Introduction: Product positioning is something that should be done at the same time as product concept development. A few days ago, in my group chat, a friend posted a photo of Nongfu Spring's "plain boiled water" and commented: "Nongfu Spring is known for its design, why such packaging... Even as a blocking product, either don't do it, or do it well." I replied: "Nongfu Spring's core product is natural water; plain boiled water is just a disruptive product. If Nongfu Spring emphasized plain boiled water in its product strategy, it would contradict its nearly 30-year philosophy in bottled water, and it would not be worth the loss (or there is no need to spend effort on it; just integrate existing resources like bottle shapes and production equipment)." Another friend replied: "It shouldn't be, just like Coca-Cola has high sugar content. If I launch a zero-sugar cola, it won't affect my sugary cola." I replied: "Purified water, natural water, mineral water, and cooked water are the four major categories of water (the first three belong to the 'raw water' category). Leading water companies have their own product positioning. Cola with or without sugar belongs to different SKUs of the same cola category." To summarize: The issue discussed above is essentially a product positioning issue. Companies with unclear product positioning always make money in a daze and lose money with clear eyes!

What is product positioning? Successful product positioning is the inherent concept left in consumers' minds. Let's first look at several product positioning cases of internet products and physical store products. Internet products include: Taobao gives the impression of being comprehensive, having everything; JD gives the impression of genuine products and fast logistics; Pinduoduo gives the impression of low prices; Meituan gives the impression of food delivery; WeChat gives the impression of a circle of acquaintances. Physical store products include: P&G series products, Rejoice's positioning is to make hair smoother; Head & Shoulders' positioning is effective dandruff removal; Pantene's positioning is healthy hair care; Sassoon's positioning is hair care and styling. As mentioned at the beginning, Nongfu Spring's bottled water is positioned as natural water, "the porter of nature." Going deeper: Nongfu Spring's 550ml bottled water is sold at a retail price of 2 yuan to consumers who are thirsty while shopping, watching games, etc., and believe natural water is the best drinking water, solving their immediate drinking needs.

So let's sort out what product positioning is? First, target consumer positioning: Who should the product (with its style and tone, and what makes it unique compared to similar products, i.e., differentiation) be sold to? Second, consumption scenario positioning: In what scenarios will it be used? Third, value positioning: After selling, what problem or need does it mainly solve? Fourth, price positioning: At what price will it be sold? The order can be shuffled, but all four elements are indispensable. Once product positioning is determined, the product's future consumers, scenarios, value, and price are basically set. Looking back at Nongfu Spring's "plain boiled water" at the beginning of the article, if Nongfu Spring invested heavily in cooked water, it would confuse target consumers: Is natural water better or cooked water better? You must know that the target consumers of these two categories overlap but are not identical, and if not handled well, they may lose one while attending to the other.

How to do product positioning? How to do product positioning is a big topic. Today we will briefly explain the four elements of product positioning.

1. Target Consumer Positioning Target consumers, as the name suggests, are the type of people who will buy your product. We need to describe the characteristics of this group. There is also a premise: what product attributes determine what consumer group, and product attributes must be determined first. In today's homogeneous and overcapacity market, differentiation in product attributes is particularly important. Simply put, it's 16 characters: What others don't have, I have; what others have, I have better; what others have better, I have refined; what others have refined, I have unique.

Target consumer description can be achieved by depicting consumer profiles, mainly describing common characteristics and labeling them, such as: age, gender, education, identity, income, city of residence, life pursuits, family and work status, hobbies, etc. Each characteristic is a label. The more labels, the more detailed the consumer description, and the more three-dimensional and clear the positioning. But also note a few points: A product that meets everyone's needs is equivalent to a product that meets no one's needs, becoming worthless, making the target consumer positioning meaningless. Secondly, more labels are not necessarily better; the granularity is related to the organization's ability to undertake. If it's too fine, the organization may not be able to operate, or the target consumer group may be too small to support the business, losing commercial value.

Another successful case of target consumer positioning: From 2012 to 2018, Jiangxiaobai quickly became a new force in the Chinese liquor market from an obscure brand. Different from traditional liquor's target group and positioning, Jiangxiaobai chose the group "ignored" by traditional liquor—urban young people—and positioned itself as "youthful small liquor." Its internet-based marketing thinking, precise positioning, heartfelt advertising copy, and scenario-based sales model became a unique portrayal of the social survival of today's urban youth.

2. Consumption Scenario Positioning A few years ago, someone proposed the concept of "no scenario, no marketing," affirming the importance of scenarios. Consumer scenario positioning, as the name suggests, is about under what circumstances consumers use your product. It points to a real, tangible world, including people, objects, environment, behavior, stories, and other elements. Essentially, our daily life is composed of countless different scenarios. For example: Not wanting to get up early in the morning, buying a can of eight-treasure porridge at a roadside stall for breakfast—this is the consumption scenario for eight-treasure porridge; feeling sleepy when arriving at the office, having a cup of coffee to refresh—this is the consumption scenario for coffee; having a meeting in the afternoon, needing a bottle of water on the desk—this is the consumption scenario for bottled water; after work, having dinner and drinks with colleagues and friends—this is the consumption scenario for alcoholic beverages. So in different scenarios, consumers' needs differ, and thus the emphasis on product functions also differs. At this time, it is necessary to determine the consumption scenario through the product. What we need to do is to be good at capturing the daily scenarios of a type of consumer and observe consumer scenario behavior more. For example: When eating hot pot, it's easy to think of getting internal heat. In JDB's advertisements, the scene of spicy hot pot paired with JDB appears many times, and the slogan "Afraid of getting internal heat, drink JDB" is shouted, all hinting at the product's usage scenario.

It is worth noting: Marketing can only discover and apply scenarios, not create them. Things like selling combs to monks should not be done.

3. Value Positioning Value positioning is the core value proposition, which is the impression you want to leave in customers' minds. Once the core value proposition is chosen, you need to persistently and continuously instill it into users through multiple channels, ultimately occupying the user's mind in the product's field. Returning to the "plain boiled water" at the beginning of the article, Nongfu Spring's value proposition is natural water, so it must persistently instill into consumers that "natural water is weakly alkaline and good for health, and we are the porters of nature," implying that no processing is done to the water. The reason for making "plain boiled water" is, on one hand, that under the leadership of Jinmailang, cooked water has made significant progress, and as a bottled water giant, it has to participate; on the other hand, it cannot conflict with its own value proposition, so it has not made any "voice," quietly coming and silently doing.

Here are a few cases of value positioning for common products:

Luhua: "Fragrant" (value positioning) 5S pressed peanut oil

Nongfu Spring: Healthy (value positioning) natural drinking water

Coca-Cola: Joy unlimited (value positioning) authentic cola

Pepsi: Passionate and young (value positioning) new generation cola

JDB: Clearing heat and reducing fire (value positioning) authentic herbal tea

Six Walnuts: Brain health (value positioning) walnut beverage

We can clearly see: Value positioning refers to the enterprise understanding customer needs and determining how to provide products and services that respond to the unique preferences of each customer segment. Choosing the correct value positioning is a crucial step in business model design and the basis for value network construction. Value content includes: experiential value, informational value, cultural value, functional value, emotional value, social value, etc. Each value must solve a specific problem in a specific scenario.

4. Price Positioning Business operations should aim for profitability, but different product positioning is also different. For example, traffic-generating products, profit products, etc. So whether the product pricing is reasonable directly affects revenue and profit, but it is not necessarily true that high prices guarantee revenue and profit. The dilemma of having a price but no market is common in reality. Secondly, products should not be priced after production but should be considered before design and production, because it involves resource allocation. Price is sensitive information. A product can sell at a good price, not a high price but an appropriate price. There are generally two methods for product pricing: First, cost-based pricing: cost + profit = price (fixed costs and variable costs are the final costs; brand owners often choose this method). Second, competition-based pricing: benchmark against main competitors (suitable for product-oriented brand owners when they want to quickly gain market share). There are generally three pricing positioning models: First, high-price positioning: brand owners have brand advantages, quality advantages, after-sales service advantages, etc., relative to competitors, and set product prices higher than category competitors. Second, medium-price positioning: set product prices within the price range that target consumers can afford on average, aiming to acquire more target consumers. Third, low-price positioning: some brand owners achieve extreme total cost leadership through meticulous improvement. At the same quality and service level, low prices are a powerful weapon to attract customers. Sometimes even if there are differences in quality and service, as long as the price difference is much greater than the quality difference, price still has an irresistible allure beyond quality and service. A typical case is Jinmailang purified water, which in 2019 reduced the price to 7.8 yuan for 24 bottles.

Final Thoughts: Product positioning should be done at the same time as product concept development, and it has a profound impact on the product and the enterprise's development. When designing a product, brand owners should not only consider needs, functions, and interaction design, but also consider positioning: how to deepen the impression on target consumers and occupy a place in their minds through product positioning. Once product positioning is clear, it is easy to understand the "plain boiled water" issue at the beginning of the article.

About the Author: Hai You: Special contributor to New Distribution, senior researcher, practitioner of offline channel marketing, designer of enterprise channel coverage models. He has provided channel consulting for more than ten first-line brands, earning a good reputation.

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