Product positioning is influencing how potential customers understand and evaluate a firm's product as compared with other brands. It assumes that shoppers place each alternative into a descriptive niche, like characterizing one laundry detergent as tough on stains and another as gentle to fine fabrics. The two main types of positioning are head to head and differentiation.
Sometimes a product needs to compete directly with competitive brands for the same target consumers. Usually this is because the products are similar in attributes and benefits, and most people want essentially the same things. For example, a pizza restaurant might choose to compete head to head by touting the freshness of its ingredients or the value of its price. It would not make sense for the pizzeria to offer Chinese food in a bid to lure a different clientele.
In some product categories, a firm can identify consumer segments that are under-served or highly receptive to innovation. Differentiation positioning is the pursuit of these new buyers by introducing features or functions distinctive from competition. For example, some fast food marketers differentiate their menus by offering low-fat options. Beach hotels try to attract business travelers by adding conference centers and executive services. If a company sells several brands of one product like cereal or soap, it may use differentiation positioning just to ensure that its own offerings do not compete with one another.
Relation to Target Market
The choice of positioning approach is strongly influenced by the nature of the target market. The firm must segment, or divide, the pool of potential buyers in such a way as to identify how they live, what they want, and how they shop. Because these factors are closely related to personal characteristics, marketers typically group consumers based on demographics or psychographics. Demographics are objective measures such as age, sex, income or marital status. Psychographics are various indicators of people's personalities and lifestyles.
Relation to the Marketing Mix
The four major tools in the marketing mix -- advertising, sales promotion, personal selling and public relations -- are often used to create or change a product's positioning. For example, advertisements can help support differentiation positioning by demonstrating why one brand's performance is better than another. In head-to-head positioning, sales promotion devices such as price discounts may be critical to prompt brand switching. When a marketer needs to reposition a brand, personal selling can help to explain the change, and public relations can spread the word about it.