What Is Brand Positioning And Why It Matters In Business

Brand positioning is about creating a mental real estate in the mind of the target market. If successful, brand positioning allows a business to gain a competitive advantage. And it also works as a switching cost in favor of the brand. Consumers recognizing a brand might be less prone to switch to another brand.

Understanding brand positioning

Brand positioning allows consumers to view brands in unique ways. For example, a consumer may associate emotions, traits, feelings, and sentiment toward a brand. Ideally, these factors give the brand a competitive advantage because positioning encourages consumers to make the decision to buy from one brand over another.

Band-Aid is an example of a brand that is well-positioned in the minds of its customers. Whenever someone is injured, Band-Aid is the product that first comes to mind despite there being many similar products on the market. In fact, Band-Aid is so entrenched in the minds of consumers that the brand has become a noun and entered everyday usage. Such is the level of integration that even non-injury related problems are sometimes referred to as needing a “band-aid solution”. 

The importance of brand positioning

Effective brand positioning shapes consumer preferences by increasing consumer loyalty and brand equity. High brand equity is particularly important since companies can charge more for their products and increase profit margins. 

The perceived brand equity in one product can also extend to products that contain the brand name in their description. For example, Virgin had humble beginnings as a record store in 1970. 

But Richard Branson has since extended the Virgin brand to many other products in airlines, trains, financial services, and cell phones. 

With each successful foray into new markets, Virgin increases their credibility and brand position among consumers. This allows the Virgin brand to become competitive relatively quickly through market differentiation. 

Different types of brand positioning

Choosing the most effective brand positioning strategy will depend on how a company chooses to differentiate their product from others in the market. 

Here are a few of the most common positioning strategies:

Value-based positioning

Value-based positioning places the brand based on its value proposition – or the tangible benefits a customer will experience from purchasing or experiencing an offer.

Value often means different things to different people, but it is usually related to completing a task, solving a problem, and increasing convenience and/or status. 

Features-based positioning

Features-based positioning is important in competitive, saturated markets where there is little differentiation between products. 

Common in the cell phone industry, this form of positioning focuses on product-level features such as price and quality and service features such as warranties and money-back guarantees.

Lifestyle positioning

In lifestyle positioning, the brand attempts to sell an image or identity, instead of the product itself. Here, the main focus is on convincing a consumer that the product is associated with a lifestyle worth aspiring to. 

Alcoholic beverage brands most commonly use lifestyle positioning, but it can also be seen in the marketing of gambling services, luxury cars, and certain clothing products.

Key takeaways:

  • Brand positioning is the unique space a brand occupies in the minds of consumers.
  • Brand positioning facilities an emotional connection between brand and consumer, increasing brand equity in the process.
  • Brand positioning strategies differ according to the product market and the features of the product that need to be emphasized.

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