Marketing Management

UNIT-2

What is Targeting in Marketing?

Targeting in marketing involves breaking the target audience into segments and then designing
marketing activities that will reach the segments most likely to be responsive to your efforts. Target
marketing can greatly increase the success you have in reaching potential customers.

Targeting in marketing generally refers to a three-step process marketers use to find the right
segment to target. STP in marketing is the name of this process, and the acronym stands for
segmentation, targeting, and promotion. Marketers divide their target audience into segments
based on demographic information like age, geographical location, hobbies, interests, or previous
purchasing history.

Once marketers have created different segments, they then assess which segment aligns best with
their products, values, and offerings. Marketers who can choose the right audience segments to
target will have a much easier job reaching potential customers and convincing them to purchase
the product or service.

The third step, promotion, involves creating tailored messaging and communications specifically
for the chosen target audience. Marketing plans can be designed to engage the target segment using
the media channels they typically get the most engagement from, which will help a marketing team
maximize their budget. Digital channels and social media are currently the most effective form of
promotion, with 53% of the global population active on platforms like Facebook, Instagram,
Twitter, and others.

What is a Target Market?

A target market is a group of people that have been identified as the most likely potential customers
for a product because of their shared characteristics such as age, income, and lifestyle.

Identifying the target market is a key part of the decision-making process when a company designs,
packages, and advertises its product.

Key Takeaways

• A target market is a group of customers with shared demographics who have been
identified as the most likely buyers of a company's product or service.
• Identifying the target market is important in the development and implementation of a
successful marketing plan for any new product.
• The target market also can inform a product's specifications, packaging, and distribution.

How Do I Define My Product's Target Market?

Part of creating a new product is envisioning the consumers who will want it.

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A new product must satisfy a need or solve a problem, or both. That need or problem is probably
not universal unless it reaches the level of indoor plumbing. More likely, it is needed by a subset
of consumers, such as environmentally-conscious vegetarians, or science nerds, or outdoor
enthusiasts. It may appeal to a teenager or a middle-aged professional, a bargain-hunter or a snob.

Envisioning your likely target market is part of the process of creating and refining a product, and
informs decisions about its packaging, marketing, and placement.

What Are the 4 Target Markets?

Marketing professionals divide consumers into four major segments:

Demographic: These are the main characteristics that define your target market. Everyone can be
identified as belonging to a specific age group, income level, gender, occupation, and education
level.

Geographic: This segment is increasingly relevant in the era of globalization. Regional

preferences need to be considered.

Psychographic: This segment goes beyond the basics of demographics to consider lifestyle,
attitudes, interests, and values.

Behavioral: This is the one segment that relies on research into the decisions of a company's
current customers. New products may be introduced based on research into the proven appeal of
past products.1

What are Market Segments?

Dividing a target market into segments means grouping the population according to the key
characteristics that drive their spending decisions. Some of these are gender, age, income level,
race, education level, religion, marital status, and geographic location.

Consumers with the same demographics tend to value the same products and services, which is
why narrowing down the segments is one of the most important factors in determining target
markets.

For example, people who fall into a higher income bracket may be more likely to buy specialty
coffee from Starbucks instead of Dunkin' Donuts. The parent companies of both of these brands
need to know that in order to decide where to locate their stores, where to stock their products, and
where to advertise their brand.

A business may have more than one target market—a primary target market, which is the main
focus, and a secondary target market, which is smaller but has growth potential. Toy commercials
are targeted directly to children. Their parents are the secondary market.6

Target Market and Product Sales

Identifying the target market is an essential part of a product development plan, along with
manufacturing, distribution, price, and promotion planning. The target market determines
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significant factors about the product itself. A company may tweak certain aspects of a product,
such as the amount of sugar in a soft drink or the style of the packaging, so that it appeals more to
consumers in its target group.

As a company’s product sales grow, it may expand its target market internationally. International
expansion allows a company to reach a broader subset of its target market in other regions of the
world.

In addition to international expansion, a company may find its domestic target market expands as
its products gain more traction in the marketplace. Expanding a product's target market is a revenue
opportunity worth pursuing.

How Detailed Should a Target Market Be?

It depends. Broadly speaking, a product may be designed for a mass market or a niche market, and
a niche market can be a very small group indeed, especially in a product's early introductory phase.

Some carbonated beverages aim for a practically universal market. Coca-Cola had to branch out
to 200 markets abroad to continue growing its customer base.7 Gatorade is owned by Pepsi Cola,
but the brand is positioned as a drink for athletes.8 The soda brand Poppi, which is branded as a
"Healthy, Sparkling, Prebiotic Soda with Real Fruit Juice, Gut Health, and Immunity Benefits," is
clearly aimed at a younger, healthier, and more trend-conscious target market.9

What is an Example of a Target Market?

Consider a casual apparel company that is working to build its distribution channels abroad. In
order to determine where its apparel will be most successful, it conducts some research to identify
its primary target market. It discovers that the people most likely to buy their products are middle-
class women between the ages of 35 and 55 who live in cold climates.

It's reasonable for the company to focus its advertising efforts on northern European websites that
have a strong female audience.

But first, the company may consider how its apparel can be most attractive to that target market.
It may revise its styles and colors and tweak its advertising strategy to optimize its appeal to this
new prospective market.

What is the Purpose of a Target Market?

A target market defines a product as well as vice versa.

Once a target market is identified, it can influence a product's design, packaging, price, promotion,
and distribution.

A product aimed at men won't be packaged in pink plastic. A luxury cosmetic won't be sold in a
pharmacy. An expensive pair of shoes comes with a branded cloth drawstring bag as well as a

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shoebox. All of those factors are signals to the target audience that they have found the right
product.

The Bottom Line

Identifying the target market is part of the process of creating and refining a new product.

A target market can be translated into a profile of the consumer to whom a product is most likely
to appeal. The profile considers four main characteristics of that person: demographic, geographic,
psychographic, and behavioral.

Target Market Selection

Target market represents a group of individuals who have similar needs, perceptions and interests.
They show inclination towards similar brands and respond equally to market fluctuations.

Individuals who think on the same lines and have similar preferences form the target audience.
Target market includes individuals who have almost similar expectations from the organizations
or marketers.

Obese individuals all across the globe look forward to cutting down their calorie intake. Marketers
understood their need and came up with Kellogg’s K Special which promises to reduce weight in
just two weeks. The target market for Kellogg’s K Special diet would include obese individuals.

Individuals who sweat more would be more interested in buying perfumes and deodorants with a
strong and lasting fragrance.

How to select the Target Market?

It is essential for the organizations or marketers to identify the set of people whom they want to
target? Marketers must understand the needs and expectations of the individuals to create its target
market.

The target audience must have similar needs, interests and expectations.

Similar products and brands should entice the individuals comprising the target market.

Same taglines and advertisements attract the attention of the target audience and prompt them to
buy.

To select a target market, it is essential for the organizations to study the following factors:

• Understand the lifestyle of the consumers

• Age group of the individuals
• Income of the consumers
• Spending capacity of the consumers
• Education and Profession of the people
• Gender
• Mentality and thought process of the consumers
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 • Social Status
• Kind of environment individuals are exposed to

Always remember you would never be successful if you try to impress everyone. Be specific

Identify individuals who show similar characteristics. Put them in one group to create target market
within a broad market.

Let us go through the below example:

Why do people use soaps?

Some would use it against body odour

Some would use it to fight germs and infections
Some for a fair and spotless skin

In the above case the product is same but the needs of the individuals are different. Consumers
have different reasons as to why they use soaps.

Target Audience 1

Against body odour - Soaps with a strong and lasting fragrance.

• Marketing professionals
• Sales Representatives
• People exposed to sun for a longer duration
• Individuals travelling by public transport

Target Audience 2

To fight germs and infections - Soaps with medicinal properties

• Individuals working in hospitals, nursing homes and research centres

• Individuals working in unhygienic conditions

Target Audience 3

For a whiter skin - Soaps which improve the skin tone of individuals.

• Teenagers
• College students

Target Audience 4

For a younger looking skin - Soaps which help get rid of wrinkles and fine lines of ageing

• Individuals between age group 30 – 50 years or above

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Individuals with identical requirements form the target audience. A 20-year-old girl can’t be
targeted along with someone who is 50 years old.

Online matrimony sites target young individuals aspiring to get married. The organizations strive
hard to fulfil their expectations by providing suitable matches.

Other important factors like climatic conditions and geographical locations also play an important
role in deciding the target market.

Deodorants and perfumes sell like hot cakes in humid and warm places.

Target Market for Beverages

Bournvita, Complan, Maltova, Boost - Growing kids

Soft drinks (Pepsi, Coke) - Teenagers
Fruit Juice (Real, Tropicana) - Health conscious individuals
Energy Drinks(Red bull) - Professionals, Office goers

Target Market Strategies

Products/Services are developed to sell. Marketing involves various strategies to make sales. The
marketing strategy varies from product to product. Organizations have dedicated marketing teams
to conduct research and surveys to understand customer behaviour. These surveys give an insight
into what features of the product appeals to customers. The survey also indicates whether the
product will appeal to the masses or a particular section of society. Surveys and researches are part
of target marketing analysis. This analysis is the basis for the marketing plan. Organizations design
a well-detailed marketing plan. The plans are reviewed on a regular basis. The plans are designed
around annual celebrations like Christmas, and New Year also.

1. Target Marketing Strategies Definition

2. Various Target Marketing Strategies

1. Target Marketing Strategies Definition

A product or service is designed to suit the needs of the market. At times, the products appeal to
all or a section of the market. The product that appeals to everyone falls under the mass marketing
strategy. Certain products are manufactured for a particular section of people. This section of
people is known as the ‘target audience’. The marketing strategy focusing on the target audience
is known as a target marketing strategy.

Based on the response from the market, marketing strategies are designed. The target marketing
strategies vary based on the purchasing power of the customer, and the geographical location of
the market. The types of target marketing strategies are dependent on multiple factors inclusive of
age group, gender, and geographical location to name a few.

Designing a target market strategy aids to focus the time and effort of the marketing team to
increase sales in its target group of customers. The different types of target markets need different
targeting marketing definitions. Based on the target marketing concept, marketing campaigns are

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designed to catch the customer’s eye. The market targeting and positioning of the product are
crucial for doing business. The strategies vary based on the types of target markets.

2. Various Target Marketing Strategies

Broadly the target marketing strategies are classified into the following types

• Mass Marketing
• Segment Marketing
• Niche Marketing
• Micro Marketing
• Local Marketing

Few market targeting examples are:

• Nike with sports shoes targeting sports playing audience.

• A niche strategy example is Dior. The brand has set itself apart with its unique designs.
• Lego has a mass market with its appeal to children.

A) Mass Marketing (Undifferentiated marketing)

Mass Marketing involves marketing to the entire population with a single strategy. Mass marketing
focuses to reach everyone with maximum exposure to the product. An attempt is made to spread
the message to everyone with mass media such as TV, newspaper, and mobile.

Regularly consumed products like toothpaste and toothbrushes, mass marketing is all that is
needed.

B) Segment Marketing (Differentiated marketing)

Segment Marketing known for its differentiated targeting strategy focuses on a section of people
known as the ‘target audience’. The target marketing concept is to attract customers to their
products. This segment of marketing fetches good results for new products entering to market with
established organizations. This differentiated marketing is expensive. The differentiated marketing
strategy can be designed uniquely for the different target audiences. A very good two differentiated
marketing examples implemented by Lilly Pulitzer are as follows.

Lilly Pulitzer a luxury beachwear company for 60 years catered to an audience inclined towards
luxury. In 2015, the company teamed up with Target and came up with a differentiated marketing
strategy. The company came up with a target market definition example. The company designed
an affordable range of products for sale for a limited duration for another set of the target audience.
On the day of the launch, the Target site crashed due to huge traffic. The company gained another
section of the target audience in no time.

The company needs to design a unique product for the market segment and requires unique
marketing campaigns and promotional events. The benefits of target marketing are it enables to
manufacture of the products to suit the need of consumers. The marketing campaigns focus on,
selling the products that the target audience frequently visits and creating suitable promotional
campaigns.
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C) Niche Marketing

Niche marketing also known as concentrated marketing targets a small section of the market. The
entire campaign is around this small section of the market. Luxury goods like Rolex and Armani
are examples of niche marketing. Niche marketing yields results for small companies with limited
production and sales. There are advantages and disadvantages to niche marketing.

Advantages of niche market segment are:

• Generates high revenues.

• Loyal customer base.
• Competition is less.

Disadvantages of niche marketing are:

• The market is small.

• The scope for growth is less.
• Less competition so keenness to improve is minimal

D) Micromarketing

Micromarketing focuses on a much smaller section of people than niche marketing.

Micromarketing definition is customized marketing or one-to-one marketing. The products are
customized to the requirements of the customer. The micro marketing strategies involve customer
tastes, whims, and wishes. A good example of a micromarketing strategy is Etsy.com which
focuses on handmade goods taking orders from customers with their specific requirements.

A few micromarketing examples are Uber and Red Bull. Uber used a unique local micromarketing
strategy in each city to become visible and expand its customer base. Reb Bull did not focus on its
unique point of being an energy drink but on a lifestyle. Red Bull focused on its target audience
‘youth’ interested in sports.

E) Local Marketing

Local marketing strategy involves nearby and neighborhood areas. The organizations use this
marketing strategy to thrive on local connections and make their presence felt. Amazon Local is a
good example of a local marketing strategy. The online service providers along with local
businesses come up with offers for hotel booking, spa treatments, and restaurant meals at regular
intervals. The local companies earn good revenue with sales. Another initiative is CSAs which are
community-supported agriculture shares. Local marketing works wonders for freshly grown
greens, fruits, and vegetables by creating a market in a nearby locality.

The marketing team is always looking for new ways to capture the audience. A combination of the
above strategies along with mobile marketing is making inroads in expanding the customer base.
Every marketing strategy will have a promotional campaign to create awareness, research, and
surveys to get to know their target audience and segment marketing to make sales to potential
customers.

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 Positioning
Let’s think about it: there are thousands of companies out there, many of which offer the same
products, promise similar results, and are generally positioned the same in the market.

So, why would a customer choose one company over another? Why take the first option, rather
than the second one, if both lead you to the same type of business that sells the same thing?

The answer is simple: No one wants to buy a product or service because it can do everything,
but rather because it can do something.

And that’s what positioning in marketing implies. A clear positioning statement is at the core of
every marketing strategy, which drives the look and feel, words, and phrases of your brand system.

Positioning requires focus and a commitment to a specific niche, idea, or target audience. Your
brand and marketing strategy won’t work if you are trying to be all things to all people.

What is positioning in marketing?

Simply put, positioning in marketing is a strategic process that involves creating an identity/
image of the brand or product within the target customers’ minds.

What is positioning in marketing?

The process indicates how you differentiate your product/ service from that of your competitors
and then determine which market niche to fill. A company’s marketing positioning strategy is
affected by plenty of variables related to customers’ requirements and motivations, as well as by
its competitors’ actions.

Let’s see some typical examples of marketing positioning:

• Tesla and Audi position themselves as a luxury status symbol

• Starbucks positions itself as a trusted source of upscale quality coffee and beverage
• McDonald’s positions itself as a place to get quick and cheap meals
• Microsoft and Apple position themselves as a tech company that offers innovative and
user-friendly products.

Positioning in marketing is about more than simply adding a category or specialty page on your
website. With positioning comes a need to live and breathe that expertise - from generating content
to conducting research and branding your company to appeal to your defined target buyer.
Therefore, it’s essential to create content on your website that provides value for your audience to
build trust and brand awareness.

Types of positioning in marketing

Researchers in the Journal of Business & Industrial Marketing discovered that positioning in
marketing is predominantly determined by hard criteria (e.g., quality of product/ service) and
relationship-building factors (e.g., personal contact).

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Other considerations, such as company structures (i.e., geographical coverage), degree of
integration, and breadth of offerings (i.e., location in the distribution chain), also play a vital part.
The study also noted that the level of familiarity with a brand is a contributing factor to perceptions
of the pursued positioning in marketing strategies.

Below are some common types of positioning in marketing.

Pricing

Pricing is an essential factor that impacts the decisions of most customers. Companies with the
lowest-priced products at a reasonable level of quality usually wins in many product areas.

For example, Gillette vs. Dollar Shave Club. Lower-priced alternatives to some high-quality
brands like Gillette have changed the landscape of razors and refill blades. The Washington Post
reported on Gillette’s decreasing market share due to Dollar Shave Club’s low prices. The cheapest
refill razor cartridge of Dollar Shave Club was 20 cents, compared to $2 to $6 a cartridge for
Gillette.

Quality

Quality can help rebuff most pricing wars. In some markets, such as luxury cosmetics or cars,
quality can define who the competitors are.

For instance, Chipotle vs. Taco Bell. Ranked 14th in the top 50 fast-food restaurants in America
by QSR Magazine, Chipotle has grabbed a significant market share over the years by focusing on
quality instead of price.

Differentiation

Differentiation is what sets your product or service apart from the crowd. If your product or service
is dramatically different, rivals may not pose as much of a threat.

Differentiation is a type of positioning in marketing

For example, Toyota vs. Tesla. Tesla entered the electric vehicle market with a luxury sports
model, rapidly sidestepping economy cars like the Toyota Prius. Tesla actually targeted the high-
end market with the Model S.

Convenience

Convenience creates an easier life for customers. From location to usability, convenience could
incorporate something like free returns and E-commerce.

For example, Simple vs. Bank of America. Some traditional banks have been slow to create
mobile apps, but online-only banks like Simple have invested in this to appeal to younger and more
technical-savvy customers. The company even charges no fees and has convenient built-in
budgeting and savings tools.

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Customer service

Customer service emphasizes creating helpful and friendly interactions. This can be especially
critical in specific industries, such as restaurants and banking areas.

For example, Allstate vs. State Farm. Both insurance companies recognize the importance of
customer service in this industry, where contact with customers is indispensable. They use
customer service-based messages in their marketing to focus on this position.

User group

This type of positioning targets a particular group of users and explains why the company’s
offerings are directly applicable and relevant to this group.

For instance, Johnson’s vs. Axe. While Johnson’s baby shampoo positions itself as gentle for
children, Axe body spray targets men.

5 Benefits of positioning in marketing

There are a number of reasons why you should consider making positioning part of your marketing
strategy. With the right positioning tactic, you can create better marketing messages, shape your
services better, and structure pricing plans so that you remain competitive.

Here are 5 advantages of positioning in marketing:

Create a strong competitive position

Proper positioning influences how customers perceive your product or service relative to the
competition. When you create a positive image of your product/ service in the customers’ minds,
you’re likely to enjoy an ongoing market advantage. By doing this, you can claim your position in
the competitive landscape, which helps you a lot to stay ahead of the curve.

Improve sales

One of the main goals of any business is to improve sales and revenue. By having a more relevant
offering and communicating it more effectively, your company may be able to penetrate a new
market, which can translate into new clients and additional sales.

Define a clearer target market

Positioning in marketing allows you to claim a specific feature or benefit and focus your products/
services accordingly so that you appear as an expert in the services. As a result, your value to
prospects will increase significantly.

Positioning in marketing helps define a clearer target market

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Make more effective decisions

Once you have the core message that ensures successful positioning strategies, you’ll be in a
position to make more effective decisions throughout the process. Clear positioning in marketing
also drives effective communication, provides healthier and stronger relationships with customers.

Connect to consumer needs

Through positioning in marketing, companies have an opportunity to communicate the critical

benefits that their product/ service offers. It not only helps to energize the product but also connects
it to the specific customer that needs it.

5 Examples of Positioning in Marketing--

Tesla

Tesla leaves price out of its branding and instead focuses on the quality of their vehicles. Therefore,
Tesla is a luxury brand that is more expensive than its competitors. In addition, Tesla automobiles
are long-range, eco-friendly, and electric. Tesla differentiates itself from other gas-powered luxury
and standard electric vehicles because of its high quality. The company established a niche market
for itself and a fun brand to match it. CEO Elon Musk has even built himself up as a Tony Stark-
like character, and the company promotes its uniqueness through ads and quirky features, such as
“Ludicrous Mode.”

Starbucks

Coffee consumption in the U.S has been witnessing a downward trend since the 1960’s. Hence,
Starbucks was extremely cautious in choosing its target market. Starbucks targeted office workers,
from the middle to high incomes, who desired to purchase premium products.

The company wants to make itself the “Third Place” - the place between home and work, where
customers could gather, relax, and interact with each other. So, they were vigilant about their
quality control to meet the high expectations.

In most of their advertising campaigns, they often highlight their identity by showing the following
value proposition statements:

• The best coffee

• The finest milk used
• Rich & smooth flavors
• Natural & clean
• 100% recycled paper use

All of these statements in the ad give a sense to potential customers that they will undoubtedly
receive high quality, clean, and upscale beverages they’ll love. With such a successful positioning
in marketing strategy like that, it’s no surprise when Starbucks for years has been the top coffee
provider in America. People can’t get enough!
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Dollar Shave Club

Its name alone demonstrates one of the main aspects of Dollar Shave Club’s marketing positioning:
its low cost. The company has focused its positioning on convenience and affordability, creating
a relatable brand for the average consumer.

Dollar Shave Club

Even though their biggest competitor, Gillette, has a very masculine tone to their messaging and
branding, Dollar Shave Club is more casual and cheeky. While Gillette has a sleek look and
features guys who look like models and actors, Dollar Shave Club features average-looking people
across different ages, who are more relatable to consumers.

Nike

Nike started their business with a focus on performance and innovation. The company invented
the waffle shoe and built their brand targeting serious athletes. Their offerings have now moved
beyond shoes, and they offer athletic attire that promotes performance.

From their “Just Do It” tagline to the namesake, the Greek Goddess of Victory, the company has
positioned itself as the market leader of sports equipment widely, providing high quality and
innovative technology.

Apple

Apple is literally a textbook example of a strong marketing position strategy. The company builds
beautifully-designed and innovative equipment that is different from anything else you’ve
experienced and markets them to resonate with their consumers.

Apple’s branding message highlights the same qualities in their customers that they do in their
products: if you’re an Apple person, you’re also imaginative, innovative, and creative.

Like Tesla, instead of price, Apple chooses to invest more in the value their products offer and
form connections with their customers.

6 Steps to create an effective positioning strategy

Step 1. Find your current position

Are you currently marketing your own product or service just like another item in the market, or
are you marketing it as something distinctive?

Your current position in the market gives you essential insight into where to go next. You should
understand your current position to analyze your competition further.

Think about the following few questions to state your current position in the market:

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 • What does your brand stand for?
• Who are your target consumers?
• What are your mission and vision?
• What makes you stand out from the rest of the market?
• What customers’ pain points that your brand can solve?

Keep in mind that we all love connecting with brands that sound and feel authentic to us. Instead
of setting up a complicated lingo that no one can understand, just talk human. Begin with
researching who your existing and ideal audience is, and use their language.

Step 2. Analyze your competitors

After understanding yourself, it’s vital to analyze your competition by performing competitor
analysis. Why?

Because you need to see who you are up against to conduct competitor research. It will help you
decide what you can do better to gain an edge.

There are many methods for determining your competition, including:

• Conduct market research. Do a quick search using relevant keywords and see which
companies are listed. Or, you can ask your sales team what sales tactics rivals come up
during the sales process.
• Use customer feedback. Ask your consumers which businesses or products make them
consider before choosing yours.
• Take advantage of social media channels. Many free platforms allow users to ask
questions about products and services. Search these communities and forums to explore
competitors in your niche.

Once you have identified who your competitors are, it’s high time to do in-depth competitor
research. The ultimate goal is to see how your competition is positioning their brand. So, your
research should include:

• Products or services your competitors offer

• Their strengths and weaknesses
• Marketing strategies they are using successfully
• Their position in the current market

Step 3. Develop your unique position

Building a unique position is all about determining what makes you different and what works best
for your business.

Chances are, after conducting competitor research, you’ll begin to see something. You can realize
some businesses that have the same strong and weak points. When you compare your product or
service to theirs, you might find one of their weaknesses is your strength.

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This is exactly what makes your position unique, and it becomes the perfect starting point for
positioning your brand in the market. Remember to note your unique offerings as you compare
and dive deep to see what you do better than anyone else.

Step 4. Create a positioning statement

A positioning statement is necessary because this one-or-two-sentence statement declares your

brand’s uniqueness to your customers in relation to your main competitors.

Some experts recommend answering these questions before creating your positioning statement:

• Who is your target audience?

• What is your product or service category?
• What is the greatest benefit of your product or service?
• What is the proof of that benefit?

For example, let’s look at Amazon’s positioning statement: “Our vision is to be the earth’s most
customer-centric company; to build a place where people can come to find and discover anything
they might want to buy online.”

Amazon sells a wide range of products for everyone, although incredibly broad, which is their
greatest benefit. And what about the proof? It’s all online.

Step 5. Create your tagline

Once you craft a strong positioning statement, you can create a tagline, or better known as a slogan,
for using externally for potential customer messaging. Instead of the positioning statement, it is a
shorter and more condensed version of what you want your customers to know.

For instance, here are some well-known taglines for your reference:

• L’Oreal: “Because you’re worth it.”

• Nike: “Just do it.”
• Target: “Expect more. Pay less.”
• Home Depot: “You can do it. We can help.”
• Southwest Airlines: “The short-haul, no-frills, and low-priced airline.”

By doing that, you can easily use it in other marketing efforts to get your business point across,
much more effectively than a longer and detailed positioning statement.

Step 6. Test your marketing positioning

Nothing should be left to chance, especially when it comes to your positioning statement. Once it
is created, you should spend time testing, experimenting, and gathering feedback from your
consumers on whether or not your positioning achieves its goal.

Testings should feature a blend of quantitative and qualitative research, from surveys and polls to
focus groups and in-depth interviews. Based on these tests’ findings, you can finally solidify your
positioning in marketing and adjust your marketing efforts, if necessary!
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Positioning map: The power of perception

If you want to clearly see how your business compares to others in consumers’ perceptions, a brand
positioning map can help.

A brand positioning map consists of different attributes that are essential to your target audience.
To do mapping right, it’s best to create multiple versions of the map based on different sets of
attributes. By placing your brand and competitors on the map, you can see who’s more competitive
in a particular area over the rest.

The attributes used in the positioning map come directly from the values your customers interested
in. The perception of your product/ service is directly linked to those values. For example, take a
look at the below positioning map, what’ll you see?

Positioning map example

It’s easy to see that Domino Sugar is the dominant player that is tastier and more natural among
its competitors.

The bottom line

Positioning in marketing is no easy feat; it requires time, dedication, and even the courage to say
“no” to some things. However, it’s critical, especially when you’re struggling to create consistent
revenue streams, bring in new customers, and retain your current ones.

It’s a way to attract prospects, talent, and influencers to your company, and that is something you
definitely have time for. Hopefully, our guide to creating an effective positioning strategy can
help you deal with that!

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What Is Product Differentiation?

Product differentiation is the key aspect or aspects that distinguish a company's products or
services from the competition. Successful product differentiation leads to brand loyalty and an
increase in sales.

A product differentiation strategy involves identifying and communicating the unique qualities of
a product or company while highlighting the distinct differences between that product or company
and its competitors. Product differentiation goes hand in hand with developing a strong value
proposition so that a product or service is attractive to a target market or audience.

If successful, product differentiation can create a competitive advantage for the product's seller
and ultimately build brand awareness. Examples of differentiated products might include the
fastest high-speed Internet service or the most gas-efficient electric vehicle on the market.

Key Takeaways

• Product differentiation depends on consumers' attention to one or more key benefits of a

product or brand that make it a better choice than similar products or brands.
• The elements of differentiation include product design, marketing, packaging, and pricing.
• A product differentiation strategy should demonstrate that a product has all the features of
competing choices but with additional exclusive benefits no one else offers.
• Companies gain a competitive advantage and market share through product differentiation.
• Product differentiation increases market competition and controls prices for consumers.

Product Differentiation
How Product Differentiation Works

Product differentiation is fundamentally a marketing strategy to encourage the consumer to choose

one brand or product over another in a crowded field of competitors. It identifies the qualities that
set one product apart from other similar products and uses those differences to drive consumer
choice.

Differentiation marketing can also involve focusing on a niche market. For example, a small
company might find it challenging to compete with a much larger competitor in the same industry.
As a result, the smaller company might highlight exceptional service or a money-back guarantee.

Promoting Product Differentiation

The references to a product's differentiating qualities are reflected in the product's packaging and
promotion and, often, even in its name. The cat food brand name Fancy Feast implies a high-
quality cat food that cats love, and the advertising reinforces that claim. The FreshPet cat food
brand highlights its use of natural ingredients. Hill's Science Diet conveys the message that the cat
food was developed by animal nutrition experts.

A product differentiation strategy may require adding new functional features or might be as
simple as redesigning packaging. Sometimes, differentiation marketing does not require any
changes to the product but a new advertising campaign or other promotions.

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Measuring Product Differentiation

As stated earlier, the differences between the products can be physical in nature or measurable,
such as the lowest-price gym in a region. However, the differences between the products could be
more abstract, for example, a car company that claims their cars are the most luxurious on the
market.

Retailers and designers often spend a significant amount of advertising dollars showing their
clothes on young, hip models to emphasize that their clothing is on-trend. In actuality, no company
can measure or quantify the level of style their product offers.

As a result, product differentiation is often subjective since it's aimed at altering customers'
evaluation of the benefits of one item compared to another. The advertising slogan, "Gets out the
toughest stains" implies that a certain detergent brand is more effective than others, but the actual
difference in the product compared with competing products might be minuscule or nonexistent.

When the functional aspects of two products are identical, as in bottled water, non-functional
features can be a differentiator—the packaging or bottle design.

Types of Product Differentiation

Ideally, a product differentiation strategy should demonstrate that the product can do everything
the competing choices can but with an additional benefit that is exclusive to that product. Below
are a few of the most common strategies employed to differentiate a product or service.

Price

Price can be used to differentiate a product in two ways. Companies can charge the lowest price
compared to competitors to attract cost-conscious buyers—the retailer Costco is an example.
However, companies can also charge high prices to imply quality and that a product is a luxury or
high-end item, such as a Bugatti sports car.

Performance and Reliability

Products can be differentiated based on their reliability and durability. Some batteries, for example,
are reputed to have a longer life than other batteries, and consumers will buy them based on this
factor.

Location and Service

Local businesses can differentiate themselves from their larger national competitors by
emphasizing that they support the local community. A local restaurant, for example, will hire
locally and may source its food and ingredients from local farmers and purveyors.

Vertical Product Differentiation vs. Horizontal Product Differentiation

There are two strict forms of product differentiation: horizontal and vertical. In some cases,
however, a consumer's choice in a purchase may be a mix of the two.

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Vertical Differentiation

An example of vertical differentiation is when customers rank products based on a measurable

factor, such as price or quality, and then choose the most highly ranked item.

Although the measurements are objective, each customer chooses to measure a different factor.
For example, a restaurant might top one customer's list because their meals are lower in calories.
Another customer might choose a different restaurant because the meals are cheaper, and price is
the most important factor for them.

Horizontal Differentiation

An example of horizontal differentiation is when customers choose between products based on

personal preference rather than an objective measurement.

For example, whether someone chooses a vanilla, chocolate, or strawberry milkshake comes down
to personal taste. If most of the products on the market cost about the same and have many of the
same features or qualities, the purchase decision is based on subjective preference.

Mixed Differentiation

More complex purchases tend to consider a mix of vertical and horizontal differentiation. When
buying a car, for example, a consumer may consider safety metrics and gas mileage, both of which
are objective measures and examples of vertical integration. However, the consumer may also
consider what colors the car is available in or the brand image. Each consumer will place a different
weight of importance on each of the criteria.

Benefits of Product Differentiation

A differentiated product can increase brand loyalty and even survive a higher price point. If a
product is perceived to be better in some way than its competitors, consumers will consider it
worth the higher price.

Differentiation marketing can help companies stand out when a product isn't perceived to be much
different from a competitor's, such as bottled water. The strategy might be to focus on a lower
price point or that it's a locally owned business. When functional aspects of the two products are
identical, nonfunctional features can be highlighted. The strategy can be an appealing change in
design or styling.

A successful product differentiation campaign raises consumer interest and gives the consumer a
reason to believe they need one product rather than another.

Examples of Product Differentiation

Companies introducing a new product often cite its cost advantages. If Company X produces a
coffee maker virtually identical to that of Company Y, Company X may offer a version at a lower
cost. If it comes with a reusable filter, the savings on paper filters are highlighted in packaging and
advertising.

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For example, product differentiation is vividly on display among the many coffee maker brands
on today's market. KitchenAid coffee makers have a hefty, substantial feel and a premium price to
match. Keurig differentiates itself with the ease of use of coffee pods. Amazon Basics, as always,
sets an unbeatably low price point

Concept of Branding

Branding
“A brand is a name, term, design, symbol, or any other feature that identifies one seller’s good or
service as distinct from those of other sellers” - American Marketing Association.

A brand can be conceived as an idea or an image that people will have in their minds when they
think about specific products and services or even the activities that are associated with the
company.

Therefore, this is just not about the physical feature which creates a brand but moreover, it impacts
the feelings of the consumers who develop belief and trust towards the company or in its product.
This physical and emotional sign is triggered when they visualize the name, the logo, the identity,
or even listen to the message communicated.

There are many identical products that flood the market, but brands are always unique. For
example, Coke, Himalayan Products, products of Amul, there are similar, but not identical
products of these ‘brands.’

“Branding is endowing products and services with the power of a brand” - Kotler & Keller.
Branding is identified as a process of giving meaning to a specific organization, company, product,
or service by creating and designing an impact in the minds of the consumers. This is actually a
strategy that is designed by the organizations which helps people to quickly identify and
experience their brand, which eventually gives them a reason to choose their products over the
competitor’s product.

Features of Branding

The features of Branding are as follows

Competitiveness
For a brand to truly be successful the needs are required to be focused as being competitive in
today’s world is very important. A company has an entire team who is working behind a brand, to
make that a hit. A successful brand goes beyond consumer expectations to give a competitive edge
cutting to the industry.
Distinctiveness
To create an identity of the brand, the creation needs to be highly distinctive from the other. The
world’s most popular brands, like Apple, Starbucks, or the BMW cars have successfully created

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this impact in the minds of the customers. Take for instance the Apple product which is renowned
for its technical approach to design and technology gets appreciation for the innovation in its
products. Starbucks promises services across the globe. Hence, we see that brands have a
distinctive approach always.

Consistency
Being consistent is always the catch. It is highly important for the company to remain consistent
with the devotion it does to create the brand. They should maintain the flow of efforts. Consistency
will help the customers be familiar with the brand.

Leadership
The greatest brands in the world are always supported by the leaders who have the power to inspire
and continually aspire for their greatness. This works the same for a sports team, and hence also
for a large corporation or a small business, the most successful business ought to have an influential
leader backing them.

Functions of Branding
The functions of Branding are achieved by a consistent effort. There is a whole team backing up
the process of Branding and making efforts to keep a continued effect on the minds of the
customers. Branding is totally a mind’s game hence, it is the mind that will help the branding to
achieve its function effectively.

The features of branding are the actual function of branding as well, as the concept of branding is
only dedicated as an overall process. The functions done by branding are as follows –
1. Differentiation.
2. Authenticity.
3. Value Setting and Centering.
4. Unification.

Importance of Branding in Today’s Age

Any company needs Branding so as to survive in the market and its credibility is built only because
of branding. A product can be differentiated on the basis of brandings such as a bar of chocolate
belonging to two different brands, hypothetically speaking Nestle and Cadbury. Branding is more
psychological than physical as it leaves a deep impact on the consumers. The better a company is
able to build its brand; the more chances are of it retaining its credibility in the market. Branding
is one of the most important aspects of any company, no matter how big or small.

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Types of Brands

The type of brand used depends on the particular entity using it. The following are some of the
most common forms of brands:

• Corporate Brands: Corporate branding is a way for companies to market themselves in

order to give themselves an edge against their competition. They make a series of important
decisions in order to accomplish this, such as pricing, mission, target market, and values.
• Personal Brands: As mentioned above, branding isn't just for companies anymore. People
use tools like social media to build their own personas, thereby boosting their brands. This
includes regular social media posts, sharing images and videos, and conducting meet-and-
greets.
• Product Brands: This type of branding, which is also known as merchandise branding,
involves marketing one particular product. Branding a product requires market research
and choosing the proper target market.
• Service Brands: This kind of branding applies to services, which often requires some
creativity, as you can't actually show services in a physical way.

Brand equity

Brand equity is the value of a brand, determined by the consumer's perception of its quality
and desirability. It is based on factors such as the brand's recognition, customer loyalty, and
customer satisfaction.

Brand equity has four dimensions—brand loyalty, brand awareness, brand associations, and
perceived quality, each providing value to a firm in numerous ways. Once a brand identifies the
value of brand equity, it can follow this roadmap to build and manage that potential value.

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