Product positioning strategy will influence your buyers and product life cycle.

Your product positioning strategy and product life cycle are correlated. Your product positioning strategy wrapped up with great messaging and content can drive your brand to more sales.

The short answer is of course. But you need a good product positioning strategy. More importantly, though, is the analysis backing up your product positioning holding accurate.

What is a product positioning strategy for small business?

market-targeting positioning strategy

Your product positioning strategy is one of the most important marketing tasks you will have to do when introducing or re-branding goods and services.

There are numerous strategies that companies use, none of which are so-called “better” in a generic sense.

Being able to define the product maneuverings that best match a business’s message is critical to explaining that product’s perceived values.

positioning strategy development

Not only is it crucial towards developing future marketing initiatives, but the adverse effect of not creating a product positioning strategy substantially decreases the utility of the goods.

What is product positioning in marketing?

Product positioning definition: Product positioning is a form of marketing that presents the benefits of your product to a particular target audience. 

Is your content converting leads? Are those leads that convert into sales?

It might be worth looking at your value proposition to see if it really resonates with your target audience.

We’ll review several strategies of product positioning where you will be able to apply and see your sales cycle compress.

The basic approach of positioning is not to create something new and different, but to manipulate what’s already up there in the mind, to retie the connections that already exist. Click To Tweet

So, what makes a product positioning strategy tick? It’s all about the perception of use, quality, and overall advantages. The way our buyers perceive an object is even more significant than any undiscovered realities.

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A good or service could contain countless benefits over the competitors, yet if the message is so convoluted to the point where consumers don’t understand, that reality goes unseen.

That makes the buyers’ perceived value the actual value. Inevitably, you begin to compete on price, and that’s a slippery slope to razor-thin profit margins.

Here are five simple steps to successful product positioning strategy

product positioning strategy
Source: Pixabay

1. Assess Top Competitors

Most product positioning strategies jump straight into defining an ideal customer profile or identifying key product features.

That leap skirts significant competition dynamics, though. It’s important to distill insights gathered from the top competitors into a framework; an overview of findings that makes them easily manageable.

It’s easiest to break a competitive analysis into four sections:


1. Competitor Profiles and Personas

Who are your top competitors? Most industries are fragmented and listing every competitor is unrealistic. So, understand that picking the contenders who closely match your market is important.

These play right into your product positioning strategy.

Sometimes regional competition is more relevant, or other times a substitute product can dominate your prospects.

Depending on how much time you are willing to devote, you can create segmented market profiles to understand the direct and indirect competition better.

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2. Marketing Strategies for Growth

What marketing activities are your competitors currently engaging in? There are thousands of tools available to uncover advertising platforms, software, keywords, social platforms, and backlinks websites are using.

You can determine what is working for competitors and improve on those activities. This research is an analytics gold mine for creating the future baseline of your product success.

3. Product Positioning to Compete

The Product Positioning Matrix helps put together a visualization of your product versus the opponents.

It will discover open product segments that are ripe for the taking and warn against overcrowded markets that scream disaster. The matrix compares pricing options against product specialization to show competitive gaps.

These play right into your product positioning strategy and may require that you have several positioning strategies.

4. SWOT Analysis for Research

For Matrix clients, we always use the “SWOT” model. The approach has stood the test of time and is a valuable summation tool, providing a clear and straightforward to put our core findings together in one place for at-a-glance assessment.

Your SWOT analysis play’s right into your product positioning strategy.

The final SWOT analysis is most conducive to product alignment discussions. By refining the analysis into short, actionable insights, you can get everyone on the same page and set the stage for the strategic recommendations that will follow.


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Determine Unique Purchasing Value Propositions

Take the time to create a fully vetted list of the products’ features. Next, to every feature add the benefit it provides customers. Product positioning is about providing a perceived value if features aren’t providing value then they are fundamentally pointless.

Does the product reduce waste, increase customer base, fix an essential problem, or resolve any other daily problem for your buyers? Then rank these values by their importance.

If you are solving world hunger, then that value should probably hold greater significance in product awareness than if it also for some reason has an alarm clock attached.

The mind, as a defense against the volume of today’s communications, screens and rejects much of the information offered it. In general, the mind accepts only that which matches prior knowledge or experience.”― Al Ries Click To Tweet

Emphasizing that unique purchasing proposition isn’t bragging. It’s about stating what your business (and essentially, your products) stand for.

You can’t stand for everything, or else it dilutes the message. Starbucks makes for an excellent example of what defining a purchasing proposition can do for business growth.

Starting out as a small coffee shop in an overpopulated industry, they were able to jump ahead of the competition and change the way people view coffee.

What does Starbucks represent? Why are they unique? They offer premium coffee at a premium price. They represent the shift away from Folgers 48oz can of coffee for $5 a pop.

That same $5 won’t even buy you a small drink from the Starbucks baristas. Clearly, there is no intention to compete on price; that would dilute the premium uniqueness of the product positioning.

I can go to any gas station and find an 89cent cup of joe, but that is serving a slightly different demographic.

A smart purchasing proposition knows which battles to fight and which ones to avoid. You can’t be everything to everyone, honing in on your voice makes a larger impact on sales than catering to every person.

Product Matrix

Define A Target Audience – Product Positioning Strategy

Your product positioning strategy includes who is your ideal customer. You need to understand them.

The process we use includes tools to design and test great value propositions in a search for what customers want. In today’s environment, things are changing rapidly and you must stay on top of them to remain relevant to your target markets.

There are always a few lucky companies that put a product up for sale with little or no primary market research, and they can’t keep up with the demand. But for the rest of us, we have to develop buyer personas that resemble active customers.

Take a look at your current consumers, typically, there will be reoccurring themes and generalizations. Who are they, what are they buying, why are they buying it? Common characteristics will surface giving you insights into other consumers that are like them.

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Next, review the product features list it will need to be combined with the competitive analysis.

You were able to determine which features were most valuable to your product; now they should be compared between which competition accomplishes these functions best.

Just because there were market segments that had gaps in the competitive analysis doesn’t mean those holes aren’t there for a reason.

Comparing a Competitive Value Matrix and Product Positioning Matrix can help align potential markets with sought after products.

You’ve almost zeroed in on a potential market. The last piece of the puzzle is considering target demographics and psychographics. These play right into your product positioning strategy and are essential.

This can be a long list, but some of the most prominent pieces are:

  • Age
  • Gender
  • Location
  • Education
  • Income
  • Family Status
  • Personality
  • Attitude
  • Values
  • Interests & Lifestyles

This list of attributes can get a little overwhelming after trying to display the associated information accurately. If you are someone who needs organizational help, try using this buyer persona workbook to guide the process. It gives helpful examples and walks the user through a successful buyer persona process.

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Before moving on, evaluate the outcome of the target market research you undertook. Ask these critical questions to validate the findings:

  • Does my criteria list form a market big enough to support my product?
  • Will this market be able to afford the product?
  • Is the market accessible or ready for a change?
  • Does the market find value in the product?
  • Do you fully understand what drives the target market’s decision making?

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Create a Messaging & Positioning Statement

Messaging is a vital part of your product positioning strategy.

Product positioning is not the effort put into a product. Positioning is how you mold the perceived value of the prospect.

Accurately placing your company and its products is the first body of thought that comes to grips with the problems of getting heard in our over-communicated and plugged-in society.

A good chunk of the legwork has already been completed for your messaging and positioning statement in creating a target audience and outlining product benefits.

That combination can often determine your “niche” placement. But, it doesn’t go as far as defining business identity and explaining that identity to prospects.

Take the time to answer these questions:

  • Who is your company?
  • What business are you in?
  • What needs do you serve within each designated market?
  • What makes your product different than the top competitors?

It’s time to take all the data, personas, markets, and answers, and combine them into a cohesive, one to two sentence statement. That is not an easy task.

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Analyze & Adjust your Product Positioning Strategy

A product positioning strategy is never-ending. It is a living breathing dynamic project. The data collected can shift based on trends that are outside of your control.

As you proceed, be sure to add different sets of opinions through market research and internal evaluations.

To effectively position a product it is imperative to live up to the expectations you’ve established in the buyer’s mind. Not meeting the assertions you make will have a far greater negative impact than you can imagine.

As you monitor and analyze the results make sure your goals are quantifiable just like any other marketing campaign an organization runs. If you can’t measure the end goal, the added value of your effort is lost. Not only that but without incremental SMART goals, the chances of reaching a satisfactory conclusion diminishes.

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Take care of the due diligence, and you will be rewarded with a product positioning that rivals even the toughest competition. 

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General FAQ

What is a product positioning strategy for small business?

Your product positioning strategy is one of the most important marketing tasks you will have to do when introducing or re-branding goods and services.

Why do I need a product positioning strategy?

Your product positioning differentiates your product from similar products on the market. It speaks to essential values and criteria customers use to make purchase decisions. It establishes the unique attributes of your product or the company.

Can a product positioning strategy influence buyers?

Yes, if done right. You need a good product positioning strategy. More importantly, though, is the analysis backing up your product positioning holding accurate.

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