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Brand Positioning Derrick Daye

Competition Based Brand Positioning

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Brand Positioning Brand Strategy

Competition-based positioning entails choosing a category and a point of difference. The category provides a frame of reference by identifying other brands that might be used to achieve the same goal as the focal brand. The point of difference then specifies the way in which the brand is superior to other brands within that frame.

Suppose that you are unfamiliar with a brand called "Two Hands." If you were told that Two Hands is a wine, you would quickly understand what the brand is and when it might be appropriate to consume it. You might further refine your feelings about whether to purchase Two Hands wine if you also were told that it is a Shiraz from Australia that sells for about $30. For Two Hands, the category would be wine or, more narrowly, an Australian Shiraz. The point of difference from another Australian Shiraz, such as Yangarra, might be the longer finish and the silky mouth feeling provided by the concentrated blackberry, pepper, and spice flavors.

The competition-based approach to positioning has its origins in the hierarchical, taxonomic organization of memory. People organize their knowledge about the world by grouping objects that share features and separating them into objects that have different features. This organizational structure begins with highly abstract, inclusive categories and becomes more specific. Moving down the hierarchy, similarities within a category increase and the differences between categories decrease. The broad category of "alcoholic beverages" is heterogeneous; wines, beers, and hard liquors all belong, but they share few features beyond their alcohol content, which distinguishes them from nonalcoholic beverages such as milk, juice, and soft drinks. At the level of an Australian Shiraz, category members have a great deal in common—the grape varietal, the country of origin, the fullness and body—and brands may only differ in relatively subtle ways, such as the finish and mouth feel.

Often an intermediate-level category, such as wine or beer, is used in the competition-based approach positioning. Categories at this level are well understood and frequently used by consumers when framing a consumption decision. For example, a consumer may first decide that wine (rather than beer, hard liquor, or a nonalcoholic beverage) fits a particular occasion and then select among the brands of wine available by comparing their distinguishing features (i.e., points of difference). However, there are occasions when a more specific or a more abstract categorization may be used. For example, if Two Hands were targeted to wine connoisseurs, using the more specific categorization of an "Australian Shiraz" rather than a "wine" might be appropriate, because consumers with greater expertise naturally tend to think in terms of more specific categories. Alternatively, a brand may be categorized at a broad level in hopes of attracting customers from a variety of products that have little in common. Thus, Two Hands might represent its brand as an alcoholic beverage appropriate for situations where one wishes to appear sophisticated and demonstrate good taste, making it an alternative to champagne and cocktails. In general, the categorization that highlights a brand's strongest point of difference is preferred.

Contributed to Branding Strategy Insider By: John Wiley & Sons, excerpted from Kellogg on Marketing, 2nd Edition by Alice M. Tybout (editor), Bobby J. Calder (editor), Phillip Kotler (foreword by) (c) 2010 by The Kellogg School of Marketing.  

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4 Comments

Dragosilinca on April 04th, 2012 said

I agree with your conclusion (“In general, the categorization that highlights a brand’s strongest point of difference is preferred.”) but I think there’s an important distinction to be made here – strongest point of difference in the context of the specific audience should be used.

If I’m a wine connaisseur, the strongest point of difference will be different than if I’m just trying to buy it as a gift or for a fun night out with the guys.

Adam Banfield on April 04th, 2012 said

I appreciate this is a top line look at brand positioning, but, for the benefit of those still coming to terms with the process, Competition Based Brand Positioning implies perhaps there are other methods of positioning?!?! Let’s be clear, positioning is not a process open to a lot of interpretation. Any attempt to position a brand targeting a particular market that does not account for discovering the overlap between 1. the realistic capabilities the parent company can deliver against (what value it can comfortably offer) 2. existing gaps within the current competition’s offering and 3. what (ultimately) resonates with the target market, will leave the fledgling brand flapping around like a sail caught in the wind (filled with ensuing management headache and frustration). Letting competition be your sole focus (as this post implies) is only part of the process to effectively position a brand to, in time, hopefully resonate strongly enough within a market so it is rewarded with that which all so desperately crave………EQUITY.

Derrick Daye on April 25th, 2012 said

Adam, there is another method – Customer Based Brand Positioning. Please see here:

http://www.brandingstrategyinsider.com/2012/04/customer-based-brand-positioning.html

In fairness, this was published after your well received comment.

Best,

Derrick

Adam Banfield on June 07th, 2012 said

Hi Derrick,

Thank you for taking the time to reply to my post. Forgive me, but I’m still failing to see how a distinction can be made between the two perspectives you reference to positioning a brand, competition based and customer based. To effectively position a brand, surely the two perspectives are inextricably linked? Any attempt to position a brand focused more on the customer alone without taking into account competitive forces already at play leaves you at the mercy of replicating what may well already exist. Conversely, focusing too much on trying to find gaps in the competition’s offering (a point of difference) without factoring consumer sentiment may leave you chasing a “gap” that exists for a very good reason – no one wants it. Finally, as my earlier post illustrated, finding a gap that will resonate with people is still useless to you unless you know you can commit to delivering against the newly created promise 100%. Call it a brand positioning trinity if you will.

I do look forward to hopefully taking the conversation further with you.

Sincerely,
Adam

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