What Marketing Approach Does a Marketer Use for Product Positioning?

In a market with many competitors, product placement is extremely important.

Marketing is the process of creating, communicating, delivering and exchanging goods and services that have some value for customers. When a company is competing with various other organizations for product sales, it must find a way to position its product in the marketplace to carve out a niche for itself so customers will find value that other competitors do not offer.

Differentiation

Product differentiation is the process of setting a company's offerings apart from those of a competitor. For example, if a company is producing soap, it may differentiate its product by offering the lowest priced option for generic soap. Alternatively, it might offer a particular scent that many customers enjoy. Differentiation can essentially be broken down into three categories: convenience, customization and cost recovery.

Convenience

One way many companies differentiate their product is by making it the most convenient. For example, a gas station that sells the same gasoline as its competitors for the same price may differentiate its gasoline by selling it at a busy intersection to make it more convenient for customers to stop in and refuel their cars.

Customization

Customization refers to creating product offerings closely tailored to the specific needs or preferences of your customers. Many online clothing or accessory companies allow customers to select the specific sizes, colors or designs they would like to see on their products. Likewise, luxury automobile manufacturers may create vehicles specific to a particular customer's specifications.

Cost Recovery

Cost recovery is a form of differentiation that focuses on value. This does not necessarily mean providing the least expensive product. Indeed, the best value could come in the form of the most expensive product if its overall quality is that much more superior to those of competitors. The most expensive set of wrenches at a hardware store might be the best value if it has a strong warranty and tends to last years longer than those offered by competitors.

References

• Knol: Marketing Strategy -- Differentiating and Positioning the Market Offering
• Business Growth; The Three Elements of Product Differentiation; Michael Walsh
• Marketing Power: Definition of Marketing