Product positioning is an important business marketing aspect

Business product positioning

Some years ago my son worked in a ready-made meals factory producing food for M&S, Sainsbury's and Tesco. Identical products were packed for each, but of course the packaging and price reflected the image and branding of the retailer. The food has been positioned to reflect their customer's expectations. M&S shoppers could save money by buying at Tesco, but they have been conditioned to believe that they are buying a superior product.

Still in the grocery field, the German chains of Lidl and Aldi have grown rapidly in the United Kingdom. Maybe because I make frequent trips to Germany I was one of the earliest patrons of Lidl, but many of our friends still shun them because they believe that Lidl's are down-market and that a lower price means poorer quality. But from Lidl's point of view they're not competing with the likes of Tesco. Their floor area and the range of goods that they carry is far smaller, staff costs are dramatically lower and I'll wager that return on investment is not bad at all.

Where a product or service is positioned governs all the messages that the supplier needs to achieve: price, value, image, performance. There is a drycleaning service in London's West End that fits out its delivery drivers in livery. Naturally, it is much more expensive than a corner shop. Customers expect to pay more and no doubt hope their neighbours will notice the regular van delivery.

Some premium lagers make the expensive price a virtue.

They say nothing about the flavour, for goodness' sake. Lagers, and especially whiskies, are sold on image, reflected glory. Some shops in Bond Street don't display a price: if you need to ask you can't afford it. But positioning doesn't just relate to highvalue items. Before the term 'fast food' was invented, there was a shop in Edinburgh called Gobble 'n' Go. Now, many educated people would regard that as horrendous, but I think it is rather clever. In one phrase it has summed up quite explicitly the nature of the food and service available. If it is right for that area and attracts custom, who are we to criticise?

Positioning governs the standard of service, quality of staff and expectations of customers. If you are a market trader, gift wrapping would be quite out of place. Move that business to the high street, and it may steal a march over the competition. Price is obviously a strong consideration. We have a view or opinion on the value of an article once we see the price. We form a judgement. As markets develop and more competition is attracted, where you position your business on that ladder of competing businesses governs everything that follows thereafter. Customer expectations reflect the price and position that you manage to achieve.

Positioning is most important when it comes to advertising in a developed market with many competing journals or papers. Think of the readership of the Daily Telegraph or the Guardian. Ignoring the jibe that the Telegraph is supposed to be read by those who think they still run the country, both are quality broadsheets, but with quite distinct political slants, one right wing, the other read by teachers, social workers, media people. Advertisers need to take account of the spending power and moral stance of these readers. The local and regional press can rarely afford the luxury of anything other than an apolitical viewpoint.

Positioning is a vital ingredient of branding, with Virgin carrying it to extremes. Based entirely on the so far untainted image of Richard Branson, the prime mover, Virgin has spread from airlines and record shops to the complex world of financial services.

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