CMG has the experience and the techniques to help you get a handle on your true strategic position by product line, then plan to do something about changing your position.

Contact Us

Get a Handle On Where You Really Stand Versus Competitors

Value Position | Portfolio Position | Value Elements Position

Many manufacturers  are fooling themselves. They believe their products are just as good or better than the competition's. But they don't have leading market share. So why don't they have leading share?

1. Their product may not be perceived as equal to the leader's by the customer

2. Their product may be perceived as equal, but other elements of the marketing mix may not be adequate to satisfy target markets: price, promotion (and sales) and place (distribution).

3. Their service capability may not be adequate (part of an extended concept of product)

4. They may not have other products necessary to sell in a package to end users, or "bundle" to have a competitive offering to the distribution channel.

To get where you want to be with a product line, you need to know where you stand relative to competition in market share and in the mind of the customer on all aspects of value.

Value Positioning

On the value positioning chart, if your "bubble" shows up to the left of the red diagonal, you are in position to gain share. If to the right, in position to lose. For example, Competitor2 in the chart below has  the highest price (100), but is perceived to have only 80% of the quality of Competitor1 (You). Hence, they have an 80% value rating of quality to price and is in position to lose share, all other elements being equal.

If you were competitor 1 in the chart, you would be in a position to gain share because the market perceived your price to be about the same as Competitor 3 (the highest share position), but quality was perceived to be higher. On the value positioning chart, if your "bubble" shows up to the left of the red diagonal, you are in position to gain share. If to the right, in position to lose.

Next: Portfolio Positioning

This technique plots your products by contribution (or gross) margin rate vs. market share. Obviously, high share products with high margins are winners, the opposite, losers. Keep your losers only if they are integral to a package sell. If not, get rid of them. If you have some pretty bad losers, consider sourcing these, even from a competitor! Many competing manufacturers trade sourcing agreements for products where the other has a strategic advantage.

Value Elements and Customer Perceived Quality

So, if your product has high potential to gain share, and is reasonably profitable, why do so many positions like this fail to realize their potential? Quality (product) and price are only two elements of the marketing mix. There are many more. The next chart shows an example of how to factor these into your assessment.

Product Quality and the right price positioning aren't enough. The chart below shows how to create a weighted average score based on customer assigned weights for different aspects of value in addition to product quality and price.

For an assessment of your distribution channel position, see Distribution Planning