The problem of “positioning” actually covers many aspects – commodities, people, prices, etc., will involve the problem of “positioning”. So in the process of corporate or brand positioning, do you know how to build the corresponding positioning strategy? In this article, the author summarizes the “positioning” problem, let’s take a look.
After “Positioning, Really Not Suitable for Startups”, it received feedback from many readers and unconsciously set off a big discussion on positioning theory.
In the current economic environment, there are still bosses who can calm down and do some very pure content exchange – this is very rare.
To this end, I have roughly reviewed the communication about positioning during this time. When I sorted out the communication materials with everyone, I found that the content was as high as 58,000 words. After most of the editorial combing, I summarized 8 questions, about 8000 words.
The article is a bit long, but I hope to bring real value to one or two readers.
First, what exactly is positioning?
In fact, most people don’t know enough about the real positioning.
First of all, we should be clear that positioning is actually a rather competitive concept. It proposes the premise that in order to make our brand gain a greater competitive advantage, the position is that the competitors do not have and you have, and the competitors have them and you are better.
Second, it’s also the key to consumer communication. Because positioning means identifying your unique presence in the consumer’s mind, your positioning has a huge appeal to him.
Finally, it is an organic combination of business management system.
The so-called positioning actually includes commodity positioning, crowd positioning, price positioning, regional positioning, format positioning, scale positioning, and promotion positioning.
And “afraid of drinking Wang Laoji on the fire”, “Chinese squeezed vegetables number Fuling, Fuling squeezed vegetables number Wujiang”, “cup milk tea pioneer” … These well-known positioning theory products are actually just the promotional positioning of the brand.
Second, why do you want to do positioning?
As the saying goes, if the market chooses, it can be half successful. Positioning is to choose the market.
Due to the differences in their own nature and the increasing personalization of consumer value, differences determine the implementation of market positioning and characteristic operations of enterprises – that is, the choice of market opportunities.
But in the differentiated needs of multi-circle consumers, our brand can’t be the best in all aspects – which requires us to be able to shine in one aspect, or even achieve unique results.
In 1995, Michael Tricie and Fred Wellsma, consultants at CSC index systems, published the book Market Leader Training.
The value criterion model established in the book shows that it is enough to become a market leader in one of the three aspects of product leadership, excellent management and service affinity, and the other two aspects are right.
Later, successive business leaders proposed more specific factors in this regard.
In 2001, for example, when Fred Crawford was executive vice president of Capgemini EY, Europe’s largest consulting firm, as the first author, he wrote “The Myth of Excellence: Why Don’t Big Companies Always Try to Be the Best in All Aspects?” 》。
In the book, the author’s study of more than 100 successful companies around the world concludes that successful companies offer customers a combination of benefits in five areas, including price honesty, product stability, accessibility, unique experiences, and service compliance.
But they don’t need to outperform the competition in all aspects of the five interests, just do a great job in one aspect, do a good job on the other, and reach the industry average in the rest.
In 2004, Willard Scott, a partner at McMillan Doolittle, a U.S. retail consulting firm, said he would like to say that he would not be able to do anything about it. N. Ender and Neil Z. Stern publishes the book Winning Retail: A Model for Sustainable Retail.
The book’s argument shows that of the five elements of variety, low price, fashion, convenience of service and speed, one element does the best, and the other four elements only reach the average or passing level.
Although these elements are more of a combination of the service capabilities of retail stores, the main body that ultimately feeds back to is still the consumer goods brand.
Third, how to market segmentation?
If a brand tries to meet everyone’s needs, it will end up in inevitable trouble.
To identify a track is to analyze the market, including consumer analysis, industry analysis, and competitor analysis. In the process of analysis, there is also a long-term market environment research, predicting the future trend of the next 5-10 years or even longer, so as to promote enterprises to formulate medium- and long-term development strategies.
How to choose market opportunities becomes the key point for entrepreneurs to win at the starting line.
You see, behind each field incision and pattern cut, there are different market segments. Only when the brand first anchors its own market segment, can it aim at the target in the later stage of products, marketing and other links.
1. Geographic segmentation
Consumers in different geographical environments often have different needs and preferences for the same type of products, so that their reflections on marketing measures such as product prices, sales channels, and advertising are often different.
Among them, the most prominent performance is that consumer goods such as cooling and cold protection of the Department of Defense are often subdivided according to different climatic zones; Consumer goods such as household appliances and textiles are often segmented by urban and rural markets; For brands of basic necessities and daily consumer goods, they will segment the market according to population density.
2. Population segmentation
Identifying target demographics is one of the most commonly used market segments for consumer brands. There are many variables in its subdivision, including age, gender, household size, income level, occupation, education level, religion, ethnicity, nationality and even social class.
Here are a few common ways to segment the population:
1) Age segmentation
Age segmentation is a segmentation variable that many consumer brands agree on. Especially in the new consumption era, the new group of people we anchor is the post-90s and even post-00 generation.
In essence, new consumption is segmented by age.
2) Gender breakdown
The target population is divided by gender, mostly male and female, but in actual business operations, there will be different categories.
If your brand produces men’s home pajamas and men’s business shirts, who is your target consumer group? From experience, the final purchase decisions for these categories are often made by groups of women as wives.
This means that your product design, your store decoration and display, need to pay more attention to the thinking logic and experience of female consumers.
3) Breakdown of educational attainment
People with different levels of education have obvious differences in consumption structure and rational decision-making.
4) Revenue segmentation
A person’s income level will directly affect his consumption desire and spending pattern.
From the current situation of China’s residents’ income, paying attention to low-income people is the biggest market.
Tang Min, a well-known economist and counselor of the State Council, said in a series of interviews with Sohu Finance and Economics and Economics magazine that the number of middle-income groups in China is now 200-300 million people, and the number of wealthy groups is 10 million to 20 million. Even if this group is counted as 400 million people, China still has 1 billion low-income people.
5) Family life cycle segmentation
In population segmentation, we can also start from the family life cycle and subdivide the life scenarios of various stages such as the single period, the new marriage period, the parenting period, and the empty nest period.
3. Behavioral segmentation
In common market segments, consumer behavior variables can also influence the development of brands. The first is the difference in consumers’ lifestyles, the most obvious of which is the attitude to life.
The young generation after the 90s, compared with the previous generation of consumers, belongs to the consumer group that is happy to socialize and chase the trend. This group of people is getting closer and closer to the Western way of consuming, seeking to improve the comfort of life, so that they are willing to spend ahead of the curve.
According to this attitude to life, many payment instruments and supermarkets have begun to provide consumers with credit consumption services. Now you go down the street and buy a baked sweet potato, and you can pay with Huabei.
In fact, it is the difference in interests that consumers seek in the process of consumption.
The difference in interests is actually the individuality of each person’s needs. In the 1980s and 1990s, when Shanghainese were still washing their hair with soap bubbles, a brand called Bee Flower appeared, proposing that shampooing and hair care should be done separately.
Immediately afterward, Procter & Gamble entered the Chinese market with a shampoo called “Haifeisi”, and the advertising slogan of “anti-dandruff power” caught the bees off guard.
Later, dandruff, softening, oil removal, moisturizing, anti-shedding, etc., each functional shampoo began to be placed on the shelves of supermarkets. But it’s irrefutable that these are the points of interest consumers seek when shopping for shampoos.
In fact, market segmentation can be carried out from different perspectives.
No single segmentation approach is right for all brands, and we have to find out the most important factor that influences consumer buying behavior, or a combination of factors.
Is your segmentation really reliable?
Due to different market segments and different products and services, there may be different fluctuations in indicators such as production costs and sales expenses that we should bear. How do you weigh revenue and costs across market segments?
This requires validating the market segment of the team before identifying the target market.
Edited by Professor Zeng Qingjun and published by Science Press in 2012, “Retail Studies” put forward four reference standards for market segments.
1. Recognizability
Recognizability is that the purchasing power and size of a segment can be identified and measured.
At present, the measurement of the size of the market segment is generally recommended by the TAM methodology.
TAM, in fact, is an abbreviation for Total Aaddressable Market, that is, total potential market, which refers to the total number of potential users in a particular product/service in the market.
This data is built on the ideal condition that there are no competitors and all markets are reachable. Let’s say you open an airline that can theoretically serve 1.4 billion Chinese.
The results of TAM’s calculations directly affect the future of two scale indicators:
The first is the Serviceable Available Market (SAM). SAM shows the size of the market that a company’s products/services can occupy in TAM, such as the aviation industry can theoretically serve 1.4 billion Chinese, but in reality, 1 billion people have not made an airplane.
So its SAM only has a market of 400 million people.
The second is the Serviceable Obtainable Market (SOM). This refers to the market that the company’s product/service is currently acquiring, or will be acquired in the future. It is part of SAM.
Just like in the 400 million consumers who need to fly and are willing to pay, your competitors already make up 50%. This part of the population may have a hard time moving on to your offer again, so you can say SOM is set to get 20% of the population first at SAM.
Under full competition, SOM is always smaller than SAM, which can represent the market potential of the enterprise in a certain period of time, and the latter is the target market share of this demand.
2. Profitability
This is easy to understand, the capacity of the market segment must be able to ensure that the brand gets enough economic benefits, at least to make money. Otherwise, this segment is ultimately meaningless.
Remember the example of Shanghai Parent-Child Department Store? In the 1980s, the business area of Shanghai Parent-Child Department Store reached 5,000 square meters, and it targeted the children’s market segment in a high-profile manner.
But at that time, the scale of the children’s segment was not large, and the frequency of consumers taking children to the mall to play creative picture books, water parks or building blocks was not high.
As a result, the department store did not have enough target consumers to arrive, and the revenue generated per unit area was not enough to cover the cost, which eventually led to the failure of the project.
3. Accessibility
Accessibility mainly refers to whether we can cut into this market with our current ability when choosing a market segment.
The most basic performance is that our marketing actions can be seen by consumers in the market segment; Our products and services reach consumers in market segments through certain channels.
4. Distinguishability
If a segment’s response to marketing strategies is largely indistinguishable from other markets, there is no need to treat it as a separate market.
The distinction here actually requires consumers to distinguish themselves. In many market segments, brands will use clever words to guide consumers to differentiate, so as to develop an unnecessary segment into an independent market.
Shampoo is a typical case.
Before 2007, people’s subdivision of shampoos was at most stuck in the functions of anti-dandruff and anti-shedding. But in April of this year, Unilever launched the country’s first “gender-sensitive” anti-dandruff shampoo “Qingyang”.
Convincing consumers of the distinctiveness of market segments can open up more opportunities in the fierce market competition.
How many segments do you serve?
After we effectively segment many market opportunities, the trade-offs are actually the hardest issues.
American marketing scholar Russell Halley has studied the consumers who buy toothpaste, and divided the toothpaste market into four types of interest segments, namely anti-tooth cleaning, toothpaste taste, packaging, and affordable price.
These 4 needs can become their respective market segments, but how many can you get? We can’t go to all market segments with the mentality of trying it out, which requires a self-evaluation process.
1. Market potential assessment
The development potential of a market segment actually needs to test the judgment of entrepreneurs and investors. Nowadays, the mainstream way for people to compare the future potential of the market is to compare the development of overseas markets horizontally.
It’s like Lanzhou ramen that exploded in mid-2021. Many investors have cited a set of data to show that the current domestic restaurant chaining rate is about 10%, while the United States is as high as 50%, which means that there is still a lot of market space for restaurant chaining in China.
But in the Chinese consumer market, there is also a kind of “individual popularization” entrepreneurial thinking.
That is, as long as I feel that there are needs and pain points here, then we can find at least tens of millions of users in China with the same idea, and once there is no one else to provide a solution, it is a new entrepreneurial opportunity.
Mouthwash is such a category.
According to a survey report released by Forbes in 2017, the average annual consumption of oral personal care in Chinese is only $2.70, which is much lower than that of other large consumers of oral hygiene products.
Among them, the main consumer goods are toothpaste and toothbrushes, and mouthwash is very few.
Is this because the user has no demand, or the brand side does not supply in time? Johnson & Johnson-Li Stalin searched for mouthwash categories on domestic online platforms and found that few brands in China actually offer such products.
So during the 2018 Double Eleven, Johnson & Johnson for the first time developed a product specifically for Chinese consumers and created a mouthwash.
Generally speaking, Johnson & Johnson’s new product development cycle is 24 months, and for this mouthwash, the development cycle has been shortened from new formula development to product launch to 5 months, creating the fastest record for the launch process of Johnson & Johnson’s new imported products.
Tmall supermarket data shows that a 1700ml/piece Li Shi Delin ice blue refreshing mouthwash set has a monthly sales volume of more than 20,000 pieces and more than 100,000 repeat customers.
2. Market landscape assessment
In order to ensure the optimization of the selection of the target market, in addition to evaluating the scale and development potential of the market segment, we must also put the company itself into the entire market pattern to compare.
Only after a clear understanding of the entire market competition environment, the company’s own resources and the performance of competitors can we decide whether this segment is worth entering.
In general, the Porter Five Forces model is the most commonly used market pattern assessment tool.
- Supplier bargaining power;
- bargaining power of the purchaser;
- New entrant threats;
- Substitute threats;
- The degree of competition in the same industry.
3. Market objectives and strategic research
Many times, choosing whether to enter a target market is not simply a consideration of market potential and competitive landscape.
Sometimes, brands need to choose whether to enter certain market segments according to their medium- and long-term goals and strategies, even if it is to sacrifice some short-term benefits for this purpose.
From the perspective of goals, the most common description is that in order to achieve a more valuable purpose, the company is willing to make strategic losses in a certain business.
A typical case is JD Logistics. In order to compete with Alibaba’s e-commerce, Liu Qiangdong proposed to spend $1 billion on the board of directors in 2007 to build his own logistics. You know, JD.com raised less than $20 million at that time.
His logic is clear, JD.com must win more users to be big. Of the complaints received by JD.com that year, more than 50% were slow arrival and damage to the goods. In addition, there is no third-party express delivery on the market that can do a good job in the collection business, but at that time, people’s trust in e-commerce was not strong, and cash on delivery was the mainstream.
This decision has caused a lot of controversy, and many people believe that JD.com will use this money to fight a good category battle faster than doing logistics.
But it is precisely because of such strategic research that Jingdong has the opportunity for rapid growth in the later stage.
Sixth, how to enter the selected target market?
The most difficult problem in the world is multiple choice.
After a long and meticulous market segmentation and evaluation, entrepreneurs are often faced with several target markets that are worth doing, and how to choose has become the first hurdle to test entrepreneurs.
Here are five entry modes for reference:
1. Large item mode
For more businesses, they aspire to reach all segments of the market, but do not have the capacity to provide the corresponding products/services.
The helplessness of losing the opportunity is like a child going to the shopping mall in Chaoyang District to play the game of “hanging snacks in the air”, seeing that a pool of snacks may be their own, but they are limited by the arm span is not long enough, and can only successfully catch three or five packs.
2. Small circle mode
Corresponding to the large single product is the small circle mode, that is, “multiple products to a single population”, the brand to meet a certain group of people and provide a variety of products and services they need.
This is a bit like Meituan Dianping, anchoring the people who eat and drink on the platform, they have takeaway needs to go online takeaway services, and there are taxi needs to provide taxi functions.
3. Full coverage mode
The complete coverage model is well understood, that is, to provide different products/services for different target groups (markets) and fully cover the current market.
It’s a multi-product to multi-crowd business with a long front line. If the company does not evaluate its own resources, this model is not easy to achieve, so this is basically the game of oligarchy enterprises to enter the new market.
4. Scatter mode
Scatter, as the name suggests, is to selectively layout several markets in all identified target markets according to their own comprehensive capabilities, and launch their respective products/services accordingly.
This is also a multi-product to multi-population entry model, but the corresponding investment scale is smaller than the All in model.
5. Basis point mode
Basis point mode is a small and beautiful entry mode, which is basically only for a single category for a single group of people.
Giving is getting. Know how to abandon most of the seemingly promising market, you will get more energy to polish their fist products, so as to enhance the appeal of this product in the market.
Firm a product, adhere to a group of users, you will gain stronger stickiness and more repurchase.
The Internet gave it the name Saturation Attack.
How do you position yourself in your target market?
If a brand is compared to a car, to ensure that it runs smoothly and reliably in the fierce market competition, it is also necessary to carry out four-wheel positioning.
We will compare the four key factors that affect the development of the brand to the four wheels of the vehicle: user, product, pricing, and marketing.
1. Customer Targeting
The target user is the basis for the survival of the brand structure, without which this group of people pays, no brand can survive for a long time. Therefore, customer group positioning is generally to solve the problem of who the brand provides products/services for, and how to build a brand value proposition.
Too many brands think too simply about this issue, they generally think that they serve high-income groups, middle-income groups, and at most add a detailed label such as age group, education level, and occupation.
In this process, we also need to gain insight into the user’s life and work, understand the user’s more specific pain points, and even the user’s interest needs.
These contents can help brands sort out products/services, think about how to help users alleviate the impact of pain points, and even create value benefits for users.
2. Product Positioning
According to the value proposition canvas proposed by Alexander Ostwald, once the brand has completed the positioning and insight of the target user, then the positioning of its product/service has taken shape.
In general, product positioning atmosphere product grade positioning and product portfolio positioning.
The product grade is dominated by the consumption level of the target user, and the product grade of bebebus and the product grade of Feitian Moutai are all going up, making its own high-end brand neutral in the industry.
The product portfolio is more of a model for validating the brand’s revenue. The positioning of Gillette’s shaver portfolio is believed to be a well-known business case and does not need to be discussed again.
3. Price Positioning
Price positioning is a way to use price as the first intuitive symbol to seize the user’s mind, such positioning can even represent a category, in the user’s mind to establish an image of a price category.
4. Promotion Positioning
The essence of promotion is a kind of consumer communication, by conveying information to consumers, occupying a certain position in the minds of consumers, so as to attract consumers to buy.
The promotion positioning is to improve the efficiency of consumer communication, and to quickly seize the mind through an intuitive and concrete content point. These include several classic positioning methods:
1) Preemptive positioning
Preemptive positioning is expensive in a “grab” word. When a brand finds a mental vacancy, preemptively identify and spread it intensively in the channel,
This way of seizing the blank market positioning is commonly used by new consumer brands that create a “category first” mentality at present. When it comes to inside and out, you might think of sizeless underwear; When it comes to self-heating pot, you may think of self-heating hot pot; When you think of three and a half meals, you might think of freeze-dried coffee…
This is the competitiveness brought about by preemptive positioning.
2) Focus positioning
Jack Trout, the “father of positioning,” has repeatedly stressed that brands should maintain a narrower focus, and should strive to establish a unique image perception in the minds of consumers that is different from other competing products.
Jiumuwang is a business casual men’s wear brand enterprise established for 32 years. In its dissemination, it has always focused on the positioning of “men’s pants experts”.
3) Take advantage of the positioning
Taking advantage of the positioning is generally a positioning strategy to determine its own market position through comparison with competing brands, especially the attachment of the first place in the industry.
There are many more such positions:
- “There are two major sauce-flavored liquors in China, one of which is Qinghualang.”
- “Lexus, a high-end car comparable to Mercedes-Benz.”
- “Disney is too far away, go to Suzhou Amusement Park.”
4) Reverse positioning
Jack Trout also says in his book Locing:
“While everyone else looked east for India, Columbus searched westward, and although he did not find India in the end, he discovered the New World. In fact, no matter what he found to the west, Columbus would be the first to discover, and his historical position was determined by his reverse walk with others. ”
This is actually the influence of reverse positioning on the brand. If most of the players in the industry are exploring in the same direction, then new entrants will not be able to get the opportunity to stand out.
For example, Nongfu Mountain Spring. In 1999, in front of pure faucets such as Wahaha, Lebaishi, Yibao’s predecessor Longhuan, and Shanghai Zhengguang, how did Nongfu Mountain Spring stand out?
“Nongfu Spring stopped producing pure water and put all of it into the production of natural water, and experiments have proved that pure water is not good for health.”
In 2007, Nongfu Mountain Spring dabbled in mineral water. At that time, the leader of this field was Master Kang, whose annual sales had reached billions of yuan.
What to do, Nongfu Spring will make the acidity and alkalinity of water a topic of public discussion, carry out drinking water pH testing activities throughout the country, and publicize the health benefits of water with weak alkaline pH value.
Have you considered repositioning?
Positioning is difficult to do once and for all, and we need to be clear about one phenomenon: repositioning is more common in reality than first positioning.
There is an Internet finance company in Shenzhen called Feilun Finance. This company was born when 94.5% of China’s small and micro enterprises are facing loan difficulties, and builds a bridge between credit institutions such as banks and small and micro enterprises, playing a role in risk review and risk collateralization.
In the process of a large number of services, Feilun Finance has precipitated more data and established a risk assessment model with an algorithm that is more in line with industry logic. Coupled with the application of cloud computing, this risk assessment model makes the entire loan process online.
But later things are known to everyone, many domestic financial companies rubbed the edge, causing a very bad industry impact.
Coupled with the supervision of People’s Bank of China, small loan companies are bound to strict financing leverage requirements, which leads to the daily growth of Feilun Finance limited to financial figures and statement orders of magnitude, and cannot leverage a larger number of businesses through limited margins.
Later, Feilun Finance stopped to think, and even those users with good risk assessment were abandoned, and re-targeted user positioning based on the current market and its own resources.
They found that their own complete risk assessment system can actually serve more similar small loan companies. As a result, Feilun Finance targets users with national guarantee companies and provides them with risk control, models, data and methods to empower their customers’ credit review and risk control.
It is not difficult to see that due to the uncertainty of the corresponding policy changes and changes in the market environment, after the brand has reached a certain stage of development, it is necessary to ask itself: Is our current growth an inertial growth?
Once growth stems from inertia, or the decline comes from the disappearance of inertia, then we need to consider repositioning.
