DEVELOPING AND COMMUNICATING A POSITIONING STRATEGY

All marketing strategy is built on STP -Segmentation, Targeting, and Positioning. A

company that discovers different needs and groups in the marketplace, targets
those needs and groups that it can satisfy in a superior way, and then positions its
offering so that the target market recognizes the companys distinctive offering and
image. If a company does a poor job of positioning, the market will be confused.
This happened when National Car Company and Alamo Rent-a-Car were combined
by their former parent, ANC Rental Corp, following its bankruptcy.

Premium brand National traditionally catered to business travelers, whereas Alamo

Rent-a-Car has been getting 90% of its business from travelers. After two merged,
the dual Alamo/National logos were plastered on everything from airport shuttle
buses to workers polo shirts. Customers of both Alamo and National had problems
distinguishing between the brands, even though Nationals cars typically rent
for 10 to 20% more than Alamos. After all, the customers had to stand in the
same line behind the same airport counter, receive from the same rental agents,
ride the same shuttle buses, and drive cars from the same fleet. National was most
hurt by the lack of differentiation at these key touch points, and its market share fell
5 to 10%.

Interestingly, after consolidation of the brands, shuttle bus frequency improved 38%
and business travelers were given even more options to bypass the rental counter
entirely. Still, in surveys, National renters perceived the buses to be slower, the lines
longer, and customer service poorer. The clear implication was that in order for the
two brands to maintain their integrity and their positioning with their respective
market segments, they had to be separated.

If a company does an excellent job of positioning then it can work out the rest of its
marketing planning and differentiation from its positioning strategy.

We define positioning as follows: Positioning is the act of designing the

companys offering and image to occupy a distinctive place in the mind of the
target market. The goal is to locate the brand in the minds of consumers to
maximize the potential the potential benefit to the firm. A good positioning helps
guide marketing strategy by clarifying the brands essence, what goals it helps
the consumer achieve, and how it does so in a unique way. The result of positioning
is the successful creation of a customer-focused value proposition, a cogent reason
why the target market should buy the product.

The word positioning? was popularized by two advertising executives. They

see positioning as a creative exercise done with an existing product.
Positioning starts with a product. A piece of merchandise, a service, a company, an
institution, or even a person But positioning is not what you do to a product.
Positioning is what you do to the mind of the prospect. That is, you position the
product in the mind of the prospect.

Marketing Insight: Value Disciplines Positioning offers another point of view about
positioning. According to virtually all approaches, positioning requires that
similarities and differences between brands be defined and communicated.
Specifically, deciding on a positioning requires determining a frame of reference by
identifying the target market and the competition, and identifying the ideal points-
of-parity and points-of-difference brand associations.

Competitive Frame Of Reference:

A starting point in defining competitive frame of reference for a brand positioning is

determining category membership the products or sets of products with which a
brand competes and which function as close substitutes.

Target market decisions are often a key determinant of the competitive frame of
reference. Deciding to target a certain type of consumer can define the nature of
competition because certain firms have decided to target that segment in the past
or plan to do so in the future, or consumers in that segment already may look to
certain brands in their purchase decisions.

Determining the proper competitive frame of reference requires understanding

consumer behavior and the consideration sets consumers use in making brand
choices. In the United Kingdom, for example, the Automobile Association has
positioned itself as the fourth emergency service? along with police, fire,
and ambulanceto convey greater credibility and urgency.

Kotler and Kellers A Framework for Marketing Management.