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Note on Developing a Positioning Strategy
Author(s):
Strang, Roger
Functional Area(s):
   General Management
   Marketing
Setting(s):
   For Profit
   Nonprofit
Difficulty Level: Beginner
Pages: 2
Teaching Note: Not Available. 
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First Page and the Assignment Questions:

Positioning your organization is central to an effective marketing strategy. It is where you decide how you are going to maximize your competitive advantage by choosing where, with whom, and on what basis your organization will compete. To put it simply, positioning is how you want your organization to be perceived by your target customers relative to your competitors. Developing a positioning strategy therefore involves three decisions:

1.    Selecting a primary customer group as the focus for your strategy (target market).
2.    Selecting a preferred group of competitors (competitive category).
3.    Deciding what makes your organization the best (point of differentiation).

Each of these decisions is interrelated but some of the issues in each include:

1.    Target Market

    Which group of potential patients (market segment) offers the greatest opportunity for the organization? Selection criteria include size, growth rate and profitability based on the willingness (and ability) to pay for the services which could be offered. Another important consideration is the ability to build on established strengths or competitive advantages such as location or specialist services for a hospital.

    The largest segments are often attractive but may have the most competitors so it is important to look at competition and the organization's relative advantage or disadvantage. Often this means targeting a smaller group of clinicians and patients such as those with specific needs. A smaller hospital like Shouldice is able to compete throughout North America by focusing on one specific condition.

2.  Selecting Competitors

    We cannot choose who competes with us but we can and must choose who we want to be compared with in the mind of our target customers. Generally an organization selects those competitors where its own advantage is greatest. Brand name pharmaceutical companies usually avoid any comparison to generic pharmaceuticals since that changes the basis of comparison from efficacy to price. A hospital might choose to be compared with others in the region rather than nationally. The goal is always to be able to claim to be the best.