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Positioning: One Overlooked Reason For Business Failure.


Business has a high failure rate. Some of the reasons for failure span from poor planning to poor funding to poor execution, poor management of resources and more. One sometimes overlooked reason for business failure is poor positioning

Dictionary definition of positioning

Businessdictionary.com defines positioning as “a marketing strategy that aims to make a brand occupy a distinct position, relative to competing brands, in the mind of the customer. Companies apply this strategy either by emphasising the distinguishing features of their brand (what it is, what it does and how, etc.) or they may try to create a suitable image (inexpensive or premium, utilitarian or luxurious, entry-level or high-end, etc.) through advertising”.

Start Your Business in 30 Days Even If You Don't Have An Idea
Start Your Business in 30 Days Even If You Don’t Have An Idea

Positioning defined in layman’s terms

In simple speak, it is how you want to be perceived by the customer. It is the range of emotions you want your customer to feel when they interact with your product or service. The human mind today is cluttered and constantly bombarded with all kinds of information and messages. The human mind, like your Gmail, copes by categorising the messages into three forms. It processes into relevant, worth looking at and noise.

So you write your business plan, get your funding and launch your product. Then one week, one month, one quarter and one year after, you don’t hit your numbers. Your enthusiasm dwindles and you start wondering what could be wrong. Besides several other things that could be wrong, have you considered if your product or service offering is well positioned in the marketplace. Does the market even know exactly what you are about? Are your offerings being filtered automatically into the noise part of their minds?

Differentiate or go home

Think about any product or service and you will realise there are a ton of alternatives. Walk into a large grocery store and take a look at the shelves. Each is lined with product after product competing under the same category, all looking the same. In today’s marketplace, products or services which have no clear and distinct value propositions are dead. The “me too” products cannot compete and their vendors “hope” the customer will buy them. The products without any form of differentiation are simply invisible in the marketplace.

Forms of differentiation

Differentiation usually comes in two forms, cost and value.

Cost differentiation

Cost differentiation sees you take an extreme position on the price spectrum. You either are low cost or high cost (luxurious and premium) if you are differentiating along this path. Low cost is the more common of this form of differentiation. Adopting a low cost positioning goes beyond setting a low price once in a while, it becomes an intricate part of your business. All your operations and marketing are geared towards being able to deliver low prices ALL the time to your customers.

Value differentiation

Value differentiation takes the issue of cost out of the buying experience. While customers would still consider price, it isn’t the primary reason why they buy from you. Your product must demonstrate some attribute in the marketplace. It could be faster, perhaps lasts longer or is of a higher quality, etc. The best value differentiation positioning is when customers can’t even say why they love your brand. Ask iPhone and Harley Davidson customers why they buy the products and they really won’t be able to give you a tangible response.

While cost and value have traditionally been how products are differentiated, there is a new school of thought that says one could have a hybrid that seeks to combine the advantages of cost- and value-based differentiation. I would recommend Competitive Advantage by Michael Porter and Blue Ocean Strategy by Kim Chan for further reading in this regard.

How to differentiate

Differentiation starts with the market gap or opportunity. It starts with the reasons why you started the business. It starts with you answering these questions: Why should the customer buy from you? What is unique about your product or service? What are the customer’s alternatives and how does your offering differ from these alternatives?

A clear articulation of answers to these questions should give you a clear understanding of how to position in the market place. As a small or new business, that you will be cheaper is a positioning you should forego as you have no idea what the margins of your competitors are and how prepared and equipped they are to engage in a price war.

Resources available to you in form of cash, human capacity, technological know-how, etc. also determine how you position. A laundry business can’t position on convenience but doesn’t have the manpower to stay open for long hours, seven days a week. It cannot be convenience without manpower to provide pickup and drop-off services to your customers. Be realistic with how you think you can play in the laundry marketplace.

Consistency is key in positioning. You must look and act the part of your marketplace positioning at all times. You do yourself a huge disservice if you promise to deliver in two days but end up delivering in five. Stay consistent internally and externally. Once you take a stand in the marketplace, stay with the path and eventually the marketplace will reward you.

Go from idea to starting your business in 30 days
Go from idea to starting your business in 30 days

The battle for the customer’s mind is an ongoing one and the mind would easily process most things to noise. Your task as an entrepreneur is to move your product in the customer’s mind from noise to worth looking at and then to relevant. While positioning may get you started, delivering superior value consistently and above industry standards will help you make the transitions in the customers’ mind.

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