European Managcmrnt /ownal Vohnr 6 No 4 @ European Managcrnent /ournal 1988 ISSN 0263-2373 $3.00

Conceptual Overview and Applications

of International Marketing Positioning

Michael Perry

Professor of Business and Marketing, Haifiz University, Israel

The author explores differing meanings of the term and concept of “positioning“ in marketing. He concludes there are two different types of “positions” - market and product - and two different territories in which the positions are being observed or measured: the market place and the consumer’s mind. These distinctions are helpful in the process of planning a marketing strategy.

Michael Perry then applies this “position” idea in marketing to a real case of marketing oranges in four European countries. The results demonstrate how the concepts of “market position” can be measured and used in planning marketing programmes.

The Meaning of “Positioning”

The concept of “positioning” in marketing was popularised in 1972 by two advertising executives, Al Ries and Jack Trout, in a series of articles in Aduertisirty Age called “The Positioning Era”. Later, they wrote a book called “Positioning: The Battle For

Your Mind”. Since then, the term and concept of “positioning“ has been used frequently by many different people, but the problem is, they also gave it different meanings, and it is these which are worthwhile exploring.

The original meaning of “positioning”, presented by Ries and Trout, referred to the competitive market standing of a company vis-a-vis its competitors.

According to this meaning, which is being used frequently in strategic planning, a “position” in the market represents the level of leadership and dominance that a product (or a corporation) has in that market. This level can be a result of the historical fact that the particular product was the first to appear in the market (the “pioneer”) or it can be result of the fact that the product holds the largest market share and therefore sets the rules of the game that others have to follow.

This meaning will be called hereafter “Market Position”.

The other meaning of the “position” concept is the one that is related to the product and its attributes. This meaning is based on the observation that a product is a complex concept with many different alternative attributes, and these attributes can be combined together to create various “profiles” of the product.

According to this latter meaning, a “position” of a product represents the profile of its attributes, in comparison to other products or to the consumer’s needs. This meaning will be therefore called “Product Position”.

Where to “Position“

Another distinction of the meaning of “positioning” has to do with the type of the battleground in which the marketing war is being fought.

There are two different battlegrounds: The market- place and the consumer’s mind. The real economic result of the marketing effort is determined in the marketplace, namely the physical places like super- markets, distributors warehouses, etc., where ex- change transactions take place; but a crucial prelimin- ary condition for such results is the state of the consumer’s mind.

INTERNATIONAL MARKETING POSITIONING 421

best strategy related to that position, and onlv then to determine and decide on the product position.

Rise and Trout themselves saw positioning as follows: “Positioning starts with a product. A piece of merchandise, a service, a company, an institution, or e\‘en a person . . But positioning is not what you do to a product. Positioning is what you do to the mind of the prospect. That is, you position the prodiict in the mind of the prospect”.

The toregoing meaning of the concept of “position- ing“ emphasises two aspects: One, the product; Two, the psychology or the mind of the consumer.

Thest! two aspects led Kotler[l](1984, p.272) to the follo\ving definition: “Positioning is the act of designing the company’s product and marketing mix to fit a given place in the consumer’s mind”.

We can see, therefore, that there are two different types of “positions” - market and product - and two different territories in which the positions are being observed or measured: the marketplace and the Iconsumer’s mind. Table 1 summarizes those conck:pts and presents the yardstick by which they can be measured. -.

The distinction between the two meanings of the “position” concept helps in the process of planning a marketing strategy, since it is important to deter- mine first the market position, and decide on the

Table 1 Positioning Concepts and Their Meaning

Tke cimcept: Market Position

The weaning: Competitive standing

Product Position

Profile of

attributes

Measurements - Mark,-tplace Market share Attributes

(Pioneering) comparison Cons Jmer’s Reputation Image mind: (Perceptual

map) Possi7le Leader (Lion) Product positions: category

Challenger (Tiger) Price/quality vector

Leaper (Frog) Main features

Nicher (Groundhog Follower (Ant) Imitator (Mouse)

Possible Enlarge Reinforce strategies:

Concur Reposition Advance Protect Withdraw

--

It is also important to understand the difference between the two types of “battlegrounds” on which the position is being located.

Some marketing analysts (e.g. Henderson, 1979[3]) Porter, 1984[4]) emphasise the marketplace position, while others (notably Ries and Trout, 1986[5]) stress the consumer’s mind position. As a matter of fact, the latter claim that the only important aspect of marketing position is the psychological aspect and the only relevant marketing warfare is the battle in the consumer’s mind.

In this particular case, probably both parties are right, and not only that both the marketplace and the consumer’s mind are important for the market- ing war, but they are interdependent and the “position” of a product or a corporation in one “territory” affects significantly the position in the other.

In fact, whenever there is a discrepancy between the two, a marketing effort has to be made-in order to close that discrepancy. If, for example, a product has a positive and desirable position in the consumer’s mind but a negative and undesirable position in the marketplace, it requires a promotional and advertis- ing campaign with the goal of changing image and attitudes. If, on the other hand, the position in the marketplace is negative and in the consumer’s mind it is positive, it requries a change in the distribution activities. The various cross-tabulations and their consequences are presented in Table 2.

Let us look at the two meanings of the “positioning“ concept in more details, including their strategic implications.

Table 2 Positions in different “Battlegrounds”

Marketplace Positive Negative

(desirable) (undesirable)

Consumer’s Mind

Positive Reinforce (desirable)

Pull Strategy Negative Change image

(undesirable) and attitude via promotion and advertising

Push Strategy Change distri- bution, price or sales policy

Make significant strategic change

422 MICHAEL PERRY

Market Position

The awareness of the importance of competition and competitive forces in the market has grown in recent years (Kotler, 1984[1]; Porter, 1980[6], 1984[4]; Ries & Trout, 1985; etc.) and, as a result, more attention has been paid to the competitive standing of one competitor against his rivals.

This standing represents the relative “strength” that each competitor has compared to his rivals. The strength can be a real one, demonstrated in the marketplace usually by means of market share, but also by other means such as the presence in sales outlets, consumer’s loyalty (especially in a case of “niche” marketing) or another competitive advan- tage. The strength can also be only in the consumer’s mind, demonstrated then by “reputation”, which might be created either by the historical fact that the particular product was the first in the market, or by advertising and promotion.

The basic categorizatio> of firms’ market position is the distinction between the market leader and all the rest. The leader, which can be seen as the Liotz of the jungle, is the firm with the largest market share or with consumer’s reputation of dominance in the relevant product category. It usually leads the other firms in price changes, new-product introduction, distribution coverage, and promotional intensity. The leader may or may not be admired or respected, but other firms or the consumers acknowledge its dominance. The leader is an orientation point for competitors or consumers; for the former a company to either challenge, imitate, or avoid; for the latter a company to compare its products to all other products as a reference.

The firms that occupy with their product the second, third, and lower ranks in the relevant product category can be called runner-up or trailing firms. These runner-up firms can adopt one of several postures.

Each one of them can see itself as a Tiger, who challenges the leader and try to become himself the leader. It can see itself as a Frog, who leaps into new markets and new segments with various innovations and improvement in some product features or other elements of the marketing mix, with the distinct awareness of the fact that it cannot protect his competitive advantage for long and it has to innovate and leapfrog consistently. It can see itself as a Groundhog and search for a niche, which it can hold and protect against the lion and the tigers. It can also see itself as an Ant, which does not innovate anything and only follow others, but concentrates on efficiency and savings and as a

result reduces costs, which can be translated to either higher margins or lower prices or both. Finally, it can see itself as none of the above and by only imitating others be “stuck-in-the-middle” with no competitive advantage, which will make it a Mouse.

In addition to the market position and the related strategy, that each competitor has to choose, there is also the choice of competitive diretion, which will affect very significantly the competitive position.

The five major directions that are open to each competitor and should be considered are:

Expand total market by searching for new users, new uses or more usage. Cormr by mutual agreement to some division of the market between all or few of the competitors. Advance market share by either frontal or flank attack on one or more of the other competitors. Protect market share by various defensive moves against a potential or concrete attackers. Withdraw from the market altogether or from part of it by either harvesting or divesting.

The end result of one or a series of competitive moves in the foregoing directions of one or more competitors will probably be a shift and change in the relative market positions.

Product Position

The more common meaning of the “position” concept is the one related to the product itself and its attributes. In developing a product, the product planner needs to design a profile of attributes, which will best appeal to a target segment in the market.

The “positioning” of the product consists of two stages: First, designing the product itself and its related - tangible and non-tangible - attributes; and second, placing it in the consumer’s mind.

It is believed that the consumer has in his mind a perceptual map, which consists of several dimen- sions (axes), each one represents an attribute or a specific aspect of the product. The “location” of the product on the perceptual map is its “position”.

The number of the possible attributes and therefore the number of the perceptual map’s dimensions can be very large. The consumer probably does not consider all of them simultaneously and he makes his decisions in a gradual way.

The first aspect that he probably considers is the

Price

~igtlr~ I PricciQdity Vector

positioning on the price/quality vector, presented in Figu 1.t’ 1.

Ther? are three major Dositions on this vector: 1)

2)

3)

High-price/high-&aiity, emphasizing mainly the pt!rt-ormance attributes of the product; Lorv-price/low-quality, emphasizing the economic aspect of the product; Low-price/high-quality, which claims both advan- tages, but is feasible only if there is a very high le\~el of efficiency.

There are several problems involved in putting a product in its best position on the foregoing vector, stemming from the fact that the two dimensions of price ,md quality are not independent, and in fact price is one of the most important indicators of qualIt!.. That is the reason why we actually deal with a one dimensional vector, rather than two dimen- sion,ll space.

The second aspect of the consumer’s consideration are all the detailed attributes of the product, which make one product d_ifferent from all the others.

To summarize, the “position” concept in marketing is multi-faceted and has several different meanings, which have to be well understood before it can be applied effectively.

Usill; the “Position” Concept in Marketing Omnges

An example in applying the “position” concept to a rtal case of marketing a product in various markets, is the case of oranges in various countries of E,Jrope.

A reference study conducted by Nelson Tailor & Asscciates has provided us with the data necessary

INTERNATIONAL MARKETING POSITIONING 423

to analyze the different types of positions of different orange brands in the market. The study was con- ducted in four countries - England, Germany, Benelux and France - and the findings will be compared between the four of them.

Table 3 presents the findings related to the Market (competitive standing) Position of three major brands in four countries. The percentage in the “market- place“ rows represent the market share of each brand, while the percentages in the “consumer’s mind” rows represent the percentage of respondents in the survey sample who were aware about the brand name. The awareness of the brand was assumed to be the measure of “market position” in the consumer’s mind.

E,h$d GUtllflJl!/ Brrwlm Frnnce

Brrlmf % Ralik % Rnrik O’o Ro!lk O/o Rn,lk

Jaffa

Marketplace 47 1 13 3 19 -2 8 3

Consumer’s mind 78 1 98 1 83 1 38 2

Outspan

Marketplace 22 2 43 1 45 1 42 1

Consumer’s mind 47 2 51 2 40 2 32 3

Maroc

Marketplace 10 3 16 2 12 3 27 2

Consumer’s mind 12 3 12 3 33 3 40 1

It can be seen from Table 3 that there are signifi- cant differences between the market position in the two types of the battlegrounds and the various countries. The direction of the differences in the battleground dictate a pull vs. push promotional strategy, while the differences between the countries indicate strengths vs. weaknesses and potential opportunities.

The Product Position of oranges can also be described, using the findings of the same study. They are presented in Table 4.

Table 4 Product (Attributes Profile) Position - Compnrison betzueen Brnnds and Countries (Percents)

Et~$nnd Gerrm,y Brmirix Frmcc

High High High Hig High Hig High High Brand Quality Price Quality Price Quality Price Quality Price

jaffa 90 42 90 40 80 90 52 15

Outspan 75 10 43 20 50 14 38 28

424 MICHAEL PERRY

High)

Low I Low High

Quality

Figure 2 Product Position on the Quality/Price Vector

The figures in the table indicate the percents of respondents who saidiof each brand that it is of high quality and of high price. These two questions were asked as a part of a series of questions on several attributes of the brands. The graphical presentation of the foregoing findings on the quality/price vector

is in Figure 2, where each country is indicated by its initial, when capital letters means Jaffa and regular letters mean Outspan.

It can be seen that in three countries (namely England, Germany and Benelux) Jaffa is perceived to be positioned higher than Outspan on the quality/ price vector, while only in France the reverse is true.

The orange example presented here is a demonstra- tion how the concepts of Market Product Position can be measured planning marketing programmes.

Position and and used in

References

1.

2.

3.

4.

5.

6.

Ries & Trout, Positioning: The Battle for Your Mind, Warner Books, 1981 Kotler, I’., Marketing Management, Prentice-Hall, 1984 Henderson, On Corporate Strategy, A.B.T. Books, 1979 Porter, M., Competitive Advantage, Free Press, Macmillan, 1984 Ries & Trout, Marketing Warfare, McGraw-Hill, 1986 Porter, M., Competitive Strategy, Free Press, Macmillan, 1980