What is product positioning?

Product positioning is a strategy that defines where a product or service sits in the marketplace compared to those offered by a competitor.

Understanding product positioning

In essence, product positioning clarifies the features that make a product unique and how those features contrast with a competitor’s offering.

The strategy considers the needs and wants of the target audience and endeavors to make a lasting impression in customers’ minds. 

Product positioning requires that the business first determine how it wants its brand and products to be perceived.

To differentiate their brand from the competition, the marketing team must be able to describe the product benefits and connect them to customer needs, mission, vision, brand essence, and the market more generally.

Product positioning must also be sensitive to the most effective communication channels and competitor product alternatives.

Effective product positioning meets customer expectations, reinforces the brand, and secures customer loyalty. It can also be used to attract different customers, launch a new product, or promote the new features of an existing product.

Product positioning types

There are five main types of product positioning, with each having a different focus:

  1. Characteristics-based – some companies attribute certain characteristics to their products to create associations. Most consumers associate Volvo with safety and Toyota with reliability, for example.
  2. Use or application-based – a company that sells nutritional supplements may promote their products to customers who are active and want to increase their performance during exercise.
  3. Price-based – where companies associate themselves with competitive prices. Supermarkets and other retailers with access to economies of scale position their many of their products in this way.
  4. Quality or prestige-based – instead of focusing on price, some brands positions their products based on quality and prestige. Watch brand Rolex is one example.
  5. Competitor-based – some product-positioning strategies are based on the competition. To promote its razor blades, Dollar Shave Club indirectly referenced Gillette’s expensive, feature-rich razors, showed it understood the pain points, and then offered an alternative.

Product positioning statements

Product positioning can be clarified using the follow statement template: For a [group of users] who [want/need], [product/brand/company] is a [solution/category] that solves this in a unique way by [benefit].

Consider a fictitious company that builds a running app for those entering the sport to improve their fitness.

For the sake of the example, let’s call the company Swift. Market and customer research shows that the target audience is concerned with their physical condition but has trouble consistently exercising.

The research also showed that runners in the 18-29 age group are social, competitive, data-driven, and enjoy sharing their wins with a community of like-minded individuals.

With that in mind, the product positioning statement may read something like this: For runners in the 18-29 age group who want to connect with others, Swift offers the leading social, data-driven running performance app that provides a space for the running community to foster a healthy competitive spirit and celebrate wins.

Key takeaways:

  • Product positioning is a strategy that defines where a product or service sits in the marketplace compared to those offered by a competitor.
  • There are five main types of product positioning based on the following: characteristics, use or application, price, quality or prestige, and the competition.
  • Product position statements clarify the company’s target audience, what makes its product unique, and most importantly, why customers should care about it.

Connected Business Frameworks

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