3.1.1 Positioning Score

Conceptually, a segment is defined by customers saying, “I want this (whatever ‘this’ is), but within limits.” It is vital for marketers to understand both what the customers want and their boundaries. The Perceptual Map captures these ideas with circles. Each segment is described with a dashed outer circle, a solid inner circle, and a dot we call the ideal spot.

The dashed outer circle defines the outer limit of the segment. Customers are saying, “I will NOT purchase a product outside this boundary.” We call the dashed circle “the rough cut circle” because any product beyond it “fails the rough cut” and is dropped from consideration. However, a product just inside the circle does not mean customers are delighted. A product near the outer limit is badly positioned.

The solid inner circle defines the heart of the segment. Customers want products in the heart of segment. We call the solid circle “the fine cut” because products within it “make the fine cut.”

The ideal spot is that point in the heart of the segment where, all other things being equal, demand is highest.

We call the orange boundary areas in Figure 3.1 “the rough cut area.” The green areas represent “the fine cut area.” The black dots are the ideal spots.

The segment is moving across the Perceptual Map a little each month. In a perfect world your product would be positioned in front of the ideal spot in January, on top of the ideal spot in June, and trail the ideal spot in December. In December it would complete an R&D project to jump in front of the ideal spot for next year.

Positioning in the Rough Cut Area

What happens to products that plot in the rough cut area? These products are badly positioned. Customers will consider them, but they are at a significant disadvantage to products inside the fine cut circle.

Specifically, products inside the rough cut have reduced customer survey scores. Their customer survey score drops in a linear fashion. Just beyond the fine cut circle the score drops 1%. Halfway between the fine and rough cut circles the score drops 50%. The customer survey score drops 99% for products that are just inside the rough cut circle.

Sensors that are about to enter the orange areas can be revised by Research & Development see (4.1.1 Changing Performance, Size and MTBF).

The location of each segment’s rough cut circle as of December 31 of the previous year appears on page 11 of the Courier.

Positioning Inside the Fine Cut

In Figure 3.1, products that plot within 2.5 units of the center of the segment are inside the green, fine cut circles. Ideal spots for each segment are illustrated by the black dots. The example on the left illustrates a segment that wants proven, inexpensive technology. The ideal spot trails the segment, where material costs are lower. The example on the right illustrates a segment that wants cutting-edge technology. The ideal spot is located towards the leading edge of the circle, where size is smaller and performance is faster.

Participants often ask, “Why are some ideal spots ahead of the segment centers?” The segments are moving. From a customer’s perspective, if they buy a product at the ideal spot, it will still be a cutting edge product when it wears out. For contrast, if they buy a product at the trailing edge, it will not be inside the segment when it wears out.

A product’s positioning score changes each month because segments and ideal spots drift a little each month. Placing a product in the path of the ideal spot will return the greatest benefit though the course of a year.