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Harvard Business School Is Wrong about Product Positioning Strategies

target audience product positioning

Product positioning strategies are key to fostering a unique connection with your customers. When a product or brand is positioned well, it’s easy to point out. There’s no confusion around what the product does, it makes it clear how it differs from its competitors, and when new products are launched, everything feels succinct and connected. When customers are ready to buy, that clarity is what will drive them to choose your product over any competitors.

Issue: Too Much Competitive Noise

Instead of creating an overarching market position, companies often rely on product features to position themselves as more valuable to the competition. This is a mistake as competitors can simply launch new features and continue to beat you with the same approach -- an unending game of feature catch-up continues. Customers won’t be able to understand the difference and will get confused about what solution they should turn to for help.

Traditional Way: Develop a Positioning Strategy with Product Features  

It’s likely that you’ve studied various best practices when it comes to product positioning strategies, including Harvard Business School Professor, Michael Porter’s, definition. In his 1985 book Competitive Strategy, Michael Porter defined a competitive position as a way of achieving competitive advantage. Porter identifies four different competitive positions based on either broad or narrow market focus, and either product cost or product feature differentiation.

1. Cost Leadership Position

A cost leadership position means that you are targeting the broad market but you have lower costs than your competitors. You can generate more profits with higher margins, or you can lower your prices to customers and take more market share. Walmart is an example of this. They are known for low prices.

2. Cost Focus Position

Porter's cost focus position is when you focus on a narrow or niche market with a low-cost product, such as Huawei. These companies are able to build stronger brand loyalty making the market segment less attractive to customers.

3. Differentiation Leadership Position

The differentiation leadership position is when you satisfy needs with your product differently than your competitors in the broad market. Apple’s iPhone is a great example. This product positioning strategy, however, requires good research, effective digital marketing and a strong sales capability framework to get customers to understand the benefits offered by your product.

4. Differentiation Focus Position

The differentiation focus position is when you satisfy specific customer needs with your product differently than your competitors in a narrow or niche market.

Although this breaks down the different approaches, how do you execute on these product positioning strategies? How do you apply this to your target market and your products?

You are probably already using industry best practices to lower your costs...but so are your competitors. Because you and your competitors are likely using the same best practices, lower costs on their own are likely not enough to lead you to success unless you are in a true commodity market.  Your focus should instead be on differentiating your product’s value. Unfortunately, Michael Porter doesn’t tell you how to do this. He also doesn’t explain how to determine if you should target the broad market or the narrow market.

JTBD Way: Focus on the Job Steps

The key difference in the jobs-to-be-done product positioning strategy is that you don't use the product features to position the brand or product. Instead, you look at the steps a customer takes to get a job done and you focus on those steps.

In order to identify the best competitive position, you need to first identify the underserved customer segment using needs-based segmentation to determine needs in the job. Who is struggling the most with this particular JTBD? After that, you’ll break out the job steps within the JTBD and identify the underserved job steps with unmet customer needs. Focusing on those specific unmet needs in the job steps is where you can begin to develop a positioning strategy, and a marketing strategy, to create a unique position and help your target make smarter purchase decisions.

Benefit:  Generate Growth from Consistent Positioning

JTBD makes it easier to generate growth out of new products or services because it helps companies avoid being stuck in a "product-focused position". Companies often fear launching and selling a new product because it may confuse their brand position with customers. For example, retailers might say they could never provide a good or service because customers don't know them for that.

If you make yourself known for a job, or steps within a job, then it's easier for the team to believe they can release a totally new product and easier for customers to buy into it. Contact thrv to learn more about using JTBD methods to create your own product positioning strategy.

Jay Haynes

Posted by Jay Haynes

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