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.
companies, intangible, positioning, product, targeting
Unfortunately, the logic breaks down when several companies play the game at once. Prices spiral downward more quickly than expected, and profits follow downward. Makers of semiconductor memories have fought this type of pricing battle several times -to no one`s advantage.
Positioning based on specsmanship has similar problems. Companies tha position their products as the “fastest” or the “most powerful” often run into trouble. Technological leads are usually short-lived. Research labs develop new technologies every day, and new startups rush to commercialize them. Products move from “leading edge” to “obsolete” more quickly than ever before. As a result, companies that live by specsmanship often die by specsmanship.
There is another problem: Companies that use specsmanship as a positioning lever often ignore the market environtment. They see product positioning as an analytic process of product comparisons. They make huge charts showing that product A can store fifty more kilobytes than product B. Or perhaps product A can perform certain tasks five nanoseconds faster than product B. These comparisons have some value. But they are only the beginning of the positioning process, not the end.
In fact, most customers are not that interested in narrow technical differences between products. Very few people buying personal computers understand the technical differences between one machine and the other 150 on the market. Moreover, they really don`t care. Rather, customers are much more influenced by intangible factors. Intangible factors include things such as technological leadership and product quality, service and support. It`s not easy for a company to position a product in terms of intangible factors. The company must build a certain aura around the product. But if it succeeds, it can attract customers and charge premium prices.
customer, intangible, positioning, products, specsmans
