Competitive positioning strength: market measurement

Abstract

A product's competitive position (CP) identifies the segment the product is targeting and the differentiated value proposition it intends to deliver. When a CP is strong, stakeholders understand for whom the product is intended and why, driving choice in the product category. CP strength (CPS) is directly associated with both firm performance and industry health, as industries with high composite CPS across competitive offers should be healthier than similar industries in which low aggregate CPS leads to lack of recognized differentiation and high reliance on price competition. As CPs live in the minds of market stakeholders, the ability to measure CPS in the market is imperative. Yet, while substantial research has investigated the measurement of brand equity (BE), a similar construct, little research has been done so for CPS. This paper highlights the differences between BE and CP and shows empirical evidence that CP and BE are distinct constructs. The paper proposes a model that suggests effects of CP strength on both product performance and industry health; and proposes the development and validation of an instrument to measure CPS.

Keywords:

• competitive positioning
• marketing strategy
• brand equity
• measurement