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Market positioning 23 August, 2006

Posted by varoom in Marketing Plans.


In order to position a product in the market you need to be able to assess, define and segment the market. This allows you to see if there any gaps in the market that you can try and fill. One good example of this was done by Virgin Atlantic and its Premium economy/Upper class positioning against British Airways. Some years ago there were 3 clear classes of Seat on a Transatlantic flight. Economy, Business Class and First Class. What Virgin noticed was a need for a bigger seat but with no additional frills on these flights. So it introduced Premium Economy and priced it in between Economy and BA Business Class. This attracted Economy flyers who were willing to pay a little more for a bigger seat. It also stole business from BA Business Class by offering a higher class service similar to first Class for Business Class prices.

There are many examples of this market segmentation and product positioning.

You should look at customer behaviour. If you introduce a product in a segment that you have found in the market where will the customers come from? Will they be new customers to the market or are they drawn from existing segments alongside your new product. Why will they switch? What does it cost them, or save them, to switch, is this cost significant against the benefit. Assuming some amount of switching and some new customers will help you define the price positioning of your product.





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