Product Positioning: Understanding What Product Positioning Is

Launching a product in the market based on research does end the job of product placement. A product proves to be an asset for any business only when it makes its space in the market while appealing the customers by being uniquely valuable. Creating own space in the market, i.e. product positioning and being uniquely valuable, i.e. product differentiation, both are vital for any product to survive, let alone be a force to reckon in the market.

Product Positioning

Product Positioning means the position of a product within the market. The market is a vast space comprising of a considerable number of customers. Every market has varied needs. The needs vary depending on the customer. As we know no customer is the same, a customer base might stay the same because of similar requirements, but you can’t say the same about customers. A customer belongs to a market group because of their primary need aligning with the rest of the group.

There are two aspects to product positioning:
• One is how the company intend to place it in the market.
• The other is how the customers perceive it.

A company might launch a product designed for the mass market, but the market could think of it as a luxury product. The degree to which the product positioning varies from both the business's and customer's perspective depends on the degree of customer understanding of the companies. How much companies understand the market and its customers dictate how the product gets placed in the market.

Why the effort for Product Positioning?

A market consists of various customers with different sorts of needs bounded by their surroundings and limitations. Markets not only differ by needs but also because of elements like financial capability, perception, understanding. A Rolex will appeal to a millionaire as a Casio appeals to the common man. A particular product will hold different value for differing personas. For a product to be successful, it has to target these personas one at a time. A product that appeals a particular persona will surely make its place in the market. But do these personas come from? Don’t forget design teams do their research upon the market. Personas are the simplified representation of actual customers. This condensation helps designers define customers easily and thus, focus their strength on product design.

For an appropriate product positioning, designers have to understand what these personas want. Missing the pain point won't make the product click with the intended customer, thus, causing an imbalance in product positioning, resulting in deploying of mitigation strategies which mean overspend of time and resources; not something you want when doing business.

Even extensive market research sometimes does not guarantee that the product you launch in the market tomorrow will be a crowd favorite. Understanding the customer and delivering the product is the job of the company, but how the customers look at it is an entirely different aspect.

That’s said, let’s see what goes into customer perceiving a particular product in a certain way.

Customer perception

Customers learn about the product depending on each touchpoint with either the product or the brand. So, companies have to portray the product in a way that grabs the attention of the intended market group. Each interaction builds or breaks the product impression. Research helps find customers; Product Positioning Research helps to understand what to say and how to represent the product to the customers.

Apart from the company and product interactions, there are various other factors like customer wants and needs, competitors’ product and their positioning, reviewers that influence the image of the product that the customers have in mind. These are some of the external factors that companies cannot control, but a proper understanding of the customer along with delivering the product that matches their expectation will help mitigate most of the other influences.

Every effort that a company puts in positioning a product appropriately in the market can be summed up by a Product Positioning Statement. A Product Positioning Statement condenses every aspect of the product, the company, customers and the goal. Product Positioning defines the place of a product in the market along with its competition. But how does one distinguish one from the others?

Product Differentiation

Product Differentiation speaks volume about how a particular product differs from the rest of the similar products in the market. Think of product positioning as referring to the fourth row of cookie jars from the bottom, and product differentiation as referring to the cookie jar with the red lid. Product Differentiation helps to spot the rotten apple in a lot of good apples.

So, how do products differ? Products belonging to the same ‘position’ in the market have something in common, the primary value; the basic customer needs that they fulfill. That aside, product differs based on the variations in characteristics and provision of additional values. Differing from the rest of the crowd of knowns could be good or bad. But, in the context of Product Differentiation, we will have a positive outlook on things. Apt and positive product differentiation will hand advantage over other rivals and create superiority. This superiority could be the product’s USP, thus, helping in its promotion and appeal.

Why Product Differentiation?

There’s hardly something in the market in the present scenario that does not have a competition, and that’s the point. The product market is full of options for customers to choose from. Thus, it can be overwhelming for the customers to settle on a product when most of the substitutes do the same job albeit the difference in appearance. A product has to avoid such customer dilemmas by being concise and straightforward about its benefits. It has to instill confidence in the potential customer that the product they are choosing is superior in every way over the rest. A product has to differ from the rest to be bold about its existence and stand out. Of course, the product has to stand out in a positive manner, one that attracts the customer towards itself. Primary value provision keeps products alike; it’s the additional values and characteristics that form the basis of differentiating products. Therefore, products to be able to attract customers have to possess the fundamental value while also offering additional benefits (in features or characteristics) and be uniquely valuable.

For a product to be uniquely valuable, it has to do one or both of two things:
• Be more effective in providing existing values (ex. faster processing) or,
• Do new things (a new feature)

Alternatively, there are some factors to differ products: benefits, design, price, quality, customer service.


It’s simple. If your product provides more value to the customers, they will identify with it over others. Maybe you have an exercise app, and you have found out that users want to be able to connect with other users. You can use this need to provide value (enable users to share their workout routines) to users. Thus, users will turn to your app as you offer them what they want.


The simplest of all, but sometimes could go wrong. Following a different theme design in your product which makes it easier to use and comprehend will attract more users towards your product. For this, you have to work out with the UX and UI aspects.


People pay for things that they feel is worth for. So, there’s a fine line between making your product affordable and cheap. If rates are too low, a product loses its value. If it’s too high, people won’t be able to afford it and look for alternatives. You have to hit the nail on two things – keeping prices reasonable while gaining profit, and making customers.


You can afford to hike your product prices if they are superior in quality over your rivals. Customers don’t mind paying for things that last long, it feels more like an investment.

Customer service

If all else fails, you can provide your customer with excellent customer service. That’s the blueprint Zappos have followed to gain customers’ trust.

The unique values and characteristics form the identity of the product. Hence, products will need a clear definition of their capabilities and tendencies for proper identification and achieving distinct product differentiation.

SWOT Analysis

SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. SWOT is a form of analysis. It provides a clear picture of an element (product) with respect to its surroundings, which makes for creating effective strategies.

SWOT analysis consists of four factors in total. They are Strengths, Weaknesses, Opportunities, and Threats. This method of analysis bases its reports on the strengths, weakness, opportunities, and threats concerning the product.

The Strengths and Weaknesses for internal factors. Internal in the sense that these factors depend on events inside the company; elements like product characteristics and values, use of resources. Internal factors can be altered by controlling on elements.


Strengths are the advantages of a product over others. It provides an upper hand in customer appeal, sales and revenue generation.


Weaknesses are the disadvantages of a product when compared with others. These are the aspects a product needs to improve upon to compete with rivals.

External factors comprise of Opportunities and Threats. They justify the term ‘external factors’ as they depend on external factors like environment (market scenario). These factors cannot be controlled as they are influenced by elements that out of reach of businesses. Hence, products need adapting to survive in the market.


Any chance is an opportunity for products. Opportunities have a positive influence on product existence. They provide scope for the growth of the product and its identity establishment in the market.


Threats are potential dangers to a product. These put negative influence on the product by hinder product growth in the market and risking its existence.

SWOT for designers

For our convenience, we shall stick with the product aspects of SWOT analysis. SWOT assess the current state of a product in relation to its surroundings, i.e. the market, based on in-depth research. By stating out the strengths, weaknesses, opportunities, and threats, SWOT helps designers understand product capabilities and limitations in the current context. This broad knowledge about the product creates a foundation for aspects of product improvement. This critical insight portrays a clear understanding of how to achieve the intended product goal and subsequently, the product vision. Because of the broad scope of view of SWOT analysis, designers can plan out strategies that adhere to the present and future market trends. Since designers are backed by facts and information hence see the bigger picture, it instills confidence in every step of product plan.

SWOT as a tool in competitor analysis

Also, SWOT analysis helps in study and comparison of competition in the market. A SWOT report of the competition reveals their strengths and weaknesses, what they are good at and where they are struggling. Moreover, an analysis report of successful competitors could be used as a blueprint for product improvement. Designers could work on the design aspects where the competition loses the ground. A SWOT analysis is outstanding in the sense that it helps make present and future-proof product plans due to consideration of opportunities and threats. It prevents future design changes due to the emergence of unexpected factors.

Product Positioning along with Product Differentiation is vital for any product to stamp its authority in the market sphere. You don't want a product to fail its objective because of your misunderstanding of customers or way of representation of the product to the masses. A SWOT analysis can help designers design products the way, a customer and the company wants.

author: patrick algrim
About the author

Patrick Algrim is an experienced executive who has spent a number of years in Silicon Valley hiring and coaching some of the world’s most valuable technology teams. Patrick has been a source for Human Resources and career related insights for Forbes, Glassdoor, Entrepreneur,, SparkHire, and many more.


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