Product Positioning Overview - American Marketing Association

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Product Positioning Overview

By Alan Dutka

	1. Introduction

Product positioning is the art of tailoring the image and presentation of a product or service to appeal to a selected market segment.

At its best, product positioning enables marketers to draw a direct link between an existing product attribute and a specific customer need. Rather than a crafting a general appeal highlighting a new car's innovative engineering, for example, product positioning enables marketers to pitch the car's fuel efficiency as a hook to attract suburban workers looking to cut their gas expenses.

Product positioning is not new. An advertisement for the Holeproof Hosiery Company in 1910 contained the following headline:

The appeal was a long-lasting pair of socks. Unmarried men were assumed to be either not capable of, or not interested in, darning socks.

Product positioning is closely related to market segmentation. This is a process in which potential customers are divided into smaller groups based on demographic and psychographic characteristics. The 1910 hosiery ad grew out of a specific marketing niche.

Although product positioning strategies have existed for decades, the proper positioning of a product is now considered essential for marketing success. In today's diverse marketplace, multiple advertising messages are often required to appeal to potential customers with dissimilar needs and requirements.

Mass Marketing Is No Longer Effective

Although not a widely used technique at the time, General Motors increased sales by using product positioning as early as the 1920s. The company capitalized on Ford's mass marketing mistake of continuing to appeal to the "one automobile for everyone" concept.

Even prior to this General Motors example, some automobile manufacturers had targeted specific subsets of the overall market. The rational and logical buyer, for example, was persuaded to purchase an automobile with dollars-and-sense arguments:

Other marketing strategies appealed to perceived gender differences:

However, even as recently as the 1960s, most products were positioned to appeal to the mass market. Forty years ago, married couples with children were the predominant consumer market. Advertising was aimed at this market:

Marketing and advertising strategies have changed dramatically in the past few decades. Today's mixture of alternate life-styles makes mass marketing substantially less attractive. Generic advertising geared to the typical or average consumer is no longer considered effective for most products. A product must be positioned to appeal to distinct segments of the population. The beginnings of this sweeping change could be observed in the middle of the 1960s:

The Relationship Between Product Positioning and Marketing Costs

Effective product positioning reduces the costs of ineffective marketing and advertising.

Product positioning, however, cannot be justified on the basis of cost reduction alone. Numerous marketing appeals using diverse media will increase expenditures. Additional product features that appeal to individual subgroups will create additional costs associated with research, production, marketing, advertising, distribution and inventory.

The justification for product positioning is remaining competitive in an increasingly complex marketing environment.

A few decades ago, popular magazines such as "Life", "Look", "Colliers" and "The Saturday Evening Post" were geared to mass market audiences. Today, over 10,000 magazines are in print. Most of these magazines have a specialized, targeted audience. Here are just 15 examples that can be found in stores offering a larger selection of magazines:

Television has experienced the same fragmentation of its viewership.

Three networks once dominated the choice of television programs. Today, cable and satellite services provide hundreds of alternatives for advertising messages. The ratings for secondary networks and cable programs may be lower, but these alternative choices tend to deliver audiences with more cohesive demographic and psychographic characteristics.

Whatever the product or service, an appropriate media outlet geared for that audience is probably available.

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2001 MarketingPower.com, Inc. Contents used by permission of the author.

Table of Contents

1.	Introduction
2.	Market Segmentation
3.	Strategy Implementation
4.	Using Lifestyle Characteristics
5.	Targeting Industrial Markets
6.	Conclusion