How to perform product positioning

Product positioning is the process of determining the best ways to market and sell a product. It considers user feedback on your product features, the attributes of your target audience, and the characteristics of competing products. 

We’ll walk you through how to position any type of product and how other companies have done it. But first, we’ll give you more context on why it’s important.

Let's define what we mean by product positioning—it’s a strategic exercise that helps you to understand where in the marketplace your products and services fit, and how they are differentiated from alternatives and substitutes. It outlines all of the features and characteristics that make your product unique. Think of product positioning as the first step on the road to your marketing journey. If you know that you want your product to be seen as more luxurious, better quality, or more affordable than its competitors, you’ll have a sound foundation for crafting your marketing materials, assets, and messages.

Only 5% of products launch successfully. Why? In the Harvard Business Review, Joan Schneider and Julie Hall explain: “The biggest problem we’ve encountered is lack of preparation: Companies are so focused on designing and manufacturing new products that they postpone the hard work of getting ready to market them until too late in the game.”

In other words, you need to do your research. The product positioning process forces you to by asking the tough questions that pressure test your messaging and target audience. 

Here are just some of the questions you’ll want to get answered:

The insights you receive in each of these areas will give your product the best chance at success.

If you’re clear about where your product fits in the marketplace, you can expect to realize a number of benefits. Let’s take a look at a few:

Remember: it's almost impossible to satisfy the needs of all customers, all of the time, using a one-size-fits-all strategy. That’s why one of the keys to resonate with customers is to segment your market, identify the distinct characteristics and needs of each segment, and then tailor your product and marketing mix in a way that each segment finds valuable. Product positioning can actually involve multiple layers. For example, you might position your cruelty-free, luxury handbags as sustainable to satisfy customers who place a high value on eco-goods, or as affordable luxury for a mid-range segment.

Check out our market research product survey.

In modern marketplaces, customers are overwhelmed with choice. In order to entice custom, you’ll need to stand out from the pack. Performing product positioning will help you understand what makes your products or services unique—and you can use this information as the basis for future marketing campaigns.

Customer dissatisfaction happens when customers perceive that you’ve failed to deliver on your value proposition. But, what if what customers expect and what you plan to deliver are actually wildly different? Product positioning helps you to meet customer expectations by understanding what they want, and ensuring that your brand promise is aligned.

Learn how to keep your customers happy with customer satisfaction surveys.

Brand names are a crucial part of any competitive differentiation and sales strategy. But, the way in which brand names become ‘sticky’, or memorable in the mind of customers is through a cognitive association that the customer creates between the brand and a standout feature. Think Apple, and you think innovative. Gucci conjures up images of prestige, while Volvo evokes a sense of reliability. Product positioning can help reinforce your brand and make it memorable to customers and other stakeholders. 

Find out where your brand stands with Brand Tracking Solutions.

Product positioning can also help cultivate customer loyalty by giving customers the sense that the key characteristics associated with your brand can’t be found elsewhere. But, this only works if you keep your brand promises: if you position your product as reliable and it continually fails to work, customers will quickly vote with their feet.

Learn how to improve customer loyalty and retention.

Since products can be positioned differently across multiple axes of features, you can attract a diverse range of customers. A high-quality, sustainable, yet affordable product might, for instance, appeal to three different segments of customers, all of whom have different priorities. Being able to appeal to a diverse customer base can drive sales and improve your market dominance.

Get insights on your industry as a whole with our Industry Tracker.