Product positioning strategies require you to learn about your competition and determine where you fit in a specific market segment. Are you the most or least expensive option? What makes your product stand out even though it's similar?
A product positioning map allows you to plot product benefits on axes to create a graph based on the most important factors to consumers. As a result, they come with several key advantages, such as:
Identify competitive advantage
The main purpose of a product positioning map is to help you identify your business's competitive edge. Even though you can only plot two benefits on your map, you're plotting the two most important to your customer base, allowing you to identify areas where your brand excels or has a unique selling proposition compared to the competition.
Uncover market gaps
A product positioning map can reveal untapped market segments or niches where there's limited competition, presenting potential opportunities for businesses to develop new products. For instance, if you operate within the pet industry, you might find that many bones aren't made in the US and contain dangerous ingredients. This information tells you there's a market for US-made bones that are safe for pets.
Understand consumer perceptions
A perceptual map can give you insight into how your customers perceive your products, allowing you to tailor your offerings. For instance, you might discover your audience perceives energy drinks as unhealthy, which can help you determine whether to create a healthier alternative.
Evaluate brand positioning
Every positioning strategy should be evaluated and re-evaluated as the market and consumer behavior changes. A product positioning map can help assess how well your brand is aligned with your target audience's preferences and expectations.
Inform product development
Because product positioning maps focus on the two most important benefits to consumers, you can use them to create better products. With the information from these graphs, you can determine pricing, features, and other key aspects of your offerings.
Target marketing efforts
Understanding where your brand fits within the marketplace can help you develop more targeted marketing strategies with effective messaging and tactics to reach your target audience. For instance, if your target audience is looking for a healthy alternative to energy drinks, you can provide them with personalized product recommendations based on their preferences.
Facilitate communication and decision-making
As a visual tool, product positioning maps can be easily understood by various stakeholders; there's no need for data analysts to explain any of the information in the graph. Instead, positioning maps make it easier to communicate basic market insights and discuss strategic options to make more informed business decisions.
How to create a product positioning map
Creating a product positioning map can help you understand your product's position in the marketplace and can be an important tool that helps you develop better products and more effectively communicate with your target audience. But before you can use the data, you have to create your map. Follow these steps to create a product positioning map to guide your decision-making process:
Define your objectives and goals
A product positioning map can identify market gaps, enhance product development, assess your competitive landscape, and help you evaluate your brand's position in the market. Ideally, you'd want to do all of these things. However, it's important to define your goals before you begin because each goal will have its own purpose and affect how you label each axis. For instance, to evaluate your brand's position in the market, you might use price and quality as axes labels. However, if you want to identify market gaps, you might use price and other benefits like low calories, health, sustainability, and so forth.
Identify your direct and indirect competitors
Next, you'll need to identify your competitors. What companies have offerings similar to yours? You should already have some information about your direct competitors, but it's worth performing market research or using Google to identify existing products similar to yours.
Since you're comparing specific products, you don't want to go broad to try to find brands since they may have many different offerings. Instead, choose the products most similar to yours. For instance, if you sell energy drinks, you can look for other energy drinks on the market.
Select relevant attributes
To build your product positioning map, you'll need to label your two axes by identifying relevant benefits or key attributes of your products. Examples include price, quality, innovation, design, customer service, and so forth. All of these must be measurable, independent, and important to your target audience. For instance, if your market research discovered your target audience prefers to spend less on the types of products you sell, price should be one of your axes.
After identifying how you'll label your axes, you can begin gathering data by learning about your competitors. Look at how their products perform on the selected attributes using market research, surveys, online reviews, social listening, and other reporting and analytics tools.
Scale the data
After gathering all your raw data, you can convert it into a standardized scale to ensure consistency and facilitate comparison. If you haven't identified your attributes, you can use this data to find similar features or benefits of the products you want to compare.
Draw and label the axes
Once you've determined your attributes and have the necessary data from your business and the competition, you can draw and label the x and y axes.
Plot the data points
After your axes are labeled, you can begin plotting the points. You can use any number of competitor products as you want as long as you can effectively plot each point on the graph without it getting confusing.
Analyze the results
Now that you have all your data plotted on the map, you can observe the distribution of products, noting clusters, outliers, and market gaps. This information can help you assess your competitive advantage, areas for improvement, and potential opportunities. For instance, if you find that all your competitor products have high sales prices, you know there might be a market for a similar product at a lower price point.
Monitor and update
Periodically update your positioning map to keep track of changes in market trends, consumer preference, and your product's performance. Consumer behaviors can alter the information on your map. In addition, as new competitors enter the market, you'll need to know where they
fit on your map to ensure your product can continue to stand out.
Gain clarity on your product's market positioning
Your product's market positioning can help you identify your competitive advantage and find new opportunities, aiding in product development and marketing. Once you understand your position in the market, you can find new ways to market to customers and meet their demands.
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