Focus on "Positioning," not "Differentiation"!

In competitive strategies for small and medium-sized enterprises (including sole proprietorships), I often hear people say, "Let's differentiate." But I wonder, is "differentiation" really possible? And in the first place, is it even necessary?

Today, I would like to think about "positioning," which is similar to "differentiation" but completely different.

What is the reason customers choose you?

If you are a large corporation, it makes sense that differentiation is important. If the goal is to capture a certain percentage of market share, differentiation is naturally necessary. You want something that is overwhelmingly different from other companies. To achieve that, you might make large investments, such as developing new products or launching large-scale promotions.

However, for small and medium-sized enterprises, market share might be 0.000x%. In other words, they often coexist and prosper among many competitors. They also cannot afford to spend much money. Creating a reason for customers to choose you under such circumstances is, in itself, a difficult task.

How can you get customers to choose you when there are many competitors?

That is the problem.

Customers only buy from No. 1

From the perspective of one customer (or one company), if your shop (or company) is the one and only existence, that is enough.Being No. 1 at that time, in that place—the reason customers buy is neither more nor less than that.

It is not that they are being compared strictly, such as being the cheapest in the world or having the best quality. Comparing is a hassle, so if possible, they want to choose without comparing. They don't want the trouble. They want to buy comfortably, without hesitation. Isn't this the true nature of consumer psychology?

The difference between "differentiation" and "positioning"

Depending on the definition of the words, my definition here is something like this:
"Differentiation": Increasing the number of items where you are superior to others across various comparison criteria (objective comparison)
"Positioning": Setting your own comparison axes to create an area where others do not exist (subjective comparison)

The trap of omnidirectional "differentiation"

Until about 20 years ago, specification competition was popular. Creating comparison tables with other companies and increasing the number of items marked with a circle. Making appeals like, "We are superior to others in XX!"

The goal was to create an illusion that having more circles meant you were amazing. But it seems people have grown tired of that kind of competition. You cannot find happiness through quantitative differentiation. They must have realized that.

Unique "positioning" that no one else has

For positioning, you choose the comparison axes yourself. There are one or two axes.
If possible, it is best to create a positioning map with two axes and create an area (quadrant) where only your company exists!

For XX, leave it to us!
Once you have a definitive selling point you can state with confidence, you have achieved No. 1 positioning.

Even a niche area is fine.
In fact, being niche is advantageous because competitors won't enter that space.

Instead of being compared,
create your own unique position.

The area where you are chosen for XX
Where is that?

This article was written by
Mousou Biz Planning Representative Shigeki Kawahara
https://mousoubiz.com/
https://twitter.com/mousoubiz