Product positioning is not based solely on the characteristics of the product, be they tangible or intangible. It is also based on how the product is targeted. Companies can build strong product positions by focusing on specific market segments. Baseball old-timers used to say: “Hit `em where they ain`t.” Companies can do the same. They can find segments of the market that other companies have ignored, then `hit` into the open spot.
Too many companies try to be all things to all people. They want to become $1 billion companies overnight. Some of you probably have encountered many start-up companies that focus on getting orders rather than on developing markets. They go after and get business in diverse and often unrelated markes, taxing their already limited resources, but also limits the laverage a company might develop by having a significant piece of business in a specific market. It`s better to be a big fish in a little pond than a little fish in a big pond.
There are two major reasons why companies should target their marketing efforts. The first reason is obvious. A company that targets its products naturally has less competition. As a result, it has a better chance of establishing itself as the leader in the market segment it choose. The second reason is less obvious but equally important. When a company focuses its efforts on a particular segment, it can do a better job of understanding and meeting the needs of its customers. And that certainly puts the company in a better position to succeed.
