How do businesses effectively position their products? One way to do this is by using Bowman's Strategic Clock. Bowman's theory includes a clock-shaped model which consists of eight different positions. Let's take a look.
Bowman's Strategic Clock theory
Bowman’s Strategic Clock is a strategic tool that designs a marketing strategy to analyse a company’s competitive position.
It aims to help with determining how a product should be positioned to give it the most competitive position in the market. It consists of eight positions across the clock indicating a different market strategy. It was invented by Cliff Bowman and David Faulkner and first published in 1997 in a paper called “Competitive and Corporate Strategy”.
Bowman's Strategic Clock Method
Firstly, you should think about the two dimensions: value and price of a product or service. These method will guide you and help you to arrive at one of eight positions on the clock. See Figure 1 below.
Figure 1. Bowman’s Strategic Clock, StudySmarter
1. Low Price and Low Value Added
In this strategy, the price and value of a product or service is very low. It is probably the least competitive strategy in Bowman’s Strategic Clock.
Poundland sells low-valued products at very low prices, usually at £1 or less.
2. Low Price
This strategy is about providing customers with a product or service at the price lower than the price of the competition. Usually, businesses using this strategy focus not on quality, but on quantity. They aim to minimise the production costs in order to sell as many units as possible at the lowest price.
Ryanair provides customers with flights which are theoretically a high-valued service. However, Ryanair cuts all the possible costs in order to offer the lowest price.
3. Hybrid
This strategy combines low price and product differentiation. Companies using this strategy aim to make their product or service highly valued in the market and in the eyes of their customers. However, the price of the product is low and therefore highly competitive.
Ikea offers a variety of highly valued products at reasonable prices.
4. Differentiation
Companies following this strategy try to make their product or service different from the products offered by their competition. Typically they offer the same product or service, but with some unique features.
Adidas offers products that are the same as their competitors (sports clothing, shoes and accessories). However, their products are unique as they have a different, specific design which is not offered by any of the competitors.
5. Focused differentiation
This strategy combines high value and high price. Here companies produce distinguished and high valued products or services and sell them at the highest price possible. Businesses using this strategy usually make high profits, but they have to put in a lot of effort to make it work successfully.
Chanel offers highly valued and distinguished products. Their products are high-priced and their customers are willing to pay much more than their competitors.
6. Risky High Margins
This strategy combines high price and low value. Here companies offer a low valued product or service, but sell it at the highest price possible. It is a fairly risky strategy that is usually used by businesses with a strong brand name.
Some gyms tend to offer expensive membership even though they do not offer much more than their competitors.
7. Monopoly Pricing
In this market, there is only one business which controls a product or service and its price. There is no competition, but companies using monopoly pricing should keep an eye on the market since all monopolies come to an end.
Microsoft offers a service that is the only option for customers looking for an operating system.
8. Loss of Market Share
This is a strategy for companies exiting a market or being in decline. It is used when companies lose their customers, become less profitable and therefore are forced to lower the prices of their products.
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