If you say “instant photography” (to anyone over 40), they’ll probably think of Polaroid. If you say “cool, innovative smartphones” they’ll think of Apple.

Each of these companies has succeeded in positioning itself in the marketplace. Each has established a unique presence for itself and its products. That type of presence is a powerful force in marketing; a key part of a business growth strategy. At the heart of every good marketing strategy is a good positioning strategy. Marketing, to a large extent, is a battle for positioning.

Positioning is always competitive. Customers think about products and companies in relation to other products and companies. Positioning is vital to having a successful marketing strategy and a business growth strategy with the objective to increase company value. All of marketing – pricing, promotions, advertising, distribution, etc. – grows out of positioning. If a company’s products (or services) are positioned poorly, the rest of the company’s marketing strategy will not be effective.

How can a company establish a strong position in today’s fast-changing markets?

In these markets, products change, technologies change, competition changes. There is a constant flux. New companies, and companies from other industries, are trying to grab a piece of the action. All of these changes can influence positioning in the marketplace. Standard approaches to positioning are not enough; in fact, they may not necessarily work. To survive in dynamic marketplaces, companies need a new form of positioning.

This new form of positioning is a multidimensional process. It involves three interlocking stages – product positioning, market positioning, and corporate positioning.

The three stage positioning process

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In the first stage, product positioning, a company must determine how it would like its product or service to fit in the market. Should it build a reputation for low cost? High quality? Advanced technology? Should it try to sell the product to a broad audience or to a niche? During this stage, it is important to pay attention to the “intangible” positioning factors, like technology leadership and product quality. Intangible factors are based on customer perceptions, not raw statistics and numbers or product specifications. Low prices and top product specifications do not always win sales. Rather, it is intangible factors that are the keys to gaining strong product positioning.

In the second stage of the positioning process, market positioning, the product must gain recognition in the market. It has to establish credibility with customers. The marketplace must perceive the product as a winner. To gain a strong market position, a company needs to understand the workings of the industry infrastructure, the network of retailers, distributors, analysts, journalists, industry influencers and build strategic partnerships. In most industries, 10 percent of the people in that industry influence the other 90 percent. If a company can win the hearts and minds of the most important 10 percent, its market positioning is assured.

In the final positioning stage, corporate positioning, the company must position not its products, but itself. This is done primarily through financial success. If the company’s profits slip, its image becomes tarnished and customers will become reluctant to buy products from a company in financial trouble. When that happens, the company must start over at product positioning and rebuild its position in the market.

This three stage positioning process must be a total business activity. It is not just advertising and public relations. It is a fundamental part of business planning, business growth strategies, and it has to be supported by managers across the company.