Startup? Positioning is Important to Your Brand

Market segmentation, product differentiation, and positioning are closely related concepts. Positioning, whether for products or the company behind those products, is about perception. Perception pertains to how a customer or user interprets and internalizes information he/she has collected about a product, a company, or a brand. The classic example is that of the word coke, referring to the carbonated beverage made by numerous companies. When the word coke is expressed, most of us will have an image and opinion about a particular brand. How that opinion was formed and placed within the mind of the customer or user illustrates the underlying principle of perception. Perceptions can be changed over time, but often, initial impressions remain strong even in the presence of alternative information. Recall the saying, “You never have another chance to make a first impression.”

Perception can occur over time as a company and its products demonstrate their value to customers and users. Typically, this is how brands become successful, as perceptions are created and maintained with many customers and users over significant periods of time.

A new venture, however, does not have the benefit of significant history for itself or its products and thus needs to form initial perceptions with customers and users through appropriate marketing activities and positioning statements for both products and the company.

Positioning statements should focus on the benefits the customer or user will realize or feel by using the product or service. Benefits can not only be functional (e.g., performance or design), but they can also be emotional (e.g., latest or hottest mobile device) or utilitarian. Once these benefits are defined, a positioning statement can be developed for a product, service, brand, and company.

The “classical” construction of a positioning statement is comprised of the following elements:

  1. Target customer or user
  2. Statement of need or opportunity
  3. Product name
  4. Product category
  5. Statement of key benefit or reason to buy

For products and services, it is useful to think about the image that is most desirable to place in the minds of customers and users. Ideally, a new venture can find the appropriate message and words based on benefits that create an instantaneous space that clearly separates the company from competitors. The formulaic approach is useful for starting the exploration of potential positioning statements for products and services.

Of course, product-positioning statements can and should be evaluated with focus groups.

In modern times, positioning statements are used to express a company’s desired or goal position within the minds of prospective customers and users without necessarily following a formula. The position statement can be used to express a company’s “wish” for how it would like to be perceived fully expecting that it will be able to satisfy customer and user expectations. For instance, consider the following positioning statements for four companies that compete in the business of providing luxury performance cars:

  • Mercedes-Benz: Engineered like no other car in the world.
  • BMW: The ultimate driving machine.
  • Audi: We delight customers worldwide.
  • Lexus: The relentless pursuit of perfection.

These positioning statements are simple, easy to remember, and virtually instantaneously stick to the mind. Each creates its own unique space in the mind of the reader.

Influencing customer and user perceptions through messaging is very important for a new venture that has yet to sell a product or service.