Competitive positioning is how a business clearly defines what sets it apart from competitors and pitches its unique selling proposition (USP) to the right customers.
Most products fail because customers can’t tell why they’re different: and when everything sounds the same, you’re left with price as your only lever. A strong competitive positioning strategy creates contrast—it gives customers a reason to choose you without needing a side-by-side comparison or diluting your margins.
Ahead, you’ll learn how competitive positioning works and how to find a position that’s clear and defensible.
What is competitive positioning?
Competitive positioning is the strategic process of communicating what makes your brand different (and better) than others in your industry or space. This involves crafting a compelling message that resonates with your target market and highlights the value you offer compared to competitors.
Why should someone choose you instead of the other options in front of them? An effective competitive positioning statement answers this and more.
And that’s where it differs from nearby concepts that often get confused, like:
- Brand positioning, which is broader in scope. This is how your brand is perceived overall; your values, personality, and long-term identity.
- Marketing messaging, which refers to the execution. The campaigns, headlines, emails, and ads that bring your competitive strategy to life.
Why is competitive positioning important?
Customers are always comparing options, even subconsciously. Competitive positioning helps them understand where you fit and whether you’re the right fit for them.
This is how competitive positioning gives you a competitive edge:
- You reduce price-led decision making. When customers understand your value, price stops being the only comparison point.
- You help customers choose faster. Customers can quickly tell whether you’re right for them instead of getting stuck comparing near-identical options.
- You attract customers who are more likely to stay. Customers who understand your value upfront tend to convert with more confidence and stick around longer.
Take Floyd Home. The brand’s positioning is clear: thoughtfully designed, modular furniture that’s built to last and adapt as customers move and reconfigure their spaces. The product strategy reinforces that position with systems-based furniture, straightforward assembly, and a direct-to-consumer model that ships to the door instead of relying on big-box showrooms.
Ways to create competitive value
Most positioning strategies fall into one of three broad approaches:
- Operational excellence focuses on efficiency and cost. The goal is to deliver reliable value at a lower price by streamlining operations, supply chains, or processes.
- Product leadership centers on innovation. These brands win by offering features, performance, or design that competitors can’t easily match.
- Customer intimacy prioritizes relationships and service. The value comes from deep customer understanding, flexibility, and a more personalized experience.
Most strong brands focus on one of these approaches and use the others to support it.
The right approach also depends on how crowded your market is. In newer markets, brands often stand out through innovation or new kinds of customer experience. In mature markets, where options look similar, efficiency and clear trade-offs matter more because customers are actively comparing alternatives.
Now, with that context in mind, here are practical ways to create competitive value.
Deliver a superior customer experience
Differentiate yourself through a superior customer experience, hassle-free transactions, or personalized interactions. By prioritizing customer satisfaction throughout the buying journey, you create value that attracts and retains loyal customers. This could involve offering extended return windows, free product consultations, or a loyalty program with unique rewards.
Read: What is a Customer Satisfaction Score? How to Calculate CSAT
Emphasize your brand’s mission and values
Consumers are naturally drawn to brand values that align with their own. Highlight your company’s mission to commit to sustainability, ethical sourcing, or social responsibility to boost your competitive position.
This creates value by associating your brand with positive attributes that resonate with your target market. For example, an athletic apparel business could emphasize its use of recycled materials and sustainable packaging, appealing to eco-conscious consumers.
Find a gap in the market
In many cases, a gap in the market isn’t a brand-new idea; it’s a group of customers whose needs are poorly met by existing options.
In early or emerging markets, gaps tend to show up around what’s possible.
Customers are still learning what the product or category can do, so positioning often centers on new capabilities, better performance, or simpler ways to get started. The opportunity is to define the category before competitors crowd it.
In mature markets, the gaps are usually about friction.
Customers already understand the category, but they’re frustrated by complexity, poor service, bloated features, or pricing that doesn’t match their needs. Here, strong positioning comes from narrowing your focus: serving a specific use case, audience, or workflow better than anyone else.
Look for cost savings
For any business, cost-effectiveness is a major concern. Tout your operational efficiency with lower prices compared to your major competitors. This could involve launching subscription services at a discount, extending your products’ lifespans, or offering bundled packages and greater value for the customer’s money.
Offer quality products or services
If you can develop a product with distinct features that your competitors’ products lack, you create value. This could involve selling cutting-edge technology or releasing a specialized product line. For instance, a phone company might offer a phone with a built-in projector, creating value for those who frequently give presentations.
How to create a competitive positioning strategy: 7 key steps
A competitive positioning strategy defines how a business chooses to compete in its market. The strategy clarifies who the product is for, which alternatives it’s compared against, and where it deliberately wins (and loses) relative to competitors.
1. Research your audience
Knowing your audience is foundational to building a competitive positioning strategy.
First, conduct market research to gather competitive intelligence (information about your competitors’ strengths, weaknesses, and strategies) and insights into factors like customer interest, then create detailed buyer personas.
This enables you to pinpoint your prospective customers’ specific needs, wants, and pain points. Once you’ve built your ideal customer profile, use it to inform your marketing strategy.
2. Analyze your competitors
A useful competitive analysis framework looks at competitors through four lenses: strengths, weaknesses, opportunities, and threats (SWOT). Using a SWOT analysis as part of your competitive positioning framework helps you know who your competitors are, as well as where they’re strong, vulnerable, or overextended.
More importantly however, your competitive set isn’t limited to direct product rivals. Many customers choose non-product alternatives instead. They build a DIY solution, use spreadsheets, or decide the problem isn’t worth solving right now. These “do nothing” or workaround options are often your biggest competition, especially in early or crowded markets.
Including these alternatives in your analysis gives you a more realistic view of the choices customers make.
3. Create a competitive positioning map
A competitive positioning map (also called a positioning map or perceptual map) is a simple visual that shows how customers perceive you relative to competitors. You plot brands on two axes that matter to buyers: then use the pattern to spot clusters, white space, and direct head-to-head threats.
If everyone lands in the same corner, your positioning probably isn’t as distinct as you think.
A good map helps you see which competitors customers are most likely to compare you with, where the market is crowded (and where it isn’t), what trade-offs each player is making, and whether your “difference” is actually visible in the market.
How to create a competitive positioning map
Here’s a step-by-step process you can follow:
- Define the buying context. Start with a specific audience and use case. “Project management tools” is too broad. “Project management for agencies managing multi-client work” is usable.
- List your real alternatives. Include direct competitors, adjacent competitors, and non-product alternatives (status quo, DIY, spreadsheets, internal builds).
- Choose two axes customers care about. Pick dimensions that influence decisions, not internal features.
- Define what “high” and “low” mean for each axis. Write down a quick rule so the team scores consistently (e.g., “high service = onboarding + dedicated support + custom setup”).
- Plot competitors based on evidence. Use pricing pages, product docs, demos, review themes, and sales notes.
- Plot your brand twice. Where you think you are, and where customers likely perceive you today; the gap between those two points is where your positioning work lives.
- Name the clusters and identify the “white space.” If a corner looks empty, check whether it’s a real opportunity or simply an unattractive trade-off customers don’t want.
4. Define your brand story and mission
Facts tell, stories sell. Tell a story that connects with your target market on an emotional level. Highlight your brand’s values, mission, and the impact you aim to have on the world to enhance your competitive position.
A compelling brand story builds loyal customer relationships and communicates to prospective customers that your brand is so much more than just another product or service.
5. Identify your unique value proposition (UVP)
Similar to your USP, your UVP focuses on the specific value your product or service provides to each customer. Think of it as the clearest, simplest answer to: Why should the right customer choose you over the alternatives?
Here’s how to create a value proposition without getting stuck in hedging language:
- Pick one target customer (not “everyone”). Name the segment and context. Who are they, and what situation are they in when they need you?
- Define the job they’re trying to get done. What are they trying to achieve? What does “success” look like in their world?
- Call out the pain you remove (or outcome you unlock). Be concrete—time saved, risk reduced, fewer steps, fewer mistakes, higher confidence, faster results.
- Name your primary differentiator. What do you do differently than the closest alternatives? This should be a real trade-off or capability.
- Add proof. A reason to believe: customer results, a measurable claim, a recognizable mechanism (e.g., automation, integrations, service model), or credible validation.
- Write the UVP in one sentence, then tighten. Keep it simple enough that a customer can repeat it back to you.
A simple UVP template to use:
- For [target customer]
- Who [need/situation]
- [Brand] is the [category or solution]
- That [primary value/outcome]
- Unlike [main alternative]
- Because [differentiator + proof]
Once you have the UVP, the positioning statement becomes much easier to write, because you already have the key inputs: audience, outcome, alternative, and proof.
💡Real-life positioning plan example: Death Wish Coffee built its brand around a simple promise: the world’s strongest coffee. Founder Mike Brown shares the narrative of the brand: “We live to rebel against blah beans—and a boring, lackluster life.”
That promise is backed up in practice. Death Wish Coffee pairs high-caffeine content with premium quality standards, ethical sourcing, and certifications like USDA Organic and Fair Trade. The brand’s growth, from a small roaster to a NASA supplier, shows how a focused value proposition can drive scale without diluting brand identity.
6. Communicate your position across touchpoints
Your message needs to reach the right ears. Identify the best marketing channels for reaching your target audience, such as social media, email, or industry publications. Tailor your brand messaging to each platform, ensuring maximum impact to reach your primary audiences.
7. Test, measure, and refine your positioning
Are customers repeating your value back to you in their own words? Do they understand why you’re different without heavy explanation? Are they choosing you for the reasons you intended?
To answer that, track a few simple signals:
- Conversion rates across key pages or campaigns to see whether your value is clear enough to prompt action
- Sales feedback and win-loss notes to understand the most common comparisons
- Customer surveys and interviews to hear how people describe your product in their own words
- Retention and churn trends to spot gaps between expectation and reality
- Time to value to see whether customers experience your promised benefit quickly
Small adjustments to language, emphasis, or trade-offs can bring your message back into alignment.
Treat market positioning as a living system—the more often you test and refine it, the stronger and more durable your advantage becomes.
Competitive positioning FAQ
What is involved in competitive positioning?
Competitive positioning involves defining how a brand or product differentiates itself from competitors in the market to appeal to a target audience. This includes identifying unique selling points, analyzing competitors, and crafting a value proposition; for example, emphasizing superior quality, innovative features, or exceptional customer service can strengthen a brand’s competitive edge in ecommerce.
What are competitive positioning tactics?
Competitive positioning tactics are strategies companies use to set themselves apart from their competitors. They can include highlighting your competitive advantage in marketing materials, crafting a compelling brand story, and focusing on unique customer needs and superior experiences. By using these tactics throughout your marketing strategy, you can fine-tune your market positioning and attract your ideal audience.
What is the goal of competitive positioning?
Competitive positioning aims to carve out a unique position in your target market. You can achieve this by identifying your competitive advantage and communicating a compelling message that resonates with your ideal customer. Ultimately, it’s about setting yourself apart from the competition to build more customer relationships and increase sales.
What is an example of competitor positioning?
Leesa, for example, positions itself against traditional big-box mattress brands by cutting out the middleman and selling a luxury mattress direct to consumers, which it ships in a compact bed-in-a-box format. It delivers similar quality for a fraction of competitors’ in-store prices and offers a 120-night trial period.
