How can an entrepreneur position a product in the market?

For an entrepreneur, positioning the product is the most important thing to become successful. For e.g. take the case of Soap market. There are thousands of kinds of soap in the market. There are market leaders(P&G, Unilever ) , followers and also-rans. Then there are categories of soaps such as disinfectant soaps, skin care soaps, body care soaps etc. Next, the soap segment is divided further by the types of distribution channels selling them. (soaps available in super market vs local grocery stores vs luxury hotels). finally, there is distinguishing by price. Some soaps are really cheap while some are extremely expensive . Most of them occupy a place  in the middle. In my opinion, soap is one of the most dissected and explored product line in this world.  Just start naming the soaps products you know and you will be surprised by how many you can recall . Still, every day or two, new soaps are being launched and further categories are being created. There is an important lesson in positioning your product in already crowded market. Many time entrepreneurs want to go head on with existing market leaders.I remember an entrepreneur who wanted to start a new airline. He had some good amount money with him and he was interested in starting a new airline business. When asked about what was his plan, he said that he would buy a few planes and start operating as soon as possible. Nothing more. He had absolutely no plans about where to position his airline business. Was he competing for price, routes or something else ? He had no idea . In an another story, I knew a person who was planning to compete against IT biggies on the basis of cost. His position was that since he was operating from a cheaper location, he would be able to service his client at a less cost. Having worked in IT industry for long, I knew he would find it difficult to survive because a bigger competitor sometimes just do work for free. How can you compete with free? Your large competitors have enormous amount of capital. They have been in the market from many years. They understand the problems and opportunities much more better. They have huge marketing teams to outwit any new entrant. Unless until you have something similar to their experience and clout, don't even try to think about attacking them. Remember David Vs Goliath story? David was able to beat Goliath because he stayed out of the reach for long .  That is how an entrepreneur needs to position himself in the market out of the way of big competitors. Take a look at some ways how your entrepreneurial venture can do that.

A great positioning  is well researched.

A well defined positioning strategy is all about finding the right niche or areas that are unexplored. A nicely researched strategy which documents the various products and their territory( financial as well as geographical)  in the market makes it very easy to create a new segment. Let us take an example of soap market above. Does it make any difference if we add one more soap brand to this market. We can use new design or packaging but soon it will be copied by our competitors. So what do we do? Create a new category, liquid soap. ( Infact liquid soap was an unexplored market a few years ago in India). It does add to the crowd in soap market and is thus differentiated.

Why is it a good strategy ?

The giants in soap market would probably not notice the new category ( because it is too small to be profitable) . Bigger companies are slow to respond and that is where entrepreneurial ventures have an edge.

Next -> Launch a car

If you want to launch a car where would you do it? There are hundreds of cars in almost all segments ( petrol and diesel). So where is the opportunity. Hint : A car that does not run on fossil fuel( at least directly). Reva is such a car and it is quite a hit. If you want to launch a drink in the overcrowded soft drink market, go for health drink market . If you want to launch a software service, a specialized segment is better. That is why research is extremely important for finding out the right segment you want to be a leader in.

A great positioning is far away from leader's radar

Remember in the story "Lord of the ring", only way for Frodo Baggins to reach tower of doom was not to go in the sight of Sauron. If he had done that, humans would not have won against Mordor. He did it under the radar and did it successfully. A great positioning strategy, if you are a small entrepreneur is to find out the segment that is so small that a leader will ignore.  There is always a hidden demand in every new category. No one wanted burgers around the world, till Mc Donald  brought it to them. MacDonald used fried stuff. KFC successfully used boiled chicken as a differentiators. Subway brought in their bread at the healthy food category. Always try to find out the segment that is so small for a leader to even consider and then dominate it.