Prentice Hall, 2005. 15. Hutt, M. D. Business marketing management. 8th edition /M. D. Hutt, T. W. Spech. Prentice Hall, 2004. 16. Janonis, V. Brand Image Formation / V. Janonis, R. Virvilait // 78-90. 17. Kalafatis S. P. , Positioning strategies in business markets / S. P. Kalafatis, M. H. Tsogas, C. Blankson // Journal of business and industrial marketing. No 6, 2000 p. 416-437. 18. Knox S. Positioning and branding your organization // Journal of Product and Brand management, Nr. 2, 2004. 19. Kotler, Ph. Marketing management 12th edition / Ph. Kotler, K. L. Keller. Upper Saddle River, 2006. 20. Kotler, Ph.Principles of marketing: 6 th edition / Ph. Kotler, Armstrong, G. New Jersey, 1994. 21. Kotler, Ph. Rinkodaros principai / Ph. Kotler, G. Armstrong, J. Saunders, V. Wong. Kaunas, 2003. 22. Kotler, Ph. A framework for marketing management. Third edition. / Ph. Kotler, K. L. Keller. Upper Saddle River, 2007. 23. Lamb, W. Jr. Marketing. 7th edition / W. Lamb, Jr. , W. Hair. Jr. , C. McDaniel. Thompson south Western, 2004. Pozicionavimo pagrind postulat sudaro vienas svarbiausi marketingo s skirtingi, ir prek absoliu iai vardyti STP modelio naudojimo prasm potencialiai jo norintiems ir j galintiems vartotojams prek pasi lyti?Tam naudojami pirmieji du STP modelio s rinkos nustatymas. Tik po to prek gali b ti pozicionuojama – nustatoma jos pozicija tikslini vartotoj galvosenoje. tai nuomoni apie konkuruojan ias prekes (preki pozicij pasirinktos grup s asmen s mon je schema (Pajuodis, 2000). stymo pozicionavimo strategijas, mon nustato savo viet rinkoje vartotoj ir konkurent sti d l vartotoj grupi (segment ), kurioms bandys daryti poveik , ir kartu d l savo veiklos profilio, kuris patenkint min t vartotoj segment reikalavimus (tikslin s rinkos strategija). s irstomas etapais.Skirtingi autoriai pateikia skirting etap skai i , skiriasi ir j daugelio mokslinink si lomus prek straipsnio autor s pateikia tok j skai i konkuruojan i preki ; apsisprendimo atribut identifikavimas ir j vertinimas; esamos prek s pozicijos nustatymas; lapio suk rimas; norimos pozicijos rinkoje nustatymas; pozicionavimo arba perpozicionavimo strategijos parinkimas; pozicionavimo teiginio suk rimas. Konkuruojan i preki pozicionavimo r mus prekei, pirmiausia reikia nustatyti nario kategorij , kitas prekes, kurios konkuruoja su preke ir gali b ti jos pakaitalai.Geriausias b ias prekes yra kiekybinis tyrimo apklausa, nes , kuris paprastai respondent ias prekes, galima naudoti ir giluminio interviu metod , ta laiko s naudas ir efektyvum , patogiau atlikti vartotoj apklaus . G. J. Hooley, J. A. Saunders ir N. F Piercy (20 06) teigia, jog iomis prek mis; Konkurencija preki grup je; poreik Konkurencija su kitomis t pat tenkinan iomis prek mis; Konkuruoti to paties poreikio lygmenyje. Taigi nustatant konkurentus svarbu ne tik identifikuoti visas prekes, esan ias toje pa ioje parduotuv s lentynoje, bet ir nustatyti, kas konkuruoja su visa lentyna. teikiami naudos aspektai yra tinkami vartotojams. Anot D. A. Aaker (2005), atributas s savybes ir naud vartotojui, bet ir asociacijas su prek s vartojimu ir vartotoju. Kit mokslinink – (G. J. Hooley, J. A. igimu, atributus geriausia yra grup . Pasak identifikuoti naudojant kokybin tyrimo metod V. Dik iaus (2006) tam gali b ti naudojamos tokios projekcin s asociacijos, testas, temos suvokimo testas, vaidmen vaidinimas. Atrinki atributai bus vertingi tik t pozicionavimo instrumentas, skirtas tiksliai vizualiai apibr vietoje pagal psichologinius veiksnius yra mon s prek s, palyginti su prek mis.Norint nustatyti, kaip skirtingi preki pasi lymai yra suvokiami rinkoje, turi b ti numatomi pagrindiniai prek s atributai, pagal kuriuos suvokiama prek kaip tokia. Labai didel rezultatas) turi b rim . Tolesn l kes ius bei pirmum , ir kaip j plane atrodo prek su savomis savyb mis. Tam tikslui pasiekti ir sudaromas lapis. lapyje yra tas, kuris reprezentuoja labiausiai apsisprendimo atribut kombinacij ideali prek . mon s pasirenka norim savo prek s pozicij kuo ar iau idealios prek s pozicijos. augelis mokslinink (Fill, 2006; Kotler, 2007; Armstrong, 2004; Doyle, Stern, 2006) s pozicionavimo rinkoje Pagal prek s savybes; Pagal prek s teikiam naud ; Pagal vartojimo b d ar situacij ; Pagal vartotoj ; Pagal konkurent ; Pagal preki grup ; Pagal kokyb ar kain ; Pagal kult rinius simbolius ar kilm . Svarbu pamin ra diskre tiesiog dalys sud ting hibridini strategij , kurias pozicionuodami prekes rinkoje, naudoja marketologai. 1. X-YZ makromodelis; 2. I-D-U mezomodelis; 3. a-b-e mikromodelis.Juose nurodoma, kas yra pozicionuojama, kam tai yra skiriama, kas turi b ti pabr Atlikus teorin prek s pozicionavimo rinkoje studij , Pozicionavimas yra svarbiausias instrumentas norint pasiekti norim prek s pozicij esam ir potenciali vartotoj galvosenoje. Dauguma marketingo srities mokslinink prek s pozicionavim rinkoje apibr pinim , kad prek , atskir ir norim viet i preki tikslini vartotoj mintyse. Prek s pozicija formuojama per prek s atribut suvokim , lyginant su konkuruojan iomis prek mis. Prek s pozicionavimas yra neatskiriama ir pati svarbiausia STP modelio dalis.Jei pirmi STP mode ar nepilnai, s kmingai pozicionuoti prek s rinkoje nepavyks. Apibendrinant daugelio mokslinink nuomones, akivaizdu, kad prek s pozicionavimas rinkoje yra sud tingas ir t stinis procesas. Pozicionuodami prek gali b 1) Konkuruojan i preki ; 2) Apsisprendimo atribut identifikavimas ir j vertinimas; 3) Esamos prek s pozicijos nustatymas; 4) lapio suk rimas; 5) Norimos pozicijos rinkoje nustatymas; 6) Pozicionavimo arba perpozicionavimo strategijos parinkimas; 7) Poz icionavimo teiginio suk rimas. prek s pozicionavimas, prek s pozicionavimo etapai, lapis, pozicionavimo ir perpozicionavimo strategija, pozicionavimo teiginys. rieinamumas, pelningumas. Svarbu pateikti atribut , kurio nesi lo konkurentai, arba atribut pateikti specialia forma. nusta ius vartotoj apsisprendimo atributus, reikia numatyti, kaip pagal juos vartotojai vertina prek ir konkurent prekes. Tam geriausiai tinka kokybiniai vertinti prek ir konkurent prekes pagal svarbiausius apsisprendimo technikas, kurias V. Pranulis (1998) rio matavimo vertinimo skal s, Likerto (sumini vertinim ) skal , semantin diferencialin skal , Stapel skal vertinimo skal , fiksuotos sumos skal r , por pasirinkimo skal . The article has been reviewed.