What is Positioning in Marketing? 3 Reasons It’s Important

When people think of a “brand,” they often fail to realize that a brand is actually made up of two components – the corporate image and the positioning.

In this guide, I’ll be discussing the latter half of a brand, which is positioning.

Positioning is so important that it’s often the make or break of a new product.

A strong positioning strategy can also positively influence all other marketing and sales efforts.

In fact, when I was working with clients as a digital marketing consultant, it was a lot easier to work with the bigger, more established “brands” that knew their positioning strategy than the clients who did not.

The clients and companies that did not have a solid positioning strategy from the get-go, did not last long.

Knowing how to position your product is not only beneficial for the health of the company, but for everyone who works in the company, works with the company, or is trying to buy from the company.

So with that being said, let’s talk positioning, its importance, and how to create strong positioning.

If you want the quick TL;DR:

What is Positioning in Marketing?

Positioning can be defined as the process of identifying a target audience and creating an image of your product that fills the target audience’s unfilled need.

As you’ll notice, I emboldened three key sections from that definition that we’ll unpack in the later section of this guide when we discuss how to create a positioning strategy.

Within that definition, there’s a lot of marketing jargon there, so let me try to explain it in simpler terms as well.

In simpler terms, it’s about having a product or service (which can be digital such as an application/software, or a physical product like a shirt), and creating an image of that product or service that fulfills the needs of your target audience.

An analogy for positioning is that of a lock and key. In this case, the lock would be the target audience’s unfilled need, and the key would be the company’s product or service.

Positioning is also one component out of six components within the Marketing Mix along with corporate image, price, promotion, product, and placement (we’ll touch on the Marketing Mix later).

For now, keep that definition and analogy in your mind, and let’s look at the importance behind this definition.

Importance of Positioning in Marketing

From my experience, I’ve been able to identify three key reasons why positioning is so important in marketing and to the overall success of your business and product development lifecycle.

1. Positioning Can be a Competitive Weapon

The first reason positioning is important is that it can be used as a competitive weapon.

If a positioning strategy is successfully implemented, then your target audience will have an image of your product that is memorable while also being the image you want them to have.

For example, let’s say you have a fitness company called Breathable Fitness that focuses on selling fitness t-shirts that have “breathable” materials so the wearer feels comfortable while working out.

A successful positioning strategy in this case will mean creating the image of comfortable, breathable shirts to the target audience of fitness enthusiasts who also want comfort while they work out.

We’ll touch on how this company could go about this later but let’s stick with the thought, that they were able to successfully position their product like this.

If this were to happen, the benefits of their products (their shirts) would be top of mind in their target audience, making it hard for competitors to copy them. They would be able to lock out their competition and have a dominant market share.

Think of all the top companies that you may use on a daily basis. This may be cliche, but let’s take Google, Uber, and DoorDash as our examples.

Google

Starting with Google, we all know what they do right? They’re a search engine and its goal is to organize the world’s information.

If we had a question pop up in our head, most of us would head straight to Google and type in our question. We would throw our question into the void and out would pop an answer to our question in the form of a Search Result Page.

But why do we go to Google? There are other search engines out there such as Bing, DuckDuckGo, Brave Browser, etc.

Why is it that over 90% of us prefer to use Google as our search engine?

One of the reasons is because of their very strong positioning in the market. They have successfully created an image of their product in our heads that fulfill our needs.

Due to this, their strong positioning in the market has locked out other competitors and is evident based on the 90% stat above.

This is a strong and very apparent case of positioning in the market, but let’s take a look at our other two companies that are competing for positioning in the market – Uber (Uber Eats) and DoorDash

Uber (Uber Eats) and DoorDash

When it comes to meal delivery, most will say either Uber Eats or DoorDash.

I wanted to use these two companies as an example of companies or services that provide the same exact thing but have different positioning strategies – allowing for one to be more successful than the other.

According to Statista, DoorDash currently has a 59% market share while Uber Eats has a 24% market share. But why is this?

They offer the same service but one has more market share? I’d argue that a big reason for this is due to the two company’s positioning strategies.

As we’ll touch on later, the company’s name plays a big role in the corporate image and positioning of a company (the two components of a brand).

When we think of Uber, we think of the ride-sharing service, and when we think of Doordash, we think of online food ordering and delivery service.

Do you see where I’m heading with this?

Uber started with a ride-sharing service and then they also launched Uber Eats in 2014 to join in the food ordering and delivery service. DoorDash is solely an online food ordering and delivery service and they only launched a year prior in 2013.

Speaking of food ordering and delivery services, DoorDash only focuses on that with their positioning so they are top of mind, and it’s evident with their dominant market share.

If we think DoorDash, we think food delivery, if we think of Uber Eats, we think oh they have Uber which will pick me up and take me anywhere, plus they have Uber Eats – see the difference?

We’ll touch more on this later, but I wanted to list these two as an example of companies that offer the same service/product, but the only difference between one making more money than the other is due to positioning (along with other marketing tactics in the Marketing Mix of course).

2. Positioning Can Create Uniqueness

The second reason positioning is important in marketing is that it can create positive uniqueness within the market.

The goal of every positioning strategy for a business is to show their target audience that they provide and offer all the benefits of their competition plus something else unique.

This “plus” should be known and identified before a product or service is even established, and if you currently offer a product or service that does not have a “plus,” or something that makes you unique compared to your competitors, then you need to figure that out.

Knowing what this “plus” is comes from doing market research on competitors before entering a market.

For example, let’s say you want to get into the candle business and you want to sell 100% soy wax, handmade candles.

Before even starting this business and offering this product, you need to do market research on the competitors out there.

So let’s say you have this idea and do market research and find that most other candle businesses offer candles that are made of paraffin wax, beeswax, and some offer soy wax.

Focus on the other candle businesses that offer soy wax and see if they make their candles handmade. If they don’t then that could be how you position your soy wax candles against the competition – that yours are handmade, that every candle you hold was created from home and not in a factory, ensuring quality and detail.

Okay, let’s say that competitors offer soy wax candles and they’re handmade! Oh no, nothing makes you unique!

Before you cross out that business idea, there are two routes you can go when competitors position their products similar to yours. 

1. You can either think of another thing that will make you unique.
2. You will have to beat them out on the components of the Marketing Mix, such as through positioning, promotion, pricing strategy, distribution, etc.

We’ll touch on the Marketing Mix after the next point but think of all the hundreds of companies that do the same thing (such as Uber Eats and Doordash as discussed earlier).

What makes a certain company “beat out” the other ones if they do the same thing, well it’s because of the components of the Marketing Mix – positioning is just one component out of six in the Marketing Mix!

3. Positioning Can Create Unity

The third reason positioning is important in marketing and business is because it creates unity around the overall goal and mission of the business.

If the company knows what positioning strategy they want to have with its product or service, then so will everyone working for the company, everyone working alongside the company (like an agency), and everyone looking to use the company’s products or services.

If you don’t know what your product or service stands for, then how will you expect others to?

Now that we’ve touched on the importance of positioning in marketing, let us look at how positioning fits into the other five components of the Marketing Mix.

How Positioning Fits into the Marketing Mix

Within the Marketing Mix, you have six components in total:

1. Corporate Image (½ of Branding)
2. Positioning( ½ of Branding)
3. Promotion
4. Price
5. Product
6. Placement

All of these components work together similar to a cog in the wheel. If one changes, then it will influence every other component in the Marketing Mix.

Here’s an example. Using the component of Price. Let’s say you have two similar products priced at two different price points.

You don’t have any background knowledge of the two companies but one is priced cheaper and the other is priced a bit more expensive.

The perception most of us will have is that the one that is priced lower is “cheaper,” while the one that is priced a bit more is more “high quality.”

This could be completely untrue, but based on the psychology of pricing alone, it can affect the positioning of the product (the image of the product).

Here’s another example using something that is currently happening to top Luxury fashion brands using the component of Placement which is also known as Distribution.

Let’s say you have a Luxury fashion brand that is known for being expensive and high-quality. Let’s say you start to see this brand being sold in flea markets and on the web for cheap – known as “knock-offs.”

You find these Luxury fashion brands being sold for a tenth of their retail price. It could be a fake knock-off of the product, but it will still affect the perception of that Luxury fashion brand, especially if many people start to buy the cheap knock-off and everyone starts wearing it.

The Luxury fashion brand will lose its positioning of the product being a high-quality, Luxury brand that only the wealthy can afford.

Many top Luxury fashion brands are currently facing this exact scenario.

Now that we’ve touched on how positioning fits within the overall Marketing Mix, let’s touch on how to actually go about creating a strong positioning strategy.

How to Create a Positioning Strategy

As mentioned at the beginning of this article, the definition of positioning is “the process of identifying a target audience and creating an image of your product that fills the target audience’s unfilled need.”

Let’s unpack these three components of the definition, taking a look at each part along with other tactics businesses can implement to create a successful positioning strategy.

1. Understand Target Audience

The first part of our definition is to identify a target audience. Let’s go back to the analogy of a lock and key.

Understanding your target audience is like knowing what the “lock” is. As someone who provides a product/service, you need to identify what the “lock” is so you can provide the correct “key” for it.

I can write a whole guide on how to find your target audience (which I probably will), but for right now we’ll keep it really simple.

Before offering any product or service, you need to know who you want your users to be.

For example, going back to the example of the company fake company Breathable Fitness which would offer workout t-shirts with breathable fabric.

The obvious answer is that their target audience would be people who work out. But the target audience can even get more defined based on demographics, geographics, psychographics, etc.

Only when you know who your target audience is, is when you can cater your product or service to fulfill their needs.

2. Create an Image of the Product/Service

The second part of our definition and how to create a positioning strategy is to create the image of your product or service.

But how does one create an image?

The factors that go into creating an image for a product includes the:

• Name
• Logo
• Slogan
• Colors
• Typography
• Mascot
• Product Shape (if physical)
• Website Design
• Testimonials

Let’s look at each of these.

Name

The company name and name of the product or service are crucial to creating the desired image of a product.

Going back again to the example of the made-up company called Breathable Fitness. The name fits with the image that they want to have with their product.

Imagine if this company was trying to sell breathable fabrics but they were called “Tight Body” or “Sweat Machine” or something like that. These are terrible names but you get the point.

Another example is with DoorDash, it’s a great name that perfectly aligns with the image they want to create in the minds of their target audience.

Here’s another funny example involving fish that shows the importance of a name. In 1977, the Patagonian toothfish was being sold in restaurants but they were finding many people were not ordering it due to the name.

Well, they started marketing it as the “Chilean Sea Bass” in restaurants and people started ordering it!

If you haven’t even thought of a name, then it should align with the mission statement, the actual product or service, the price point, and your target audience.

Logo

The logo of the company and product/service also plays a big role. Similar to the name, the logo should align with the image of the product.

A great example of a logo includes AT&T’s logo of the globe. AT&T wants to position its service as the go-to telecommunications provider that has a “global presence.”

The globe represents their global presence image.

Slogan

The slogan is also important. Slogans if used, should be memorable and include a key benefit.

For example, a great slogan can be seen with Dollar Shave Club where the goal is to provide affordable razors and other grooming products via mail.

Their slogan is “Shave Time. Shave Money.”

Colors

Colors used and company/brand colors are also very important when it comes to creating an image of your product/service.

Color theory can be another separate guide as well as diving into the psychology behind colors is a lot.

But I want to provide the foundational knowledge. In case you haven’t heard of color theory, it’s essentially how colors and different color combinations can be used to influence how we feel.

For example, reds can capture attention and often give off the emotion of danger or excitement – which is why they’re often used in stop signs, red lights in traffic, alert signs, etc.

Yellow can represent happiness and optimism and is often why it’s used in education. It’s also the color of the Sun which usually symbolizes these emotions.

Green can represent growth, health, and nature which is why they’re often the go-to color used for medical companies and companies that care about their environmental impact. It’s also the same color as grass and trees which usually symbolizes these emotions.

Blue can represent peace, calm, and harmony which is also a color commonly used by companies who want to give off this appearance. It’s also the same color as waves and the ocean which usually symbolizes these emotions.

These are just a few of the major colors and the psychology behind them.

Here’s an example of combining colors. It has been shown that the color combination of red and yellow together actually make you hungrier.

Have you ever noticed that most fast food chains use this color combination such as McDonald’s, Pizza Hut, Burger King, etc.? That is the reason why.

Typography

The typography a business chooses to use also has great influence over the image of their business and product/service.

Typography, similar to color, can have a great influence over one’s feelings and emotions when viewing them.

I won’t dive much into it now, but the main factors that can influence us within typography include font choice, leading, tracking, and kerning.

The font choice consists of using different fonts such as serif-font types, sans-serif font types, slab-serifs, etc. Using a Serif font vs a Sans-Serif font will give off different emotions to the user reading the font.

Leading consists of the pacing between the lines of the text. Tracking is the space between the letters/characters. Kerning is the distance between certain characters or the spacing in a single word.

Regarding typography, for example, take a look at Serif fonts with the most popular one being Times New Roman. Serif fonts are very popular with print due to their even spacing and clear legibility. 

Growing up, most of us had to write our essays in Times New Roman because the font has a feeling of education and gives off a professional feel.

Mascot

Although not often used, mascots play an important role in the positioning of a product or service as well.

Think Tony the Tiger or the Pillsbury Doughboy.

Pillsbury and their cookie products have the Pillsbury Doughboy. Firstly, his name perfectly aligns with the image of the product.

Second, image if the Pillsbury Doughboy was a muscular stud with chiseled abs, do you think he would align with the image of cookies?

Product Shape

The product shape, if applicable, also plays a huge role in the positioning of the product.

Of course, product shape only applies to businesses that sell physical products.

An example where you can see product shape be heavily researched is within the alcohol industry.

If you’ve ever stared at liquors and bottles of alcohol, some give off a sense of “expensiveness,” “fanciness,” and perhaps even a sense of luxury to them.

Behind the scenes with these companies, there is a lot of research on the shape of the bottle and how it will influence the perception of the users looking to purchase their alcohol.

One of the best examples of this can be seen with ABSOLUT VODKA (also take note of their all uppercase font and how they use this typography to be bold and stand out).

If you take a look at their positioning strategy, their whole idea was to provide “ABSOLUT PERFECTION” and their bottle is designed to give the appearance of purity almost like an angel with a halo that sits atop its head.

Website Design

The website design of a business also plays a vital role in the positioning and image of the product or service.

While the previous points of color, typography, name, and logo are applicable to website design, I also wanted to bring up the element of UI/UX which stands for User Interface/User Experience and this is how you lay out certain elements on the page to create a user journey on the website.

While once again, this topic can be explored over numerous pages, the fundamentals and knowing that this influences the mind of your target audience is important.

An example of a UI/UX choice could be:

• “What images should we put on the homepage?”
• “What buttons should we emphasize in the navigation bar?”
• “What should our demo landing page look like?”
• etc.

Testimonials

Lastly, testimonials play a big role in the image that is created of a product or service as well. In today’s digital world, reviews play a vital role in not only creating an image of a product or service but also changing one’s image of a product or service – for good or for bad.

While testimonials aren’t traditionally considered an element of a positioning strategy, I think it’s important in today’s day and age and should be considered in many positioning strategies.

For example, how many times have you been looking to buy a product or service, did some research, and stumbled across some reviews or testimonials that influenced the image you have of that product or service?

The biggest example you could see of this is probably with restaurants.

No matter how hard a restaurant could try to create an image of their service in the minds of the target audience, if they receive mostly negative testimonials and reviews, then the reviews create the image themselves.

3. Fills the Target Audience’s Unfilled Need

The last part of the definition of positioning involves “filling the unfilled need of the target audience.”

If you’re thinking, “well what need do they have?” then you have not done enough market research yet to even begin thinking of creating a product or service.

Also, side note, many products or services are created out of the founder having a certain pain point or need that no other product or service on the market fulfilled. The founder then usually asks others if they have this paint point and then voilà – a new product or service is born.

So the question then remains of how do you fill the need?

Well the product itself should fill the need.

At this point (going along with the three parts of the definition), you should have identified the target audience, be creating an image of the product or service in the minds of your target audience, and now it’s time for the product or service to do the rest of the talking.

For example, going back to the Breathable Fitness company that I made up, let’s say they finally sold some shirts and have been positioning their product the way they wanted to.

The shirt itself needs to deliver on the promise and image that they’ve been providing to its target audience.

This means that shirt should actually be breathable and comfortable to wear when working out!

Final Thoughts

In conclusion, in this article, we’ve looked at what the definition of positioning is, some examples, the importance of positioning, how it fits into the Marketing Mix, and how to create your own positioning strategy.

Positioning and the Marketing Mix for that matter can be overlooked in today’s digital world because I believe it can be easy to promote (the Promotion part of the Marketing Mix) your way to success these days by just dumping money into ads or influencer marketing campaigns.

While this may work for a while, in order to build a truly sustainable business that lasts years, having an understanding of positioning and trying to constantly position your product or service the way you want to is important.

It’s an ongoing effort that should be revisited every once in a while.

So go out there, and start positioning that product or service!