This "Outside Consultant" column by Opus College of Business faculty member Steve Vuolo ran in the Star Tribune on Aug. 9, 2021.
Positioning is the art of sacrifice. In essence, that means that being really good at something will result in not being as good at something else compared to someone else. And this is OK! Trying to be good at all things to all people is virtually impossible and will leave a company falling short on every metric.
A former colleague of mine from General Mills loves to use the example of Dinner Tonight versus Chicken Tonight. Dinner Tonight lost the share battle to Chicken Tonight due to positioning. While one could argue that Dinner Tonight had broader appeal (good for all proteins), if families were serving chicken, it became obvious which dinner solution they would choose … the one developed particularly for chicken. Chicken Tonight sacrificed being good at proteins that weren’t chicken.
Positioning is made up of four components: the target, the frame of reference (also known as point of parity), the point of difference and the reason to believe.
The target is not always demographically described. Sometimes it is based on a psychographic measure (or a values-driven difference), or a behavioral difference (people looking for gifts), or a particular benefit sought (cavity prevention toothpaste). It’s important to define a particular segment to target (and note, the targeting process requires sacrifice as well).
The frame of reference defines with whom you are competing. Notably, Subway defined its frame of reference as fast-food places versus other sub shops because they were national pioneers, the fast-food market was large, and they had a real point of difference compared to other fast-food offerings.
Which leads to the point of difference: the benefit that a product or service offers that is superior to the others in the frame of reference. In Subway’s case … healthiness.
Lastly, the reason to believe helps you substantiate your point of difference claim. In the case of Subway, the ingredients are fresher, the sandwiches are made in front of customers and there are many offerings with fewer calories than fast food.
It is important to write out a positioning statement using all four components. The positioning statement helps guide marketing implementation decisions (product features, pricing, placement strategy and promotion). Without knowing your positioning, you risk having tactics which will not enable you to strategically fulfil your goals in the marketplace.
Steve Vuolo is on faculty at the University of St. Thomas Opus College of Business.