What Is Market Positioning? How To Develop a Strategy

Updated March 21, 2023

As companies sometimes offer similar products and services so how a brand positions itself with its customers is very important. Market positioning makes it possible to influence consumers' perceptions of your brand so that you stand out from the competition. Understanding what market positioning is can help you make your company more successful and improve your reputation. In this article, we answer "what is market positioning?", explore its benefits, explain how to create one, and describe how to improve it.

What is market positioning?

Market positioning is the strategic process of influencing your target audience's perception of your brand. It's a more specific subset of brand marketing. The primary goal of brand positioning is to differentiate your brand and place it above the rest of the competition in the minds of your target audience. Many businesses leverage this tactic to remain competitive and to provide value for consumers. The common positioning strategies they use to attain this includes:

  • Product quality: This positioning strategy focuses on promoting a high-quality product to stand out from the others in the market. Most brands aim to demonstrate what makes their brand high quality, which sometimes features the product's durability, where it's made, or highlighting its popularity with other customers.

  • Product price: Customers weigh a product's price and quality when making purchases. Some brands price their products higher so they perceive them as the best in the market, or lower to position themselves as an affordable brand.

  • Customer needs: To demonstrate how a product can benefit its customers, companies research their audience's needs, preferences, and challenges. That makes it easier to convince the target audience that a specific product suits their needs.

  • Product application and use: This strategy focuses on the product's functionality. For example, a company that sells solar generators may show its prospects how easily it can use them during a power outage.

  • Focus on results: With this method, companies position their product or service as a way to change their customers' lives. For example, fitness supplements promise to support physical health and affect the customer's appearance.

  • Unique to the competition: This strategy works where a company highlights some key differences in their marketing to make its brand more unique and favourable than the other market options. For example, companies can target another brand with a vast customer base and attract their existing consumers by coming up with a similar product at a better price while offering the same benefits.

Related: Top 10 Skills of a Marketing Manager

Advantages of market positioning

There are a few reasons market positioning is worth implementing. Here are some common benefits:

  • Creates a positive image of your products or services: Positioning allows you to influence how people view your brand. So, if you create an impression that your brand creates high-quality products, it can lead to more purchases.

  • Communicates brand association: Effective market positioning helps make your brand relatable and develops a bond with your customers. It can make them feel more connected and loyal to your brand.

  • Increases sales: Once you create a positive image of your brand in the minds of your customers, you can expect to see a significant increase in revenue.

  • Helps you meet the needs of your audience: Understanding the needs of your prospects is crucial to provide the best solutions. Once you know what your customers need and want, it becomes easier to meet those needs and exceed their expectations.

  • Makes decisions easier: A positioning strategy ensures you have extensive knowledge of your customer base. This means you're better positioned to make decisions that strengthen your brand relationship with your target audience.

How to develop a positioning strategy

A positioning strategy guides you in achieving how you want your target audience to think and feel about your brand. Every stage of the strategy ensures you can define the particular characteristics of your brand you want to feature for your customers. You can follow these steps to create a positioning strategy:

1. Research your competitors

Before you develop a positioning strategy, it's crucial to understand how your competitors are positioning themselves. Find out what they're doing to attract customers and take note of anything that may be giving them an advantage. You can then see how you can position yourself to surpass them more clearly. Some elements to evaluate when researching your competitors include:

  • Audience engagement

  • Target audience demographics

  • Past and current marketing efforts

  • Cultural factors

  • Current marketing tactics

Related: Guide to Direct vs. Indirect Competition (With Examples)

2. Know your target audience

It is easier to influence your target consumers' perception of your business when you already know who you're targeting. Start by identifying who's interested in buying your product. You can even reach out to some to find out the problems they are trying to solve or the products they're looking for with a survey or by conducting a focus group. There are several ways to gather market data and narrow your efforts to a particular group of people who can benefit from your products or services.

Related: What Is a Target Audience? (And How to Identify Yours)

3. Define the problem you're solving

The next step is to determine how you can solve those problems, needs, or wants. This mainly involves understanding which needs your brand can address for your target audience. This step ensures that every time potential customers have a need, they look to your brand for solutions. Conducting regular market research is essential for staying updated on their changing wants and needs.

4. Differentiate your brand

You can benefit from proving why your target customers are right to only consider your brand. Consumers have the freedom of choice, and you need to show you can address their needs better than your competition. Making your brand unique has several benefits, and there are many ways to achieve this. For example, you could develop creative branding, use a unique voice, or provide an innovative product or service.

You can aim to release unique marketing material or develop an entire campaign using a differentiation strategy. The right material resonates with your target audience and makes them interested in learning more about what you have to offer.

5. Develop a positioning statement

A positioning statement is similar to a mission statement. It describes what your brand is, who you're targeting, and what you want to achieve. Consider your target audience, their challenges, and how your product or service can solve them. Include all of these details in your statement to keep your objective clear and ensure you and your team are all working towards the same goal. Once you have a positioning statement, you can use it to guide you in creating a compelling slogan for your promotional materials.

Related: How to Write a Positioning Statement in Seven Steps (With Examples)

6. Evaluate the success of your positioning

Regularly testing the success of your market positioning helps make improvements where necessary. Since your business is growing, your marketing may change or may need to be revamped to reflect the current status of your business. So always find time to test your positioning, as it is the only way you know if you are appealing to your customers.

How to improve market positioning

If you're already implementing positioning, the best approach sometimes is to improve it instead of creating a new one. Follow these steps to improve it:

1. Determine your brand's personality

Your brand's personality is how your customers or prospects perceive you when they visit your website, see your updates on social media, or see your advertisements. Determine whether you want your voice to be funny, authoritative, trendy, or another style you've identified to suit your brand's personality and appeal to your target audience. Ensure you communicate this effectively to your audience so they perceive you as you intend.

Related: Complete Guide on How To Become a Brand Ambassador

2. Create a SWOT analysis

A SWOT analysis is a strategic framework that assesses your brand's strengths, weaknesses, opportunities, and threats. By addressing these factors, you can better position your brand on the market. It helps you identify both internal and external factors that can affect the success of your brand. You can leverage your strengths and focus on your brand's areas of improvement, you can create an effective strategy to position yourself ahead of your competitors. Conducting these assessments regularly can help you stay current.

Related: SWOT Analysis Example, Steps, and Importance at Work

3. Listen to your customers

You can listen to your customers and consider their feedback by reading reviews, asking them to rate your brand, and looking for what they're saying about the brand on social media. Doing this provides insight into your customers' thoughts and feelings, and into what needs improvement. It helps to identify the best channels for communicating with your audience to find the most accurate representation of their opinions.

Related: How to Get Customer Feedback to Improve Your Business


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