By Entrepreneur Staff


Positioning Definition:

How you differentiate your product or service from that of your competitors and then determine which market niche to fill

Positioning helps establish your product's or service's identity within the eyes of the purchaser. A company's positioning strategy is affected by a number of variables related to customers' motivations and requirements, as well as by its competitors' actions.

Before you position your product or service, you should answer the following strategic questions about your market and your products or services:

  • What's your customer really buying from you? Remember that McDonald's isn't just selling burgers and fries. It sells fast food that tastes the same, no matter when or where it's ordered, in an environment that's clean and friendly to families.
  • How's your product or service different from those of your competitors? A cheeseburger is a cheeseburger, you may think. But look how McDonald's, Burger King and Wendy's differentiate their fast food. They offer different side dishes (onion rings at Burger King, french-fried potatoes at McDonald's), different toys with kids' meals (a big incentive for the under-age-10 set), and different ways of cooking their burgers (Burger King's are broiled, McDonald's, grilled).
  • What makes your product or service unique? In New England, McDonald's is the only fast-food chain to offer lobster rolls (a lobster salad sandwich served in a grilled hot-dog roll) in the summer.

Once you've answered these strategic questions based on your market research, you can then begin to develop a positioning strategy for your business plan. A positioning statement for a business plan doesn't have to be long or elaborate, but it does need to point out who your target market is, how you'll reach them, what they're really buying from you, who your competitors are, and what your USP (unique selling proposition) is.

Remember, the right image packs a powerful marketing punch. To make it work for you, follow these steps:

  • Create a positioning statement for your company. In one or two sentences, describe what distinguishes you from your competition.
  • Test your positioning statement. Does it appeal to your target audience? Refine it until it speaks directly to their wants and needs.
  • Use the positioning statement in every written communication to customers.
  • Create image-marketing materials that communicate your positioning. Don't skimp.
  • Include your team in the image-marketing plan. Help employees understand how to communicate your positioning to customers.

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