Positioning in the market place

Positioning is one of the most difficult and maybe (as well) most misunderstood subjects in business and marketing strategy. When managers in companies of any size are asked to define and occupy the right strategy to place the business in a favorable position, most often some grave errors are committed.

Positioning is not an expression about the company and its goals or objectives!

Positioning is the realization, which place the company takes in a system that is interrelated within two parts:

  1. Purchase choices available
  2. Sum of all companies in the market place

Since no company within an industry serves 100% of customers, there is always a competitive situation comprised of stakeholders within a market. This structural system of competitors is impacted by a permanent rivalry among participants, which is influenced by the following 5 market forces (See graphic above).

The principal market forces are:

  1. Potential new companies entering the market demanding market share
  2. Buying power from customers and buying groups
  3. Substitute products rending traditional products unattractive
  4. Suppliers and distribution pricing

Independently from the position of ones company, these force are influencing the market permanently.

Markets and participants can be subdivided into the following categories:

New Market
New Products / Services
(Old Market Leader)
New Products / Services
(Visionaries / Founders)
Established Market
Traditional Products / Services
(Old Market Leader)
New Products / Services
(New or old Market Leader)

 

Depending on the individual situation of a company, the positioning can vary drastically. Strategies can range from market entry strategies to establishment strategies trying to create entry and exit barriers in order to protect the market and thus the own position.

By |2016-10-24T16:15:03+00:00January 30th, 2015|Consulting|Comments Off on Positioning in the market place

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