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What Factors Affect Market Positioning?

Carrieanne Larmore

Last Modified Date: February 02, 2024

Factors that affect market positioning include a change in product perception, brand loyalty, and strategic plan alterations. Market positioning is a strategy that involves influencing potential customers to think of the product in a certain way. If perceptions about the products do not match what was intended, such as customers believing that the products are low quality, then the business's market position may fall. Brand loyalty also plays a role, since a business with high brand loyalty will have a stronger position than one without. The overall strategic plan of the business also affects its positioning since modifications can result in a change of product attributes, quality, target market and product class.

Product perception is a strong factor that affects market positioning. If the product is not distinguishable from its competitors, then it will have a weak position. Consumers should be able to identify the product's unique characteristics and place a value on it. Standing apart from competitors and offering a unique product with enticing characteristics can directly influence product perception, resulting in better positioning. If the product is perceived as being cheap and low quality, then the market position will most likely fall.

Brand loyalty also is connected to the product's position in the market — if one increases, the other will increase as well. When consumers are loyal to a brand, they are less likely to switch to another, even if faced with a faulty product. For instance, if a consumer always purchases software from a particular company, he or she is more likely to believe that a release that doesn't provide all the usual features or that is full of bugs is a one-time fluke, and will continue to purchase products from that company. If consumers are continuously disappointed with a particular brand or the brand has done something to disrupt its following, however, then it can quickly lose its market position.

If a consumer perceives an item as being cheaply made and of low quality, market positioning will be affected.

Strategic plans are an internal factor that affects market positioning when decision-makers are not satisfied with the current position or want to change product offerings, features, or quality. The plan outlines the future direction of the company, which may be different from what current consumers expect. For instance, if consumer perception of the company's products is that they are cheaply made, then the company may change to a more aggressive policy of creating high-quality products at higher prices. When doing this, it may then be able to effectively change its market position.

Discussion Comments

icecream17

July 20, 2011

@Comfyshoes - I think that image has a lot to do with the market segmentation and positioning of a cosmetic brand. For example, you have some cosmetic brands that are sold in drug stores and mass market retailers, but you also have higher end cosmetics that are strictly available in select department stores.

The problem with these higher end cosmetics involve when unauthorized dealers sell these products. This really takes away from the image of the brand and tarnishes it a little.

People don’t see the brand as exclusive anymore. A lot of these aftermarket cosmetic stores are usually in outlet malls and some of the products sold are expired.

Some of these stores get these products through third party liquidators and this merchandise should not be sold. Cosmetics has a shelf life, so if the price is too good to be true it probably is.

This is really a shame because people are expecting a good deal, but it is better to buy these higher end cosmetics products in a department store because there you know what you are getting.

comfyshoes

July 19, 2011

@Sneakers41 -I have to say that I would love having a marketing job. I think that doing competitive marketing research is really a lot of fun. I was hired by a company to do a competitive study on other banks in the area. The bank that ordered the study wanted to upgrade the services that they offered their customers and asked me to target boutique banks in order to get an idea of how to market to this niche.

They later developed a full service brokerage division in order to provide more services to their higher end clientele. They felt that by being a full service bank they would be able to expand their market share and make these customers even more loyal.

This way they could market to both the mass market as well as the higher end clientele by market segmentation through target market selection and positioning. They offered these investment services to their best customers and enticed them by offering a free financial checkup.

sneakers41

July 19, 2011

I think that positioning market research is really important for new and existing brands that are looking to expand. I was involved in a market research study that I was selected for because I matched the company’s target market demographics.

This was an established cosmetic company that wanted to test a new lipstick formulation. After my initial survey was completed, the company offered to send me a prototype of this lipstick in order for me to give them additional feedback on this new formulation.

I think that positioning research is really important because you have to understand who your target market is before you can effectively market to them.

A lot of positioning studies like this also include questions involving potential price points for the products along with where the products would normally be found.

I was asked if I would buy the product in a supermarket, a drug store, or a big box retailer. Each of these businesses offer a different demographic, but based on my answers and the answers of others in the study the company could figure out where the merchandise should be placed for sale.