Market positioning is the manipulation of a brand or family of brands to create a positive perception in the eyes of the public. If a product is well positioned, it will have strong sales, and it may become the go-to brand for people who need that particular product. Poor positioning, on the other hand, can lead to bad sales and a dubious reputation. A number of things are involved in market positioning, with entire firms specializing in this activity and working with clients to position their products effectively.
When a product is released, the company needs to think beyond what the product is for when it comes to positioning. It also thinks about the kinds of people it wants to buy the product. For example, a luxury car manufacturer might be less interested in promoting reliability, and more interested in promoting drivability, appealing to people who are looking for high-end cars which are enjoyable and exciting to drive. Conversely, a company making mouthwash might want to go for the bottom end of the market with an appealing low price, accompanied by claims asking consumers to “compare to the leading brand” so that they can see that the product contains the same active ingredients as a famous brand, at a much lower price.
Market positioning is a tricky process. Companies need to see how consumers perceive their product, and how differences in presentation can impact perception. Periodically, companies may reposition, trying to adjust their perception among the public. For example, a company might redesign product packaging, start a new ad campaign, or engage in similar activities to capture a new share of the market.
Companies also engage in depositioning, in which they attempt to alter the perception of other brands. While outright attacks on rival brands are frowned upon and may be illegal unless they are framed very carefully, companies can use language like “compared to the leading brand” or “we're not like those other brands.” A television ad, for example, might contrast two paper towels: the brand being advertised, and a “generic” with a package which looks suspiciously similar to a popular brand of paper towels, but isn't quite identical.
Developing a market positioning strategy is an important part of the research and development process. The marketing department may provide notes during product development which are designed to enhance the product's position, and they also determine the price, where the product should be sold, and how it should be advertised. Every aspect of the product's presentation will be carefully calculated to maximize its position, with the goal of market positioning being domination.