What is Competitive Positioning?

Competitive positioning is what sets you, your business, product, or service, apart from the competition.

It requires that you identify what differentiates your business from others and how that provides value to customers and clients. This information is used to formulate marketing and branding plans.

Essentially, it’s the reason that potential customers will choose your business over others.

Brand positioning is one part of a strategic plan, but good positioning alone isn’t enough to ensure business success. You must also convey your position to potential customers, ensuring that they see the benefits you offer.

Your competitive position is the thing that makes your business, product, or service stand out from the crowd. It’s important to note that it’s focused on how your potential customers perceive you, rather than how you want to be perceived. As such, your desired position may differ from your actual position. 

Types of position

There are, in fact, many types and examples of competitive positioning, including:

  • Operation excellence - When a company’s business strategies and processes are completed effectively, efficiently, and consistently. Operational excellence translates to customer benefits because problems are solved rapidly or better quality products and services are delivered sooner.
  • Product leadership - When a company sells what is perceived to be the best product. To do so, a company will need to constantly research and improve on existing products in the marketplace. It should also aim to be the first brand that comes to mind when a potential customer is asked which company offers the best product.
  • Service excellence - When a company provides its customers with better service than any of its competitors. For example, a company that boasts exceptional customer reviews and a reputation for quickly and resolutely responding to queries.
  • Cost leadership - When a company is known for being the cheapest around or for offering the best value from its products or services.
  • Niche positioning - When a company targets a very specific niche or section of a market. This allows it to position itself as the leading brand in its chosen niche. It may reduce the competition it faces. Some examples of niche positioning include a law firm that concentrates on providing services to seniors, or a realtor that focuses on first-time buyers.

How to identify your position

A business needs to determine its desired position. Do you want to be seen as the cheapest? Do you want to be known for the reliability of your products? Or do you want your business to be a luxury provider?

Perceptual maps: A business can use a perceptual map to identify gaps in the market. A perceptual map is a basic graph, with two axes representing two key variables. The most common combination of variables is price and quality.

Competitors are plotted on the graph according to their performance in these variables and a gap on the chart represents a gap in the market or an opportunity for a new market entrant. For example, a chart could show a gap exists for a brand that is deemed to be high quality with high prices.

The position statement: Once a position has been determined, the brand should create a position statement. This paragraph should identify the target market and their needs. It should then detail how the brand meets those needs and what differentiates it from the rest of the companies on the market. Finally, it should outline the reasons why consumers should believe the brand position.  

When to use it

Used in branding, competitive positioning can be a powerful marketing tool that enables you to choose your position in a market segment. It gives your branding and marketing purpose, and it can (and should) guide your entire business strategy, not just your marketing strategy.

If your position is one of ethical manufacturing and resourcing, for example, this should be considered in everything you do, even in processes like going paperless or choosing a software provider that shares your ethical vision.

Competitive positioning is a business strategy that is used in branding and marketing, but should also be adopted throughout your business processes. It involves identifying what makes your business, product, or service stand out from the rest in the marketplace, and then highlighting this position to target potential customers.