It’s difficult to find your place in a noisy world. This is even truer for small business, where competition abounds. As if crafting the perfect product or service wasn’t hard enough, you have to craft great messages as well. In other words, you have to find your market position.
Don’t let the complexity catch you off-guard, though. We’re here to help!
What is a Market Position?
First things first, we need to talk about positioning, and what that term means in marketing. According to Wikipedia, a market position is “the place that a brand occupies in the minds of the customers and how it is distinguished from the products of the competitors.”
We spend a lot of time talking about product-market fit. The idea of product-market fit is that you need to create products (or services) that perfectly meet the needs of your target market.
Branding works the same way. Your brand needs to reinforce the idea that your product is a perfect match for your customer. By carefully crafting messages, you can enhance the customer experience, increase sales, and improve your return on marketing spending.
Why is Market Positioning Important?
Market positioning is important for a lot of the same reasons that product-market fit is important. For starters, carefully choosing a marketing position pushes you toward clearer communication. By thinking about what your brand means to your prospective customers, you are forced to craft great messages.
A few paragraphs ago, we describe product-market fit as what happens when you create products (or services) that perfectly meet the needs of your target market. Similarly, market positioning can help you find audience-message fit: crafting messages that perfectly fit your audience.
It gets better from here, too. The research you put into market positioning will help you create better products and services, too. The very act of learning how to describe your product to others can help you see weaknesses and strengths.
Lastly, market position is relative to your competition. That is, market positioning means finding a way to distinguish yourself from the competition. Finding out how to distinguish yourself from the competition means thoroughly researching them, which is a good idea in general.
Market Positioning & Your Target Market
If you speak to a room of ten people, everyone will hear the same speech, but each person will have their own understanding. Because of this, you need to be keenly aware of who your target market is when staking out your market position.
As we say in our recent post about the subject, a target market is a group of potential customers to whom you want to sell products or services. Target markets have specific qualities, such as age, location, or interests that set them apart from the general population. You want your message to speak them and their unique needs.
It’s also worth mentioning that while a company can serve a large target market, each individual product or service can appeal to different market segments. If this is the case, you may want to stake out a different marketing position for each market segment you serve. (Read up on market segmentation here.)
Market Positioning & Your Niche
We’ve talked about market niches before and why they’re important. The short version can be summed up as follows: “you’ve found your niche when you’re able to make very specific products for very specific people with a very specific message.”
Let’s break that down a bit. You have three parts:
- Products: very specific products
- Target market: very specific people
- Branding: very specific messages
When you combine 1 & 2, that’s product-market fit. Combine 2 & 3, and you have your market position. Put them all together, and you’ve found your niche!
The 5 Common Market Position Strategies
With all of the above in mind, market positioning strategies tend to fall into a few broad categories. Marketing91 did a good job of listing them and they provide inspiration for our own take on the subject below.
In messy reality, bear in mind that you will probably use a mix of these when staking out your market position, though one strategy will likely be more prominent than others.
1. Consumer Benefits
One way that you can differentiate your product from others on the market is by emphasizing the benefits. If you sell cars, you could claim that your car is the “safest” or “the most fuel-efficient.”
Another way you can differentiate your product from others is by setting the price much higher or much lower. That way you can either position yourself as “the low-cost option” or “the pinnacle of luxury.”
3. Use or Application
Pumpkin spice lattes could be made at any time of year, but they are typically consumer by Starbucks consumers in the autumn. This is part of what makes them special. In this sense, the product’s use is what truly sets it apart on the market.
4. Product or Process
Alternatively, you can also position a product by how it is used or who uses it. A good example straight from Marketing91 is the following: “Johnson and Johnson repositioned its shampoo from one used for babies to one used by people who wash their hair frequently and therefore need a mild shampoo.”
5. Product Class
Lastly, you can find your market position by classifying your product differently than others on the market. For example, some toothpastes are teeth-whitening. Others are breath-freshening. (You’ll notice that this is not dissimilar to differentiating by product benefits.)
How to Find a Market Position
With all of the above in mind, we are now going to help you find your market position. You find it in much the same way that you find product-market fit – a lot of research and trial and error. Understand that it will take some time to find your market position, but it will be well worth it when you do!
1. Review your company’s strengths and weaknesses.
Finding a market position is all about coming up with attractive messages that you can send to potential customers. However, you also need to be very honest when you do so. Take a moment to think about what your company can and cannot do well.
2. Analyze your competition.
Market positioning, as we said earlier, is relative. The whole point is to set yourself apart from the competition. Take some time to really research your competition. Know their strengths and weaknesses. Look out for opportunities to exploit and threats to avoid.
3. Conduct marketing research.
Marketing research is really important to your business’s success. In fact, it’s a favorite subject of ours that we’ve written about many times:
- A Crash Course in Market Research for Your Small Business
- 14 Cheap Ways to Do Market Research for Your Small Business
- 23 Excellent Questions to Ask Your Customers
- 15 Ways to Use Market Research to Grow Your Small Business
- 15 Ways to Research Your Competitors & Grow Your Small Business
Even if you don’t read any of those articles, the message is clear: you need to take the time to really learn about what your customers need and like. Don’t make assumptions without testing them! Ask a lot of questions.
4. Figure out what makes your products distinct from others.
This is where the market positioning strategies which mentioned in the previous section come in handy. Think about what makes your product different than others on the market. Does it offer unique benefits or uses? Is the price different? Is it in a category all of its own?
5. Determine which of your products’ qualities will attract customers.
After you figure out what distinguishes your product from others on the market, you need to think about what qualities will actively attract new customers to it. In other words, what’s the X factor?
Your customers are not making rational decisions to buy much of the time. They’re making emotional decisions. What makes them excited to buy your product?
6. Revisit your target market and niche.
Once you figure out what sets your product apart, it’s time to revisit your target market and your niche. Is your product really meeting your target market’s needs? Are your messages going to really resonate with your target market to the extent needed to carve out a niche?
If you can’t say “yes” to both those questions with a high degree of confidence, test out different marketing messages and see which ones people respond to!
Finding your market position is not easy. It’s a complex process that takes time. It’s well worth it, though. Knowing what makes your business special will help you gain and retain customers.
Consider your target market’s needs. Figure out how to meet their needs with great products or services. Then figure out how to communicate with them in a way that feels natural. Lastly, find a way to distinguish yourself from the competition.
It’s a lot of work, but you can do it and it will be worth it. If you have any questions, feel free to ask in the comments below. We always loving hearing from our readers 😀