Marketing for Small Businesses
Part 4
Positioning Our Business

 

In previous articles, we discussed what makes our product (idea) unique, who are our customers, and who are our competitors. Now we come to a fourth question. 

1.      How do we want to position our business to best display our uniqueness of products and services? 

What does “positioning” mean? We create a consistent image (brand) that adds value to our business products in the mind of the customer. We let them know how wonderfully different we are from the competition by our packaging, pricing, any special benefits or colors, or many other ways. We make ourselves unique to our customers.

 Uniqueness can be viewed by the customer as special pricing campaigns, unusual packaging, or just by the products and services themselves. And these differences only count when it influences our customers’ purchasing decision.

But what happens when our business isn’t really that different from our competitors? Now that’s a scary thought. If this is true, then we need to create differences. What really is the difference between a generic drug and the name brand drug? Cost. Nothing else because the FDA ensures that the critical formulation is the same.

 Most customers typically say price is a determining factor in purchasing a product or service, And most of these customers think the higher the price, the greater the quality. We all know this is a fallacy. But it happens all the time. If something is priced too low, we call it junk. If the same item is priced higher, we believe it’s something valuable.

The last major question we need to ask about our business is:

2.      How will we get our products to our customers? Do is this an effective distribution method for our products? Do we know what our competition is doing?

Our decision on how we’re going to handle distribution affects:

            Margins and profits
            Budgets for marketing
            Retail pricing

Whatever distribution method we select, it can include any of the following (depending upon whether it’s a product or service)

            Retail stores           
            Wholesale (an intermediate who sells to retail stores)
            Direct mail (such as catalog merchants)           
            Telemarketing (groan - how do they always know when it’s dinner time?)
            Cybermarketing           
            Sales personnel

 No matter which distribution method(s) we choose, it all affects the bottom line. We need to research how our competitors are handling it and we need to avoid the pitfalls that they’ve already experienced.

Small businesses like ours have a difficult time identifying how our competitors sell their products. We should make lists of all competition within our marketing area, then separate the list into distribution methods.  For example, some competitors might advertise in local newspapers, real-estate pamphlets, or the yellow pages. Other competitors may work with television or radio. Still others may wholesale to several retail chains.

 We need to devise several strategies based upon distribution methods if we are going to out-do our competition.

Our next article will discuss Promotion and Advertising.

 

Sources: CCH Business Owners Toolkit
              Entrepreneur.com