How to Develop Brand Positioning and Competitive Advantage

Product position is the way the product is defined by consumers on important attribute – the place the product occupies in customers minds relative to competing products. Products (Software) are created on the company’s office, but brands are created in the mind of customers.

Ask your self the following questions before developing a positioning:

• What are the main problems each persona type face?
• What are the solutions we provide to each problem?

Your solution

What is the problem/s and how your company solves them?

Choosing a positioning strategy:

You need to identify set of competitive advantages upon which to build a position:

choosing the right competitive advantages and selecting an overall positioning strategy . And then you must effectively communicate and deliver the chosen position to the market.

Identifying possible competitive advantages

You must understand customer needs better that competitors do and deliver more value. To the extend that a company can position it self as providing superior value, it gains competitive advantage.

To find points if differentiation , we must think through the customer’s entire experience with the company’s product or service.

What are the ways the company can differentiate it self or its offer?

In the following: product, service, channels, people or image.

Product differentiation on features, performance, style and design.

In a software or SaaS startups, you should provide a UX which is much better and easier to use than competitors. for B2B startups Business customers are looking for solutions: features that help them solve their problems better than competitors. But they also look for easy of use. Your website and all customer touch point should provide great visual appeals, easy-of-use a solid brand identity.

Companies can also differentiate their products on such attributes as consistency, durability, reliability or repeatability.

Service differentiation.

Image differentiation: a company or brand image should convey the product distinctive benefits and positioning. The chosen symbols, characters and other image elements must be communicated through advertising the company’s or brands’ personality, brochures and on the website.

Choosing the right competitive advantage:

Some marketers say that the company must stick with Unique Selling Proposition (USP) for each brand and stick to it. Other says they can be more than just one difference.

Which Difference to promote?

Not all brand difference are meaningful or worthwhile. Not every difference makes a good difference. Each difference has the potential to create company costs as well as customers benefits.

The difference is worth establishing to the extent that satisfies the following criteria:

1- Important: The difference delivers a highly valued benefit to target buyers.

2- Distinctive: Competitors do not offer the difference, or the company can offer it in a more distinctive way.

3- Superior: The difference is superior to other ways that customers might obtain the same benefit.

4- Communicable: the difference is communicable and visible to buyers.

5- Preemptive: competitors can not easily copy the difference.

6- Affordable: Buyers can afford to pay for the difference

7- Profitable: The company can introduce the difference profitably.

Selecting an overall positioning strategy:

The full positioning of a brand is called the brand’s Value Proposition- the full mix of benefits upon which the brand is positioned. It is the answer to the customer’s question “Why should I buy your brand? Not from your competition?

What are the benefits of using our product over other competitors?

The five winning value propositions upon which companies can position their products: more for more, more for the same, the same of less. Less for much less and more for less.

More for more:

More-for-more positioning involves providing the most upscale product or service and charging a higher price to cover the higher cost.

Radisson Hotel, BMW cars -each claims superior quality, craftwork, durability, performance or style and charge a price to match.

Other examples for more-for-more is iPhone offering a higher price for performance style and easy-to-use.

More for the same

Companies can attack competitors more for more positioning by introducing a barns offering comparable quality at a lower price.

For example, Toyota introduced it Lexus line with “more-for-the-same” value proposition versus Mercedes and BMW. Its headline read: “ Perhaps the first time in history that trading a 40K car for 20 K car could be considered trading up.” It communicated the high quality of its new Lexus through rave reviews in car magazines and through a widely distributed videotape showing side-by-side comparisons of Lexus and Mercedes cars. It published Surveys showing that Lexus dealers were providing customers with better after sales and service experiences than were Mercedes dealership. Many Mercedes owners switched to Lexus.

The Same for Less:

Offering “the same for less” can be a powerful value proposition – everyone likes a good deal.

For example, Dell offers equivalent quality computers at a lower “price for performance.

Discount stores such as Walt-Mart and category killers” such as Toys ‘R” US and Tesco use this positioning. They do not claim to offer different ir better products. Instead, they offer many of the same brands as department stores and specialty stores but at deep discounts based on superior purchasing power and lower-cost operations.

Other companies develop imitative but lower-priced brands in an effort to lure customers away from the market leader. For example, AMD makes less expensive versions of Intel’s market-leading microprocessor,

Less for much less

A market almost always exists for products that offer less and therefore cost less.

Few people need, wants or can afford “the very best” in everything they buy. In many cases, consumers

will gladly settle for less than optimal performance or give up some of the bells and whistles in exchange for a lower price.

For example, many travelers seeking accommodation prefer not to pay for what they consider unnecessary extras, such as a pool, attached restaurant, or mints on the pillow. Hotel chains such as Travelodge suspend some of these amenities and charge less accordingly.

“less-for-less” positioning involves meeting consumer’s lower performance or quality requirements at much lower price.

Retailers like Colruylt in Belgium, Dia-Mart in France and Lidl and Aldi across Europe (but originally for Germany) are examples of this type of positioning . Ryanair also practices less-for-much-less positioning. It charges incredibly lower price by not serving food, not assigning seat and not using travel agents.

In our case excel and punch-cards are a cheaper than using our full HR solution. We need to convince hesitant price sensitive business customers, that out solutions are better and error free compared to excel.

More for Less

Of course, the winning value proposition would be to offer “more for less”. Many companies claim to do that. And, in the short run, some companies can actually achieve such lofty positions. For example, when it first opened for business in the USA, Home Depot had arguably the best product selection, the best service and the lowest prices compared with local hardware stores and other home improvement chains.

Yet in the long run, companies will find it very difficult to sustain such best-of-both positioning. Offering more usually cost more, making it difficult to deliver on the “for-less” promise.

Companies that try to deliver both may lose out to more focused competitors. For example, facing determined competition from Asda, Sainsbury’s must now decide whether it wants to compete primarily on superior service or on lower prices.

Summery:

All said, each brand must adopt a positioning strategy designed to serve the needs and wants of its target markets. “more for more” will draw one target market, “less for much less” will draw another and so on. Thus, in many market, there is usually room for many different companies, each successfully occupying different positions.

The important thing is that each company must develop its own winning positioning strategy, one that makes it special to its target consumers. Offering only “the same for the same” provide no competitive advantage, leaving the firm in the middle of the pack.

Companies offering one of the three losing value propositions “the same for more”, “less for more” and “ less for the same” will inevitably fail.

Customers soon realize that they have been undeserved, tell others and abandon the brand.

Any feedback? comments? what is the positioning strategy for your band?