How To Craft The Perfect Product Positioning Strategy
Product positioning is the art of carving out a place for your product in the minds of your target audience.
It's not just about what you sell—it's about how your product is perceived relative to the competition. A strong positioning strategy ensures that customers understand your unique value, making it essential for standing out in a crowded market.
Get it right, and you'll foster loyalty, drive sales, and stay top of mind. Get it wrong, and your efforts can backfire catastrophically.
So, how do companies master it? Let's start from the beginning.
What Is Product Positioning?
According to the classical definition, product positioning refers to the way you differentiate your product from other brands in the market, establish a distinct brand identity, and create a unique competitive advantage.
A more non-conventional definition would be how consumers perceive and describe your product in a single sentence.
For example, how would you describe Jira? Most likely, it will be something similar to this:
“It’s a task management tool for software teams.”
Now, how would you describe the messaging app Signal? Again, many of you would probably call it “a messenger for security-sensitive users.”
These two sentences are what product positioning is all about.
Why Is Product Positioning Important?
Product positioning is important because it ensures your market survival. If you don’t have a clear and sound positioning or your users can’t describe what your brand is about in a single sentence, you will have a tough time competing with your competitors.
No positioning means that you are no different than anybody else. However, it’s easier said than done, and there are two nightmarish scenarios that you may face when trying to position within the market:
- There are few products with positioning; the rest don’t have one.
- Everyone in the market has a position.
In the first case, you will be considered a generic product “about nothing.” Your place is in the supermarket aisle, where people will have difficulty finding you, surrounded by other similar products.
They would only pick you through sheer luck as they just happened to find your product first.
In the second case, you’re doomed. Competitors with proper positioning will outshine you, and the chances of people picking your product instead are close to zero.
Product Positioning Examples
To better understand product positioning, let me share a few real-life examples of products that have owed much of their success to their sound positioning strategy and proper execution.
Lush’s Fight Against Animal Testing
Lush is my family's favorite skincare and cosmetics brand. We love Lush for the quality of its products and for its notorious commitment to eliminating animal testing in the beauty industry.
Rather, their products are tested by dermatologists without the involvement of any animals.
Do you think they really believe in this cause? Most likely, yes. But fighting animal testing also happens to be their positioning. They even sell reusable bags at checkout that announces their stance.
Lush is not the only beauty product manufacturer with cruelty-free testing processes. However, it is well-known for its socially conscious ethos, which extends to testing, manufacturing, and sustainable packaging choices.
In effect, Lush has secured its reputation as a go-to brand for consumers who value the strong ethics of the brands they support.
The Luxury of Mercedes
Take a few seconds to mentally list several luxury car brands. I bet Mercedes came to mind first—or, at the very least, was in your top 3 (the other two probably being Tesla and Lexus).
But why do most of us associate the cars produced by the oldest manufacturer in the world with luxury? That’s right, it’s because of their positioning.
Mercedes produces everything from family sedans and trucks to sports cars. They are also famous for their G Wagons and the S Class vehicles. But even though not every car made by Mercedes screams "luxury vehicle," there’s a reason Mercedes is the most common car among world leaders.
If you look closely at their ads, it’s not about the speed or the mileage of each car. It’s how they've successfully positioned themselves as the make of triumph, power, and luxury.
The Accessibility of Android
Moving to digital products, let's take a look at Android. Among the many factors behind its massive success, one factor in particular trumps the rest—Android is an operating system for everyone.
After a careful analysis of the market, Google understood that, unlike Apple, it wanted to enter the mobile world by focusing on the mass market.
The logic here was simple. It was really hard to beat Apple by producing high-end phones and the OS that goes with them. Whatever you do, Apple will always be, at least, a couple of years ahead of you (because they keep improving their products, duh).
So, it was more pragmatic to target the mass market to gather as many users as possible. This has been Google’s overall strategy for their many business ventures, including Android.
Hence, they ended up positioning themselves as the OS that is accessible to anyone. As a result of this positioning, they developed an operating system that pretty much any device could run. They also made it available to any phone manufacturer to use for the same reason.
In the end, thanks to picking a pragmatic positioning and sticking to it, they became the dominant OS in the world with a 70% market share.
Benefits of Product Positioning
Simply stating that positioning is important would be a major understatement!
A well-selected and executed positioning strategy is key to your product’s success in the market and comes with a vast array of benefits, including:
- Solidifying a market segment for you: Positioning allows you to better solve the pain points of a specific section of the overall market. If you’re a digital artist, you are very likely to pick the latest iPad Pro on M4 chip along with the Apple pen as no other tablet can fulfill your design needs. So, the iPad Pro’s positioning as “the tablet for designers” has enabled Apple to obtain a strong grip on the artist segment of the tablet market.
- Creating a sustainable revenue stream: Thanks to your ability to solve the problems of a certain segment better than anybody else, you are less likely to be outcompeted and lose paying customers from that segment. Therefore, you can enjoy a predictable and sustainable revenue stream.
- Standing out in the crowd: The hard truth is that unless you have a clear position in the market, you are doomed to be nobody in the eyes of your target audience.
Pitfalls of Product Positioning
Despite its importance, product positioning is not void of any problems or challenges.
Specifically, there are three significant caveats that you need to take into consideration when selecting and executing your positioning:
Misaligning positioning and the product
It’s really easy to invest in a positioning strategy that does not accurately represent your product’s capabilities. A good example of this is the story of luxury phone maker Vertu.
The Un-Virtuous Tale of Vertu
When Vertu switched to producing touchscreen phones, they picked Android as their operating system for some reason.
As previously mentioned, Android was positioned as an OS for the masses; thus, it was certainly a bad fit for a luxury phone with the price tag of a brand-new car.
Naturally, the consumers paying that price did not get the expected luxury customer experience from Vertu’s operating system and were outraged, resulting in highly negative customer feedback. There was also no proper differentiation from other new smartphones, and the perception of high-quality phones was lost.
Due to bad positioning and a lack of unique selling points (USP), the company failed miserably and quickly lost its position in the smartphone market.
Cost of execution
It’s very expensive to pick and execute positioning. You will need to run a deep analysis of the market to understand the positionings of other players, the needs of users and the gaps available for you to exploit.
After picking one, you will need to run an endless series of product marketing campaigns to solidify your positioning in the minds of your target audience.
Loss in market adaptability
Aligning all of your product and marketing efforts around your positioning means that it will be hard for you to change it. If user needs or regulations change and your positioning is no longer valid, adapting to the new reality will take quite a while.
Elements of Product Positioning
Now that we have a clear understanding of what product positioning is about, let’s break it down to its barebone components.
Effective product positioning is complex and consists of dozens of different layers. The components of positioning will also change depending on the product and specific market.
However, they all share several core elements. These elements include:
- Target market: the group of people with specific needs and pain points for which your product is made.
- Mission: the path your product is taking to reach its positioning and take over a target market segment.
- Core marketing message: includes your tagline and the underlying message your marketing content is trying to communicate. For example, the core message of the iPad Pro is that it’s the best tablet for creators and artists.
- Branding: your brand name, colors, and the overall way you represent yourself in the market.
While focusing on perfecting these components is important, remember that you will not achieve proper positioning by achieving them one at a time. Proper positioning is about having all of the components working together simultaneously. The complete set is larger than the sum of its parts.
How to Position a Product
Now, let’s understand what you need to do to prepare these core elements. Let me share a simple 4-step plan to help you position your product.
1. Know your consumer base
Good positioning is about connecting with your target audience and creating an image that best represents your brand or product in their minds.
To do this, you need to understand who they are and their unique pain points. You can run user interviews, examine demographic data, ask people to fill out surveys, and even attend relevant trade shows to talk to them face-to-face.
No matter which path(s) you take, your end result should be a buyer persona document that:
- Describes the person you’re targeting
- Indicates their demographic data
- Includes the environment where the need for your product occurs
- Contains the pains and problems that they are experiencing at that moment.
You can find templates for a buyer persona document in most product planning tools.
2. Analyze competitors
Knowing your potential customers is only half the battle. The other half is about knowing your competitors.
What you'll want to do is conduct market research and create a list of their positioning, unique value proposition, a backlog of product features, key messages, target customers, user experience, retention, market fit strategy, and more.
You will then place all of this competitor information side by side to better understand their similarities and differences. The similarities are what you need to have in your product to survive. The differences, on the other hand, are how they position themselves. You don’t need to copy them here. Instead, you will need to find a gap in their positioning strategy and exploit it.
3. Identify gaps in the market
Speaking of gaps! To understand how this element of your marketing strategy works, let's imagine that you’re building the visual collaboration tool, Miro, from scratch. You’re at the very beginning of your journey, and you have no idea how to position your product. So, you use the information you have gathered from your competitor research to visualize how they position themselves.
The end result should look like a chart with X and Y axes representing certain characteristics of the products in the market. In our case, X would represent the quality of collaboration in that tool, and Y would show whether the tool is niche or built for the mass market.
Looking at this chart, you’ll notice that there are two empty areas. The first one is mass products with bad collaboration—a place where nobody wants to be. The second (highlighted with a red oval) is tools that are meant for everyone and are great at collaboration.
This is a market gap that your product can fill. Therefore, you can define your market position as a collaboration-first visual design tool for the masses.
That’s exactly what Miro is about.
4. Determine what emotions you want to evoke and formalize your message
Finally, after identifying the gap and obtaining a clear understanding of how you want to position yourself, you need to formalize your product positioning statement.
The most important part here is considering the emotions that your target audience will experience when interacting with your marketing content and product.
For example, when you watch a Mercedes ad, test drive their cars, or buy one, the specific feeling you get is that you’re a high-class, powerful, and successful person simply because you drive a Mercedes.
It doesn’t matter if you’re actually that kind of person. Many Mercedes drivers have taken out loans they can't afford in order to buy their car, but you can bet they still get that 'I drive a Mercedes' feeling.
And that’s why positioning matters.
The 7 Best Product Positioning Strategies
Following the steps described above will definitely help you to find your positioning. But, apart from that, I would also like to share a couple of handy tips to significantly simplify this process for you.
Namely, you can consider:
- Pay attention to your price points. No matter how well you position your product and cover their use cases, your target customer needs to be able to afford it. Otherwise, they will choose other, similar products, instead of yours.
- Keep all of your strategic elements in harmony. Your product strategy, its key benefits, and your product’s unique value should all match your positioning.
- Build a roadmap of features that take you towards your positioning. In general, your product development should always work on unique features that are aligned with your positioning.
- Never be misleading. Make sure that the quality of the product matches the expectations of your audience.
- Help prospective customers choose. Create comparison pages displaying why your product is better than others in your market segment.
- Don't bite off more than you can chew. Do not try to expand to other markets until you feel like your segment is saturated.
- Consider your positioning in every single touchpoint. Make sure your positioning is reflected everywhere, from social media posts to landing pages highlighting your selling points and product benefits, and even your product requirement documents.
Finally, you should keep the positioning steady in the long run, unless the market conditions change. Sometimes it takes years to achieve proper positioning in the market. So, be patient and don’t worry if the process is slow.
Product Positioning Templates
Usually, in cases like this, I would suggest downloading some kind of spreadsheet or Word document where you can fill in the necessary information and create a positioning document for yourself.
Luckily, it’s the 21st century and you don’t have to rely on janky spreadsheets anymore. Instead, my suggestion is to use a specialized product planning tool that has the functionality required for positioning built-in.
To understand how to select one, be sure to check out our guide on what product planning software is about and which one is best suited to your specific needs.
Further Learning
If you ask the marketing and product gurus out there, they will tell you that reading a single guide is not enough to completely understand product positioning.
I absolutely agree with this claim.
Our guide can help you kickstart your first positioning, but you can’t really claim to have mastered it unless you try it a few times and read the more advanced literature from the masters of product positioning.
Here’s what I suggest checking out:
- Brand Positioning with Power by Robert Gordon.
- The Battle For Your Mind by Jack Trout
- Creating Brand Loyalty by Richard Czerniawski
Finally, positioning is only one aspect that you need to get right to achieve product success. Therefore, I also recommend that you subscribe to our product newsletter to learn about the other important aspects of successful product management.
