Positioning 

Simply, positioning is how your target market defines you in relation to your competitors. 

A good position is: 
1. What makes you unique 
2. This is considered a benefit by your target market 

Both of these conditions are necessary for a good positioning.  So what if you are the only red-haired singer who only knows how to play a G minor chord?  Does your target market consider this a good thing? 

Positioning is important because you are competing with all the noise out there competing for your potential fans attention.  If you can stand out with a unique benefit, you have a chance at getting their attention. 

It is important to understand your product from the customers point of view relative to the competition. 

Environment 

In order to begin positioning a product, two questions need to be answered: 

1.What is our marketing environment? 
2.What is our competitive advantage? 

The marketing environment is the external environment. Some things to consider: 
 

• How is the market now satisfying the need your software satisfies?
• What are the switching costs for potential users for your market?
• What are the positions of the competition?

The competitive advantage is an internal question. What do you have that gives you advantage over your competitors. Some things to consider: 
 

• Is your company small and flexibility?
• Do you offer low cost and high quality?
• Does your product offer unique benefits?
• Are you the first on the market with this product (First mover advantage)?

Positioning Strategies 

There are seven positioning strategies that can be pursued: 

Product Attributes: What are the specific product attributes? 

Benefits: What are the benefits to the customers? 

Usage Occasions: When / how can the product be used? 

Users: Identify a class of users. 

Against a Competitor: Positioned directly against a competitor. 

Away from a Competitor: Positioned away from competitor. 

Product Classes: Compared to different classes of products. 

Segmentation 

There are three types of segmentation: 

Mass Marketing or Undifferentiated Marketing: Go after the whole market with one offer and focus on common needs rather than differences 

Product-variety Marketing or Differentiated Marketing: target several market segments and design separate offers for each 

Target Marketing or Concentrated Marketing: Large share of one or a few sub-markets. Good when company’s resources are limited 

To identify a niche market, a series of 2 by 2 matrixes can be used to identify an area that is being overlooked by larger competitors. The competitors are mapped on this matrix and you can see where there may be some opportunities. 

Positioning Differences 

The differences that are promoted for a product must be: 

Important: The difference delivers a highly valued benefit to the target buyers 

Distinctive: Competitors do not offer the difference, or the company can offer it in a more distinctive way 

Superior: The difference is superior to other ways that the customer might obtain the same benefit 

Communicable: The difference can be explained and communicated to the target buyers 

Preemptive: Competitors cannot easily copy the difference 

Affordable: Buyers can afford to pay the difference 

Profitable: Company can introduce the difference profitably