What Is Market Positioning? Definition and Beginner’s Guide (2024)

Imagine this: After months of tireless work and more knitting-related injuries than you’d like to admit, you’re finally launching your custom dog sweater company. You know there’s no shortage of brands and Etsy sellers specializing in canine apparel. However, after struggling to find a sweater for your own 100-pound Bernese Mountain dog, you realized there was a gap in the market for cozy garb for big dogs.

Bolstered by your savvy design eye and sharp business acumen, you decide to develop a company that sells sweaters for non-diminutive pups. Recognizing your unique value proposition, you lean into the big dog approach when developing your brand identity and marketing. Within a few months of adopting this brand positioning strategy, sales have taken off so exponentially that you can barely keep up with demand.

In this example, you’ve used an effective market positioning strategy to set yourself apart from other brands and boost your bottom line. So what specifically is marketing positioning and how can you use it to successfully position your company and beat out your competitors? Read on to learn more.

What is market positioning?

Market positioning refers to the practice of establishing a brand’s unique value proposition that sets it apart from its competitors. Once you stake out what your brand stands for and what you can provide your target audience, the competitive positioning and marketing strategies will start to fall into place. This process involves finding and carving out a competitive niche to differentiate your company in a compelling way to target customers, leading to better brand awareness, more shoppers, and higher sales.

Why is market positioning important?

Creating a positioning strategy can be helpful in many ways, including:

Enhanced brand awareness. With a differentiated brand and a strong identity comes more brand recognition. A strong market positioning strategy helps a company get in front of shoppers by surpassing competitors in providing direct value to them.

Improved customer acquisition. Having a unique product makes it easier to explain your appeal to customers, and a clear position can make it easier to generate buzz—online and offline. Successful market positioning can help lower customer acquisition costs (CAC) and attract prospective customers.

Higher customer loyalty. Through cultivating a specific niche in the marketplace, you’ll establish yourself as the go-to destination for your product or service. When a target customer comes back time and again, odds are they’ll start bringing other people along too.

Increased sales. More customers and increased brand loyalty translate directly to higher sales, meaning more for your bottom line.

There’s no one-size-fits-all approach to market positioning. When it comes to effective brand positioning, a company can take many approaches, including:

Price point positioning

Whether you’re a luxury brand thriving on exclusivity or a discount retailer with a devoted following of bargain hunters, price point can play an integral role in brand identity. A company can leverage its pricing strategy to entice more shoppers.

Quality positioning

Highlight the quality of your products. Note how they’re better than your competitors in a compelling positioning statement. Quality positioning emphasizes areas like product craftsmanship, manufacturing, and materials.

Competitor positioning

Going head-to-head with your competitors is a brand positioning tactic that you can use to highlight your brand’s specific advantage. This is the type of strategy you might see in commercials for dish soap or feminine hygiene products that directly show a product performing more strongly than a competing brand.

Usage positioning

Usage positioning allows companies to focus on the specific applications and unique benefits of their products. This marketing strategy focuses on providing hands-on proof that demonstrates exactly how your product works and why that’s important.

Availability positioning

Just being accessible during a specific time or in a particular region can be instrumental in making headway among consumers. Availability positioning involves leaning into logistical elements to set your company ahead of your peers. For example, if your coffee machine is compatible with coffee pods consumers can find in most grocery stores, you can position your product as more accessible than machines that require specialized pods.

Novelty positioning

Novelty positioning works for products or services that are especially innovative, compelling consumers by sheer force of being groundbreaking or offering cutting-edge technology.

How to develop a market positioning strategy

Conduct a competitive analysis
Determine your target audience
Identify your value proposition
Set your brand identity
Craft your messaging
Track the impact
Reposition as needed

Settling on an effective market positioning strategy doesn’t just happen overnight. Here are the steps you can take to create your own:

1. Conduct a competitive analysis

The best way to beat out your competition is to intimately know the ins and outs of how they operate. Conducting extensive market research in order to understand your top competitors will help to identify gaps where your brand can really shine in market positioning.

Take the olive oil company Graza. After doing extensive research on the market, founder Andrew Benin saw an opportunity to capitalize on the household cooking staple. “This is in every single pantry, it has massive household penetration,” Andrew says in an episode of the Shopify Masters podcast. “There was no brand affinity for sure. This was the opportunity to say, well, there's a different way of doing this, a different way of positioning something that everyone already knows about.”

2. Determine your target audience

Identifying your target demographic is essential when developing a market positioning strategy. Conducting extensive user research and analyzing data to understand consumer perceptions will help inform your approach and lead to better results.

3. Identify your value proposition

After you’ve conducted a thorough competitive analysis and set your target market, the next step is identifying your value proposition. What does your brand bring to the table and how does this resonate best with your audience? Lean into these findings to carve a competitive niche.

In the case of Graza, Andrew created a sleek, distinctive bottle design, thus positioning the olive oil as being suitable for both garnishing and cooking, which helped Graza make gains in the market.

4. Set your brand identity

Build upon your unique value proposition to craft a brand identity designed to highlight your strengths. A strong brand identity encompasses how you showcase your company to the world and spotlights your core values.

For Lindsay McCormick of the eco-conscious toothpaste company Bite, her brand identity centered on sustainability. Her eco-friendly toothpaste brand has since evolved to provide a suite of environmentally friendly products. “From the very beginning, we wanted products that were not only better for our bodies, but better for our planet, and more efficacious too,” Lindsay says on the Shopify Masters podcast.

5. Craft your messaging

Consistency is key when developing to build a market positioning strategy. Utilize your messaging strategy across mediums and campaigns to really drive brand identity home. Just make sure to tailor it to each platform rather than approaching everything as a one-size-fits-all fix.

6. Track the impact

Deploy focus groups and collect feedback from consumers to determine if your brand identity and messaging are moving the dial. Let the results inform how you move forward or revise your plan.

7. Reposition as needed

Your unique value add may change over time as your product or service evolves. Make sure your strategy keeps up with the transformation of your company.

Market positioning FAQ

How do you determine market position?

You can determine market position based on what your brand offers that distinguishes itself from competitors. Conduct a thorough competitive analysis to find gaps and help you understand what sets your company apart, then use that to craft your messaging.

What is involved in market positioning?

A company’s unique selling point and value proposition can take many forms, including price point, quality usage, availability, and novelty, among others. Once a company identifies its competitive advantage, it can craft marketing content to drive the message home.

What is an example of a market positioning strategy?

There are several types of market positioning strategies and the best approach will vary by company. For example, technology brands like Apple employ a novelty positioning approach, winning over audiences with innovative one-of-a-kind gadgets.