Positioning refers to the development of strategy that helps to influence how a particular market segment perceives a brand, good, or service in comparison to the competition. Positioning is all about defining a space in the mind of the customer — something that your customer thinks of and associates with your product.
Remember that positioning doesn’t just mean what your target market thinks about your product. Rather, it’s about how they think about it relative to competitors’ products — your product is less expensive, performs better, or fits better with the customer’s lifestyle. Positioning often relates to a brand’s strategic objectives.
Perceptual Mapping and Positioning Dimensions
Perceptual mapping is a graphic display explaining the perceptions of customers with relation to product characteristics. Perceptual mapping is a diagrammatic technique used by marketers in an attempt to visually display the perceptions of customers or potential customers. Typically the position of a product, product line, brand, or company is displayed relative to their competition. Some perceptual maps use different size circles to indicate the sales volume or market share of the various competing products.
Perceptual maps commonly have two dimensions even though they are capable of having more than that. For example, in the perceptual map below, you can see consumer perceptions of various automobiles on the two dimensions of sportiness/conservative and classy/affordable. This sample of consumers felt that Porsche cars were the sportiest and classiest of the ones in the study. They felt that Plymouth cars were the most practical and conservative. Cars that are positioned close to each other were seen as similar on the relevant dimensions by the consumer. For example, consumers saw Buick, Chrysler, and Oldsmobile as similar: they are close competitors and form a competitive grouping. A company considering the introduction of a new model may look for an area on the map free from competitors or find a way to further differentiate and stand out from the crowd.
Positioning is facilitated by perceptual mapping to determine the ideal points of consumers. This helps to determine if positioning should be functional, symbolic, or experiential. Strong positioning will enable a single product to appeal to different customers for different reasons. For example, two people are interested in buying a new car; one wants a car that is powerful and stylish while the other buyer is looking for a car that is reliable and safe and yet they buy the same exact car. One purchase solved a problem and exemplifies functional positioning while the other purchase is an example of symbolic and/or experiential positioning.
After marketers work through the process of homing in on the best positioning strategy, they arrive at the final step: the positioning statement. The positioning statement reflects everything you’ve learned up to that point about how your product, service, or brand can best reach your target segment. As a statement, it explains exactly how you plan to provide value to those target customers. In effect, it’s a short, persuasive argument.
Typically, a positioning statement is one sentence that succinctly identifies the target market and spells out what you want them to think about your brand. This statement should include 1) the target segment, 2) the brand name, 3) the product/service category or frame of reference in which you are establishing this market position, 4) the key points of differentiation, and 5) the reasons customers should believe the positioning claims.
The brand consultancy EquiBrand (n.d.) recommends the following straightforward formula for writing positioning statements:
To [target audience], Product X is the only [category or frame of reference] that [points of differentiation/benefits delivered] because [reasons to believe].
The parts of the formula supplied by you (the marketer) are as follows:
- The “target audience” is a brief description of the segment you’re targeting with this positioning strategy. For example: young urban males, managing partners in law firms, or small business owners in the Pacific Northwest.
- “Product X” is your product, service, or brand name.
- The “category or frame of reference” is the category of products or services you’re competing in. For instance: spectator sporting events, virtual assistant services, or employer 401K benefit plans.
- The “points of differentiation/benefits delivered” explains both what problem you solve and how you solve it in a different and better way than competitors. It highlights the competitive advantage(s) underpinning your positioning strategy. Be sure to explain not just what is different about you, but why customers care about that difference.
- The “reasons to believe” are any proof points or evidence that show your customers how you live up to your claims about how you are different and better.
Let’s look at some examples of well-written positioning statements:
For World Wide Web users who enjoy books, Amazon is a retail bookseller that provides instant access to over 1.1 million books. Unlike traditional book retailers, Amazon provides a combination of extraordinary convenience, low prices and comprehensive selection. (“Figuring Out”, 2014).
This clearly worded positioning statement follows the formula closely, even though the “reasons to believe” are added as a second sentence. It presents the competitive advantage (“instant access to over 1.1 million books“) as a clear differentiator, and with this wording we also understand the problem Amazon solves–convenient access to lots of books. The specific reasons to believe are highly desirable benefits for the target audience. Note that World Wide Web refers to the Internet.
To frugal people, Motel 6 is the alternative to staying with family and friends that provides a welcoming, comfortable night’s rest at a reasonable price. (Kelley & Jugenheimer, 2015).
The Motel 6 example is a very concise positioning statement. It’s interesting that the frame of reference is “staying with friends and family,” rather than “motels” generally. This shows an astute understanding of the target customer’s mindset and the recognition that the motel chain’s leading competitor is not staying in a motel. The point of differentiation also reveals the problem Motel 6 solves: where to get a “welcoming, comfortable night’s rest at a reasonable price.” Its points of differentiation and reasons to believe blur together, but the statement provides well-focused direction for a marketing mix that targets “frugal people.”
For cost-conscious moms of large blue-collar families with active children, Tide is the brand of laundry detergent that gets clothes their cleanest and keeps them looking new because “improved” Tide formulation powers out stains while keeping clothes from fading and fraying. (Kelley & Jugenheimer, 2015).
This third positioning statement identifies the target audience so specifically that it’s easy to create a vivid mental picture of the customer. The problem Tide solves is very clear: getting clothes clean. This statement emphasizes the product’s competitive advantage around cleaning power and superior formulation, while promising valued benefits that customers enjoy when they use this product. The onus here is on the brand to provide these concrete benefits around not “fading and fraying,” but these are definite reasons to believe if indeed the product can deliver.
Evaluating Positioning Statements
How do you know when a positioning statement is going to be effective? Obviously, positioning statements should contain all the elements in the formula above, since that information is needed to translate the positioning strategy into a well-developed marketing mix. There are other criteria you should look for, as well. For example, the following:
- Is it tailored to the target market? Too often, positioning statements either leave out the target segment, or else the entire approach isn’t really suited to that unique group. If a positioning statement would work just as well if you plugged in a completely different target segment, then you probably haven’t thought deeply enough about your target’s unique needs and what will make them want your product. Or, you’ve defined your target segment too narrowly, in which case you should revisit whom you’re trying to reach.
- Is it simple, focused, and memorable? A positioning statement that is overly complex will be hard to execute against because it isn’t focused enough to deliver a clear message to the customer. Make sure it is very clear what problem(s) you solve. Use easy-to-understand words instead of jargon that muddles the meaning. If your statement is running long, consider trimming a few differentiators or benefits. It’s actually very good to prune down to the essentials so your meaning is crystal clear. Make every word count!
- Does it provide an unmistakable picture of your product, service, or brand? Your positioning statement should work beautifully for you, but not very well for your competitors. If you can substitute any competitor’s name for your own in the positioning statement—and it still sounds credible—then you need some additional work on your differentiators and competitive advantages. If you are going to own your market niche, it must be a place that no one else can easily occupy.
- Can you deliver on the promise you make? The positioning statement promises some benefits or outcomes to your customers. You must be able to consistently live up to this promise—otherwise you’ll lose credibility, and your offering will stand for something that’s untrustworthy. If you can’t live up to your promise, you need to take another, more realistic look at the offering’s benefits and the customers’ reasons to believe.
- Does it provide helpful direction for designing the marketing mix and other decisions? From the positioning statement, you should have a sense of what types of activities and messages are consistent with that positioning and support the brand you are working to build.
By combining customer research and perceptual mapping, a marketer can also create a positioning statement using one of the three basic concepts discussed below.
The Three Basic Concepts for Positioning:
Positioning is a powerful tool, but when you position a product, service, or brand, the world doesn’t stand still. Market conditions change. Your customers and competitors change. You change.
Positioning should be designed to last. But for most offerings, you’ll eventually need to revisit your positioning strategy and consider whether to make adjustments. This process has a very logical name: repositioning. In some ways, repositioning is more challenging than initial positioning because you’re building on prior established work, trying to strengthen what’s working and fix what isn’t—it’s a bit like remodeling an old house instead of building one from scratch.
Just as the name implies, repositioning involves changing the identity of a product relative to competing products. Many famous companies have saved failing products by repositioning them in the market. When a company initiates a repositioning strategy, it needs to change the expectations of stakeholders, including employees, stockholders, and financial backers. An organization can reposition a product line, a brand, or an entire company. Determining which type of repositioning is needed isn’t always easy; it is important to understand the changes in the current market and how competitors will react to the change. If a change is volatile and is unprecedented, there may not be enough information available to use to make a decision. Understanding the strengths and weaknesses of a company can help determine when repositioning may be necessary and how the change should occur.
Despite the risks, repositioning can be wildly successful when it is handled effectively. A good case in point is the American Red Cross. In 2009, the U.S. had sunk into the Great Recession, and the American Red Cross (“ARC”) was also feeling the pain. With its budget relying heavily on charitable donations, and with Americans giving less due to the recession, the nonprofit organization faced a budget deficit going into the fourth quarter.
For many nonprofit organizations, the last quarter of the year is prime fundraising season, since people open their wallets for holiday giving. Up until 2009, this was not the case for the Red Cross. Americans gave generously to the organization during disasters, but the ARC wasn’t people’s top choice for holiday giving. Seeing an opportunity in this apparent disconnect, the ARC engaged a creative agency to help repositioning the organization in the minds of potential donors.
Research confirmed that the competitive advantage of the American Red Cross, in consumers’ minds, was providing help in times of disaster. The organization’s then-current positioning of “Change a Life, Starting with Your Own“ shared a powerful emotional message, but it did not reinforce the competitive advantage or create a sense of urgency around giving to the ARC. The repositioning effort developed a new positioning direction expressed in the tag line “Give the gift that saves the day.”
This message reinforced the powerful role that the Red Cross plays in times of disaster and invited Americans to be part of that important work. With words like “give the gift,” it also implanted the idea of the ARC as a great recipient for holiday giving. The following video was created as part of the 2009 integrated marketing campaign that introduced this new positioning.
The repositioning was a resounding success. Income increased more than 5 percent compared to prior years. People who saw ads associated with the repositioning campaign were twice as likely to donate as people who didn’t see them. The fourth quarter of 2009 was one of the strongest since 2000. Brand awareness increased by 6 percentage points. The benefits didn’t stop in 2009, either. Building on their success, the ARC expanded the repositioning campaign in 2010. By the end of the year, income had increased 26 percent over 2009, and the average gift size increased 43 percent (“American Red Cross”, 2013).
These impressive results reveal the power of repositioning when it is handled well.
- The section on “Positioning Statements” and “Evaluating Positioning Statements” are adapted from “Developing Positioning Statements”. Created by Lumen Learning is licensed under CC BY: Attribution. Retrieved from https://courses.lumenlearning.com/suny-marketing-spring2016/chapter/reading-developing-positioning-statements/
- The section under “Repositioning” is adapted from “Introduction to Repositioning”. Created by Lumen Learning and licensed under CC BY: Attribution. Retrieved from https://courses.lumenlearning.com/suny-marketing-spring2016/chapter/outcome-repositioning/
- The opening paragraphs on “positioning” are adapted from “Launch! Advertising and Promotion in Real Time” [PDF] by Saylor Academy is licensed under CC BY-NC-SA 3.0.
- The section under “Perceptual Mapping and Positioning Dimensions” is adapted from “Principles of Marketing” by University of Minnesota is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.
- The section on “Repositioning” is adapted from “Repositioning“. Created by Lumen Learning and licensed under CC BY: Attribution.
American Red Cross Integrated Marketing Campaign. (2013, February). Retrieved from https://russreid.com/2013/02/american-red-cross-integrated-marketing-campaign/
Kelley, L. and Jugenheimer, D.W. (2015, February 11). Advertising Account Planning: Planning and Managing an IMC Campaign. Retrieved from https://books.google.ca/books?id=zEGhBgAAQBAJ&printsec=frontcover&source=gbs_ge_summary_r&cad=0#v=onepage&q&f=false
Figuring Out The Delicate Art Of Positioning Your Startup. (2014, August 25). In Fast Company. Retrieved from http://www.fastcompany.com/3034721/hit-the-ground-running/figuring-out-the-delicate-art-of-positioning-your-startup
PerceptualMap1.png. Adapted from https://upload.wikimedia.org/wikipedia/commons/6/60/PerceptualMap1.png
Positioning templates. (n.d.). EquiBrand Consulting. Retrieved from http://equibrandconsulting.com/templates/positioning-templates.
Berner, Robert. (2007). Chanel’s American in Paris. BusinessWeek. (70–71).