Positioning: Target Marketing for Technology Products
Because of the proliferation of new technologies and new products, users are
bombarded with choices and have a difficult time differentiating and selecting
the best of many alternatives. Meanwhile, many small companies fighting for
recognition in this sea of possibilities can't understand why their innovative
products aren't selling well.
The solution to both group's problems is positioning: creating a desired image
for a company and its products within a chosen user segment. The positioning
process further helps high-tech manufacturers deal with such problems as limited
product life cycles, limited lead times before competitors respond with equal
or greater improvements, as well as the desire to control new technologies introduced
during a short time period or to a particular target market.
Traditional Methods Fall Short
Traditional market segmentation is the division of a large market with diverse
needs and wants into specific segments or submarkets. Each segment consists
of potential buyers with similar needs and wants. It is from these segments
that you must select the target markets to which you will sell your products.
According to classical marketing theory, the segmentation process creates specific
- Each have relatively distinctive behaviors
- Can be described by measurable and understandable dimensions
- Have appropriately sized market potential
- Have an accessible means of communicating with them
Consider the example of consumer-goods market segmentation. That process identifies
target markets by either classifying the universe into demographic categories,
or by conducting psychological or sociological research. If either method uncovers
an adequately sized potential market, a company can further discern that particular
group's purchasing habits, needs, and wants, and tailor its product accordingly.
This approach, though, is inappropriate for many high-technology manufacturers.
These segmentation procedures are designed for markets where manufacturers can
easily identify and gather extensive quantitative data on the appropriate industry
or on the broad customer group interested in its product or service. Additionally,
the uses for consumer products, such as household appliances, are generally
inherent in their design or have already gained market acceptance.
Particularly Difficult Environment
High technology companies face a particularly difficult marketing environment
for several reasons. First, competition and technology move too fast to allow
marketers to gather extensive quantitative data. They often don't know, or can't
identify, many of a product's applications. They must often prioritize the market
they choose to address because many products have market potential across several
industry categories. In the process, they must deal with different buying cycles.
Second, many high-tech buyers are reluctant to take the personal risk of bringing
new technology into their company due to the rapid pace of technological advances
and the incapacitating FUD factor (Fear, Uncertainty, and Doubt). This problem
is only exacerbated by the plethora of engineering-driven companies that appeal
to customers' needs and wants based solely on product specs.
In reality, many high-tech companies don't even go as far as using traditional
techniques. Often they see a small, unfilled niche within a market, create a
product to fill it, and hope a sizable market will appear to support their efforts.
A good example comes from the data acquisition market where more than 150
vendors currently sell PC-compatible devices alone. How can buyers differentiate
all these products? Complicating the situation is the fact that such devices
are suited for a wide variety of R&D and manufacturing applications, ranging
from medical research to chemical batch processing to electronic assembly. Put
simply, the battle for recognition and share of mind can't be won on engineering
This battle leads to the concept of market positioning. The concept is simple
- to be successful, a company must differentiate itself and its products from
all others, thus obtaining a unique position in the marketplace.
After all, if manufacturers can't differentiate their products from their competitors',
how can they expect the same of customers - who are much less familiar with
the products and the market?
When positioning is left to buyers, they carry out the process in a haphazard
manner. For instance, to effectively evaluate products that are sold on specifications
alone, end users must perform a painfully detailed competitive analysis that,
in many cases, reveals no significant differences. This dilemma is magnified
when manufacturers make no efforts to sell to specific markets or inform buyers
of their strengths. Indeed, when buyers make a purchase, they're interested
in buying much more than product specs. They also buy into the company selling
the product, including its service, quality, and future technological innovations.
The actual implementation of market positioning isn't as straightforward as
segmentation. To achieve the desired positioning, manufacturers must honestly
evaluate many factors:
- What business are you in?
- What are your company's strengths and weaknesses?
- Describe your market. Is it mature? What is its growth rate?
- What do you think the public considers to be your strengths and weaknesses?
- Who are your competitors? What are their strengths and weaknesses?
- What directions will your company take in the near future? Longer term?
Consider aspects such as technology, pricing, distribution channels, and new
- What are the key factors for success in each of the above market segments?
- How long will it take to implement your strategy in each segment?
- What are the trends in each market segment?
- What percentage of company resources will be devoted to each segment?
Many companies are often surprised that there's little consensus internally
regarding the answers to these questions. Especially in regard to two of the
most important factors:
- What is our company's business?
- What do we do better than anyone else?
A company can differentiate its products from its competitors' based on such
factors as technology, target audience, target application, price, quality,
or distribution channels. For instance, do we offer the broadest line of products
that meet the requirements of many industries? Can we take advantage of economies
of scale and offer the lowest price? Do we have the lowest defect rates and
most accurate specs of all our competitors and thus offer the highest quality?
Product positioning alone won't make a product successful, though. Marketeers
must also be sensitive to how the market receives and subsequently positions
their company as well as the product. If the company isn't totally honest during
its internal evaluation, the marketplace will let it know. Based on market feedback,
a company must be flexible enough to react to those opinions it wants to enhance
For instance, it's not hard to find vertical-market electronics companies that
are convinced they offer the best service. One such company insists they offer
the best of everything - from sales assistance to applications engineering to
high-quality manufacturing. In fact, the market perceives its products as poorly
engineered, the sales department is understaffed and undertrained, and the applications
engineering group has little interest in giving a customer more than two minutes
on the phone. Although this company keeps trying to convince buyers that they
have the best service, the market tells them through decreasing sales and loss
of market share that they don't.
The Long Road Back
Such companies face a long haul in changing this perception. None of the steps
in market positioning happen overnight, and it's a long, painful process to
position both a company and its products. Having to reposition a company and
change customers' views is even harder. Therefore, it's best if a company carefully
considers these issues up front - long before it introduces any products.
Whether it concerns product positioning, public relations, advertising, or
distribution channel management, marketing must be treated as a long-term, strategic
process. To be successful, marketing must be a learning process for the entire
company, from the CEO to the receptionist. With the proper guidance, your marketing
efforts will represent an accumulation of knowledge and experience about your
products and, most importantly, your customers.
- McKenna, R. "The Regis Touch". Addison-Wesley Publishing Co. Inc.,
- Shanklin, W. and Ryans, J. "Marketing High Technology", DC Heath
and Co., 1984.