Market Positioning Strategy Guide

According to the market research firm Yankelovich, the average media consumer sees between 3,000 and 20,000 marketing messages per day, depending on how you qualify exposure. Even at the low end of that exposure range, those numbers are far too great for any one label, logo, or slogan to leave a significant impression. And this condition has not been created by the internet and ecommerce either. In fact, studies dating back to the 1960s indicate that people have been exposed to as many as 5,000 advertising messages per day since those early days of television.

The basic business takeaway is that marketing in today’s consumer society is excessively message-heavy and over-communicated; people swim in an ocean of advertising messages. So, advertising messages, in and of themselves, must really hit their mark if they want to carry any meaning at all. This is also nothing new; in the late 1960s, the idea of market positioning was born to create a way for brands to cut through all the advertising clutter and reach an audience of people whose minds they do stand a chance of leaving an impression on.


So, What is a Market Positioning Strategy?


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A positioning strategy is a deliberate branding plan or process that operates on the symbolic levels of consumer consciousness, where meanings and associations – even of individual words – really hold weight. A market positioning strategy is built on business data and seeks to compose the precise chain of words to balance concepts of differentiation, distinction, and similarity in a unified brand-narrative. It is a long-term effort to solidify the identity of a company, and its products or services, in a unique space within the minds of the target audience. It is an organized attempt for a brand to set itself apart from the crowd and influence the way their target audience perceives them.

The idea of market positioning was first introduced in 1969 by Jack Trout in a paper published by Industrial Marketing Magazine. The concept was later popularized when Trout and co-author Al Ries published a bestselling book under the title, Positioning – The Battle for Your Mind, in 1981. Ries and Trout’s book describes the positioning strategy as an organized system for finding a window in the customer’s mind, based on the idea that communication can only take place at the right time and under the right circumstances.

Market Positioning Guide

This brief positioning strategy guide has been compiled to help give you an idea of how market positioning works. It is important to note that, as a company, business owner, entrepreneur, or corporate executive, you can elect to perform market positioning deliberately, or you can opt out and let things happen organically. But there is a combination of both truth and error in this thinking. Yes, you can opt out of a deliberate positioning strategy if you want, and yes there will be an organic result that flows from inaction. But one way or another, your brand will occupy a market position for as long as it exists, and it’s a mistake not to take full control of it, because you can bet the competition will.

One last cautionary tale before moving on to the guide. Actively positioning a brand means the brand must decide to stand for something, hang their hat on a set of values, and stand by that decision for the long-term. It’s easier said than done, and once positioned, it is very difficult — but not impossible — to reposition without compromising the credibility of the brand. For that reason, a solid market positioning strategy is crucial to the vitality and longevity of a company. The sooner you undertake this process, the better off your business organization will be.

The Steps to an Effective Positioning Strategy


The process is best broken down into its steps to keep the concept as simple as possible. But, do not assume that knowing the steps makes execution easy. It takes a great deal of clarity and conviction to follow through. Knowing the steps should help with the clarity part, but conviction is something that must be developed internally if it doesn’t already exist. It’s very important for marketers to muster the conviction of the organization, because following the process through to the end creates degrees of certainty moving forward that can’t be substituted any other way.

Plenty of companies out there get by without much conviction, and without a dedicated market position strategy. But without some degree of certainty and conviction, most companies will eventually default to the status quo when the waters get choppy. It’s only a matter of time. But, those who can follow the process through to the end will find that every action that follows becomes an expression of the market positioning strategy.

Market positioning follows seven basic steps listed below:

  1. Draft a positioning statement — There are four simple questions that will yield a set of basic facts about the identity you have determined for your company (see below). The positioning statement is the result of plugging those facts into a basic, formulaic sentence structure.
  2. Compare and contrast to identify your own uniqueness — Differences between your own messaging strategy and communication channels, and those of your competitors reveal openings in the market that your positioning message should address.
  3. Competitor analysis — Investigating and analyzing the competition helps to determine the strengths and weaknesses of your own business measured against the competition. Understanding the differences between a business and its competitors is central to finding gaps in the market that can be filled.
  4. Determine current position — Determining your existing market position is every bit as vital as any competitor analysis. That’s because you have to understand your own market position to be able to properly compete for your share.
  5. Competitor positioning analysis — An accessory to the competitor analysis, competitor positioning analysis identifies the conditions of the market that influence how much power competitors are able to exercise.
  6. Develop a unique positioning idea — With all the analytical data in hand, you should have a better idea of who you are, who you are not, and who your best audience is. It’s time to make a statement about those facts.
  7. Test the effectiveness of your brand positioning — Testing methodology will consist of qualitative and quantitative data gathering, mainly determined by the steps prior to this, but may also include focus groups, surveys, in-depth interviews, ethnography, polls, etc. The results of the testing should then be rated against a set of criteria listed below.


Determining Current Market Position

One of the telltale signs that a brand has neglected their market positioning is that they feel misunderstood by their target audience. If your audience misunderstands you, there’s a good chance that you misunderstand yourself on some level. To sort this predicament out, or avoid it altogether, there are a few questions you need to answer decisively.

  • Who are you as a brand and what do you stand for?

The most unique attributes of your business will set you apart from the competition, but establishing difference or uniqueness is not all there is to an effective positioning strategy. ‘Distinction’ of those attributes and values that only your company can provide to customers, also needs to be established. So does ‘attraction’, which can be expressed in terms of attributes and values that the target customer base genuinely wants or needs.

  • Who are your target customers and what do they want or need?

With difference, distinction, and attraction determined, you can then shift the focus outward to determine which customers your company best serves. Those customers will represent the market segment your final market position will be set up to serve.

  • How will you reliably meet those needs?

Great brands understand that it simply isn’t possible to please all people, in all ways, all the time. Instead they rely on a clearly defined market segment where they can serve the customer base more meaningfully because of their unique attributes.

  • Who are your competitors and what do you do differently?

Trying to slot your company into a market position already occupied by a competitor entails a tough uphill battle. It’s also a bad idea to try and leverage another brand by likening yours to it. Imitation may be the highest form of flattery, but in business, flattering the competition too much can weaken your brand just as easily as it can strengthen it.

Address these questions for yourself and write the answers down so they can be referenced or revisited later.

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Competitor Analysis


Next, you want to conduct a thorough competitor analysis to understand who they are, what strategies they use or may have planned, how they may react to your strategic actions, and how your actions may influence their behavior to your advantage. Some of the data you’ll need is easy to find. Some will take time and effort to gather and analyze. As long as you understand that this process will aid the development of your own marketing strategies – and help locate needs in the market that aren’t being met – then maintaining the motivation to see the process through shouldn’t be a problem.

A thorough competitor analysis can be broken down into four subcategories.

  1. Competitor Objectives — These aren’t necessarily financial objectives, and may instead relate to market share or growth rate. If you can pinpoint one or two crucial objectives such as short-term revenue vs. investing in research and development, or whether they are investing in translation software to serve international market segments, then you can act and react accordingly.
  2. Competitor Assumptions — General, and typically unqualified data that may include past experience, market trends, and regional cultural factors, should be noted for reference against the rest of the data.
  3. Competitor Strategy — This is probably the most difficult information to uncover but also the most useful. Check press releases, white papers, shareholder reports, promotional campaigns, mergers, acquisitions, and hiring practices for deeper insight into the direction the competition is moving.
  4. Competitor Capabilities — The answers to the above three questions should outline a comprehensive story of what the competitor’s capabilities are. That information should inform an understanding of where their strengths and weaknesses lie, which will help you direct focus to where your efforts will be most effective at the end of the market positioning process.

Competitor Positioning Analysis

Michael Porter of Harvard Business School says that there are five forces of competitive position analysis that determine the competitive intensity and attractiveness of a market, and point to the place where power lies in any business situation.
Porter’s five forces are:

  1. Supplier Power — How easy is it for suppliers to raise prices? The number of suppliers, the uniqueness of their products or services, their relative size and strength in the market, and the cost of switching between suppliers all factor into the answer.
  2. Buyer Power — How easy is it for buyers to drive prices down? The number of buyers in the market, the importance of their patronage to the supplier, and the buyer’s cost of switching between suppliers can all be relevant. Suppliers with a handful of powerful buyers are usually vulnerable to the terms buyers want to set.
  3. Competitive Rivalry — How many competitors exist in the given market? The more competitors there are offering similar products or services the less attractive the market is.
  4. Threat of Substitution — How many similar products exist in the market? Where an abundance of similar products exists, the likelihood of price-driven brand switches runs high. Suppliers have less power in saturated markets so those markets are less attractive.
  5. Threat of New Entry — How profitable is the market? More profitable markets attract newcomers, eventually eroding profitability unless there are barriers to entry such as patents, economies of scale, government compliance issues, etc.

The competitor positioning analysis will help you understand the factors that influence profitability in the market where you wish to compete. The resulting data set will also help inform decisions concerning whether to enter a specific industry or not, whether to increase capacity in a specific industry, and how to go about developing competitive strategies.

Competitor Compare and Contrast

Now gather together your company’s version of the same set of information that you sought out in the competitor analysis and the competitor positioning analysis. Hold the two data sets up for comparison. It should become pretty evident where your market positioning strategy should place its focus. Market positions that allow you to take full ownership of a niche are rare but valuable.

Develop a Unique Positioning Idea

Once the ideal market position is identified the goal is to create a unique impression in the mind of customers that associates something specific and desirable about your brand that is distinct from the other competitors in the space. With all this information in hand, you should be able to clearly and specifically state who you are as a company, who you are not, what problems exist in the market, how you solve for those problems, and how to cater to the customer base that will benefit from the solutions you offer. Will you need to translate website copy into other languages to serve the most promising market segments, for example?

These facts form the basis of the market positioning statement. It’s now time to draft a formal statement about those facts.

Drafting a Positioning Statement

The formula for the market positioning statement will probably look very familiar. It might even seem simplistic. But, all the investigation and data analysis you’ve done up to this point should indicate that a positioning statement is far more than just a chain of hollow platitudes. Every word of the positioning statement is deliberate and backed by the data you have gathered. It is from that process that the authority and credibility of your brand should be built.

The positioning statement, which becomes the basis for subsequent advertising and communication initiatives, first identifies who the company is and what it stands for. From that point it identifies the target customer, what their needs are, and then states how those specific needs will be addressed by the brand. Then the positioning statement transitions to a statement of distinction that sets the brand apart from the competition.

Here are a couple of examples of positioning statements:

Amazon used this positioning statement back when it almost exclusively sold books:

“For World Wide Web users who enjoy books, is a retail bookseller that provides instant access to over 1.1 million books. Unlike traditional book retailers, provides a combination of extraordinary convenience, low prices, and comprehensive selection.”

To urban-dwelling, educated techno-savvy consumers, when you use Zipcar car-sharing service instead of owning a car, you save money while reducing your carbon footprint.”

The four steps to creating a positioning statement are:

  1. Identify target customers — Draft a concise summary that describes the demographic, primary attitudes, sensibilities, and tastes that your brand is attempting to appeal to based on the findings of the previous steps.
  2. Define the market — Between the category a brand is competing in and the context in which it executes its initiatives lies the concept of brand relevance. That idea of relevance must be established in the mind of the target audience. The data collected up to this point should have revealed a niche for you to occupy. Choose the exact right words to define it.
  3. Make a Promise — Whatever is the most emotionally or rationally compelling benefit your brand provides to the target customer base should be something you can take full ownership of.
  4. Present Evidence (reason to believe) Compile evidence that proves your brand delivers on its promise to suit the wants and needs of the target audience. Without a promise you can reliably keep then the market positioning statement really will be just a set of hollow platitudes.

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Once you have completed these four steps, you are ready to draft a positioning statement. Begin with the following formula, and edit down to the most simple concise statement that maintains the full measure of substance. In each of the (parenthetical) categories try to be as granular, and specific as possible.

  • For (target customer) who/that (statement of need/want), the (product or brand name) is a (product category) that/which (statement of benefit). Unlike (competitor), our product/brand (statement of distinction).

Reference the and examples to get an idea of how the positioning statement should look. Take a second to notice how brand positioning statements differ from taglines or slogans. Where taglines and slogans are the persuasive language of advertising directed outward to a target audience, positioning statements are established for internal use, at least as the primary reason for creating one. Positioning statements guide the key marketing and advertising decisions that positively impact the customer’s perception of your brand.

Testing the Effectiveness of the Final Brand Positioning Concept

Positioning concept tests are the final step in the process. You’ll have to build your own testing model according to your industry and target audience. Generally speaking, testing methodology should include a combination of qualitative and quantitative data gathering which may include focus groups, surveys, in-depth interviews, ethnography, polls, etc. The core questions revolve around the planned purchase of the brand or product (given its implicit positioning), the image projected by the brand, the planned frequency of usage, pricing expectations, distribution expectations, potential problems, and so forth.

Based on the findings of these tests, a winning positioning concept can be solidified. This winning positioning concept then becomes the blueprint for the development of all creative advertising assets and marketing plans and materials (packaging, promotion, pricing, brand name, distribution, product improvements, website copy, customer service, and so on). All subsequent brand messages must remain consistent with the final brand positioning concept.

Every brand has a positioning, even though it may be obscure or unrecognized. Sometimes this positioning is a result of inertia, history, or competitive activities that seem natural to the day-in-day-out operation of the company. But, a brand that wants to be strategically successful must not leave its positioning to chance, or worse, for competitors to decide. The company or brand that aspires to market dominance must take control of its positioning through the scientific methods of marketing research. And creating your optimal positioning strategy will guide the focus, and energize long-term advertising and marketing efforts of your brand.

Before making final decisions on final drafts here are some criteria your new market positioning statement should meet:

  • Does it paint a clear picture differentiating your brand from the competitors?
  • Does it match what surveys reveal to be accurate customer perceptions of your brand?
  • Does it leave room for growth?
  • Does it identify the unique value your brand provides?
  • Does it focus on your core customers?
  • Is it memorable and motivating?
  • Does it remain consistent across all areas of your business?
  • Is it easy to understand?
  • Can it be easily mimicked?
  • Will it become dated over time?
  • Does the statement promise something that is both believable and credible?
  • Can your brand take full ownership of it?
  • Will it stand up to counterattacks from competitors?
  • Will it effectively inform and direct marketing and branding decisions moving forward?

Using data from the competitor analysis, competitor position analysis, and the compare and contrast section of this guide, you should be able to evaluate each draft of the market positioning statement and rate them against these criteria.




The typical mindset underpinning arguments against a formal market positioning strategy is that it induces an official organizational stance regarding company identity, core values, desired clientele, and so on. Once a hard stance has been assumed, the idea of pivoting to match the needs of a shifting market might seem more risky. It’s true that repositioning involves risk, mainly to brand credibility. It’s also true that market positioning places limits on market penetration, but that fact should be treated as less a restriction than a liberation from thinking about segments where yield is likely to be low. In volatile markets it can be necessary, even urgent, to make moves toward repositioning product lines, brands, or even entire companies. It’s also true that market repositioning presents serious challenges – that are more difficult to face without robustly detailed data sets from a thorough initial market position analysis – but if managed and timed correctly, repositioning can offer greater value .

None of the above are legitimate reasons to avoid formal market positioning. For one thing, once an organization has experienced the full process of market positioning, subsequent attempts at the same process should become easier and more efficient. And the idea that neglecting market positioning allows businesses the ability to pivot more easily is often negated by the awkward position of trying to be all things to all people, wasting precious business resources on fruitless endeavors. Brands without an adequate positioning strategy stand to find any market volatile. The good news is that neither positioning, nor repositioning require the creation of something new and different per se. They simply require making the connections that already exist in the minds of your customer base, and of course, the conviction of your brand.