Growing Small Businesses

Lesson 2: Positioning your product or service

How to use marketing strategies to position your product or service for optimum competitiveness and best profitability. Defining to which market segment you're offering your product and designing your product presentation accordingly.

Introduction

The first step in getting new business for your company is to identify who your new customers are going to be. The second step is to make sure they are going to be satisfied new customers by giving them exactly what they want.

Put yourself in the target customer's position. A company contacts him. It offers him something he needs. It's something he can afford. He has nothing against buying from that company. There's just one thing he still needs before he will decide to buy - he has to know that he's getting good value for his money.

Don't forget, you're not going to call him up and convince him to buy - that's selling. Instead, the product or service and your information material have to speak for themselves. You have to know this customer well enough that you will highlight those aspects of your product or service that he values the most. That's why you have divided your customers up into groups - so that you can customize your approach to the members of a particular group.

You look at your groups and you ask yourself, "How do they use my product or service? What do they want it to do? What do they value about it?" Once you have answered these questions about the members of each particular group, you can position your product to appeal to them.

Speaking about value, what exactly does your business do that is of value to your customers? If you're going to charge them money, you have to be adding value to what you're selling. That value is what is generating your profit. It's important to have a clear concept of the value you're adding and whether you can earn more by adding more value.

Of course the best kind of value that you can add is the kind nobody else can do. If there's something unique you can do which is valued by the members of your target groups, then your company is likely to be very successful. To find such a unique feature is very difficult. The next best thing is to find something which has value to your target groups, which is not unique but which you can do better or at lower cost than anyone else. In either of these cases you will have identified a competitive advantage that you have and which has to feature prominently in all your literature and publicity.

Once you have your target groups, the only thing left is to give them what they want. Since you have pre-selected them on the basis that they'll buy your product or service and since you have grouped them based on your knowledge of what they want, this is just closing the circle. You match what you tell them about your product or service to what they are interested in and they'll buy from you.

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