Product Positioning Process Explained: The Power Of Perception

Product positioning

What if you could get a clear vision of how exactly you should market a product by following one simple formula? And, which is even better, it won’t require stretching the truth or using any selling hooks. With the pandemic prompting a tremendous shift towards online shopping, consumers have too many choice options. Brands that want to stay relevant have to nail the magic combination of highlighting the right features for the right audience on the right platform. Here’s where product positioning comes into play.

What product positioning is

Product positioning is a relatively short statement that depicts the exact place you want your brand to occupy in the mind of the target audience. It follows a standard formula:

Among [target market], [x] is the brand of [frame of reference] that [point of difference] because [reason to believe].

Example

Among families with children, Branch Basics is the brand of household chemicals that is safe for kids because it is plant-based.

Product positioning is not a course of action, rather, it is a theory that prompts further actions, and a base for the subsequent marketing strategy. It shows what your brand can do for a certain community of people and what makes the product different from other existing alternatives.

Main tasks and purposes of product positioning

The main purpose of formulating a product positioning statement is getting a crystal understanding of what exactly you are offering, who benefits from it most, and why. You can then get closer to solving the following tasks:

  • Segmenting the audience to narrow down the interested groups
  • Finding the appropriate marketing channels to reach them: social media / digital advertising / newsletters (check out our email marketing strategy tips for best practices)
  • Figuring out ways to present the product as valuable and trustworthy
  • Highlighting the product’s competitive advantages
  • Applying that knowledge to market existing products and develop future ones

Why is product positioning important?

If you don’t know your target audience, you might be trying to sell a product to people that do not even need it. Unless you’ve deliberately chosen the right medium to broadcast your message, it will not get noticed. And without the unique selling proposition reflected in that message, you are just another brand among many other businesses.

Product positioning does not guarantee immediate success on all those fronts. Your first few hypotheses might seem in vain. However, if you learn from them and adjust to the feedback from your customers, it can take you far. Keep testing different audience segments, introduce new competitive advantages, or reinforce existing product features, and turn to statistics to find the right market position for your product.

Example

The first version of Instagram, called Burbn, was meant as a location data app. The launch wasn’t too successful: people were not using the check-in features as much. But they were actively posting and sharing photos taken from their phones though. So the creators decided to drop all of the extra features and focus on social photo-sharing. The newly positioned product was called Instagram, the rest is history.

What elements define it

A product positioning statement is short and simple but getting it right requires a lot of preliminary research. A good place to start is to consider the elements that define your brand and the specific product. Look both internally and externally: while the customer should be at the heart of everything you do, your own goals and capacities are also important.

Mission

A mission statement is all about where your brand is at right now: the services you offer and the impact you hope to have on people’s daily routines. As the product list changes from time to time, the mission is often revised. Use the message reflected in the brand as a reference for the positioning formula.

Example

cradles

From Cradles to Crayons’ mission statement, we can see that the audience of the brand is capped at children aged 12. Therefore, the “target market” in the product positioning statement cannot exceed that age group. It can, however, represent an even smaller segment of it.

Vision

A vision statement is an overview of your future objectives as a brand in the span of 5-20 years. Unlike the mission, it does not need to be reviewed as often. Vision is most commonly verb-based (to make, to deliver, to organize, to bring, etc.). It can reflect:

  • Your management aspirations: to end the water crisis (Charity: Water), to enable economic growth (CAT), to move the web forward (Adobe).
  • Your desired place among other competitors: the worldwide leader (Walmart), a European leader (Credit Agricole), the best in local government (Martin County, Florida).
  • The community you want to influence: people with limited mobility (The Scooter Store), all Australians (Australian Department of Health), every person on Earth (Intel).
  • The changes you would like to implement: to grow sustainably (Kraft Heinz).
Kraft Heinz vision statement on their website. Source: Kraft Heinz
Kraft Heinz vision statement on their website. Source: Kraft Heinz

Vision is not directly involved in product positioning, but it is necessary to keep your outlook in mind when launching new products or tools. If your vision contains an audience, it can help narrow down the “target market” part of the positioning statement.

Market category

A category represents the segment of the market where different businesses offer the same service. The size of each section is determined by the number of consumers that constitute its audience.

If you create a new product in a large competitive arena, you need a strong point of difference for the positioning formula. And, alternatively, if the segment is so small that you happen to be a category inventor, focus more on defining the “target market” and the “reason to believe” variables.

Tagline

A tagline is a one-line catchphrase that you associate with your brand and use on your website, blog, and in marketing campaigns. It won’t directly help you with the product positioning formula as it is usually quite vague if taken out of context. The famous “Just Do It” (Nike) slogan alone doesn’t tell us much about the values or products of the company. And yet, if we look at what they sell, the taglines perfectly convey the essence of the brand. Therefore, you can try matching potential positioning statements you come up with to your tagline to see which combination makes the most sense.

Customer challenges

A product that makes someone’s life easier is bound to be a success if presented right. Try to identify the areas where your potential customers lack something, and you might find a more pressing market need for your existing product. Most offline businesses had no choice but to adapt their positioning strategies last year during the pandemic restrictions, as their customer challenges had evolved as well.

Example

TeamBuilding, a company that organized corporate team-building activities before the pandemic, saw a dramatic drop in sales in March 2020. To keep the business running, they started offering the same events and exercises in a virtual format. New customers came in, along with more revenue and profit.

Company and product differentiators

The “point of difference” is a key component of positioning. Product differentiators can be hard to pinpoint, especially for essential commodities which serve the same purpose. Today’s tendency is to develop strong brand values that correspond to certain segments of the market, making every product under that company appealing. One example is the trend for sustainability: if a business maintains sustainable packaging of all produced goods, there is a specific group of people that will be more receptive no matter what exactly is offered.

Brand essence

Brand essence represents an underlying value or characteristic that translates into everything you do as a brand. It is not directly related to the products you sell, rather, represents an emotion or a feature that can be applied to everything your business does. You can use brand essence to verify, compare, and disregard different positioning statements to narrow them down to the most fitting one.

Visa’s brand essence is “available everywhere”, and their first screen design, commercials, and campaigns correspond to that value. Source: Visa
Visa’s brand essence is “available everywhere”, and their first screen design, commercials, and campaigns correspond to that value. Source: Visa

Product positioning strategies

Once you’ve gone over the elements that constitute your brand, review the common positioning strategies used in marketing to determine the product’s point of difference. All of these approaches aim to create a certain image in the customer’s mind, whether it is a price or a feature, which is exactly what positioning is about.

Characteristics-based

This strategy focuses on core product characteristics that match your customers’ values. Once you’ve determined the target market, you can think of a feature they essentially look for in a product, besides its basic functionality.

Example

A properly functioning car of any brand can perform its basic functionality: getting you from point A to point B. The difference is in positioning: for example, Volvo is associated with safety, Bugatti — with the thrill of speed, and Volkswagen is a solid choice for families with children. To support that image, Volvo’s website has several sections and testimonials dedicated to safety, like this one:

Source: Volvo
Source: Volvo

Pricing-based

There are three different pricing positions your brand can occupy in the customer’s mind:

  1. Above the competition. Use it carefully for introducing a new product, only if you feel like the service you offer is a notch above the quality other brands are offering.
  2. Same as the competition. This is a good place to start, but it doesn’t give you an edge.
  3. Lower than the competition. Here is where the pricing-based strategy can really work in your favor. It shouldn’t be long-term but can give you a great boost to enter the market.

Example

As a bulk email service that has recently entered the US market, we in Unisender are still using the third approach of a lower-than-competition pricing plan as an edge over other popular email service providers. We’ve also considered other factors, like the speed and quality of support and the number of ready-made email templates, and the findings are taken down in this comparison article.

Quality or prestige-based

Luxury is often associated with certain personality traits. People who own a high-end product, like a very expensive car or a designer bag, may look like they have more authority, power, and achievements. Having a luxury product can also mean a certain legacy, like in Patek Philippe’s iconic advertising campaign from 1996: “You never actually own a Patek Philippe. You merely look after it for the next generation”.

Source: Forbes
Source: Forbes

Paired with the previous strategy, you can occupy that sweet spot in the market where your product borders on being above the competition price-wise but is still affordable to the masses.

Use or application-based

You can try tying your brand to a certain habit of a customer. Then, focus your marketing efforts on recreating the image of them performing that action and suggesting how your product can help. If you can relate to the challenges they face in the process, you can leverage that in offering a solution.

Example

Target offers shopping carts for the disabled, and while the end product is not the cart itself but the merchandise, it can still be an advantage above Walmart for a target audience of kids and adults with special needs.

Competitor-based

A competitive advantage is enough to develop a positioning and marketing strategy. The most important thing is to make your “reason to believe” component of the positioning formula as solid as possible: with numbers, statistics, and customer testimonials. Facts speak louder than descriptive adjectives.

How to position a product

To complete the positioning formula given above, you will need to fill in the blanks with specifics related to your brand. Two of the variables are easy to tackle: the name of your brand and its frame of reference, i.e. what products or services you are offering. The other three: target market, point of difference, and reason to believe, might need preliminary research.

Define your target audience and get to know it

Here is a questionnaire that will help you narrow down the appropriate audience segment of your product:

  • What does your audience have in common demographically? Can you determine their age, occupation, education, income, relationship status?
  • Are they based in a certain country or worldwide? What languages do they speak?
  • What core values does your audience have? What would make them turn down a proposition?
  • What is their buying behavior? What factors influence their decision to make a purchase (sales, limited availability)? Do they prefer online or offline shopping?

Do a market research

Another set of questions to answer:

  • Which market segment does your product belong to?
  • Who are your competitors, how long have they been in the industry, what are their best practices?
  • What makes your brand different?

And some broad ones for your potential customers (via interviews, surveys, and focus groups):

  • What would make them not purchase a product?
  • What do they look for in a product?
  • How much would they be willing to pay for this kind of product?

Try to imagine the whole customer journey, from first encountering a product or getting an idea of it, to the process of making a choice, all the way through completing the order.

Assess your product

To figure out the “reason to believe” variable, think of the following:

  • Are there any unfulfilled customer needs that your product covers?
  • How would you describe your product with adjectives?
  • What are some numbers or facts that back up your assessment?

Use the positioning formula

Now you should be ready to fill in the template and create your own positioning formula:

Among [target market], [x] is the brand of [frame of reference] that [point of difference] because [reason to believe].

Top product positioning examples you must be aware of

Emails are the place where the copy, design, color choice, image content, and every little detail, to the last dot, reflect the chosen positioning approach. The same can be said for product-related marketing campaigns.

  1. The Better Bagel
Source: Really Good Emails
Source: Really Good Emails

A great example of competitive-based product positioning with a strong reason to believe basis. Newsletter subscribers get to make their own decision on which product is healthier based on the chart. The Better Bagel refers to the calorie count and contents of their bagels, and the comparison is further supported by the very name of the brand.

  1. GoodAll Nutrition
Source: Dotorg
Source: Dotorg

This brand targets customers who want to feel healthy every day. It is reflected in the tagline and in the design of the campaign with vibrant colors and vigorous models. GoodAll values a healthy lifestyle, which is a company differentiator that attracts people of similar views to every product they offer.

  1. Hers
Source: Really Good Emails
Source: Really Good Emails

Product positioning in a nutshell

Product positioning is a powerful instrument that can help you develop the right marketing strategy for getting noticed. The research and effort you put in to create it allows you to save time, money, and resources on theories that are bound to fail. To put together a product positioning statement, keep the following steps in mind:

  • Research the corresponding segment of the market. Identify the target audience, key players, and direct competitors.
  • Select several points of difference for your product: price, quality, application, or core characteristics.
  • Think of your brand’s defining elements: mission, vision, tagline, and essence. Consider the values of your brand as a whole to support your competitive advantage.
  • Test several hypotheses and rely on the numbers to choose the best strategy.
  • Revisit the formula from time to time to make sure it still corresponds to your current and long-term goals.

As you can see, a short phrase needs a lot of effort, but your work won’t be in vain.

Do you think marketing is a battle of products or perceptions?

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