Strategy REsources
Published on
20
May 2024

Market Positioning from a Business Strategy VS a Marketing Lens

Market Positioning from a Business Strategy VS a Marketing Lens

Understanding your company's position in the business world is not only beneficial; it's crucial for survival and growth. This holds true across both business strategy and marketing, though these areas often use similar terms with differing meanings. This article aims to clarify these important concepts.

We will explore:

  1. Market Positioning vs. Brand Positioning
  2. Understanding Your Competitive Landscape
  3. Crafting a Value Proposition

Market Positioning vs. Brand Positioning: What’s the Difference?

To start, let’s define what positioning is.

Positioning is the strategic approach of defining a business's proposition by understanding the market through the customer's perspective. It involves positioning a product or service in a way that it stands out relative to competitors, focusing on aspects such as price, quality, and customer service to achieve differentiation and outperformance in the market.

Imagine the market as a vast landscape, with various territories occupied by different businesses. Your positioning is the specific territory you occupy, how you defend it, and how you're perceived by those looking at the landscape.

Market Positioning vs. Brand Positioning: Understanding the Difference

While the two terms are often used interchangeably, there's a subtle yet significant difference between market positioning and brand positioning:

Market Positioning:

  • Focuses on leadership in the market and strategising how your offerings compare with competitors in terms of price, quality, customer service, and more.
  • Considers the needs and preferences of the target market and positions the product or service to meet these functional needs better than the competition.
  • It’s a dynamic process. As markets evolve and competitors change their strategies, businesses must adjust their positioning to maintain or improve their market status.

Brand Positioning:

  • Aims to shape the perception of your brand in the Customers' mind. It’s how people think and feel about your brand – its personality, values, and attributes. It’s how you communicate and resonate with your customers.
  • It’s more about building an emotional connection and brand loyalty. It's less about the competition and more about the unique attributes that make your brand distinct.
  • While market positioning can change with shifts in the market, brand positioning tends to be more consistent, focusing on long-term brand identity and values.

Why is Understanding These Differences Important?

Recognising the distinction between market and brand positioning allows you to more effectively strategise your business approach. Market positioning helps you understand where your business fits in the current market landscape and how to compete effectively. Brand positioning, on the other hand, helps you build a lasting relationship with your customers, based on more than just price or product attributes.

In summary, while market positioning helps you navigate the competitive market landscape, brand positioning builds your identity in the minds of your customers. Both are crucial, and understanding their differences can empower your business to not only find its place in the market but also to resonate deeply with your customers.

Understanding your competitive landscape for your business strategy and marketing

At face value, it’s easy to see why the business strategy and marketing view the competitive landscape in similar lights. However there is a vast difference between the two. One takes an overarching view looking at the full landscape, whereas the other focuses on the distinctions between direct rivals in the market.

Each has its place and brings its strengths to your business. Get these right and it’s a powerful combination that’s sure to propel your business to new heights. Confuse these two approaches and you’ll be guaranteed to lose money, time and energy.

Competitive landscape from a business strategy perspective:

To understand the context of a dynamic marketplace, you need to consider a broad range of forces that influence the industry. Focusing on one force can be incredibly useful, but you’ll miss the broad context that will impact your business.

The best tool we’ve come across to do this successfully is the tried-and-tested Porters' Five Forces model. Using this tool, helps you understand the totality of your market dynamics and is especially useful in understanding your customer's lens into making choices across the competitive landscape.

The Five Forces that Michael Porter identified are: Competitive Rivalry, Threat of Substitutes, Customer Power, Threat of New Entrants and Supplier Power. Each of these forces has a range of factors that once analysed provide clear areas of strength and weakness across the business. This analysis allows a business leader to make overarching decisions about competing like whether to invest in new operational capabilities to enhance the speed of delivery or to improve their procurement systems to negotiate better terms with suppliers.

Competitive landscape from a marketing perspective:

Typically marketing takes a narrow view of the competitive landscape often looking at the differences and similarities between direct and indirect competitors. This analysis usually focuses on the aspects and attributes of where your offering competes within the market. It’ll incorporate concepts such as communication channels, brand positioning, price points, offering features, etc.

This view is crucial in knowing how to engage with your target audience and develop your brand perception with them. It’s very much around managing this perception. A marketing lens is great at feeding you information to decide what attributes to compete on. It can predict trends and help you understand your target market.

Why the Distinction Matters?

Both views have their place and when utilised together are a powerful combination. Using each lens to draw on their strengths can only improve the performance of your business.

In summary, a business strategy view looks at the overarching performance of the business and looks for ways to improve how the business competes within this landscape. A marketing view looks to understand the product or brand attributes where businesses compete to enhance the perception and reputation of the business within that target market.

Crafting a Value Proposition for Business Strategy vs Marketing

Before we get into it, we find it useful to define what a customer value proposition is so that we’re aligned on how it impacts your business.

A Customer Value Proposition (CVP) is a succinct statement that clearly articulates the specific benefits a product or service offers to a target customer segment, distinguishing it from competitors. It effectively communicates the unique value that a customer can expect to receive by choosing a particular product or service, addressing their specific needs and solving their problems.

The CVP is essential for businesses as it helps define the core reasons a customer should prefer their offering, focusing on the advantages in terms of feature, cost, quality, or the experience provided. It serves as a foundational element in marketing and sales strategies, aiming to attract and retain customers by emphasising how the offering enhances their situation or resolves key pain points.

Seems straightforward, so what’s the difference between a value proposition for business strategy and marketing?

Quite simply the difference between crafting a value proposition for business strategy vs marketing comes down to who the target audience is.

Value Proposition in Business Strategy

In business strategy, a value proposition is functionally orientated and intended to be communicated internally and with key external stakeholders, not directly to customers. The purpose is to empower, align and ideally excite people working in the business towards a centralised direction that brings value to the target market.

This alignment and empowerment gives;

  1. Managers the direction to prioritise issues and make better resourcing decisions.
  2. Front-line workers the ability to make better daily decisions in service of your customers needs.
  3. Procurement the ability to select the best suppliers for the needs of the customer.
  4. Allows finance providers to quickly and easily understand the business.
  5. Attracts better quality employees through clear value creation and alignment with their purpose.

Value Proposition in Marketing

In marketing, a value proposition is designed to resonate with the customer for them to make a purchasing decision based on this offer. This CVP is usually more evocative and uses a customer's language to make a lasting impression.

This is a key component of the business’s brand strategy and positioning with the ultimate goal of increasing revenue through more or higher quality sales. This CVP is shared with all customer-facing employees and service providers to make it easier for them to sell the products, services and overarching brand.

In summary:

Although this article has been framed as a Business Strategy vs Marketing view on key elements that impact a business’s market positioning. These aren’t competing views on the subject - they’re complementary and should be treated as such.

Using these concepts in a complementary way gives your business the best chance of success within your market. Using one or the other or mixing up the two, you’ll put yourself and your team under unnecessary stress by self-sabotaging the business through ineffective leadership.

Brett Matheson
Co-founder & Director of Product and Operations

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