Finding the right position is more important than blind efforts
What exactly is positioning? Why do positioning? How to do market segmentation? How to position yourself in the target market…
This article summarizes several issues about brand positioning, hoping to bring real value to readers. Answering these few questions well will half the battle for your positioning.
What exactly is positioning?
In fact, most people don’t know enough about the real positioning.
First, positioning is a rather competitive concept. The premise it puts forward is that in order to make our brand gain a greater competitive advantage, we must position what competitors do not have but you have, and what competitors have but you are better.
Second, positioning is a key to consumer communication. Because positioning means determining your unique existence in the minds of consumers, and this positioning has a huge appeal to him.
Finally, positioning is an organic combination of an enterprise’s operating system.
The so-called positioning actually includes product positioning, crowd positioning, price positioning, regional positioning, format positioning, scale positioning, and promotional positioning.
And “drinking Wanglaoji for fear of getting angry”, “Chinese mustard mustard counts Fuling, Fuling mustard mustard counts Wujiang”, “creator of cup milk tea”… These positioning theory products that are well-known to the public are actually just brand promotion positioning.
Why do positioning?
As the saying goes, choosing the right market is half the battle. Positioning is to choose the market.
Due to their own differences and the increasingly personalized value of consumers, the differences determine the market positioning and characteristic operations implemented by enterprises—that is, the selection of market opportunities.
However, in the face of the differentiated needs of consumers in multiple circles, our brand cannot be the best in all aspects—this requires us to be outstanding enough in a certain aspect, and even be unique.
In 1995, Michael Treacy and Fred Welshma, consultants of CSC Index Systems, published the book “Market Leader Practice”. The value criterion model established in the book shows that: to become a market leader in one of the three aspects of product leadership, excellent operation and service affinity, it is enough to perform properly in the other two aspects.
Later, business leaders successively put forward more specific factors in this regard.
For example, in 2001, Fred Crawford was the executive vice president of Capgemini Ernst & Young, the largest consulting company in Europe. As the first author, he wrote “The Myth of Excellence: Why Big Companies Never Try to Do Everything to the best? “This book.
In the book, the author draws a conclusion through the research of more than 100 successful companies in the world: successful companies provide customers with corresponding benefit combinations in five aspects, including price honesty, product stability, accessibility, unique experience and service commitment .
But they don’t need to outperform their competitors in all of the five benefits, just one is excellent, another is excellent, and the others are at the industry average.
For another example, in 2004, Willard N. Ander and Neil Z. Stern, partners of McMillan Doolittle, an American retail industry consulting firm, published the book “Winning Retail: A Model for Sustainable Development in the Retail Industry”. According to the book, among the five elements of rich variety, low price, fashion, convenient service and fast speed, one element is the best, and the other four elements are only average or passing.
Although these elements are more about combining the service capabilities of retail stores, the final feedback is still consumer brands.
How to do market segmentation?
Any brand that tries to please everyone will end up in inevitable trouble.
To confirm a track is to analyze the market, including consumer analysis, industry analysis, and competitor analysis. In the analysis process, there is also a long-term market environment research, and forecasting of future trends in the next 5 to 10 years or even longer, so as to prompt enterprises to formulate medium and long-term development strategies.
How to choose market opportunities has become the key point for entrepreneurs to win at the starting line. Behind every field cut and model cut, there are different market segments. Only when a brand anchors its own market segment first, can it aim at the target launch in the later stages of product and marketing.
(1) Geographic segmentation Consumers
in different geographical environments often have different needs and preferences for the same type of product, so that they often have different reactions to marketing measures such as product prices, sales channels, and advertising.
Among them, the most prominent ones are consumer goods such as heatstroke prevention and cooling, cold protection and warmth, which will be segmented according to different climate zones; consumer goods such as household appliances and textiles are often segmented according to urban and rural areas; brands of basic necessities and daily consumer goods are The market is segmented by population density.
(2) Demographic Segmentation
Determining the target group is the most common method of segmenting the market used by consumer brands. There are many subdivided variables, including age, gender, family size, income level, occupation, education level, ethnicity, nationality, etc.
Here are a few common population segmentation methods:
1. Age segmentation. Age segmentation is a segmentation variable that many consumer brands agree on. Especially in the new consumption era, the new people we anchor are the post-90s or even post-00s generation. In essence, new consumption is segmented by age.
2. Gender breakdown. Classification of target groups by gender is mostly done in two ways: men and women, 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 in these categories are often made by women who are wives. This means that your product design, 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 expenditure pattern.
Judging from the income status of our country’s residents, it is the biggest market to focus on low-income earners. Tang Min, a well-known economist and counselor of the State Council, said in an interview that the number of middle-income groups in China is now 200-300 million people, and the number of wealthy people is 10-20 million people, even if this part is counted as 400 million people , China still has 1 billion low-income people.
5. Segmentation of the family life cycle. In the population segmentation, we can also start from the family life cycle and segment the life scenes of each stage of the crowd, such as the single period, newly married period, parenting period, and empty nest period.
(3) Behavior Segmentation
In common market segmentation, consumer behavior variables can also affect brand development. The first is the difference in the lifestyle of consumers, the most obvious is the attitude towards life.
Compared with the previous generation of consumers, the post-90s generation belongs to a consumer group that is willing to socialize and follow new trends. This group of people is getting closer to the Western consumption style, pursuing to improve the comfort level of life, and willing to consume ahead of schedule.
As a result, many payment tools and supermarkets have begun to provide consumers with credit consumption services. Now if you go to the street to buy a baked sweet potato, you can pay with Huabei.
This is actually the interest difference that consumers seek in the consumption process. Differences in interests are the individual needs of each individual.
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 afterwards, Procter & Gamble entered the Chinese market with a shampoo called “Head & Shoulders”. The advertising slogan of “anti-dandruff powerful” caught Fenghua by surprise.
Later, shampoos with various functions, such as anti-dandruff, smoothing, oil removal, moisturizing, anti-hair loss, etc., began to be put on the shelves of supermarkets. But what is irrefutable is that these are the benefits that consumers are looking for when buying shampoo.
In fact, market segmentation can be carried out from different angles. No single segmentation method is suitable for all brands. We must find out the most important factor that affects consumers’ purchasing behavior, or consider several factors together.
Is your segmentation really reliable?
Due to different market segments and different products and services, indicators such as production costs and sales expenses that we should bear may also have different fluctuations. How to weigh revenue and cost under market segmentation? This requires validating the market segmented by the team before determining the target market.
Edited by Professor Zeng Qingjun, “Retailing” published by Science Press in 2012 proposed four reference standards for market segments.
(1) Recognizability
Recognizability means that the purchasing power and size of market segments can be identified and measured. Currently, the TAM methodology is generally recommended for the measurement of market segment size.
TAM (Total Aaddressable Market), that is, the total potential market, refers to the total number of potential users of a specific product/service in the market. This data is based on ideal conditions where there are no competitors and all markets are accessible. For example, if you open an airline, it can theoretically serve 1.4 billion Chinese people.
The calculation results of TAM directly affect two future scale indicators:
the first is the Serviceable Available Market (SAM). What SAM indicates is the market size that an enterprise’s products/services can occupy in TAM. For example, the aviation industry can theoretically serve 1.4 billion Chinese people, but in reality, 1 billion people have never taken an airplane. So its SAM only has a market of 400 million people.
The second is the Serviceable Obtainable Market (SOM). SOM refers to the market that the company’s products/services currently obtain, or the market that will be obtained in the future. It is part of SAM.
Just like out of 400 million consumers who want to fly and are willing to pay, your competitors actually account for 50%. It may be difficult for this part of people to transfer to your product/service, so you can set SOM to get 20% of the people first in SAM.
Under full competition, SOM is always smaller than SAM. The former can represent the market potential of the enterprise within 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 ensure that the brand can obtain sufficient economic benefits, at least making money. Otherwise, this market segment is ultimately meaningless.
(3) Accessibility
Accessibility mainly refers to whether we can enter this market with our current own ability when we choose a market segment. The most basic performance is that our marketing actions can be seen by consumers in market segments; our products and services can reach consumers in market segments through certain channels.
(4) Differentiability
If a market segment responds to a marketing strategy indistinguishably from other markets, there is no need to treat it as an independent market.
The distinction here actually requires consumers to distinguish themselves. In many market segments, brands will use some clever words to guide consumers to differentiate, thus developing an unnecessary market segment into an independent market.
Shampoo is a typical example. Before 2007, people’s subdivision of shampoos still focused on functions such as anti-dandruff and anti-shedding. But at that time, Unilever launched the country’s first “male and female” anti-dandruff shampoo “Clear”.
Convincing consumers of the distinguishability of market segments can open up more opportunities in the fierce market competition.
How many segments are you going to serve?
After we have effectively subdivided many market opportunities, the choice is actually the most difficult problem.
Russell Halley, an American marketing scholar, once studied the consumers who bought toothpaste, and divided the toothpaste market into four types of benefit segments, namely anti-moth tooth cleaning, toothpaste taste, packaging, and affordable price.
These four requirements can all become their own market segments, but how many can they handle? We can’t fight for all market segments with the mentality of trying, which requires a process of self-evaluation.
(1) Market potential assessment The development potential of
a market segment needs to test the judgment of entrepreneurs and investors. Nowadays, the mainstream method for people to judge the future potential of the market is to compare the development of overseas markets horizontally.
Jack Trout, the founder of positioning theory, the founder and former president of Trout Consulting Company in the United States.
Just like the Lanzhou ramen that will explode in 2021. Many investors have cited a set of data, indicating that the current domestic catering chain rate is about 10%, while that in the United States is as high as 50%, which means that there is still a lot of market space for catering chains in my country.
However, in the Chinese consumer market, there is still a kind of entrepreneurial thinking of “one case popularizes”. In other words, as long as I think there are needs and pain points here, I can find at least tens of millions of users in China who have the same idea, and once no one else provides a solution for this idea, it will be a new entrepreneurial opportunity.
Mouthwash is such a category.
According to a survey report released by Forbes in 2017, China’s per capita annual oral personal care consumption is only US$2.7, which is far lower than other major oral cleaning products consumption countries. Among them, the main consumer products are toothpaste and toothbrush, and there are very few mouthwashes.
Is this because there is no demand from users, or is the brand not supplying it in time? Johnson & Johnson – Listerine searched for mouthwash categories on domestic online platforms and found that there are few brands in China that provide such products.
So during the “Double 11” period in 2018, Johnson & Johnson specially developed products for Chinese consumers and created a mouthwash. Generally speaking, Johnson & Johnson’s new product development cycle is 24 months, but this mouthwash shortens the development cycle 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.
According to data from Tmall Supermarket, a 1700ml/piece Listerine Ice Blue Refreshing Mouthwash Set has monthly sales of more than 20,000 pieces and more than 100,000 repeat customers.
(2) Evaluation of the market structure
In order ensure the optimization of the target market, in addition to assessing the size and development potential of the market segments, companies must also be placed in the overall market structure for comparison. Only after a clear understanding of the performance of the company’s own resources and competitors in the overall market competition environment can it be determined whether this market segment is worth entering.
Generally speaking, Porter’s five forces model is the most commonly used market assessment tool, which includes: bargaining power of suppliers, bargaining power of buyers, threat of new entrants, threat of substitutes, and level of competition in the same industry.
(3) Market target and strategic research and judgment
In many cases, choosing whether to enter a target market is not just a matter of simply considering market potential and competition pattern. Sometimes, brands need to choose whether to enter certain market segments according to their medium and long-term goals and strategies, even if they 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, an enterprise is willing to make a strategic loss in a certain business.
A typical case is JD Logistics. In order to compete with Ali’s e-commerce, Liu Qiangdong proposed to the board of directors in 2007 to spend 1 billion US dollars to build its own logistics. You know, JD.com raised less than $20 million at that time. His logic is very clear, if JD.com wants to grow bigger, it must win more users. Among the complaints received by JD.com that year, more than 50% were slow delivery and damaged goods. In addition, there is no third-party express delivery company on the market that can do a good job in the collection business, but at that time people did not have a strong sense of trust in e-commerce, and cash on delivery was the mainstream.
So this decision caused a lot of controversy at the time. Many people believed that JD.com would use the money to fight a good category campaign, which would be more effective than logistics. But it is precisely because of such strategic research and judgment that JD.com has the opportunity for rapid growth in the later stage.
How to enter the selected target market?
After a long and meticulous market segmentation and evaluation, entrepreneurs are often faced with several target markets worth pursuing. How to choose is the first hurdle to test entrepreneurs. Here are 5 entry models for reference:
(1) Large single product model
For more companies, they are eager to cover all the population markets, but they do not have enough ability to provide corresponding products/services.
(2) Small circle model Corresponding
to the large single product, is the small circle model, that is, “multiple products for a single group of people”, and the brand provides various products and services that meet the needs of a certain group of people. This is a bit like Meituan Dianping, which anchors the platform for people who eat, drink and have fun. If they have a need for food delivery, they will launch a food delivery service, and if they need a taxi, they will provide a taxi-hailing function.
(3) Full coverage model The
full coverage model is to provide different products/services for different target groups (markets) and completely cover the current market. This is a multi-product to multi-crowd business with a long front. If the company does not evaluate its own resources well, this model is not easy to realize, so this is basically a way for oligarchic companies to enter new markets.
(4) Scattered mode
Scattered , as the name implies, is to selectively lay out several markets in all determined target markets according to their own comprehensive capabilities, and launch their own products/services accordingly. This is also a multi-product entry model for multiple groups of people, but the corresponding investment scale is smaller than the full coverage model.
(5) Base point mode
The base point mode is a “small and beautiful” entry mode, which generally provides a single category for a single group of people.
What you give up is what you get. If you know how to abandon most of the seemingly promising markets, you will have more energy to polish your competitive products, thereby enhancing the appeal of your products in the market. Stick to a product and stick to a group of users, and you will gain stronger stickiness and more repurchases. The Internet gave it the name saturation attack.
How to position yourself in the 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 necessary to carry out four-wheel alignment. We compare the four key factors that affect brand development to the four wheels of a vehicle: users, products, pricing, and marketing.
(1) Customer group
positioning The target users are the basis for the survival of the brand. Without this group of people paying for it, no brand can survive for a long time. Therefore, customer group positioning generally solves the problem of who the brand provides products/services for and how to build a brand value proposition.
Many companies think about this issue too simply, and generally think that they serve high-income groups and middle-income groups, and at most add a detailed label such as age group, education level, and occupation. We also need to gain insight into the life and work of users, understand the more concrete pain points of users, and even the interests and needs of users. 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 for users.
(2) Product positioning
According to the value proposition canvas proposed by Alexander Ostwald, once a brand has completed target user positioning and insight, then its product/service positioning will take shape.
Generally speaking, product positioning is divided into product grade positioning and product combination positioning.
The product grade is dominated by the consumption level of the target users.
The product portfolio is more of a model to verify the brand’s revenue, such as the product portfolio positioning of Gillette razors.
(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 and establish a price category image in the user’s mind.
(4) Promotion positioning The essence of
promotion is a kind of consumer communication. By conveying information to consumers, it occupies a certain position in consumers’ minds, thereby attracting consumers to buy.
The promotion positioning is to improve the communication efficiency of consumers, and can quickly seize the mind through an intuitive and concrete content point.
This includes several classic positioning methods:
1. Preemptive positioning. The word “rush” is the most important thing. When a brand finds a mental space, it should be determined first and spread intensively through channels. This method of seizing a blank market position is commonly used by new consumer brands that create a “category first” mentality. When it comes to inside and outside, you may think of sizeless underwear; when it comes to self-heating pot, you may think of self-heating hot pot; when it comes to three and a half meals, you may think of freeze-dried coffee… This is the competitiveness brought by preemptive positioning .
2. Focus positioning. “Father of positioning” Jack Trout has repeatedly emphasized that brands should maintain a relatively narrow focus and strive to establish a unique and unique image recognition in consumers’ minds that is different from other competing products. Jiumuwang is a 32-year-old business casual menswear brand enterprise. In its communication, it has always focused on the positioning of “men’s trousers expert”.
3. Take advantage of the situation to position. Generally, it is a positioning strategy to determine its own market position through comparison with competing brands, especially the clinging to the industry’s first place.
There are many such positioning opportunities:
”There are two major sauce-flavored baijiu in China, one of which is Qinghualang.”
”Lexus, a high-end car comparable to Mercedes-Benz.”
”Disney is too far away, go to Suzhou Paradise.”
4. reverse positioning. Jack Trout said in the book “Positioning”: Others looked east for India, but Columbus looked west. Although he did not find India in the end, he discovered the New World. In fact, no matter what is discovered by walking westward, Columbus will be the first discoverer, and his historical status is determined by his reverse walking with others.
This is actually the influence of reverse positioning on the brand. If most players in the industry are exploring in the same direction, new entrants will have no chance to stand out.
For example, Nongfu Spring. In 1999, how did Nongfu Spring stand out in front of Wahaha, Robust, C’estbon predecessor Longhuan, and Shanghai Zhengguang and other pure water faucets? “Nongfu Spring stopped producing pure water and put all of it into natural water. Experiments have proved that pure water is not good for health.”
In 2007, Nongfu Spring set foot in mineral water. At that time, the leader in this field was Master Kong, whose annual sales had reached several billion yuan. what to do? Nongfu Spring made the acidity and alkalinity of water a topic, and carried out drinking water pH testing activities across the country to promote the health benefits of water with a weakly alkaline pH value.
In addition, when an enterprise develops to a certain stage, it needs to think about repositioning. Positioning is difficult to achieve once and for all. We must be clear about a phenomenon: repositioning is more common than initial positioning in reality.
Due to changes in corresponding policies and uncertainties in changing market environments, after a brand develops to a certain stage, it needs to ask itself: Is our current growth a kind of inertial growth? Once the growth comes from inertia, or the decline comes from the disappearance of inertia, then we need to consider repositioning.
