Later that night after I posted the 6P’s of Marketing blog post, I remembered there was a 7th P- Position. Position means where in the market the product sits in relation to its competitors. Basically, are you selling a $2,000 Louis Vitton handbag or a $20 handbag at Wal-mart? What is the position of the product?
Position can be one of the following:
- High quality and low cost (not profitable business plan)
- High quality and high cost (Louis Vitton handbag)
- Low quality and high cost (great business model!)
- Low quality and low cost ($20 handbags at Wal-mart)
Why does the position matter? It matters so that you can identify your nearest competitors. You can evaluate what benefits and features they are offering and at what costs. Entrepreneurs usually fair well by offering high quality and premium products at a high cost. It’s the customization and specialization and value to the customer that commands a higher price point.
Wal-Mart didn’t start off being the low cost leader in retailing. It took a couple of decades to grow to the Billion dollar, international company that it is today. How about Amazon? This company started out about 30 years ago as an online bookseller. Now it sells millions of goods around the world as a low-cost online retailer.
While you are creating your marketing plan, be sure that all of the P’s flow together: product, price, place, people, promotion, profit/performance, and position. For example, you can buy a pear at your local grocery store for about $1 each. It may be stacked in a pile of other pears, some bruised, some more ripe than others. But it’s in the local grocery store. Expect the price to be cheap: low quality and low price. On the opposite end, you can order a box of succulent, ready to eat pears from Harry and David. The box of pears come in a nice box with a bow, individually wrapped pears for freshness, one wrapped in gold foil, and an overall feeling of high quality. With a price tag of about $25 for 9 pears. That’s almost $3 a pear. These pears are positioned as high quality and high price.
Here’s another example. Tiffany’s blue box is part of the package of the product. However, seeing the blue box brings a sense of high quality and premium product although it is still a blue box. Consumers immediately identify the blue box with the brand. The inside product can be a $5,000 engagement ring or it can be a $40 crystal holiday ornament. If Tiffany’s ever decided to change the blue box to a blue shopping bag, consumers would feel cheapened and cheated.
If you need assistance in creating coherence and positioning for your brands and company, please reach out to me for guidance!