Positioning – Your Strategic Choice
There are many choices to be made in business. Where will you operate? Who will you serve? What range of products will you sell? How will you promote them? The biggest question of them all though, is how will you position your business? If you can answer this most strategic question, the answers to the others will fall into place.
When Apple was able to answer this question, with just 15% of the phone market, it obtained 80% of the profits! Their positioning in the marketplace ensured that this outcome was possible.
They didn’t want to sell the most smartphones (which is probably Samsung’s plan). They wanted to sell the most profitable phones. Their positioning was a premium built around innovation and design. Their marketing underpins their chosen position so they customers recognise it as well.
Note that they didn’t plan just to sell to the most well off. Millions of iPhones are sold in the developing world. So desirable is their product that less well-off customers are prepared to save and sacrifice to own it, even if it’s not the latest model.
How do you position your products and services?
Is it for everyone? Is it for the discerning? (Not the same as a premium product aimed at the very well off.) Is it a high or an affordable quality product? Is it a high-volume commodity product?
These choices have consequences. What makes it a quality product? Is it the design? The workmanship? The materials? If it’s to be high volume low cost, how will you reduce your costs to be profitable? Whatever your positioning, these consequences must flow through all parts of the business. Consistency is critical.
McDonalds are not the worlds best burgers, but they are one of the cheapest, and everyone knows what to expect. On a scale of 1-10 I would rate them as a 6, just acceptable. But it’s always a 6 wherever you buy them. While the ingredients and the preparation are not as high quality as you might experience from an upmarket chain, their systems are superb, allowing them to produce a mass market low cost product. (BTW I recommend you see the movie “The Founder” the story behind McDonalds, even if you hate their burgers.)
So define the position of your products and services, and then what enables you to maintain that position. (For Apple it’s their technical innovation and design, for McDonalds, it’s their systems. Both businesses then communicate this position to their customers through all their marketing, otherwise known as branding.) Then consider the implications of that positioning in every part of your business.
What happens when you don’t make this strategic choice? Your competitors make it for you.
How do you position your products and services and how do you communicate this to your customers?
May Your Business Be – As You Plan It.
Dr Greg Chapman – The Profit Whisperer
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