Forming a successful product positioning strategy is one of the most fundamental elements of B2B marketing because it allows your business the opportunity to differentiate itself from its competitors.

However, a big mistake many businesses make is assuming that positioning is simply just a marketing strategy when, in reality, it should provide the foundation for the overall business strategy itself.

Knowing your target audience and positioning your brand in a way that both caters to and is appealing for a certain segment in the market is crucial. Positioning is a brand’s unique way of providing value to its customers and a successful product positioning strategy relies on a deep understanding of the marketplace that it wants to compete in.

After all, Ries & Trout stressed the importance of developing:

“A position that takes into consideration not only a company’s strengths and weaknesses, but those of its competitors as well.”

(Ries & Trout, 2001)

Throughout this article,  I will provide five top tips on how to develop and maintain a clear positioning strategy, which is both sustainable and recognizable to potential customers.

What is a positioning strategy?

A positioning strategy is a set of actions and processes that are designed to improve the image and visibility of a brand, company or product.

Product managers should plan for how people in the market will think about their product, as truly the only product positioning that counts is what your customers think as the product has a life of its own. If a customer isn’t thinking about it, your product doesn’t occupy that position.

Successful positioning strategies not only focus on where the product is today but how the product could potentially progress to where you would ideally like it to be in the near future.

Businesses use marketing to communicate their market position to customers and influence their perception of the brand’s products or services. Marketing establishes the brand identity, influencing consumer perceptions of its position in the market relative to the alternatives available from competitors.

“Positioning is not what you do to a product. Positioning is what you do to the mind of the prospect. That is, you position the product in the mind of the prospect.”

(Ries & Trout, 2001)

Tip 1: choose an appropriate market segment

Before determining a position in the market, it’s crucial for a product manager to decide on a segment of the market they would like to target.

This segment of the market should be profitable with either many customers already available to buy a product within this segment or have its own niche in the market, which presents an opportunity as a result of a lack of competition.

Product managers need to base their brand decision-making on the group of customers they would like to target, making the brand as attractive as possible.

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In this article you’ll find quick primers on some of the most popular and effective methods for B2B marketing segmentation, along with their pros and cons so you can get started on deciding which would be the best approach for you and your business.

Tip 2: Decide which positioning strategy best suits the product or service you’re offering

Whilst some strategies focus more distinctly on the price range of their products, many others concentrate on the characteristics or the practicality of the products themselves. Below are five main strategies that businesses can base their positioning on:

Product positioning based on product characteristics

This type of positioning involves associating your brand with a certain characteristic that would be beneficial to customers.

For example, in the automobile industry, Toyota’s position in the market is reliability whilst Porsche’s position is performance and Volvo’s position is safety.

Brands consistently communicate the most unique benefit or characteristic of the product with consumers.

Product positioning based on price

In most cases, when it comes to this type of strategy, a brand aims to be the cheapest or one of the cheapest in the market, and value becomes their position. For example, supermarket chains such as Morrisons and ASDA have a house brand with very low-priced products in many product categories.

Their lower logistical and distribution costs allow them to price these products lower than their competitors. Price-sensitive buyers will often purchase them without knowing the price because they know it is often the cheapest option.

Alternatively, brands may choose to use the competitive pricing strategy if they discover a gap in the market at a certain price point. Being the only option in a certain price range, potentially, could become your market position as many brands often extend their product lines to fill a gap in the market.

Product positioning based on quality or luxury

It's unsurprising that the price and quality of a product usually align as, certainly in the mind of the consumer, the high price is often associated with high quality. However, positioning a product based on its high quality or ‘luxury’ is very different from positioning based on price.

Often these brands do not communicate their price point, but instead, entice their target audience with the high quality or prestige of the product in order to create a desire for customers to want the product regardless of the price.

Product positioning based on product use or application

This strategy focuses specifically on the practicality of the product, seeking to actively associate a product with a particular use.

For example, meal replacement supplements can be used to target anyone lacking time or needing a quick convenient meal. Alternatively, they can target a more specific audience such as people who are searching for supplements that are much lower in calories for dieting purposes.

Product positioning based on the competition

Competitor-based positioning focuses on using the competition as a reference point for differentiation.

In this particular strategy, the brand highlights a key difference their product or service offers in their marketing, to make it seem more favorable and unique in comparison to other options in the marketplace. The competition, in this particular case, can also be used as a reference point to follow a similar strategy.

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Tip 3: craft a unique selling proposition (USP)

The result of effectively positioning a product or service gives it a Unique Selling Proposition (USP). A USP is an attractive feature or characteristic of a brand that differentiates it from similar alternatives. In other words, it provides a unique benefit that encourages customers to purchase your brand over another.

In a modern world cluttered with an overwhelming amount of choices with similar benefits, you want your brand to stand out from the rest. Product managers must seek to craft a memorable brand that has competitive advantages over alternatives.

McDonald’s is a notable example of using a USP to help position its brand. They are the world’s most widely known fast-food brand and compete with hundreds of other fast food outlets.

However, despite their competition, they do not try to position themselves as the fastest, cheapest, or best tasting. Instead, their USP targets families. The brand focuses on the fact that they are a family-friendly restaurant with the children’s menu items, the free toy with a kids meal and the playgrounds all contributing to the company’s success.

Tip 4: develop your product positioning statement

Upon crafting a successful USP, a positioning statement should be used to further communicate the brand and its intentions.

Although a USP and positioning statement are quite similar, the biggest difference is that a USP is product or service-centric and focuses on what sets your product or service apart from competitors. Whereas a business creates its positioning statement after the USP, focusing on the primary benefit of the product or services for their target market.

When it comes to developing a successful positioning statement, product managers should ask themselves “how do I want our brand to be perceived?” Once you can answer this question in a clear and precise way, it becomes much easier to communicate these intentions with your target audience.

After all, how can you expect potential customers to understand the practicality and intentions of your business if you are unable to outline them yourself?

Once the product manager has a clear idea of how they would like their brand to be perceived, it can be put into a positioning statement. A positioning statement should be no longer than a paragraph that outlines the following:

The target market

The positioning statement should begin with describing your target market and what the specific needs or goals of that target market are.

Market research is essential for product managers to carry out to successfully understand their market and customers much more intimately.

The category that your product belongs to

The statement should define the category to which your product belongs and how it meets the needs of consumers.

The main differentiation from other products

The statement should additionally highlight what differentiates your product from the alternatives. It is best to only include one point of differentiation, stating your difference from the customer’s perspective.

Provide evidence to build customers trust

It’s important to explain why consumers in your target market should believe your brand’s claims. Consumers must see credibility in your positioning through the evidence that justifies your claims.

For example, it would not be wise to just say how your product or service is the fastest or the best quality without also stating how.

Below is an example of what a product positioning statement may look like:

An exemplar format for a product positioning statement:

For (target customer) who (statement of need or opportunity), the (product name) is a (product category) that (key benefit, reason to buy).

Unlike (primary competitive alternative), our product (statement of primary differentiation).

Tip 5: keep the customer at the forefront of every decision

Finally, and considerably, the most important thing is to keep the customer at the forefront of every decision you’re going to make. Successful strategies always put the customer first and use their opinions as a way of creating the ideal image for the brand’s product.

Remember, positioning is all about defining how the brand's offering is unique and how it provides a distinct benefit to customers.

“There is a positive relationship between company performance (profitability/efficiency) and well-formulated and clearly-defined positioning activities.”

(Kalafatis, Tsogas & Blankson, 2000)

Struggling with your brand positioning? Got advice on how you've got it nailed? Head to the B2B Marketing Alliance Community!