for Walmart. Red Lobster is a direct competitor for Outback Steakhouse. Indirect competition can be more difficult to identify and is sometimes overlooked as a consideration.
Indirect competitors represent alternatives to your product. For instance, indirect competition for Target and Walmart could be a wide range of other stores, both brick and mortar and online. Local grocery stores (or eating at home) represent indirect competition for both Red Lobster and Outback Steakhouse.
Thoroughly understanding the competition for your products and services — direct and indirect — can help you to be more precise in targeting specific segments that are most likely to respond to what you have to offer. You will want to target those segments where you believe you can have the most impact because the attributes of your products or service (e.g., quality, price, service, etc.) are competitive when compared to these other options.
Keep in mind, though, that the segment that offers the most in terms of numbers of potential customers is not necessarily the segment you should select. These obvious segments have most likely already been targeted by your competitors. Your best opportunities may be in smaller segments that have not yet been pursued by others — even though the numbers may be smaller, the potential for positive impact will be greater.
2.3 Positioning
According to the American Marketing Association, “positioning refers to the customer’s perceptions of the place a product or brand occupies in a market segment.” In some markets, a position is achieved by associating the benefits of a brand with the needs or lifestyle of the segments. More often, positioning involves the differentiation of the company’s offering from the competition by making or implying a comparison in terms of specific attributes.
Walmart has positioned itself as the low price leader. Its positioning statement prominently displayed on its website and in communication materials includes the statement: “Always low prices. Always.” Contrast this position with that of Nordstrom, which states that “the company’s philosophy has remained unchanged for more than 100 years since its establishment by John W. Nordstrom in 1901: offer the customer the best possible service, selection, quality, and value.” Nordstrom has selected a position based on service, selection, quality, and value — not price. Subtly different, yet clearly apparent to consumers who have shopped at both stores.
Your company may already have a stated mission and perhaps even an established segmenting, targeting, and positioning strategy in place. Even so, it’s important to revisit your statements and strategies regularly to ensure they are still relevant and appropriate.
3. Your USP — Unique Selling Proposition
Another important consideration in marketing is what is known as a “unique selling proposition” or USP. A USP represents something about your product or service that is different from competing products and services in important ways which represent value for your potential customers. It’s what makes you not only different, but valued. Clarifying your USP can help you establish a strong position in your marketplace and can also serve as the basis for the direct mail messages (words and images) that you will eventually create.
Your USP conveys those qualities that are unique in that they are about what you have to offer; something that none of your competitors have to offer. Selling in that it’s a benefit — something that will appeal to a potential customer. Proposition in that it’s an offer you’re making to people who buy your product. After all, if your product is just like all the rest, why would anybody choose you? There has to be something that sets you apart from the crowd. That something can be as simple as a good location or a low price. Or, it can be as complex as a refined manufacturing technique that allows your product to literally last forever.
What does your company’s product or service offer that nobody else has, or that very few others have to offer? Do you give a full money-back guarantee? Does your product experience extend back many years? Do you offer free maintenance? Do customers receive an add-on gift for making a purchase? Does your product differ in some integral way from your competitors’ products?
In some cases, your USP may be very apparent. In other cases, you may need to spend a great deal of time thinking of a slant that’s effective and appropriate. Maybe, as in the case of Maytag and their “lonely” repair staff, your USP is more a subjective image than a hard fact. The point is that once you’ve developed a USP, you have a hook that can help you grab the customer, but only if you use it effectively in your communication materials.
Your USP allows you to create awareness of your product or service by differentiating it from similar products or services available to your customers. Once you’ve established what your unique selling proposition is, you need to make sure that it plays an integral role in any marketing communication you do.
To identify a USP, you need to consider the following:
• Which product or service benefits are most important to your target market?
• Which benefits do you “own” (i.e., benefits not already claimed by your competitors and not easily imitated by your competitors)?
• Which benefits will be most easily understood by your target audience?
The resulting statement should be a one-line statement that contains a clearly identifiable, unique benefit that is meaningful to your market. Do you remember the following?
• Wonder Bread: “Helps build strong bodies 12 ways.”
• KFC: “It’s finger-lickin’ good.”
• Burger King: “Have it your way.”
Note that in each of these statements it is not the literal translation of the words, but the overall impact of the benefit implied in each statement that makes the USP truly powerful. That is the challenge that marketing communicators should embrace when working toward the development of copy that will achieve results.
Note, also, that each of these statements could have been made by the competition in each product category. The power of an effective USP is that it can create the perception of uniqueness in the mind of consumers.
Once you’ve developed a USP, it should be implicit in all of your direct mail (and other marketing communications) materials.
4. Is Your Target Market Online?
An important audience consideration in this digital age is whether or not your target market is online. Despite the fact that the Internet, social media, and online marketing seem to be what “everybody who is anybody” is talking about these days, marketers should not assume that they should be attempting to reach their audience online. It depends. Just as when researching and analyzing other attributes about your potential audience (e.g., age, income, geography), you need to consider whether your target market may be effectively reached online or whether they are still best reached through traditional mail.
General research can provide some direction. For instance, Pew Research Center conducted a survey in 2010[*] which surprisingly points out that about one-third of the American population does not use a broadband (Internet) connection in their homes. Two-thirds (66 percent) of American adults do currently use a high-speed Internet connection at home, up only 3 percent since the 2009 survey. There are racial differences, as well. For instance, broadband adoption by African-Americans now stands at 56 percent, up from
