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34. Positioning

 All marketing strategy is built on segmentation, targeting, and positioning (STP). A company discovers different needs and groups of consumers in the marketplace, targets those it can satisfy in a superior way, and then positions its offerings so the target market recognizes its distinctive offerings and images. 

By building customer advantages, companies can deliver high customer value and satisfaction, which lead to high repeat purchases and ultimately to high company profitability.

 Positioning is the act of designing a company’s offering and image to occupy a distinctive place in the minds of the target market. The goal is to locate the brand in the minds of consumers to maximize the potential benefit to the firm. 

Example of Positioning: Volvo = Safety Automobile

A good brand positioning helps guide marketing strategy by clarifying the brand’s essence, identifying the goals it helps the consumer achieve, and showing how it does so in a unique way. Everyone in the organization should understand the brand positioning and use it as context for making decisions.

One result of positioning is the successful creation of a customer-focused value proposition, a cogent reason why the target market should buy a product or service. As value proposition captures the way a product or service’s key benefits provide value to customers by satisfying their needs. Hertz, Volvo, and Domino’s—have defined their value proposition through the years with their target customers.

Positioning requires that marketers define and communicate similarities and differences between their brand and its competitors. Specifically, deciding on a positioning requires: (1) choosing a frame of reference by identifying the target market and relevant competition, (2) identifying the optimal points-of-parity and points-of- difference brand associations given that frame of reference, and (3) creating a brand mantra summarizing the positioning and essence of the brand.

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