What is Positioning Strategy and How-To Develop One in 6 Steps

A common question we hear from clients, “What is Positioning Strategy?” Positioning Strategy is not what you do to a company or a product. It is what you do to the mind of your key audiences. It’s about claiming an advantageous position in the minds of customers and prospects that takes into consideration not only your own strengths and weaknesses but those of your competitors. You can apply positioning strategy to companies and organizations, and also products and services. If you can beneficially tie your positioning to a thought that already exists in the minds of your key audiences, it is much easier than trying to put a whole new thought in their minds.

Positioning Strategy Definition

A good positioning strategy is compellingly tied to an idea your key audiences already hold. It takes what they already know to be true in the world, and turns that truth to your advantage. This not only creates a competitive advantage, but it gives your company a clear direction on who you are, what you do, and why you are valuable. It increases internal morale. It provides a platform for all external marketing and communications It guides all that the company says and does.

Think about Volvo, they took it upon themselves to be the leaders in safety – a concept that established them as a major global automotive brand with a real clear reason for being. Or Avis, who celebrated their #2 ranking in the marketplace as a badge of honor, because it meant “we try harder.”

The Origins of Positioning

It’s impossible to talk about positioning without giving major credit to Jack Trout and Al Ries, who developed and introduced the concept of positioning in the early 1970’s. Their highly celebrated first book was called, Positioning: The Battle for your mind. The book has been re-released in multiple editions over the years.

How to Develop a Positioning Strategy in 6 Steps

Step 1: Differentiation.
Differentiation is clearly an important marketing and communication concept. If your company or product is not differentiated, there is no reason to choose it. You are just a commodity stuck with competing on price. You must stand apart from your competitors to get noticed at all. you can differentiate in two main ways – to create a preference, or command a premium. Think of the airlines – they are all essentially selling the same service, which is transported from one place to another. Southwest and Emirates both fly Boeing aircraft from one destination to the other, yet each is highly differentiated. Southwest has decided to create a preference by offering low cost, convenient flights and eliminating a lot of the perks (even peanuts!). Emirates, on the other hand, commands a premium price by offering a five-star hotel experience in the sky.

Step 2: Relevance.
Differentiation alone is not enough. You must be differentiated in a way that is compelling to your audience. For example, you could put your fine wine in yellow plastic squeeze bottles. That would be differentiating, but not relevant or compelling to wine connoisseurs. This is where positioning comes in. It begins with finding unfulfilled desires and focusing on them. For example, Miller Beer found that big beer drinkers felt too full too early in their drinking, so it positioned Miller Lite as “everything you’ve always wanted in a great beer, and less”. It quickly became the 2nd largest selling beer in the U.S.

Step 3: Coherence.
Your positioning strategy is not just a slogan. It’s how you create and deliver your product or service. It’s how you address and engage your audiences. Once you’ve made a decision on how you will differentiate in meaningful ways, you need to articulate and plan how that unique value will be delivered to all. BMW’s position as the “ultimate driving machine” is essentially a claim to superior engineering, resulting in a superior experience. To succeed in defending this position, they needed to do more than create great cars. They had to show up in places where extra driving is celebrated and appeal to people for whom a car is more than a way to get around – its a symbol of values and status.

Step 4: Reputation.
Successful positioning strategy takes commitment, investment and repetition. You need to set and fulfill expectations over and over again to earn the reputation that your strategy suggests. Starbucks didn’t immediately become the “third space” that people frequent for personal and professional respite. They worked hard and invested heavily to become the world’s largest and favorite coffeehouse. Similarly, one of the worlds best known brands, Nike, invested many decades of heavy advertising and product innovation to become known as the title holders to athletic performance and victory, especially considering they had competitors like Adidas who were trying to own a very similar position. In the end, both owned athleticism, but Nike owned the winner’s attitude.

Positioning Strategy Examples

We’ve already mentioned Avis, Miller Light, Volvo and BMW, Southwest and Emirates, Nike and Adidas. But any successful brand has likely made deep commitments to successful positioning strategy. Here are a couple who evolved their positioning strategies as they themselves grew and evolved:

Walt Disney had successfully positioned themselves as providers of family entertainment. However, that represented only 20% of the movie-going market. They were perceived as a niche player that would never really grow. They created a new studio called Touchstone Pictures, and introduced it as committed to quality adult entertainment. It’s first Touchstone picture was “Splash”. It out-grossed all previous Disney pictures, because the 80% of the market came. While Walt Disney Pictures still stood for family entertainment, they had realized that Disney could stand for distinctive, franchisable quality entertainment in all forms, which has led to their rapid and unstoppable growth. Now they own some of the best brands in entertainment, including Lucasfilm, Marvel Studios, and ESPN – all distinctive, high quality brands.

Salesforce first positioned themselves with the slogan “no software” to call attention to their early adoption as the cloud as a new way to sell “software as a service”, meaning its always up to date, and requires no installation. Once the world caught up with them, they repositioned themselves as the leaders in “Customer Success,” leading with a high-level benefit that every business wants to achieve, and Salesforce had the data, the breadth and the technology to help them achieve it.

Six positioning questions to get started

What position do you own – in the minds of your key audiences? What can you work with?
What position do you want to own? – Don’t try to “own” a position that is already owned.
Whom must you outgun? – Avoid head to head combat. Anticipate your competitors’ moves.
Do you have enough money? – It takes money to establish a position and to hold a position.
Can you stick it out? – Owning a position in the mind is like owning valuable real estate.
Do you match your position? – Are you who you say you are?