Product positioning is the consumer perception of a product or brand in comparison to its competitors. To visualize product positioning, a diagram called Product Position Map, or Perception Map is used by marketing managers. It shows what perceptions current customers and/or potential customers have towards the product or brand.
Before a marketing department decides which products to research, develop and launch, it is important to know how these products will relate to other products in the same market segment.
Consumers will be comparing different products in their minds in relation to two attributes such as Price and Quality.
What does Product Position Map look like?
Goods or services are ‘mapped’ together on Product Position Map. This allows them to be compared and contrasted in relation to each other. This is the main strength of this marketing tool.
Product Position Map has two dimensions. The most common criteria could be Price (variable one) and Quality (variable two). Or, Comfort (variable one) and Price (variable two). The marketer would draw out the map and decide upon a label for each axis. The individual products are then mapped out next to each other.
Any gaps could be regarded as possible areas where new products can be developed.
Let’s take a look at the basic Product Position Map, or Perception Map, for popular brands of sports shoes:
Marketers decide upon a competitive position which enables them to distinguish their own products from the offerings of their competition, hence the term positioning strategies: Cost Leadership, High-Quality Focus, Differentiation.
We know that the term ‘positioning’ refers to the consumer’s perception of a product or service in relation to its competitors. So, you need to ask yourself, what is the position of the product in the mind of the consumer?
Four types of products in Product Position Map
Based on the two most common criteria of customer perceptions used in Product Position Maps such as Price and Quality, marketing managers can classify all products into four categories:
- Premium Products. These products or brands are of high quality and high price, e.g. Siemens home appliances, Audi cars, Longines wristwatches.
- Bargain Products. These products are of high quality and low price. This is a short-term marketing strategy to increase sales revenue because charging low prices for high quality products will make the business unprofitable in the long-term.
- Cowboy Products. These products are of low quality but high price. This is also a short-term marketing strategy to increase sales revenue because customers will not overpay again for poor-quality products in the long-term.
- Economy Products. These products are of low quality and low price, e.g. own-label products owned by supermarkets such as Costco.
How to use Product Position Maps?
Product Position Maps, or Perception Maps, can help the business to identify gaps in the market and identify the need to reposition, so the business will be able to develop future strategies based on current position or improve image when undesired perception exists.
Example 1: A high-end car company found out after conducting thorough market research that there is a market for smaller cars for women that featured its luxury brand name.
Example 2: Another car company identified a gap in the market for luxury SUV4x4 utility vehicles, hence introduced a new line of its cars targeting wealthy adventurous customers.
Example 3: A well-known airline decided to appeal to younger and less affluent customers after market research revealed the airline was perceived as only targeting older customer groups.
Example 4: A luxury cosmetics brand found out that it is perceived to be of higher quality and higher price compared with its direct competitor of similar size.
Example 5: A bottled water producer discover after surveying the current customers that they perceive the brand as superior to other brands of bottled water.
Example 6: Two major global cola manufacturers introduced mid-calorie colas under revamped brands containing roughly half the carbohydrates, sugars and calories compared to classic cola.
In short, Product Position Map, or Perception Map, represents visually customer perceptions of a product or brand in relation to other products or brands in the market segment.
One of the biggest advantages of Product Position Map, or Perception Map is that market research results of customer perceptions of the firm’s products or brands can be simply presented in a visual way. The two-dimensional map is also quick and easy to construct and interpret to identify market gaps or the need to reposition the product(s).
