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How to create a winning product positioning strategy

PostsDesign & UX
Georgina Guthrie

Georgina Guthrie

March 03, 2023

The business world is like a party, where everyone’s vying for attention, but only a few stand out. This is similar to product positioning — trying to get your product noticed in a crowded market full of impressive competitors.

In this article, we’ll discuss what product positioning is, why it’s important, and how you can create a successful strategy for your brand. We’ll use real-world examples to demonstrate how companies have used product positioning to their advantage, plus you will discover practical tips for how to do the same. 

So whether you’re launching a new product or trying to reposition an existing one, this article will give you the tools you need to make a splash. Let’s dive in! 

What is product positioning?

Product positioning aims to make your product stand out among competitors by highlighting its unique features and appealing to customers’ specific needs.

To successfully achieve this, you must understand your target audience, their desires, and how to craft a message that resonates with them. Marketers must also identify gaps in existing offerings from competitors to create a clear point of difference for their brand and product.

Product positioning can take many forms depending on the campaign’s objectives. It may involve simple messages about product features, more sophisticated campaigns around lifestyle or emotion, or highly targeted campaigns on niche markets and segments. A successful product positioning strategy often combines elements from each type depending on what’s most appropriate for a given brand’s goals.

Why is product positioning important?

Product positioning is one of the most critical aspects of any successful marketing strategy. Done correctly, it can make your product stand out from the competition — and neglecting it can be a costly mistake. Risks include blending in or, worse, being seen as inferior. Customers who struggle to understand why your product is different will turn to other brands with a clear-cut message.

On the other hand, a well-positioned product can be what drives your business forward. By crafting a message that speaks directly to your target audience, you can capture their minds and hearts, grabbing their attention. This means more customers and more sales — something every business owner wants.

Effective product positioning can also help establish brand identity. When you consistently communicate a clear message that resonates with your target audience, you can build brand loyalty, which means repeat customers and word-of-mouth advertising, which can be a powerful marketing tool. 

How to create a product positioning document

Marketers have a lot to consider when creating a product positioning strategy.

Here are some quick definitions you should know:

  • Product Description: A brief description of the product and its features, including any unique selling points that differentiate it from similar products
  • Target Market: A clear definition of the target market for the product, including demographics, psychographics, and other relevant information
  • Competitive Analysis: A comprehensive analysis of the competitive landscape, including an assessment of competitors’ products, strengths, weaknesses, and market share
  • Value Proposition: A clear statement that outlines the product’s unique value and the benefits it provides to customers
  • Brand Personality: A description of the brand’s tone and visual identity, which should align with the product’s target market and value proposition
  • Mission Statement: A clear, concise statement summarizing the product’s unique value and place in the market
  • Marketing Mix: A description of the marketing mix, including the product’s price, promotion, distribution, and packaging
  • Metrics and Goals: A set of metrics and goals that will be used to measure the success of the product’s positioning strategy and marketing efforts
  • Implementation Plan: A detailed plan for implementing the product positioning strategy, including timelines, responsibilities, and resources needed to execute the plan successfully

Let’s look at how each of these fits into the process.

1. Write a product description 

First, you need to know exactly what you’re trying to sell. Here are some things to check off as part of this: 

  • Define the product: Include its name, category, and purpose. This will provide context for the rest of the document.
  • Identify key features: Determine what makes the product stand out from similar offerings in the market. This could include anything from technical specifications to unique design elements or price points.
  • Determine the benefits: Decide how key features appeal to the target market. This could include improved functionality, increased efficiency, or enhanced user experience.
  • Highlight unique selling points: Include unique traits in the description to differentiate the product from competitors in the market.

Top tip: Keep it concise! While providing a detailed description of the product and its features is essential, simplicity works best here. Avoid technical jargon or complex language and focus on communicating the message as effectively as possible. 

2. Define the target market 

Defining the target market involves identifying the specific group of consumers who are most likely to purchase the product and tailoring the product’s features and benefits to their needs. 

Start by conducting market research to gain a deeper understanding of your audience. This research could include surveys, focus groups, or interviews. You can identify common themes and patterns by asking questions about their needs, preferences, and buying behavior.

When defining the target market, it’s important to consider demographic and psychographic factors. Demographic factors such as age, gender, income, education level, and geographic location can provide insights into the target market’s characteristics. Psychographic factors such as values, attitudes, and interests give you insight into motivation.

Once you have this data, you can create a buyer persona representing the product’s target market. User personas put a face to all that data, making it easier to craft your messaging — it’s easier talking to one ‘person’ vs. a big faceless group.

User persona template available in Cacoo

Next, evaluate the market size to determine the potential customer pool. Also, consider the rate of growth and the level of competition. There’s no point diving into a crowded market in decline.

Finally, refine the definition of the target market as necessary. As the product and market evolve, ensure that the definition remains accurate and relevant. 

3. Run a competitive analysis 

Analyze competitors to see what types of customers they are targeting and identify any gaps your product could fill. Observe their marketing strategies, customer reviews, and social media activity to gather useful information — this will form your competitive analysis. 

Here’s how to do it: 

  • Identify competitors: This could include direct competitors with similar products or indirect competitors with adjacent products.
  • Gather information: Focus on products, pricing strategies, distribution channels, marketing tactics, and customer reviews through market research, competitor websites, or industry reports.
  • Analyze strengths and weaknesses: Investigate product features, quality, customer service, and brand reputation. 
  • Identify opportunities and threats: Examine emerging trends, changes in consumer behavior, and shifts in the competitive landscape.
  • SWOT analysis for your product: Conduct a SWOT analysis to develop strategies and leverage strengths and opportunities while mitigating weaknesses and threats.
  • Benchmarking: Determine how your product stacks up in terms of features, pricing, quality, and other factors. 
  • Refine: As the market evolves, refine the competitive analysis to ensure that the product is positioned for success. This could involve gathering additional information, updating the SWOT analysis, or adjusting marketing strategies.

4. Create a value proposition

A value proposition is a concise statement that outlines the product’s benefits. Since you’ve already identified your customers and their needs, all you need to do is determine what benefits the product should offer. For example, if your target market seeks improvement with time, you’ll want to make speed a key feature. 

Your product should benefit functional and emotional needs, like performance and convenience. So split your list in two. That way, you’ll have a good mix of functional and emotional features. 

Refer to the competitor analysis regularly, and be wary if there’s too much crossover between you and a competitor. Your value proposition should display why you’re different.

5. Define your brand personality

A strong brand personality, like Apple or Nike, is recognizable to customers, making it an easy choice. Customers enjoy seeing how a business aligns with their values and will gravitate toward a familiar brand. Creating a brand personality involves choosing adjectives that describe your brand’s tone, voice, and values. 

For example, if your brand aims for sustainability and eco-friendliness, you may choose adjectives like “caring,” “compassionate,” and “responsible.” If your brand is focused on innovation and new technology, you may select adjectives like “dynamic” or “progressive.” 

Once you have a set of adjectives, you can create a brand personality statement that encapsulates the essence of your brand (ideally with the help of a designer and copywriter or a marketing agency).

This statement should guide all aspects of branding, like logo, color scheme, tone of voice, advertising, and social media presence. By defining your brand personality, you can create a consistent and engaging brand identity that resonates with your target audience.

6. Define your mission statement 

Many businesses encapsulate their brand via a snappy mission statement. Like an elevator pitch, these are concise sentences defining the purpose, values, and goals. A clear mission provides the foundation for all other elements, so it’s crucial to get it right. 

Here are some real-world examples of mission statements from well-known companies:


“Build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis.”

Patagonia’s mission statement reflects the company’s commitment to environmental sustainability and responsible business practices. The statement emphasizes the importance of building high-quality products while minimizing environmental impact and using business as a force for positive change.


“To organize the world’s information and make it universally accessible and useful.”

Google’s mission statement reflects the company’s market-leading goal to make search results as relevant and accessible as possible. The statement is concise and specific, emphasizing a commitment to innovative problem-solving.


“Belong anywhere.”

Airbnb’s mission statement reflects the company’s goal of providing unique and personalized travel experiences to people all over the world. The statement is aspirational and emphasizes the company’s commitment to creating a sense of belonging and community.

7. Define your marketing mix

The marketing mix comprises the 4 P’s: product, price, promotion, and place. 

  • Product: To start, you need to ensure that your product meets the needs and expectations of your target audience — something you have done via steps 1–4.
  • Price: This should be based on production costs, competition, and the perceived value of your product. 
  • Promotion: This involves advertising, public relations, and other promotional activities to create awareness and generate interest in your product. Work out where your audience is, then choose the channels that will help you reach them most effectively. Promoting across every social media platform can be tempting, but it’s better to focus on a small number of platforms at first.
  • Place: Lastly, determine your product’s location or distribution channels, such as online sales or brick-and-mortar stores. You already know who your target market is, so choosing your place should be as simple as working out where they are, then putting yourself in front of them. 

8. Set metrics and goals 

Setting metrics and goals involves defining specific and measurable targets aligning with your business objectives. 

First, identify the key performance indicators (KPIs) most relevant to your product and business. These can include metrics such as sales revenue, customer acquisition, customer retention, website traffic, conversion rates, and social media engagement. 

Once you’ve identified these, you can set specific goals for each one. For example, you may set a goal to increase website traffic by 25% in the next quarter or increase customer retention by 10% within the following year. 

Setting realistic and achievable goals that align with your overall business strategy is essential. You should regularly track your progress towards these goals, adjusting your strategy as needed.

9. Create your implementation plan 

The implementation plan outlines the specific actions needed to achieve the product positioning goals. 

  • Identify the key activities such as developing a marketing campaign, launching a new product feature, or improving customer service. 
  • Establish a timeline and assign responsibilities for each task. This will ensure that everyone involved in the implementation process is aware of their role and clearly understands the timeline. 
  • Determine the resources required to execute the plan, such as budget, personnel, and technology. It is crucial to allocate resources effectively to ensure the plan is executed efficiently and effectively. 
  • Finally, communicate the implementation plan and its progress with all stakeholders, including employees, customers, and suppliers. This will build support and ensure everyone is working towards the same goals.

Product positioning tools

Effective product positioning is essential for businesses looking to stand out and grow. Choosing the right collaboration tools for your team can go a long way.

With Cacoo, our diagramming software, it’s easy to simplify complex data into visual charts that make sense to everyone. And with our project management tool, Backlog, you manage every task throughout your product development lifecycle.



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