Competitive positioning, like most things in business, is a balancing act. In essence, it is all about finding a unique selling proposition (USP) that will set you apart from your competition and help to drive sales. It is about carving out a unique niche in the competitive landscape and then focusing your business/product/service on delivering on this unique strategy. If done successfully, it can provide significant benefits to your bottom line.
Competitive positioning requires you to determine specific competitive strengths and identify your weaknesses. Identifying your weaknesses involves looking at the competition and seeing what their strengths and weaknesses are. For example, how are other companies positioned relative to your offerings? How are their positions currently positioned in overall customer demand and overall profitability? These questions are important for a competitive positioning strategy because they help you answer the question: What do customers want and need today?
Once you have determined how to differentiate yourself from the competition, you then need to determine how to position your products and services so that you can meet their needs. This is where you start to become strategic and start thinking about how you plan to optimize your positioning strategy for specific segments within the market. For example, you may be a truck rental company that offers services to trucking and auto dealerships. Now, in order to be truly competitive in these segments you have to ensure that you’ve got a solid truck driver training program in place, you’ve got strong connections with regional auto dealers and that you’ve got a trucking sub-niche marketing program in place. This is called the Truck Driver Demand segment and this will help you become a logical choice for these customers.
Another common example of a competitive positioning strategy is a retailer that sells fashion accessories such as fashionable handbags and accessories. To really be successful, retailers must target a specific niche within the fashion accessory niche. For example, you could be a retailer that sells women’s designer handbags to teenage girls. Or, you could be a retailer that sells professional sports equipment to men.
Another important step when it comes to competitive positioning your business is making sure that you have a strong value proposition to potential customers facing the segment you are targeting. What value proposition do you give customers in relation to the segment you are targeting? And how do you present this value proposition? A strong value proposition is something that gives customers enough information to make a buying decision while still being easy for them to buy from you.
Finally, in order to become successful at competitive positioning you need to know how other companies are positioned within their respective target segments. The more you know about how your competitors are positioned within their target segments the better able you are going to be to position yourself within your target market segment. One way to do this is to spend some time visiting other companies that are in the same segment as you and getting a better understanding of their overall business strategy and how they achieve their success. Once you have a better understanding of what other companies are doing, you can then implement some of the ideas into your own strategy and start leveraging the mindshare that you have built up with other companies within your industry.