Gold / Silver / Bronze product positioning

How to position your product to multiple groups.

I flew Ryanair recently. It was for our holiday to Spain; me the Mrs and 3 kids. I’m writing this article in our holiday apartment while the kids are quiet for a few moments watching some cartoons in Spanish, the peace and quiet comes few and far between so I thought I’d take this time to write some thoughts about my experiences with Ryanair and what it could mean for you and your business too.

We booked a few months ago for this holiday and the price was clear; we could fly to Spain for as little as £24.99 each – amazing! These prices are fantastic and are clearly going to attract attention. We didn’t have to scratch the surface too far however to find that very soon the price was not all it seemed: there are 5 of us in total, a carry on bag each would not suffice – we needed to add baggage, lots of baggage!

The total price for our flights pretty much doubled from the listed price, but that is nothing new or particularly surprising to the reader I’m sure, what I find more interesting than anything is the opportunity is presents us all to cater to different needs.

What do I mean by different needs?

I looked around while on the plane, I chatted to the person next to me and observed other passengers. The chap next to me was an expat flying home to Spain. The couple behind perhaps heading on a cheap weekend away, the group of lads towards the back, heading it seemed on a stag weekend away.

Yet we were all on the same plane heading to Murcia.

The airline market is competitive, very competitive. . Why would Ryanair want to position themselves out of the market for some customer groups, or massively undercut and lose out on profits from others?

We all have the same need to ultimately use an airline today, but how things are packaged and priced for the different customer groups is the interesting story here. It comes down to not everyone being your customer, but rather the importance of identifying customer types, customer groups and desires to use your product or service and bundling elements of your packages for different personas.

For example, the chap flying on his own back to his place in Spain only has the requirement for the seat on the plane and the small walk on hand baggage; why should he pay more?

The stag group want to know they can get to Spain quickly, with good connections away from the airport. They may have one or 2 bags between them.

We are a family of 5 going away for nearly 3 weeks – our requirements are different and in the modern world of airline travel becoming a convenience akin to train travel, pricing and packaging needs to be adjusted accordingly.

Identifying different customer groups

Who is the user of your product or service? Remember, everyone is not your customer. When I work with businesses to improve their marketing and business proposition, one of the first things I ask is who is your customer ? You would be surprised the amount of times I hear that everyone is that businesses customer – I have never met everyone and I don’t think I ever will, but they seem quite an in demand person!

Assuming everyone is your customer will not only lead to less sales, but ultimately it will lead to more expensive communication to your market as you are pitching so broad that you are likely to miss anyone of relevance for your product.

In a time when reaching so many people has become much more achievable, it seems that alongside that, business now assumes that because they can reach with relatively low budgets, an immense amount of people, that reach is the answer to marketing.

Reach is vanity. We must consider identifying a clearly defined group of people who would most likely benefit from our products and services. This will make your marketing more efficient, more effective, but also help you identify whether or not your product is any good in the first place.

Take my Ryanair example, the older expat chap, the stag group, the young couple, and us – the family of 5, are all travelling to Spain on the same flight, but each with different needs.

Pricing appropriately for different needs.

Once you have your groups identified, now you can break down your product consider which parts are relevant to which group.

Again, to reference Ryanair (and other airlines), some of the options available to purchase, above and beyond my £24.99 seat are…

  • Reserve a seat
  • Front row seating
  • Priortiy boarding
  • Baggage
  • Extra baggage
  • Another cabin bag

None of these are essentials, but they are nice to have if money is no option. Remember, Ryanair, EasyJet, Jet2 and others are vying for dominance in their marketplace in the sky – by breaking down the package to such detail, people can build a price and a package that works for them – for as cheap as possible, or for something that works for larger groups and families.

Now you have identified your customer groups, what can you do now to package your product – or rather deconstruct your product and then repackage – in order to appeal to those customer groups?

Try and identify 3 customer groups and an offer to match: a bronze, silver and gold product.

If money was no option and a customer came to you wanting your max solution, what would it be? What would you charge?

Likewise, if you want to help those who have smaller budgets, but your product can still help, what can you remove or repackage in a way that the core offering is still there, but it is no frills version of what you offer?

Striking a balance between value and service.

Ok, so I use the Ryanair example as it creates instant opinion. Lots of people get frustrated by the strictness of the rules and the seemingly endless charges to everything they offer, but then if you want to fly to Spain for £24.99, you can. It’s not false advertising, it’s not a lie, it’s real and available – you just wont get anything else.

You need to think about the exchange of value and what you charge for use of your products and services.

Marketing has opportunity everywhere and by identifying your customer groups, communicating to them an offer that holds a good perception of value exchange, you will be heading in the right direction.

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Further reading

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