How To Create A Product Positioning Strategy.

Are you thinking about launching your new product? If yes, do not enter the market without a solid product positioning strategy. An effective positioning strategy helps the product stand out and capture the target audience’s attention. It isn’t just about promoting the product but carving out a unique position in the minds of consumers. 

A solid strategy when entering the market is crucial for achieving a unique market positioning that is hard for others to replicate. But, developing such a strategy is a complex task that requires a careful balance of market research, competitor analysis, and a deep understanding of consumer needs.

This article provides a comprehensive guide to creating a convincing positioning strategy. It covers everything from identifying the intended audience to crafting a persuasive value proposition and implementing the plan. Read on to master the art. 

Product Positioning Strategies 

Companies use different tactics to position their product in the market uniquely. Three of the most common product positioning strategies are as follows:

• Competitor-based positioning: CoverGirl expanded its consumer base beyond traditional demographics by featuring male and gender-fluid models.
• Differentiation Positioning: Barilla’s Pronto Pasta stands out in the competitive pasta market by offering a convenient feature that competitors do not have – pasta that requires no draining
• Segmentation Positioning: Château Margaux, a prestigious Bordeaux wine estate, targets high-end luxury consumers by emphasizing its heritage, quality, and exclusivity. This segmentation strategy appeals to wine enthusiasts seeking premium and rare wines.

Understanding The Target Customers

A good knowledge of the target customers and their interests is the prime requirement of a successful product positioning strategy. It guides the process and allows companies to gain an advantage over their competitors. The following are the necessary steps companies may take to segment and understand their target customers properly:

Conducting Market Research

Thorough market research is the foundation of any effective product positioning strategy. It involves gathering insights into your industry, competitors, and, most importantly, the target customer. It must encompass quantitative and qualitative data to gain a well-rounded understanding of the market landscape.

Monitoring market trends is crucial to staying ahead of the curve and anticipating shifts in consumer behavior and preferences. It can also help identify emerging opportunities or threats to your brand positioning strategy.

Defining The Target Audience 

Once you have a solid grasp of the market, the next step is clearly defining your target audience. This specific group of target customers or customers should represent the individuals most likely to purchase and benefit from your product or service.

Effective segmentation can help you identify critical demographics, psychographics, and behavioral characteristics that distinguish your ideal target audience. This deep understanding will inform your positioning strategy, from messaging to channel selection. 

For instance, Comcast targets college students by offering exclusive deals in partnership with Amazon Music and HBO. The brand leverages demographic and behavioral segmentation to attract this specific audience.

Identifying Customer Needs and Pain Points

After segmenting the target audience and narrowing down the search space, the next step is to learn about their needs and wants. Properly utilizing these insights guides the value proposition and differentiation strategy. Companies can use market research data in this stage. 

It will help uncover the specific challenges, frustrations, and desires that resonate with the potential customer group. This knowledge helps craft messaging and product positioning statements that directly address their needs, establishing the product as the solution they’ve been seeking. 

Analyzing The Product and Competition 

After market research and audience analysis, the next step is to consider the product and competition in the market. This step ensures your product stands out from many “me too” products.

Evaluating Product’s Strengths and Weaknesses

After deeply understanding your target audience and their needs, the next crucial step is critically evaluating your product. It involves taking an honest look at its strengths, weaknesses, unique features, and potential areas for improvement.

For example, in the CPG industry, a company like Procter & Gamble might assess their detergent’s unique formulation and long-lasting scent as a critical strength while identifying the lack of eco-friendly packaging as a potential weakness.

Conducting a thorough product analysis will inform your positioning strategy and highlight opportunities for innovation and differentiation. It can unlock new opportunities to attract potential customers. 

Researching Competitors and Their Offerings

To effectively position your product, you must comprehensively understand your competitors and their offerings. It involves identifying direct competitors who offer similar products and indirect competitors who may appeal to the same target audience.

For instance, Lay’s may analyze other snack brands like Pringles and Kettle-Brand. They may also research healthier alternatives like veggie straws and popcorn that appeal to health-conscious consumers.

Companies can learn a lot by studying their competitor’s marketing strategies, pricing, distribution channels, and competitive positioning. This way, they can quickly identify gaps and opportunities to differentiate their product and messaging. 

Identifying Your Competitive Advantage

After understanding the product’s strengths and weaknesses, it is time to identify its unique competitive advantage. Companies may ask themselves a simple question: Why should customers buy their products, especially when hundreds of options are available? At this stage, companies may leverage a product positioning map. 

This distinct benefit or value proposition sets your product apart and makes it more appealing to your target audience. Defining the competitive advantage is also helpful in crafting a compelling brand positioning statement that resonates with the target audience. 

Developing a Unique Value Proposition 

A unique value proposition is an essential aspect of effective brand positioning. Companies can create it by leveraging their research insights. They must analyze the insights to understand the product’s unique value to their target audience. 

For example, food brands can emphasize zero sugar or more organic ingredients to differentiate themselves from competitors. This brand positioning framework will guide the development of their value proposition.

Red Bull is a premium, high-performance beverage in the energy drink category. It provides an unparalleled energy boost for athletes and active individuals. This unique value proposition sets it apart from mass-market alternatives.

Aligning the Value Proposition with the Brand Identity 

While crafting your value proposition, ensure it aligns seamlessly with the brand identity and positioning strategy. Your product’s value proposition should reinforce and amplify the brand’s core values, personality, and positioning in the market.

For example, in the luxury skincare space, a brand like La Mer might position itself as a premium, science-backed solution for achieving ageless beauty, aligning its value proposition with a brand identity rooted in innovation, exclusivity, and high-end luxury.

Crafting the Positioning Statement 

Compelling product positioning strategies heavily rely on their positioning statements. These statements serve as the guiding force for all of the marketing efforts. They encapsulate the essence of the product, value proposition, and target audience. Here are the necessary steps to crafting a unique and effective positioning statement. 

The Elements of an Effective Positioning Statement

A well-crafted positioning statement typically consists of the following elements:

Element	Description
Target Audience	Clearly define the specific group of consumers you’re targeting.
Opportunity or Need	Identify the problem, challenge, or desire your product aims to address.
Product or Service	Describe your offering and its key features or benefits.
Competitive Advantage	Highlight what sets your product apart from competitors’ offerings.
Reasons to Believe	Provide evidence or proof points that support your positioning claims.

For example, a positioning statement for a premium skincare brand like La Prairie might look like: 

“For discerning women seeking luxurious, age-defying skincare solutions (Target Audience), La Prairie offers a scientifically advanced line of products (Product or Service). It harnesses the power of rare, precious ingredients (Competitive Advantage) to reduce signs of aging visibly. It reveals a radiant, youthful complexion (Opportunity or Need), backed by over 30 years of Swiss skincare expertise (Reasons to Believe).”

Incorporating The Value Proposition and Target Audience

To ensure your positioning statement effectively communicates your value proposition and resonates with your target audience, brands may consider the following brand positioning template:

“For [Target Audience], [Product or Service] provides [Key Benefit or Value Proposition] by [Competitive Advantage or Differentiator], unlike [Primary Competitor or Alternative].”

Refining and Finalizing Your Positioning Statement

Crafting an effective positioning statement is an iterative process, often involving multiple rounds of refinement and feedback. As you develop your statement, it’s essential to:

1. Seek input from cross-functional teams (marketing, sales, product development) to ensure alignment and buy-in.
2. Test the statement with a sample of your target audience to gauge resonance and clarity.
3. Ensure the statement is concise, memorable, and reflects your brand’s identity and value proposition.
4. Regularly revisit and refine the statement as your product, market, or target audience evolves.

By investing the time and effort into crafting a solid positioning statement, you’ll have a clear, consistent message that guides all your marketing and branding efforts. It will help you stand out in a crowded marketplace and effectively communicate your product’s unique value to your target audience.

Implementing the Product Positioning Strategy

Crafting an adequate positioning strategy is only half the work. Implementing it correctly is another challenge. This step involves integrating the positioning into every aspect of the marketing and brand efforts. Companies must ensure consistent and effective communication with their target audience. The following are the steps to bringing the product positioning strategy to life:

Integrating Positioning into Marketing Mix

The product positioning strategy must inform and guide all elements of your marketing mix, including product development, pricing, promotion, and distribution channels. It ensures a cohesive and aligned approach that reinforces the positioning at every touchpoint.

For example, if your positioning emphasizes premium quality and exclusivity, your price may reflect a higher price point commensurate with that positioning. Similarly, your distribution channels should align with your target audience’s preferences and reinforce your brand’s positioning (e.g., high-end retailers for a luxury brand).

Developing a Consistent Brand Voice and Messaging

Consistent brand voice and messaging are essential for adequately communicating the positioning strategy. The messaging and voice must reflect the band’s position. It may include advertising campaigns, social media content, or other promotional content that reinforces the value proposition. 

For instance, a packaged food brand positioned as a natural, eco-friendly alternative might adopt a brand voice emphasizing sustainability, environmental stewardship, and a commitment to using pure, organic ingredients.

Monitoring and Adjusting Your Strategy

Businesses must continuously monitor their product positioning strategy after implementing it. They may gather customer feedback, analyze sales data, and track key performance indicators to evaluate the success of their practical product positioning efforts. 

If the strategy is not delivering the desired results, it’s time to refine the approach. Sometimes, even a working marketing strategy may get outdated. Under such conditions, the company must tweak its messaging, adjust its pricing strategy, or revise its product positioning statement. The goal is to better align with the evolving target market conditions and customer preferences. 

Companies may face the following pitfalls when implementing the strategy: 

1. Inconsistent messaging across different channels or teams
2. Failure to align all marketing mix elements with the market positioning strategy
3. Lack of buy-in or understanding from internal stakeholders
4. Inability to adapt and evolve the positioning as market conditions change

To overcome these challenges, companies should prioritize cross-functional collaboration, clear internal communication, and a willingness to be agile and data-driven. Companies must continuously monitor and refine their successful product strategy to ensure their marketing campaign remains relevant and practical.

Product Positioning Strategy KPIs

KPI	Description
Sales Revenue	Indicates a brand’s ability to convert consumer interest into profits, reflecting product popularity and market demand.
Market Share	Measures a brand’s portion of total market sales within its category, showing marketing effectiveness and competitive strength.
Retailer Performance	Provides insights into product performance on retail shelves, including distribution, shelf space, and consumer visibility.
Brand Awareness and Recognition	Measures brand recall, awareness levels, and social media engagement to assess brand prominence in consumers’ minds.
Customer Loyalty and Repeat Purchases	Reflects customer satisfaction and loyalty through repeat purchases, indicating product quality and brand trust.
Trade Promotion ROI	Assesses the return on investment from trade promotions to optimize marketing spend and promotional strategies.
New Product Success Rate	Indicates the percentage of successfully launched new products, reflecting innovation capabilities and market adaptability.
Online Sales and E-commerce Metrics	Includes metrics like conversion rate, average order value, and website traffic to measure digital success in online sales.
Consumer Feedback and Reviews	Provides insights into product performance and areas for improvement through online reviews and consumer feedback.
Environmental and Sustainability Metrics	Measures sustainability efforts and environmental impact to resonate with conscious consumers in the CPG industry.
Brand Perception	Assesses consumer perceptions through surveys or sentiment analysis to gauge brand recognition’s impact on product performance in the CPG industry.
Packaging Effectiveness	Evaluates packaging appeal, clarity of information, and differentiation to attract customers effectively in the CPG sector.
Point of Purchase (POP) Displays	Analyzes POP displays’ effectiveness in capturing attention, driving impulse purchases, and enhancing brand visibility at the point of purchase for increased sales.

Building Customer Relationships and Loyalty 

Delivering exceptional customer service and fostering long-term customer relationships are crucial post-processes of a successful brand positioning strategy. You can build unwavering customer loyalty by consistently providing a superior customer experience aligned with your brand positioning. 

Leverage customer feedback to continuously improve offerings and interactions, reinforcing your brand’s unique value proposition. This commitment to customer-centricity retains existing customers and attracts new ones through positive word-of-mouth, solidifying your brand’s position in the market.

Collaborating with Cross-Functional Teams 

Collaboration with cross-functional teams is another helpful step. Companies must involve product managers and management early to ensure offerings align with the positioning. They may coordinate closely with the product marketing team to develop coherent messaging across all touchpoints. 

Additionally, align with the sales team to equip them with effective positioning tactics for seamless communication in the field. This cross-functional collaboration ensures a cohesive, united front, reinforcing the brand positioning throughout the entire customer journey, from product development to sales interactions.

Data Drive Product Positioning Strategy Development

More than just a product positioning agency, we drive growth through our integrated and iterative brand development process. Our Path To Performance™ process can determine how your product will perform with high predictability when it hits the shelf. Book a call to discuss your project.