Positioning is the policy and associated effort of a company to create a certain image in the minds of (potential) customers of how its products or services compare to the rest of the market. The result of conscious positioning is an image that makes a brand or product relevant to its target audience and distinguishes it positively from competitors.
Positioning may consist of general qualities, such as low price, high quality, best service or unique features. Chosen values often also relate to the identity of the target audience. For example, a positioning can be tough or feminine. The emphasis may be on solving a practical problem or on luxury and belonging to a particular group.
Positioning is based on the fact that people process and rank information in boxes. Within a given product category, we can only store a limited number of brands. These are then ranked based on the associations they evoke. People differ in which values they consider most important. This can leave room for different providers of similar products.
A concrete offer or promise about the value of a product or service is called a proposition.
An example of positioning
The smartphone market is a good way to illustrate how companies are positioning themselves.
Apple has given its iPhone phone brand a luxury reputation, thanks to devices with a beautiful design, the latest features, powerful hardware and good software, with a price tag to match. Competitor Samsung has been developing similar products for years, but positions itself more as a follower by marketing alternatives with slightly lower prices. For both, slick marketing campaigns play an important role in positioning their brand and products.
At the same time, Samsung (more than Apple) is an example of a company with a differentiated range, consisting of low-budget entry-level, mid-range devices and exclusive flagship models. With a range within which is positioned differently, Samsung is not exclusively a premium brand or a price fighter but can serve a broader segment of the market.
