What are positioning strategies? (Plus types and how-to)

By Indeed Editorial Team

Published 6 July 2022

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

Positioning strategies are a way of changing how a brand behaves in the market. It involves that same brand taking stock of both itself and its competitors, examining the different ways in which one stands out from another. Then, the original brand uses these differences to promote itself to customers, winning profits away from competitors and thus strengthening its own position in the market. In this article, we look at what positioning strategies are, their five main types and how to position a brand.

What are positioning strategies?

Companies use positioning strategies to highlight areas where improvement is necessary. Typically, an organisation's upper management examines their performance on the market to see what's going well and if they require any improvement. From these highlighted issues, there's often a particular area that takes absolute priority. This requires an organisation to then strategise how they're going to rectify their market position, as such correction improves market visibility.

Organisations position a new series of strategies that cater foremost to customer needs. This, in conjunction with where that organisation ranks in comparison to its competitors, helps to uncover areas where the organisation can capture its demographic's attention. For example, an online streaming service can offer a wider or a different selection of films and steal customers away from competitors.

Related: What is strategy and why is it important in business?

Types of strategic positioning

The areas that an organisation highlights as part of its brand analysis often inform its subsequent strategies. As several different areas may require improvement, there are several different types of strategic positioning available. Here are the five main types:

1. Price positioning

Strategies based on price are sometimes referred to as 'competitive pricing', where an organisation looks at similar brands and how they're pricing their products. Then, to entice competing customers to change brands, the original brand lowers its prices so much that they're offering the same type of product for a much lower price. Customers see this and can't justify spending more on the same product. Organisations implementing such a strategy anticipate that, because their prices are so low, demand is going to raise enough capital to cover the cost of production while also returning a profit.

Often, organisations price position when there's a noticeable price gap in the market. For example, phone companies may produce and sell a phone as part of a line rather than a standalone product. They may offer the same phone with 25GB of storage at the lowest price, then sell the same phone with 75GB of storage at an increased price. This is so that the company can cater to each price range. There's no room for a competitor to steal customers by offering a lower amount of storage at a lower price for those with a limited budget.

2. Competition positioning

Competition-based positioning involves analysing more successful brands to see how they operate. They then use such practices as a starting point for positioning their brand to be something different. The original brand uses a range of marketing techniques to advertise this differentiation, emphasising its positivity and why it makes this brand superior. Essentially, the strategy involves a brand filling a market gap to make their product seem more unique. This links into the aforementioned strategic positioning, as organisations often base their price point on that of their competitors.

3. Product positioning

The third type of strategic positioning is product positioning. This involves an organisation positioning itself on the market through the characteristics of its products and the benefits they have for a customer. For example, in the fashion industry, a retailer may emphasise the positive environmental factors of its clothing. For example, the products may be only made from recycled or sustainable materials. This is appealing to customers, as it reduces their carbon footprint.

As this is the most valuable characteristic that the brand has to offer its customers through its product, it uses it to position itself on the market. The brand communicates itself as one of the only truly sustainable brands by using its brand logo and slogan to capitalise on this defining feature.

Related: How much do fashion marketers make? (Role and skills)

4. Application positioning

Another type of strategic positioning focuses on the product's application. Advertisers focus on how the product's use can make the consumer's life better by focusing on the benefits that it can bring. This is different from product positioning as it focuses exclusively on how customers use the product rather than focusing on aspects of the product itself.

An example of this is the marketing of subscription-based meal kits. Rather than marketing these meal kits based on what they are, they're advertised according to the benefits they can have for the user. Such benefits in this instance include minimising food shopping and, instead, delivering the food straight to the customer. They're also beneficial to those wanting to eat healthier and more exciting foods, as they can search for recipes fitting this online.

Related: How to become an advertising sales agent (plus salary info)

5. Quality positioning

The last type of strategic positioning is quality positioning, where an organisation lines up the quality of a product with an increased price. It's distinct from price positioning as quality positioning doesn't openly communicate the price of a product. Rather, it sees a brand build up its reputation through its luxurious products. When done effectively, customers often pay larger sums of money for a product coming from a specific brand than they would for the same type of product created by a lesser brand.

For example, there may be two types of shoes. One is a luxury brand charging £500 for a pair of trainers, whereas the other is an unnamed brand selling a similar pair for £50. While some consumers might go with the unnamed brand because it's cheaper, those who can afford it may choose the luxury brand because it's recognisable, even though both sets of shoes are remarkably similar. This is because the luxury brand has positioned itself as one of quality. Often, there isn't a significant difference between the longevity of each product.

How to position a brand

Positioning a brand is a worthwhile process. It's a process that, when enacted correctly, helps to cement a brand in the mind of a consumer. This can promote the brand value and ultimately increase profits. Here's how to position a brand in four steps:

1. Determine where the business is

The first step in creating a strategy is to determine where the current market position of the business. This allows you to see how far the business has to go before it commands the desired market space. Honestly identifying where you stand in the market becomes useful later on when analysing the company's position in terms of competitors.

2. Identify the company's main competitors

The second step in creating a strategy is identifying who the company's competitors are. This allows you to gather research into what sets the business apart from these organisations in terms of their strengths versus the company's weaknesses. For example, their brand may be more effective at communicating the usages of their product line. This inspires more sales as customers can see why they need that product and how it's going to improve their lives.

3. Define what sets the company apart

When you've identified who the competitors are and how they position themselves, you can identify how to use this to your advantage. For example, your company's product might fill a gap in the market, catering to a specific customer need that competitors don't address. For example, a competing telecommunications company might offer customers the chance to buy more data when they run out. In response to this issue, your brand positions itself based on its application. To save customers the bother of having to sign up for more data, they can buy a contract with unlimited data included.

4. Create a positioning statement

After deciding how to bridge the gap between competitors and position the brand as distinctive, it's time to create a positioning statement. This is often a two-sentence declaration made by an organisation that draws attention to who they are, what their brand is and how it attempts to make the lives of customers easier, along with providing proof of how this works in the real world. The main aim of this is to give customers something to identify with, inspiring them to purchase one of the company's own products rather than a competitor's.

Related:

  • How to create a positioning map successfully in 8 steps

  • What is strategic positioning? (With tips and benefits)



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