The Big Three: Top Picks for Positioning

Most businesses focus on one of three primary “positionings” in order to define themselves – and their products – for their target market. (See Build it and They Might Come for background). My examples focus on consumer goods, but these positionings hold for non-retail and non-consumer businesses, as well.  

The three classic, proven positionings include:

A. Price

If price is your primary selling point, you have relatively low prices. 

Considerations:

  • Lower prices tend to generate higher volume, which can result in “economies of scale” (i.e. higher production quantities result in cost efficiencies per piece). 
  • Buyer expectations may be lower.
  • It is extremely difficult – if not impossible – to successfully raise low prices.
  • Labor-intensive output puts pressure on costs.
  • A price positioning allows for product differentiation as good, better and best.

Price Example:  Big Lots

These stores are known for low prices as seen in their mission statement: 

“As the nation’s largest broadline closeout retailer, Big Lots has the power to negotiate the best deals in the business….”

B. Quality

A primary positioning of quality implies good workmanship, lasting materials and excellent service. “Quality” can mean top quality or good quality on a relative basis.

Considerations:  

  • A high-quality product that requires re-purchase (e.g., mattresses, cars, high-end chocolates, consulting services), can generate strong customer loyalty. 
  • Buyer expectations will be high.
  • Competitors will try to imitate you at a lower price.

Quality Example:  Original Mattress Factory https://www.originalmattress.com/our-story 

Mission Statement: At OMF, our mission is simple: produce quality mattresses in our own factory and sell them directly to consumers. 

C: Variety

Traditionally, variety was tied to floor space at retail.  In 1888, the first Sears catalog changed that model. Today, on-line shopping has enhanced the variety positioning. 

Considerations:

  • Variety broadens the target audience.
  • Repeat purchases are more likely for satisfied customers, since there are more purchase options.
  • Inventory management is critical to customer satisfaction.

Variety Example:  Zappos.  http://www.zappos.com/

Zappos offers the ability to shop for shoes by a) size, b) style, c) brand, d) price and e) popularity. Considering return rates of about 40% on direct-sold (i.e., non-retail) footwear, their level of variety is incredible!

Although price, quality or variety often serves as a primary positioning, you may choose one primary positioning and one (or more) as secondary. For example, Zappos focuses on variety, supported by service.  

Next week we will talk about more positioning options:  value, convenience/accessibility & emotional. 

What is your primary positioning? 

What do your competitors focus on?

Until we meet again,
The Entrepreneur’s Friend

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