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Product Positioning


What is product positioning?


Product positioning definition

Product positioning is a strategic marketing exercise that challenges teams to decide how they want their product to fit in the marketplace. 

Every product has a unique positioning; yours may be that it’s cheaper than the next competitor, faster, more feature-packed, ethical, luxurious, revolutionizing the space, and so on. Product positioning is all about how you want the market to think about your product — and requires you to communicate how it can solve your customers' problems better than its competitors.

Why is product positioning important?

An old saying states if your product is for everyone, it's actually for no one. Brands should be looking to target specific customers to help create a competitive advantage

Product positioning does just that. It allows you to shape how consumers think about your product based on how you market and communicate its benefits. 

With more precise targeting, you can directly interact with your ideal customer. Your product positioning should answer users’ questions and address their key pain points. 

For example, Lululemon originally positioned itself as an affluent and prestigious niche yoga brand. The goal for Lululemon was not just to sell their product but to promote the benefits of wearing their clothing. Their product positioning helps them sell an experience as well as their products.

What are the types of product positioning?

As we explored above, there are several different types of product positioning — the one you choose all depends on your target users’ wants and needs.

The most commonly used positioning strategies are:

Product positioning in marketing

The best marketing strategies are built around product positioning. Proper product positioning can help you reduce ad spend and find interested buyers by presenting your product to a highly targeted audience. 

The idea is to position yourself to control how customers think about your product. You can control this by deciding who you are targeting and what product benefits you want to highlight to trigger a positive response from the customer. 

Price-based positioning

The price of a product is one of the first tools customers use to compare their options. Not only is cost very important in both the b2b and b2c space, but a product’s price also speaks volumes about its position in the market.

Price-based positioning refers to offering your products at a competitive or lower price versus others in the market. And, most often, consumers choose these products based purely on price — without considering or comparing the other options. The best example of price-based positioning can be found in the grocery store, where promotions help brands compete on cost savings head-to-head.

Lifestyle-based positioning

Brands may also define their market position by associating their product with a certain usage or lifestyle. A finance app, for example, can either be advertised as helping grow your personal wealth through high-risk trading and investments — appealing to a certain fast-paced lifestyle — or it can be positioned as a savings aid for families who want to put a little aside each month.

Products may contain the same or similar features, but the benefits of using those features will be explained (positioned) differently. 

Characteristics-based positioning

Reliability, performance, efficiency, sustainability, aesthetics, and novelty — these are all characteristics that help create a unique positioning for a product. Positioning your product based on these characteristics encourages consumers to develop a certain brand image based on what your product can offer. Just look at how car brands position themselves: Volvo is about safety, Toyota is about reliability, and so on.

Quality- or prestige-based positioning

Remember how we said that price can be a positioning tool? Well, prestige positioning is when brands avoid competing on price — using their higher fees to suggest a product of higher quality or status. A watch is always a watch, and yet Rolex has secured and forever protected its space in the luxury watch market.

What is an example of product positioning?

We shared a couple of product positioning examples above, but let’s look at a very well-known brand/product positioning in more detail. 

Nike is one of the world’s most prominent brands and their products have become known as competitive sportswear for everyone (not just elite athletes). Instead of simply positioning itself as a manufacturer of shoes and sportswear, Nike positions itself as a company that provides athletes from all walks of life with high-quality, fashionable apparel. Better still, these products perform under the most extreme conditions and inspire athletes to excel.

Looking at the tech space, we see great examples of characteristic-based positioning everywhere: "Voted brand with best-performing laptops for three years in a row. The highest-rated HD i10 core processor notebook currently on the market."

How to develop a product positioning strategy?

How do you develop your product positioning strategy? Here are a few key steps to follow:

1. Perform a competitive analysis: Identify key competitors and compare your product to theirs. Highlight key differences and what makes your product unique. The objective is to turn features into benefits for your messaging. 

2. Perform a brand positioning analysis: Analyze how your product and brand are currently perceived in the market. Ask customers for feedback or send out surveys to gather data. You need to know how people see your brand before you can make any changes. 

3. Compare your positioning with your competitors: After seeing how your customers see you, compare this to your competitors. Who are they targeting? What benefits do they highlight most? 

4. Determine the gaps in the market: You should have a clear understanding of the market now. Use this knowledge to highlight any gaps in the market. Which of your product’s unique benefits can fill these gaps? This step is critical to get a detailed image of who you are as a brand. 

5. Develop a new positioning strategy: Finally, you can combine all this information and research to develop a new positioning strategy. To finish a positioning strategy, you need a concise product positioning statement. 

How to write a product positioning statement

A well-written product positioning statement describes a product or service and how it fits into a particular market. This statement is used by sales and marketing teams to communicate your product’s benefits to potential customers. 

Here’s how to write an effective product position statement: 

1. Know your customers 

By now, you should have a good understanding of who your ideal customer is. You’ve done competitor research, gathered customer feedback, and found gaps in the market. 

2. Keep it concise

The most successful positioning statements are concise. The goal is to create a detailed message in a few short sentences. 

3. Align your message with your brand’s values

Your brand story, mission statement, and company's values should all align in your positioning statement. A consistent brand alignment allows customers to identify and resonate with your message across different marketing channels. 

4. Keep the focus on the customer’s needs

Your statement should focus on customer needs by voicing what sets you apart from your competitors. 

For example, does your customer really care about price? Then try focusing on why your product is the best affordable option. The most important thing is to keep your messaging aligned with what your customer cares most about. 

Product positioning matrix and map (+ a PPT template)

A product positioning matrix or map is a visual representation used to measure and compare your product’s position versus that of your competition — the matrix/map visualizes key differences among competing brands across relevant dimensions. These models are used in product positioning strategy work, usually in a matrix format that visualizes competitive differences against two axes. 

You can find a product positioning matrix PowerPoint template right here.

When it comes to your own mapping exercise though, you may need to rename the matrices. Think about the comparisons that make sense to your product and competitive marketplace — are you exploring price-based, characteristic-based, or quality-based differentiation for example?

When used well, the product positioning matrix allows you to identify how competitors are positioned relative to your product — revealing opportunities in open segments and risks in overcrowded ones.


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Product Positioning

General FAQ

Why is product positioning important?
Product positioning helps to create and protect a unique place in the marketplace — and in consumers’ minds. This is vital for product success as users will be able to instantly understand what you’re offering and see that your product best suits their needs.
What are the steps to positioning your product?
From there, you can identify which product benefits best meet their needs. Then, you need to compare how your product benefits fit among competitors — what can you do better or offer that other similar products can’t?
What are the elements to consider for product positioning?
Identify these elements before you embark on product positioning: target audience, customer pain points, who else you’re competiting with in the market, what your unique selling proposition could be, and the different positioning strategies as shared above (price, lifestyle, characteristics, quality or prestige).
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