There must be at least several companies out there right now positioning to compete with you. If you’re large enough, you may be the target, and if smaller, you are the minnow not the shark—and need to be agile and creative.
The five strategies: Picking one to emphasize
So, how do you position yourself to be a stand out? There are five strategic positioning areas for you to consider. That’s our subject this week. There are five niches you can chose when defining your positioning strategy: price, quality, service, innovation, and elegance.
And although many positioning efforts cross the lines between these, great companies play to the strength of just one. And within that slice of differentiation, to make any sort of impact and lasting company, the difference between you and your competitor cannot be incremental. “Me too” positioning is lost in the noise of today’s targeted marketing and corporate reach through inexpensive, but effective, use of Internet marketing.
Pricing strategies differentiate your business
First, and easiest to understand, is creating differentiation by price. Certainly Walmart, Target and others have gotten the attention of their potential customers using price as the primary leader to drive sales. Walmart succeeds because it has changed the game with its suppliers, actually partnering with them to help drive costs down so that prices can truly be lower at the store level. Since that capability is far beyond most every other retailer, there is great risk in competing by price alone. Most anyone else can meet or beat your price any time they wish. And their motive may have little to do with short term profit, a most frustrating finding when you finally realize that it is impossible to compete with such driven opposites.
Using price creatively
Price can become a competitive tool by creative companies where they can change the game, reducing the number of parts for example to lower manufacturing costs, or reducing the time to install a product, lowering after-sale costs. But, for the most part, competing on price alone is not a good strategy for the long run. Success is not rewarded appropriately by continued dominance of a niche when price alone built that niche.
Quality can be, and is, an important differentiation.
Ford recently returned from the land of the nearly-dead to become not only profitable but a desirable alternative to the dominant Japanese cars by emphasizing quality at competitive prices. And some brands are built principally upon quality even at increased price, including Mercedes, Tesla and Audi, to name a few auto brands that have successfully been able to charge more for quality than just the added features above their lower-priced competitors.
Service is a remarkable differentiation.
Those who shop constantly at Nordstrom’s are knowingly paying more for personalized service that has proved endearing and able to withstand the competition for decades of continued high standards, not compromised by the need for profit first, service second. Internet hosting providers, ISPs, are often distinguished by their potential customers by the level of up-time which equates to quality of service, even at incrementally higher hosting cost.
Innovation, technology, and early adapters
Innovation certainly defines a number of companies catering to early adopters and the mass audiences that follow. Apple stands out as the first name on most minds when thinking of innovation, even though Apple originated none of its dominant product lines, choosing instead to come to market with innovative adaptations of existing products. The iPad created an entirely new market segment from what was for over a decade a sleepy niche computer tablet market dominated by a few small-selling products aimed at niche markets.
And finally, elegance
Elegance serves as a major differentiation for those who are willing to add quality and service into a brand that is priced well above reach of the masses. Coach, Bentley, Patek Philippe, and Chanel are brands defined by elegance, not feature-functionality and certainly not by being the low-priced competitor. The great benefit of reaching for differentiation outside of low price is that the public you court is the public loyal to you over time because of your brand and your brand recognition, and the least likely to abandon you for another when their price is lower by increments.
Increase your margins and brand awareness
Branding, price strategy, and positioning are related as differentiations that help you to increase margins and drive profits when competitors fail with inferior strategies.
So, consider your core competencies and pick one or two of these positioning strategies to drive your company’s growth and profitability. You’ll be ahead of many of your competitors who often don’t think strategically when positioning their companies in your niche.