All marketing strategy is built on STP: Segmentation, Targeting, and Positioning.
A company discovers different needs and groups in the marketplace, targets those needs and groups that it can satisfy in a superior way, and then positions its offering so that the target market recognizes the company's distinctive offering and image. As companies increase the number of claimed benefits for their brand, they risk disbelief and a loss of clear positioning. In general, a company must avoid four major errors:
A company discovers different needs and groups in the marketplace, targets those needs and groups that it can satisfy in a superior way, and then positions its offering so that the target market recognizes the company's distinctive offering and image. As companies increase the number of claimed benefits for their brand, they risk disbelief and a loss of clear positioning. In general, a company must avoid four major errors:
- Under positioning: Some companies discover that buyers have only a vague idea of the brand. The brand is seen as just another entry in a crowded marketplace. When Pepsi introduced its clear Crystal Pepsi in 1993, customers were distinctly unimpressed. They didn't see "clarity" as an important benefit in a soft drink.
- Over positioning: Buyers may have too narrow an image of the brand. Thus a consumer might think that diamond rings at Tiffany start at $5,000 when in fact Tiffany now offers affordable diamond rings starting at $1,000.
- Confused positioning: Buyers might have a confused image of the brand resulting from the company's making too many claims or changing the brand's positioning too frequently. This was the case with Stephen Job’s sleek and powerful NeXT desktop computer, which was positioned first for students, then for engineers, and then for businesspeople, all unsuccessfully.
- Doubtful positioning: Buyers may find it hard to believe the brand claims in view of the product's features, price, or manufacturer. When GM's Cadillac division introduced the Cimarron, it positioned the car as a luxury competitor with BMW, Mercedes, and Audi. Although the car featured leather seats, a luggage rack, lots of chrome, and a Cadillac logo stamped on the chassis, customers saw it as a dolled-up version of Chevy's Cavalier and Oldsmobile's Firenze. The car was positioned as "more for more": customers saw it as "less for more."
