Positioning is about how you want the market to perceive your company - the value you offer and the values you uphold as an organisation. But how do you take a customer-first approach to this crucial task of commercial defintion?
What is brand positioning?
"Positioning is not what you do to a product. Positioning is what you do to the mind of the prospects.”
Ries and Trout, “Positioning: The Battle for Your Mind“.
For a definition of a marketers’ primary strategic task that’s pretty hard to beat.
But how should you position your manufacturing services more closely in relation to your competitors and customers needs? How can you orient yourself within the marketplace to maximise your growth potential?
Brand positioning? Product, competitor or customer first?
Different organisations position (or orient) themselves in the market using different approaches. And each approach has its own strengths and weaknesses.
What's a product orientation?
In this model your brand is positioned as objectively ‘the best’ in the market. It is the highest quality, the product customers’ most aspire to. For those who can afford it, It is the natural choice. The classic example of a product-oriented brand is, of course, Apple. They have built a reputation for design brilliance that defines rather than responds to customers’ expectations. Their marketing department works to maintain the brand’s aura of unrivalled excellence and its reputation for market-defining service and innovation.
What's a competitor orientation?
In this model, your brand positions itself primarily in relation to your competitors’ offerings. It studies and responds quickly to competitor trends. It wins customers by refining competitor features, by pricing themselves more keenly, or simply being more ubiquitous in the marketplace than your rivals. It follows, but it does not lead. The job of the marketing department is to make their product the ‘natural alternative’ to the leading company in the space. True differentiation is hard to achieve and can lead to price wars when too many companies start to contest the same space.
What's a customer orientation?
With a 'customer first strategy' your brand is defined by its deep and responsive relationship to customer demand. Amazon is the classic example of a brand that positioned itself and its solutions entirely in relation to consumer wants and needs. From the beginning Jeff Bezos saw retail success entirely through the lens of customer satisfaction. He identified the waiting, inconvenience and waste involved in bricks and mortar shopping and the unique opportunity the internet offered to turn the traditional customer experience on its head. He realised his company’s deep knowledge of what the consumer wanted from retailers in the age of digital could drive their continual success.
And it worked for him.
Why does a customer first brand position look like?
This famous positioning diagram illustrates how a ‘customer first’ position can be the foundation for a uniquely powerful (and profitable) brand identity.
In this classic image you can see certain positions that a company might adopt in a mature market.
For this analysis, we’ll leave aside ‘the dumb zone’ - where a company focuses on markets where customer demand is low and competition is practically unassailable. That’s never going to end well.
Instead, we’ll look at the other positioning choices brands can make:
Competitor focus vs product focus; which is best?
Competitor focus: doing the same, but cheaper?
Some companies choose to compete for customers’ business in markets where demand is high and where competition is already strong. To succeed here, they may have found a way to undercut prices while still offering an acceptable level of quality to customers who may be tempted to switch.
But the potential for price wars and a 'race to the bottom' too often makes this a losing zone.
Product focus: doing the same, but better?
Others may choose to compete around quality with entrenched competitors. Think Apple entering an apparently saturated mobile market in 2007. To succeed in this strategy a company must have supreme confidence in the power of their brand and product to cut through. They must be sure they can win market share and maintain margins without compromising the quality that is their USP.
The danger here is that customers will not agree with your vision of quality - or respond well to your price point. As a result this this is definitely a risky zone.
Take a customer first approach - address a new niche
Other companies dedicate themselves to uncovering a niche where customer demand is currently unmet and where they have the unique skills to fill the gap. Based on deep market research, customer data analysis and market-sizing, they look to identify the sweet spot for growth in their chosen sector and match it to their own capabilities.
Blue ocean vs red ocean
Unlike a competitor-led or a product-centred focus, this approach looks at customer need first. It addresses an audience that is currently neglected with answers that only your brand can provide.
The customer-first approach identifies the ‘winning zone’ for a brand, the place where your expertise and customer demand uniquely coincide. This is the place that authors Chan Kim & Renée Mauborgne refer to in their book - Blue Ocean Strategy.
In their book, 'the red ocean' is the competitor-filled segments of the business world (red from the blood of cutthroat competition) where your company risks being overwhelmed and overlooked. Meanwhile, the blue ocean is the "unknown market space, unexplored and untainted by competition".
These are the places where you can grow unfettered by competition.
Brand telepathy: the 'magic' of the customer first approach
When a brand adopts a customer-first approach and identifies their ‘winning zone’ something uncanny can happen.
These brands can become deeply attuned with customer demand and committed to customer satisfaction. With a clear target market and a deep understanding of their ideal customers' aspirations and frustrations - every department is able to speak with the same voice and serve with the same aim.
A customer-first culture engenders loyalty and encourages continual customer feedback that can inform future sales and marketing campaigns. This kind of engagement results in a virtuous circle of customer success and revenue growth.
From the outside, sometimes it seems like these brands are able to telepathically change the way they work to address customers’ niggles and improve the quality of their service, as they:
- Continually add value with targeted products and services
- Anticipate and answer customer questions in their marketing and sales collateral
- Speak to hard-to-reach decision-makers buried deep in organisations
- Generate new demand and build more sustainable pipelines
- Build resilient customer relationships and enduring loyalty
But this isn’t a result of mind reading! It’s simply the result of operating with a 'customer-first' mindset.
Position yourself as a trusted guide in a complex world
The right positioning is critical to success in a mature market and contract manufacturing is no exception.
In a noisy world, mimicking competitors or trumpeting the brilliance of your own solutions can only get you so far.
Instead, you need to build a brand that is customer-centric - a brand that continually uses customer insight to improve service offerings and speak to prospects in a voice that resonates with them.
Producing content and fostering customer interactions that showcase your brand as a trusted advisor in a complicated environment can significantly enhance your brand's visibility and accessibility. This approach sets you apart from brands that solely focus on self-promotion or those that are happy to follow the crowd.
What’s the strongest approach to positioning for a contract manufacturing brand?
Choosing a product first’ orientation is a bold move. Realistically, only limited Tier 1 service providers with extraordinary market share and global presence have the chance to build a contract manufacturing brand in this way. Not every contract manufacturer can be a Foxconn.
Positioning your brand closely with competitors, leaving only price or feature levers to differentiate yourself makes it harder to ‘stand for something’ significant in the mind of your prospects and customers - and maintain a distinct identity. Right now, there are many contract manufacturers who are sitting here in the undifferentiated middle!
With a customer orientation you can position your brand as uniquely helpful and responsive to the needs of your ‘ideal buyer’ - and become their natural choice of partner amidst a crowded playing field. Choosing a customer orientation can give you a compelling voice and story with which to differentiate yourself in the marketplace.