Establishing your position
Are you offering high-end or mass-market items? Are your products cheap, value-priced or expensive? Do your items cater to the masculine or to the feminine? Young or old? Lifestyle or practical?
Early on, your upstart business may be forced to ponder these issues, and this is very natural. As it turns out, you are actually pondering the position that you want your company to occupy in the minds of the consumers.
Position refers to how you want your firm’s products and services to be perceived by the market. It helps to have a consistency in your position because this makes your offerings predictable. And predictability helps the consumers to become habitual buyers.
Bausch & Lombe, an American optical devices business, did research to identify what the market perceived their company to be all about, and they found out that the market perceives Bausch & Lombe products to be precision engineered items that are used for “anything above the neck.” This perception was then taken advantage of by the company in order to develop its new lines of products, all of which were designed to capitalize on the market’s perception.
Consistency reduces market confusion. If you have been selling low-cost goods for the longest time, coming up with a high-priced product would confuse the market because they do not know if your new item really is high-priced or is even worth the price in the first place.
Hapee toothpaste is one of the Philippines’ most successful challenger brands, offering value-priced toothpaste to the mass market. So when Hapee came up with a higher-priced toothpaste named Hapee Gold, the market did not know how to react. Does this new product mean that regular Hapee is inferior after all? And if not, then why should they pay more for the new toothpaste? Confusion thus set in.
You must then determine, as early as possible, what path you would like your business to take in terms of what kinds of products to offer. If in the long term you envision your company to be selling high-end items, for instance, then perhaps it isn’t such a good idea to be too associated with cheap products early on. And if you have dreams of providing shoes to the adult market, then starting with children’s shoes may not be a good idea if this ends up stereotyping your products as being “kiddy” shoes.
In short, determine early on what your future portfolio of products and services are bound to be. Then work your way backward. Make sure that you develop a position early on that will support your envisioned future product lines.