Product positioning is a systematic process to ensure that the benefits associated with the company’s offering meet the target customers’ most important needs in a way that (1) satisfies customers and (2) increases sales and profits for the company. The benefits not only include product attributes but also brand reputation, pricing, distribution, communication, and customer service.
Consider the example of Almetta Foods, a company dedicated to creating healthy, great-tasting, plant-based food products with all-natural ingredients. It used a four-step process to drive its customer strategy through product positioning. Pricing, distribution channels, and communications complemented each other to support the product’s positioning and drive customer strategy.
STEP 1 – Target Segment and Needs Identification. Almetta conducted focus groups and customer surveys to determine its target segment was over 90% female, 15-55 years old, college educated, and had an annual income over $75,000. These customers valued a healthy lifestyle, were typically lactose intolerant, and carefully read labels on anything they bought. Almetta next determined their customer value equation as shown in Figure 1.
FIGURE 1
Almetta’s Customer Value Equation
STEP 2 – Product Development and Refinement. Almetta developed and tested multiple variants of its non-dairy mousse. It chose the variation rated “very high” on taste. The offering was all-natural, vegan, and dairy-free. As seen in Figure 2, the packaging and pricing were designed to highlight and complement the customers’ most important needs- taste and all natural ingredients.
FIGURE 2
Almetta’s Product Development and Refinement
STEP 3 – Product Positioning and Brand Strategy. To clearly communicate important benefits to target customers, employees, and other stakeholders in a coherent, simple, and easy-to-understand manner, Almetta’s executives developed the positioning statement shown in Figure 3. It was complemented by the tagline, “An Amazingly Delicious Dessert or Snack.”
FIGURE 3
Again, the brand’s positioning and tagline conveyed its two primary benefits: taste and all-natural ingredients, while associating the benefits with European, feminine, sleek, and stylish branding.
STEP 4 – Marketing Strategy to Support Brand Strategy and Product Positioning. Almetta’s executives supported its positioning with a coherent strategy including premium pricing and distribution through high-end retail chains like Whole Foods. The firm ensured the product’s packaging, brand logo, and other marketing elements were consistent with its premium, high-quality, high-end dessert image.
CONCLUSION: As the Almetta example shows, product positioning is one of the most critical elements driving a company’s customer strategy. Once firms identify a target customer segment and its needs, they begin by developing a product satisfying those needs. Developing a product involves creating the basic good and ensuring it has all the attributes and features required to meet customers’ most important needs.
Learn more about product positioning in Chapter 8 of Market-Based Management (7th edition). Chapter 1 can be reviewed online at www.mbm-book.com.