Product management guide Product strategy What is product positioning?
Product management
Product strategy
Product roadmap
Release management
Idea management
Requirements management
Agile development
Enterprise transformation
Strategy templates

What is product positioning?

Positioning is where your product or service fits in the marketplace. It is a strategic exercise that defines what makes your product unique and why it is better than alternative solutions. Distilling the truth of your product in this way informs your messaging so you can effectively explain the value of your offering to potential customers.

Why is product positioning important?

Your strategic positioning is the basis of your marketing story. The goal is to distill who your audience is, what they need, and how your product can help — all so you can craft messaging that is on target. Establishing upfront how you want your product to be known in the market sets the foundation for how you will communicate the value of your product to customers.

Your ability to articulate the key benefits of your product and the problem it solves is critical to business success. It keeps your marketing strategy grounded in the true value of what your product provides. This ensures your promotional activities resonate with customers and help them understand why your product is the best option to meet their needs.

What influences how a product is perceived?

Product positioning is made up of core building blocks that explain your product’s unique value. By bringing together your customer, market, and product knowledge, you can align the broader team around the best way to position your product for success.

Here are the key elements that define your product positioning:

Vision

The overall direction for where your product is headed.

Mission

How you are going to make your vision a reality.

Market category

The market that you are in and your key customer segments.

Tagline

Catchphrase or slogan you use to describe your company or product.

Customer challenges

Major pain points for your customers.

Company and product differentiators

Unique, value-creating characteristics of your company or product.

Brand essence

The core attributes you want to be known for.

Here is a template you can download for free to capture the key positioning elements described above for your product or service.

Product positioning templateExcel Download

What is the best way to develop a positioning strategy?

Developing a positioning strategy is a collaborative exercise. It often involves product management and product marketing working closely together to define the core essence of your product. You will need to bring together your knowledge of the following areas:

Understand the customer

Your positioning should succinctly capture who your customers are and what they need. Describe the attributes of your target customers, including demographic, behavioral, psychographic, and geographic details. You will also want to provide insights into the main problems the customer is trying to solve. Use your persona profiles to inform your positioning and help the broader team build empathy with your customers.

Analyze the market

You need to know what alternatives customers have to your product so you can highlight what sets your offering apart. Research your direct and indirect competitors to understand how they serve your customers’ needs. This will allow you to differentiate your product from the competition and help you explain to potential customers why your solution is the best option to solve their problems.

Assess the product

Your positioning must be built on the unique value your company and product provides. Conducting a SWOT analysis is a useful way to objectively analyze what your product is doing well and where it can do better. This ensures that your marketing message aligns with the product experience, thus helping customers make informed decisions.

What is a product positioning statement?

Once your positioning strategy is defined, create a brief positioning statement that describes your target audience, what sets your product apart, and why customers should care about it. Here is an example of a positioning statement template:

For [group of users] that [need/want], [company/product] is a [category/solution] that uniquely solves this by [benefit].

It would be helpful to use an example company to talk through this. Let’s use Fredwin Cycling. The target market is predominantly cycling enthusiasts who are interested in improving their fitness. Your market and customer research reveals that users are concerned about their health but are struggling to stick with an exercise program. Users want to stay motivated by connecting with like-minded friends. The product addresses this need by providing a social cycling community that promotes friendly competition and tracks workout performance.

Here is a sample positioning statement for Fredwin Cycling:

For cyclists that want to connect with other athletes, Fredwin Cycling is the leading social fitness application that uniquely brings the cycling community together by promoting healthy competition.

What influences how a product is perceived?

Your positioning shapes how you want your product to be known in the market. But there are many different factors that can affect how your product is perceived. The major influence is what customers experience when they actually use your product and interact with your company. It is the summation of the Complete Product Experience (CPE) that determines what customers think and feel about your product.

There are seven core areas that contribute to the CPE:

Marketing

How potential customers learn about your product and decide if it might be a fit.

Sales

How prospects get the information they need to make a purchasing decision.

Technology

The core set of features that customers pay for.

Supporting systems

The internal systems that make it possible to deliver the product.

Third-party integrations

The ecosystem of products the customer uses.

Support

How customers receive product training and assistance.

Policies

The rules that govern how your company does business.

Remember, every touch point with your company either reinforces or undermines your positioning. So, while you should consciously plan how to position your product you should think broadly about every aspect of the adoption process — because your customers will decide what they really think about your product.

Aha! is the world's #1 roadmap software
The world's #1 roadmap software