After a company has decided which market segments to enter, it must decide what 'position' it wants to occupy in those segments. A product's position is the place the product occupies in consumers' minds. If a product were perceived to be exactly like another product on the market, consumers would have no reason to buy it. Market positioning gives a product a clear, distinctive and desirable place in the minds of target consumers compared with competing products. Marketers plan positions that distinguish their products from competing brands and give them the greatest strategic advantage in their target markets.
In positioning its product, the company first identifies possible competitive advantages upon which to build the position. To gain competitive advantage, the company must offer greater value to chosen target segments, either by charging lower prices than competitors or by offering more benefits to justify higher prices. However, if the company positions the product as offering greater value, it must deliver greater value. Effective positioning begins with actually differentiating the company's marketing offer so that it gives consumers more value than is offered by the competition. The company can position a product on only one important differentiating factor or on several. However, positioning on too many factors can result in consumer confusion or disbelief. Once the company has chosen-a desired position, it must take steps to deliver and communicate that position to target consumers.
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