Marketing Communications

140 CHAPTER 4 TARGET GROUPS

Not all diff erences with competitors are meaningful for an eff ective diff erentiation. Every

diff erence could mean an increase in costs to a company, therefore the way a company dif-

ferentiates its products and brands should be well considered. Th e chosen USP(s) should be

important to the target group, clearly diff erent from what a competitor is off ering, superior,

easy to communicate, diffi cult to imitate or copy, aff ordable for the target group of consumers

and profi table for the company.

Th e more claims a company makes about its brands, the greater the risk of disbelief.

Moreover, the diff erent product benefi ts should be compatible in a consumer’s mind: a super-

strong detergent that also claims to be mild for the hands will not have any credibility.

Th ere are indeed three possible positioning mistakes a company or brand can make:

z Underpositioning. A company fails to make a clear diff erentiation with competitors, e.g.

Korean car brands such as Kia or Hyundai: how do they position themselves against

Japanese or European cars?

z Overpositioning. Extreme positioning on one benefi t will reduce the number of interested

consumers, e.g. if IKEA only claimed low prices and not quality (Möbelfakta guarantee,

for example), it would deter people looking for a durable dining room suite.

z Confusing positioning. Inconsistent communications or an inconsistent choice of distribution

channels would give a customer a confused image of a company or brand. For example,

bath towels claiming exclusive quality but also sold in hypermarkets will have diffi culty

keeping their positioning.

Developing a positioning strategy

Th ere are seven consecutive steps in the development of a positioning strategy ( Table 4.5 ).

Firstly, the company has to identify its major competitors. Th is competition analysis should

go further than the brands in exactly the same product category, but should also include

generic competition, i.e. products in diff erent product categories that nevertheless satisfy the

same need. For instance, a gift box of chocolates (e.g. Ferrero) is competing not only with

other chocolate gift boxes, but also with wine, champagne and fl owers, which people take

when visiting friends or relations. All possible competitors and their eff ects and evolutions

on consumer target group behaviour should be taken into account. Secondly, the consumers’

perception of the products and brands of competitors should be assessed. Questions such as

which attributes or benefi ts are important in this market segment and how a competitor’s

product or brand is evaluated on these criteria are important.

Table 4.5 Stages in the development of a positioning strategy

z Identification of competitors

z Assessment of the consumers’ perception of competitors

z Determination of positions of competitors

z Analysis of consumers’ preferences

z The positioning decision

z Implementation of the positioning

z Monitoring the position

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