How can competitive matrix charts help develop your positioning?
Products and brands that are well positioned can occupy a particular niche in the minds of prospects and customers, they are able to be similar yet differentiated in easily identifiable ways. Distinct positioning can ensure your brand product becomes the go to product of choice for key target markets or consumer needs.
“Positioning is not what you do to the product; it’s what you do to the mind of the prospect. It’s how you differentiate your brand in the mind. Positioning compensates for our over-communicated society by using an oversimplified message to cut through the clutter and get into the mind. Positioning focuses on the perceptions of the prospect not on the reality of the brand.”
- Al Ries
There are a number of steps that need to be taken when developing your brand or product positioning:
1. Define your competition
If your company, product or service didn’t exist then what alternative would a customer choose? Remember this doesn’t necessarily need to be a like for like alternative, in science there are numerous applications and ways to do pieces of research, some modern techniques and some more traditional.
2. What are your unique attributes?
What features and capabilities do you have that the competitive alternatives do not?
3. What is the value to the customer?
The term value can have different meanings, to some it means price to others it means benefit. It’s best to think about customer value (CV) as being the perception of what a product or service is worth to a customer. Does the customer feel they would get, or got, the benefits and services (B) over the price (P)?
4. How do you prove your value?
What research, information and data can you share with prospects to prove the value your products or services can offer them?
5. Define the characteristics of your target market and category
Determine who cares a lot about the value you can offer them, what context makes your value obvious for these target customers?
6. Are there any trends?
Are there any trends that are influencing the relevancy of your product in a particular market category right now?
There will always be situations and trends that arise that will make your product more or less desirable to a given market category at a given time, it’s a reason why it’s good to review your positioning on a regular cadence.
Matrix diagrams are widely used in marketing planning and positioning, they provide an effective tool for visualising complex relationships.
By placing elements into a matrix diagram of rows and columns, marketeers are able to easily identify relationships between different factors and how complex those relationships that they are observing are.
These 5 different marketing matrix diagrams can help you better visualise different aspects of your product and brand positioning.
Created in 1968 by Boston Consulting Group's founder Bruce Henderson, the BCG Matrix is a well known and well used marketing diagram.
“To be successful, a company should have a portfolio of products with different growth rates and different market shares. The portfolio composition is a function of the balance between cash flows. High growth products require cash inputs to grow. Low growth products should generate excess cash. Both kinds are needed simultaneously.”
— Bruce Henderson
The matrix is a simple yet valuable strategic planning tool which uses the relative market share and growth rate to assess the strength of products in a brand’s portfolio. By visualising where a product sits on the matrix it is possible to start to draw some conclusions around the positioning of the product.
Stars (high share and high growth) - products that can be seen as market leading, generating a lot of income. They may need investment to retain their position and maintain a lead over competing products.
Cash Cows (high share, low growth) - products that are still generating a significant level of income but are not costing as much in investment to maintain their market position. These products can be “milked” for their revenue.
Dogs (low share, low growth) - products that could be generating a very low profit or even a loss. These products could be a drain on time and resources, raising the question as to whether to exit the product or try to reposition.
Question Marks (low share, high growth) - products that are in a high growth market but do not seem to have a high share of the market. The positioning of these products should be explored in more detail, do these products need more investment in them to turn them to Stars?
The ADL (Arthur D Little) Matrix is another portfolio matrix tool, similar to the BCG Matrix, however it considers the overall market life cycle and your own placement within that market.
The 4x5 matrix has industry life cycle stages on the Y-axis and the competition position on the X-axis.
There are 4 industry life cycle stages:
Embryonic - rapid market growth, little competition, possible high investment and high prices.
Growth - continued market growth, more competitors exist.
Mature - the market is stable, but growth is slowing, there is a well-established customer base, however there is now established competition.
Aging - market demand starts to fall and companies abandon the market.
The 5 categories of competitive positions are:
Dominant - you are the market leader with little or no competition.
Strong - you have a strong and stable market position despite the competition, you have good customer loyalty.
Favourable - you enjoy some market share with some degree of competitive advantage, however there is more competition, with no clear market leader.
Tenable - your position in the market is small or niche, this may be either geographical or product related.
Weak - you are loosing market share, the market may not be profitable.
Circles represent the the sizes and position of your business according to the size of the market they belong to.
A customer perception map is a matrix of price versus quality. This type of diagram can provide an excellent visual representation of how products are differentiated in the minds of consumers, helping you determine where to position a new product or reposition an existing product.
To build a customer perception map it is important to collect reliable data from voice of customer studies, market surveys and consumer reports.
Perceptual maps can be customised for different factors across the X and Y axis based on what you are trying to uncover, the basic concept is to visualise who does what better.
There may be quite noticeable differences in the outcome of customer perception maps based on the demographics and markets in which your customer groups fit. For example pricing may vary greatly from one region to another based on import duties and shipment costs, so ensure you understand your data sets when interpreting the matrix.
Price/Benefit Positioning Map
A price and benefit positioning map shows the relationship between the primary benefit that a product provides to customers and the prices of all the products in a given market. This type of matrix is useful for identifying and positioning different tiers of products (low, mid and premium range products) against market pricing, and expected linear pricing curves.
Matrix of Competitive Advantage
A matrix of competitive advantage (MOCA) is arguably one of the most useful tools for identifying and articulating your product’s benefits/value in meaningful terms to your prospects.
On the Y-axis, list the relative importance of your innovation benefits (unique or not) to your prospects/customers. On the X-axis rate your innovation performance against the competition, remember this should be from your prospects/customers perspective.
In your product positioning, value proposition and across all of your marketing materials you will want to emphasize the attributes and benefits that your product delivers that are most important to the customer and competitors are unable to match (the top right hand part of the matrix). You will want to ensure that you have the correct information and data to prove the value that these benefits can deliver to your customers.
The matrix will also highlight areas which are highly important to your customers where you may be under performing (top left hand part of the matrix). You should build counter arguments to defend against your competitors disadvantages.
Polymorphic Marketing can help you develop your brand and product positioning