Article

Value Proposition and Positioning: A Refresher

Posted on: December 6, 2018

By Gabriele Dadalt Souto

Gold puzzle piece - learn about how to define your marketing value proposition on PSI.UL.com
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Like most markets, the cosmetics market is an ever-changing space that needs to be constantly evaluated so we are sure not to overlook any opportunities or be outdated. After all, we want to offer our customers the best options to keep the business running. A constant and thorough analysis of the environment in which we operate is key to a successful Marketing Strategy. Reviewing basic concepts can be useful when deciding a new strategy, as we may generate new insights in the process. To be sure that you are getting the most out of your Marketing Strategy, let’s review some positioning strategies you might be overlooking.

Analyze your marketing environment: The 5 Cs

The market environment analysis consists of 5 Cs: Context, Customers, Collaborators, Competitors and Company. These factors are essential while evaluating your market, and I would like to emphasize the Customers factor:

  • The purchasers – the primary customers, the company you are supplying your products to, part of a B2B process
  • Final users – your primary customers have their customers (B2C process). Should you consider those as your secondary customers? What impact do their choices have on your client and hence on your business? Should you target your offerings based only on demand? Keep in mind that your client has their long-term strategies (10 years) but also developments based on the products they are currently selling (short-term, two years)
  • Influencers – who are the most successful blogs in the markets where your client is active? What are they talking about? What is the impact of new trends on your client’s customer base? How reactive to new trends is the company and their customers?

Based on this first evaluation, how can you keep offering the best products to your client? Do you know what’s important for them when deciding to make a purchase? How can you come up with the points of differentiation (these points may vary for each client)?

Differentiate your product with a value proposition

  • Relevant and important for our target group – What trends are your customer following? Are natural-derived ingredients important for them? What about silicones, mineral oil, or parabens?
  • Exclusive, distinctive and superior against what is available in the market – Patented technologies offered with exclusivity can be very profitable, and what about performance and/or clinical tests that will facilitate the decision-making?
  • True and reliable – Disclosing any supply problems that may arise will give your customer the time to reformulate any products, be sure to have a backup to offer

Differentiation strategies you can apply to your offerings (besides cost):

  • Associated services: ease of purchase, delivery, customer support, documentation
  • Staff and employees: competencies, courtesy, credibility, communication skills, ability to solve problems
  • R&D and access to technology: training, performance/clinical data, matrix studies

Position your product

After understanding your points of differentiation and defining the value proposition for your products, it’s time to plan the right positioning. Al Ries and and Jack Trout referred to this as the “process through which we decide the company offering to attend to a segment or a pool of segments with the valid proposition which is going to be relevant for them.”1.

When and where your customers are more willing to listen to your offer? Conferences, workshops, flyers, e-mails, and visits to showcase your portfolio are powerful ways of getting your customer’s attention, but most of your competitors have that figured out as well.

What if you offer training on your company’s expertise (holding the sales pitch for later)? Or if you could formulate side-by-side with your customers, showing all the benefits of your product, while answering questions and building a relationship? What if you adapt marketing trends like “freemiums” and offer a lot of free services that will make your customers’ lives easier? I know I would make sure to choose ingredients from that company!

There are alternative positioning strategies that can also be useful in some situations:

  • Reverse positioning: remove some attributes from your value proposition to offer a simpler and to-the-point product. It’s an important strategy to be more competitive when several companies offer the same product
  • Break-away positioning
    • Red Ocean: the usual situation where higher value equals higher cost and price, and you need to do things better than the competition. Points of difference here are the focus.
    • Blue Ocean: are there any new markets where the existing competition is not taken as a valid reference? The focus here is placed on innovation and reaching out to a different market where your products can be useful.

Yes, it’s a lot of questions, and no right or wrong or definitive answers. After all, what’s being bought today may not sell tomorrow, and we’d better be prepared.

Reference

  1. Ries, A., & Trout, J. (1986). Positioning: The battle for your mind. New York: McGraw-Hill.