Product positioning is a systematic process to ensure that the benefits associated with a company's offering meet the target customers' most important needs in a way that satisfies customers and increases sales and profits.
Product positioning is a systematic process to ensure that the benefits associated with the company's offering meet the target customers' most important needs in a way that (1) satisfies customers and (2) increases sales and profits for the company. The benefits not only include product attributes but also brand reputation, pricing, distribution, communication, and customer service.
Consider Almetta Foods, a company dedicated to creating healthy, great-tasting, plant-based food products with all-natural ingredients. It used a four-step process to drive its customer strategy through product positioning.
Step 1 – Target Segment and Needs Identification
Almetta conducted focus groups and customer surveys to determine its target segment was over 90% female, 15–55 years old, college educated, and had an annual income over $75,000. These customers valued a healthy lifestyle, were typically lactose intolerant, and carefully read labels on anything they bought.
Step 2 – Product Development and Refinement
Almetta developed and tested multiple variants of its non-dairy mousse. It chose the variation rated "very high" on taste. The offering was all-natural, vegan, and dairy-free. The packaging and pricing were designed to highlight and complement the customers' most important needs—taste and all-natural ingredients.
Step 3 – Product Positioning and Brand Strategy
To clearly communicate important benefits to target customers, employees, and other stakeholders, Almetta's executives developed a clear positioning statement complemented by the tagline, "An Amazingly Delicious Dessert or Snack." The brand's positioning conveyed its two primary benefits—taste and all-natural ingredients—while associating them with European, feminine, sleek, and stylish branding.
Step 4 – Marketing Strategy to Support Brand Strategy
Almetta supported its positioning with premium pricing and distribution through high-end retail chains like Whole Foods. The firm ensured the product's packaging, brand logo, and other marketing elements were consistent with its premium, high-quality, high-end dessert image.
Conclusion
As the Almetta example shows, product positioning is one of the most critical elements driving a company's customer strategy. Once firms identify a target customer segment and its needs, they begin by developing a product satisfying those needs.