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Small business marketing: Differentiation and positioning

Posted 6 years ago in Xero news by xero
Posted by xero
Think different

Peter Economides for Apple 1997 TBWA/Chiat/Day

Last time, we defined what marketing is and how the ‘Four P s’ framework illustrates the marketing mix for your business.

There have been some really good discussions over in Xero Community and its great to see everyone sharing ideas across lots of different industries.

Now we start getting into the fun stuff: differentiation and positioning. It’s a huge topic so today I’ll just cover off ‘attributes’ and ‘consideration sets’.

Simply put, differentiation is what makes your product or service unique from your competitors. As we all know, business is competitive so you have to define attributes of your offer that make you stand out from everyone else.

Positioning is what you do to the mind of the customer. That is, you position the product in the mind of someone, rather than necessarily making changes to the product itself. One commonly quoted example of this is ‘Volvo: Safety’. Engineers may argue with you that there are other cars that are equally, if not more ‘safe’ but Volvo has put a stake in the ground that the attribute ‘safety’ is theirs.

Sound confusing?

An easy way to think about this is to ask yourself:

“What am I going to buy for lunch today?”

Instantly, your brain will start to shortlist options based on various attributes of the products or services around you. Your brain will form what’s known as a ‘consideration set.’

“I want something healthy so I might get a salad from Molly’s Salad Bar”

Molly’s Salad Bar owns the attribute ‘health’ in your mind.

“I’ve only got five minutes so I’ll have to get something quick from Hunger Busters”

Hunger Busters owns the attribute ‘fast’ and gets put to the top of your consideration set.

Here’s how you can translate this into your own business with a  simple consumer behavior exercise.

For this example, leave out price versus quality for now- I’ll cover this off next in a pricing strategy piece.

1.Think about what features or ‘attributes’ you want to own in your customer’s mind to establish your competitive position. Try to keep it to three or four. Be specific. Attributes like ‘friendly’ or ‘innovative’ need to be fleshed out to something tangible a customer can see and believe.

2. Scribble down a list of your direct and indirect competitors and think about how you perceive them in your own mind. What attributes are you rating them on and what attributes do you think they own that you may want to own, or stay away from? Look at the whole business. Companies can own negative attributes such as ‘high staff turnover’ or ‘you always have to wait for ages.’ Be honest about what is front-of-mind for you.

3. Get someone else who may not know your business or industry to give you their view. Show them some websites of your competitors and ask them what their snapshot view is. Remember that it is about customer perception, which may not necessarily be reality. Try to get an understanding of what is triggering their perception. For example, “he keynotes all the industry conferences, must be a thought –leader.”

Let us know how you get on or ask any questions here on the blog, or over in the Xero Community marketing discussion.

Suggested reading: Al Ries and Jack Trout, Positioning: The Battle for Your Mind 

One comment

October 29, 2012 at 2.22 am

Thanks for revealing your ideas. I’d also like to say that video games have been actually evolving. Better technology and improvements have served create realistic and active games. These types of entertainment games were not really sensible when the real concept was first being tried. Just like other styles of technological innovation, video games as well have had to progress by many ages. This is testimony for the fast development of video games.

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