Positioning in Marketing: Definition, Types, Examples, Benefits & How to
Let’s think about it: there are thousands of companies out there, many of which offer the same products, promise similar results, and are generally positioned the same in the market.
So, why would a customer choose one company over another? Why take the first option, rather than the second one, if both lead you to the same type of business that sells the same thing?
The answer is simple: Noone wants to buy a product or service because it can do everything, but rather because it can do something.
And that’s what positioning in marketing implies. A clear positioning statement is at the core of every marketing strategy, which drives the look and feel, words, and phrases of your brand system.
Positioning requires focus and a commitment to a specific niche, idea, or target audience. Your brand and marketing strategy won’t work if you are trying to be all things to all people.
This blog post will unearth some facts and let you know what positioning in marketing is and how to create an effective positioning strategy.
Let’s get started!
Table of Contents
- What is positioning in marketing?
- Types of positioning in marketing
- 5 Benefits of positioning in marketing
- 5 Examples of Positioning in Marketing
- 6 Steps to create an effective positioning strategy
- The bottom line
What is positioning in marketing?
Simply put, positioning in marketing is a strategic process that involves creating an identity/ image of the brand or product within the target customers’ minds.
The process indicates how you differentiate your product/ service from that of your competitors and then determine which market niche to fill. A company’s marketing positioning strategy is affected by plenty of variables related to customers’ requirements and motivations, as well as by its competitors’ actions.
Let’s see some typical examples of marketing positioning:
- Tesla and Audi position themselves as a luxury status symbol
- Starbucks positions itself as a trusted source of upscale quality coffee and beverage
- McDonald’s positions itself as a place to get quick and cheap meals
- Microsoft and Apple position themselves as a tech company that offers innovative and user-friendly products.
Positioning in marketing is about more than simply adding a category or specialty page on your website. With positioning comes a need to live and breathe that expertise - from generating content to conducting research and branding your company to appeal to your defined target buyer.
Types of positioning in marketing
Researchers in the Journal of Business & Industrial Marketing discovered that positioning in marketing is predominantly determined by hard criteria (e.g., quality of product/ service) and relationship-building factors (e.g., personal contact).
Other considerations, such as company structures (i.e., geographical coverage), degree of integration, and breadth of offerings (i.e., location in the distribution chain), also play a vital part. The study also noted that the level of familiarity with a brand is a contributing factor to perceptions of the pursued positioning in marketing strategies.
Below are some common types of positioning in marketing.
Pricing is an essential factor that impacts the decisions of most customers. Companies with the lowest-priced products at a reasonable level of quality usually wins in many product areas.
For example, Gillette vs. Dollar Shave Club. Lower-priced alternatives to some high-quality brands like Gillette have changed the landscape of razors and refill blades. The Washington Post reported on Gillette’s decreasing market share due to Dollar Shave Club’s low prices. The cheapest refill razor cartridge of Dollar Shave Club was 20 cents, compared to $2 to $6 a cartridge for Gillette.
You may be interested in: How to Price to Protect your Margins and Make your Customers Happy
Quality can help rebuff most pricing wars. In some markets, such as luxury cosmetics or cars, quality can define who the competitors are.
For instance, Chipotle vs. Taco Bell. Ranked 14th in the top 50 fast-food restaurants in America by QSR Magazine, Chipotle has grabbed a significant market share over the years by focusing on quality instead of price.
Differentiation is what sets your product or service apart from the crowd. If your product or service is dramatically different, rivals may not pose as much of a threat.
For example, Toyota vs. Tesla. Tesla entered the electric vehicle market with a luxury sports model, rapidly sidestepping economy cars like the Toyota Prius. Tesla actually targeted the high-end market with the Model S.
Convenience creates an easier life for customers. From location to usability, convenience could incorporate something like free returns and E-commerce.
For example, Simple vs. Bank of America. Some traditional banks have been slow to create mobile apps, but online-only banks like Simple have invested in this to appeal to younger and more technical-savvy customers. The company even charges no fees and has convenient built-in budgeting and savings tools.
Customer service emphasizes creating helpful and friendly interactions. This can be especially critical in specific industries, such as restaurants and banking areas.
For example, Allstate vs. State Farm. Both insurance companies recognize the importance of customer service in this industry, where contact with customers is indispensable. They use customer service-based messages in their marketing to focus on this position.
This type of positioning targets a particular group of users and explains why the company’s offerings are directly applicable and relevant to this group.
For instance, Johnson’s vs. Axe. While Johnson’s baby shampoo positions itself as gentle for children, Axe body spray targets men.
5 Benefits of positioning in marketing
There are a number of reasons why you should consider making positioning part of your marketing strategy. With the right positioning tactic, you can create better marketing messages, shape your services better, and structure pricing plans so that you remain competitive.
Here are 5 advantages of positioning in marketing:
Create a strong competitive position
Proper positioning influences how customers perceive your product or service relative to the competition. When you create a positive image of your product/ service in the customers’ minds, you’re likely to enjoy an ongoing market advantage. By doing this, you can claim your position in the competitive landscape, which helps you a lot to stay ahead of the curve.
One of the main goals of any business is to improve sales and revenue. By having a more relevant offering and communicating it more effectively, your company may be able to penetrate a new market, which can translate into new clients and additional sales.
Define a clearer target market
Positioning in marketing allows you to claim a specific feature or benefit and focus your products/ services accordingly so that you appear as an expert in the services. As a result, your value to prospects will increase significantly.
Make more effective decisions
Once you have the core message that ensures successful positioning strategies, you’ll be in a position to make more effective decisions throughout the process. Clear positioning in marketing also drives effective communication, provides healthier and stronger relationships with customers.
Connect to consumer needs
Through positioning in marketing, companies have an opportunity to communicate the critical benefits that their product/ service offers. It not only helps to energize the product but also connects it to the specific customer that needs it.
5 Examples of Positioning in Marketing
Tesla leaves price out of its branding and instead focuses on the quality of their vehicles. Therefore, Tesla is a luxury brand that is more expensive than its competitors. In addition, Tesla automobiles are long-range, eco-friendly, and electric.
Tesla differentiates itself from other gas-powered luxury and standard electric vehicles because of its high quality. The company established a niche market for itself and a fun brand to match it. CEO Elon Musk has even built himself up as a Tony Stark-like character, and the company promotes its uniqueness through ads and quirky features, such as “Ludicrous Mode.”
Coffee consumption in the U.S has been witnessing a downward trend since the 1960’s. Hence, Starbucks was extremely cautious in choosing its target market. Starbucks targeted office workers, from the middle to high incomes, who desired to purchase premium products.
The company wants to make itself the “Third Place” - the place between home and work, where customers could gather, relax, and interact with each other. So, they were vigilant about their quality control to meet the high expectations.
In most of their advertising campaigns, they often highlight their identity by showing the following value proposition statements:
- The best coffee
- The finest milk used
- Rich & smooth flavors
- Natural & clean
- 100% recycled paper use
All of these statements in the ad give a sense to potential customers that they will undoubtedly receive high quality, clean, and upscale beverages they’ll love. With such a successful positioning in marketing strategy like that, it’s no surprise when Starbucks for years has been the top coffee provider in America. People can’t get enough!
Dollar Shave Club
Its name alone demonstrates one of the main aspects of Dollar Shave Club’s marketing positioning: its low cost. The company has focused its positioning on convenience and affordability, creating a relatable brand for the average consumer.
Even though their biggest competitor, Gillette, has a very masculine tone to their messaging and branding, Dollar Shave Club is more casual and cheeky. While Gillette has a sleek look and features guys who look like models and actors, Dollar Shave Club features average-looking people across different ages, who are more relatable to consumers.
Nike started their business with a focus on performance and innovation. The company invented the waffle shoe and built their brand targeting serious athletes. Their offerings have now moved beyond shoes, and they offer athletic attire that promotes performance.
From their “Just Do It” tagline to the namesake, the Greek Goddess of Victory, the company has positioned itself as the market leader of sports equipment widely, providing high quality and innovative technology.
Apple is literally a textbook example of a strong marketing position strategy. The company builds beautifully-designed and innovative equipment that is different from anything else you’ve experienced and markets them to resonate with their consumers.
Apple’s branding message highlights the same qualities in their customers that they do in their products: if you’re an Apple person, you’re also imaginative, innovative, and creative.
Like Tesla, instead of price, Apple chooses to invest more in the value their products offer and form connections with their customers.
6 Steps to create an effective positioning strategy
Step 1. Find your current position
Are you currently marketing your own product or service just like another item on the market, or are you marketing it as something distinctive?
Your current position in the market gives you essential insight into where to go next. You should understand your current position to analyze your competition further.
Think about the following few questions to state your current position in the market:
- What does your brand stand for?
- Who are your target consumers?
- What are your mission and vision?
- What makes you stand out from the rest of the market?
- What customers’ pain points that your brand can solve?
Keep in mind that we all love connecting with brands that sound and feel authentic to us. Instead of setting up a complicated lingo that no one can understand, just talk human. Begin with researching who your existing and ideal audience is, and use their language.
Related topic: Define your Customer Before Marketing
Step 2. Analyze your competitors
After understanding yourself, it’s vital to analyze your competition by performing competitor analysis. Why?
Because you need to see who you are up against to conduct competitor research. It will help you decide what you can do better to gain an edge.
There are many methods for determining your competition, including:
Conduct market research. Do a quick search using relevant keywords and see which companies are listed. Or, you can ask your sales team what rivals come up during the sales process.
Use customer feedback. Ask your consumers which businesses or products make them consider before choosing yours.
Take advantage of social media channels. Many free platforms allow users to ask questions about products and services. Search these communities and forums to explore competitors in your niche.
Once you have identified who your competitors are, it’s high time to do in-depth competitor research. The ultimate goal is to see how your competition is positioning their brand. So, your research should include:
- Products or services your competitors offer
- Their strengths and weaknesses
- Marketing strategies they are using successfully
- Their position in the current market
Step 3. Develop your unique position
Building a unique position is all about determining what makes you different and what works best for your business.
Chances are, after conducting competitor research, you’ll begin to see something. You can realize some businesses that have the same strong and weak points. When you compare your product or service to theirs, you might find one of their weaknesses is your strength.
This is exactly what makes your position unique, and it becomes the perfect starting point for positioning your brand in the market. Remember to note your unique offerings as you compare and dive deep to see what you do better than anyone else.
Step 4. Create a positioning statement
A positioning statement is necessary because this one-or-two-sentence statement declares your brand’s uniqueness to your customers in relation to your main competitors.
Some experts recommend answering these questions before creating your positioning statement:
- Who is your target audience?
- What is your product or service category?
- What is the greatest benefit of your product or service?
- What is the proof of that benefit?
For example, let’s look at Amazon’s positioning statement: “Our vision is to be the earth’s most customer-centric company; to build a place where people can come to find and discover anything they might want to buy online.”
Amazon sells a wide range of products for everyone, although incredibly broad, which is their greatest benefit. And what about the proof? It’s all online.
Step 5. Create your tagline
Once you craft a strong positioning statement, you can create a tagline, or better known as a slogan, for using externally for potential customer messaging. Instead of the positioning statement, it is a shorter and more condensed version of what you want your customers to know.
For instance, here are some well-known taglines for your reference:
- L’Oreal: “Because you’re worth it.”
- Nike: “Just do it.”
- Target: “Expect more. Pay less.”
- Home Depot: “You can do it. We can help.”
- Southwest Airlines: “The short-haul, no-frills, and low-priced airline.”
By doing that, you can easily use it in other marketing efforts to get your business point across, much more effectively than a longer and detailed positioning statement.
Step 6. Test your marketing positioning
Nothing should be left to chance, especially when it comes to your positioning statement. Once it is created, you should spend time testing, experimenting, and gathering feedback from your consumers on whether or not your positioning achieves its goal.
Testings should feature a blend of quantitative and qualitative research, from surveys and polls to focus groups and in-depth interviews. Based on these tests’ findings, you can finally solidify your positioning in marketing and adjust your marketing efforts, if necessary!
Positioning map: The power of perception
If you want to clearly see how your business compares to others in consumers’ perceptions, a brand positioning map can help.
A brand positioning map consists of different attributes that are essential to your target audience. To do mapping right, it’s best to create multiple versions of the map based on different sets of attributes. By placing your brand and competitors on the map, you can see who’s more competitive in a particular area over the rest.
The attributes used in the positioning map come directly from the values your customers interested in. The perception of your product/ service is directly linked to those values. For example, take a look at the below positioning map, what’ll you see?
It’s easy to see that Domino Sugar is the dominant player that is tastier and more natural among its competitors.
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The bottom line
Positioning in marketing is no easy feat; it requires time, dedication, and even the courage to say “no” to some things. However, it’s critical, especially when you’re struggling to create consistent revenue streams, bring in new customers, and retain your current ones.
It’s a way to attract prospects, talent, and influencers to your company, and that is something you definitely have time for. Hopefully, our guide to creating an effective positioning strategy can help you deal with that!
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