PRODUCT POSITIONING: UNDERSTANDING CONSUMER PERCEPTIONS
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 customers 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. 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 businesses managers to create a graph in order to map consumer perceptions along several 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.
Understanding Consumer Perceptions
Product positioning, which is the sixth and final step in the market segmentation process, involves developing a product and marketing plan that will appeal to the selected market segment. In order to position a product effectively, a business must identify the attributes that are most important to consumers in the segment, and then develop an overall marketing strategy that will attract consumers’ attention. Positioning can be usefully applied during the earliest stages of product design, when a company first identifies who its target customer will be in terms of demographic, geographic, and behavioral characteristics.
A number of tools exist to help marketers understand the consumer perceptions that underlie purchase decisions. One such tool, a perceptual map, is a graph that can portray various product positioning options in a visual manner. Marketers can create perceptual maps from market research data in order to identify consumer needs that are not being fulfilled.
For example, say that consumers were asked to rate home computers in the following attributes:1) ease of use, 2) availability of service, 3) processing speed, and 4) data storage capacity. These four attributes could be combined into two perceptual dimensions: 1) utility (consisting of ease of use and availability of service), which would appeal to non-experts who needed a basic computer for business or personal use; and 2) technical (consisting of processing speed and storage capacity), which would appeal to experienced computer users who wanted the latest in technology. Then each brand of home computer could be represented on the graph according to consumers’ perceptions of the product. If most computer manufacturers touted their products’ technical attributes, there might be an opportunity for a new market entrant who emphasized ease of use and service.
However, it is also important to understand the relative importance that consumers place upon the different dimensions. In the home computer market, for example, consumers ultimately want utility and technical characteristic, but vary in the importance they place upon each product dimension.
The implications of this importance for positioning are significant. It is necessary to understand preference differences within the targeted market segments because they are important in selecting a position for a brand and in determining the competitive structure within the segment. When preferences vary within a segment, positions and physical product features may vary considerably. If preferences are relatively homogeneous, within a segment, the positions of competing brands will be relatively similar, and the quantity of advertising and promotion will be the critical competitive weapons.
It is important to note that price is not represented in the home computer perceptual map, whereas price definitely has an effect on the final purchase decision made by consumers. Marketers can reflect the importance of price by adding a dimension to the perceptual map, so that it becomes a cube, or by dividing the dimensional coordinates of each brand by its average price.
Finally, business owners need to consider the fact that perceptual maps show “overall dimensions of evaluation and not detailed features”. Feature selection is critical in positioning, however, because features are an important determinant of overall perception and choice. In fact, product features influence both consumer perceptions and product pricing.