How to Position a Brand
Struggling to differentiate in a crowded market? Read this post written by professional strategists to learn how to position a brand and become more competitive.
February 20, 2024
It’s becoming more difficult for brands to impress potential customers. As more competitors enter the market, people face overwhelming choices in every product category. The companies that do the best job of communicating their unique value to customers win the sale.
Brand positioning is crucial for businesses of all sizes. In this post, I’ll summarize positioning and how you can use it to gain a competitive advantage.
What is brand positioning, and why is it important?
A brand’s position is the unique place it occupies in the minds of consumers. Companies use a positioning strategy to differentiate themselves from competitors. A positioning strategy can apply to the organization itself or individual products. For example, a company with several products may position each one as a unique brand designed for different market segments.
Customers have expectations of the brands they buy from. Yours is no exception. To meet their expectations, companies must learn what consumers value about brands from which they buy.
Many businesses are not sure how to position a brand. The process begins with understanding customers’ preferences. Only then can they align the brand with its market. As a simple example, people who buy premium products expect them to have the qualities of a high-end brand. To position your company as a premium brand, you must align its identity with the audience's expectations.
Positioning also influences customer perception regarding the brand’s quality and value. The belief in a product's superiority drives people to pay more for it. Companies that lack differentiation find it difficult to compete. To compensate, they often resort to other tactics to generate sales, such as lower prices and discounts. However, these tactics usually require companies to sell larger quantities to maintain profitability—a strategy that is not easily sustainable.
Adopting a positioning strategy does not guarantee people will see your business the way you want them to. It takes a while. To be successful, companies must have a long-term brand management plan and remain consistent. Over time, building a powerful brand will help a business improve ROI on marketing strategies.
What are some common mistakes to avoid when positioning a brand?
Some common brand positioning mistakes to avoid include not understanding the target audience, failing to differentiate from competitors, and losing focus on the company’s mission. A brand audit and a comprehensive positioning strategy can help companies avoid these pitfalls.
Successful brand positioning examples
To illustrate how to position a brand, I’ll use two popular car manufacturers as examples.
Immediately, we can note the following observations:
- The word “dream” appears in the headlines on the landing page. This word taps into the buyer’s emotions.
- We do not see any car images, only headlights and reflections. This adds an element of mystique.
- Mercedes-Benz uses a minimalist color palette (i.e., blue, black, and white). Minimalism is a design style often associated with a high-end brand image.
Premium and luxury brands prioritize emotional connections over product features—which is exactly what Mercedes is doing here.
Now, here is a screenshot of Honda’s website:
Notice the headline focuses on fuel efficiency and being made in America—two benefits Honda uses to establish a competitive advantage. We also see a few cars on display. Honda is positioning the product using its features to attract customers.
Mercedes and Honda use these brand elements to position their products and attract buyers:
- Brand identity
- Key benefits of each car
- Target audience segments
These elements work together to create the product’s unique position. However, each brand strategy targets a different type of customer.
American Express: A masterclass in resilience
To survive the turbulent times of a worldwide pandemic and to fuel future growth, American Express thrived by focusing on people, customers, and the brand.
While competitors slashed budgets, Amex invested in employees, fostering loyalty that translated to customer wins (think #1 for Millennial-loved innovations). By customizing offerings (i.e., rewards, Kabbage acquisition, streaming partnerships), they catered to diverse customers, attracting a younger crowd (60 percent of new cardholders).
Recognizing that brands are journeys, American Express revitalized its image, shedding the "old-fashioned" label with digital experiences and targeted marketing. The brand balanced quality and quantity growth, fueled by loyal customers who drove profits.
How to position a brand: Creating a strategy
Strong brand positioning follows a similar process regardless of business type. In the following sections, we’ll look at how to position a brand using the primary strategy components.
There are two approaches to positioning:
- Market-to-brand alignment.
- Brand-to-market alignment.
The first involves developing a market around an existing brand or product. The second is the opposite: developing the brand to fit a market.
Most companies fall into the first category. But sometimes, businesses want to match the brand to a specific target audience. A company that rebrands is the most common brand-to-market example.
The pillars of a positioning strategy: The brand, target market, and competition
Effective brand positioning relies on three fundamental pillars: the brand, customers, and the competition. Understanding how to position a brand by combining these three components sets the stage for success.
The brand is the cornerstone of your business. It’s not just your logo, name, or tagline—it also communicates the organization’s purpose, values, and promise to customers in every interaction.
Brand positioning begins with the unique value proposition (UVP). The UVP is a brief elevator pitch for your business that emphasizes key benefits, such as superior quality, unrivaled customer service, or an innovative product.
Companies should develop their UVP around the target market. You need to understand your customers, their needs, problems, and how your brand can assist them. Market research, detailed customer segmentation, and buyer personas can help with this.
Knowing your competition allows you to differentiate. A competitor analysis lets you understand their strategies, strengths, and weaknesses. Then, you can use the reconnaissance to create a brand perception that better communicates your unique value.
How to position a brand using market segmentation
Successful positioning begins by focusing on your ideal target audience. These customers are the most profitable for your business.
Once you have identified target segments, create buyer personas for each. Personas are fictional representations of your target customers based on accurate data. They are not mere sketches or outlines but full-fledged, living characters. The power of customer personas lies in their realism. The more lifelike your personas are, the easier it is to position your brand with the right target audience.
Buyer personas should include characteristics such as:
- Demographic factors (age, gender, or occupation)
- Geographic factors (location)
- Factors related to income levels and consumption habits (socio-economic)
- Psychographic factors (lifestyle or values)
- Behavioral patterns, such as loyalty or shopping frequency
But don’t stop there, dig deeper. What are their hobbies? Fears? What motivates them? What are their long-term goals? The more complete your personas are, the more helpful they will be.
Customer segmentation models help businesses understand the problems and desires of their audiences so they can connect with more potential buyers.
How to position a brand by analyzing competitors
The next step is to explore competitors. You may already know who your primary competitors are. But if you want to be certain, reach out to your sales team or use product-related keywords to perform an online search.
Once you have a list of competitors, identify their strengths and weaknesses while reviewing their marketing campaigns, mission statements, and online reviews. Examine competitor promotions, discounts, and sponsorships on media platforms as well. Anything you find that helps you understand their current positioning strategy is valuable.
Reviews are especially helpful. Pay attention to patterns in customer feedback. For example, many customers may have a similar request or complaint that can help you improve your customer experience.
Analyze competitors’ benefit claims to help you understand their unique selling propositions. Then, you can develop benefit claims to improve your own brand positioning. This process is not about copying what others are doing but improving upon it.
How to position a brand with benefit claims
Customers are looking for the product or service that best meets their requirements. In positioning, you must link your product’s benefit claims to their desires and expectations.
We can break benefit claims down into two types.
- Functional benefits describe the product’s features and the tangible advantages it offers.
- Emotional benefits relate to how customers feel when using it.
The power of brand positioning relies on a combination of both.
For example, a car gets someone from point A to point B. That is the functional benefit of a car. But a car can also make a person feel safer when they travel. Safety is an emotional benefit.
Functional benefits are practical qualities that are attractive to consumers. These benefits refer to a product’s features and performance.
Emotional benefits focus on how customers feel during or after the use experience, such as feelings of trustworthiness, fun, or relaxation. Emotional benefits are more powerful because they create stronger ties with the customer.
For instance, consumers in the luxury car market have similar preferences. Some are:
- The desire for higher social status
- Electric options
- A car with exceptional durability and performance
A luxury car brand could use marketing tactics that target customers with these preferences. This approach would be much more effective than just talking about how great their cars are.
Brand positioning statement
A brand positioning statement communicates what makes your offer unique. This is a concise statement that also guides your marketing efforts.
To create a positioning statement, consider the brand’s:
- Target audience
- Market sector
To illustrate, here is how to position a brand for a new eco-friendly beauty product:
- Identify the essential elements of a positioning statement. A good positioning statement should call out the target audience. It should also explain what differentiates your brand and why customers should believe it.
- The UVP should address target customers. Conscious consumers who value eco-friendly and sustainable products. These customers are environmentally aware and will pay a premium for green products.
- Conduct market research to uncover customer preferences. Eco-friendly consumers value brands that use natural ingredients and ethical production methods.
- Communicate the brand promise. Offer high-quality products that are eco-friendly and produced without compromising performance or luxury.
- Be sure to include compelling reasons to believe. Incorporate a strict “Earth First” policy and ethically sourced ingredients. A part of every sale supports environmental conservation efforts.
With these elements, our positioning statement could be:
"Brand A is a market leader for consumers who value eco-friendly beauty products. We will deliver high-quality, sustainable products that balance performance and luxury. You can trust in our commitment because we adhere to a strict 'Earth First' policy. Every ingredient is ethically sourced. All packaging uses recycled materials. And a portion of every sale directly supports environmental conservation efforts."
Keep your positioning statement simple, clear, and concise. Avoid complex sentences or jargon that could confuse people. Don’t forget to review it for accuracy before making it public.
Branding and messaging
To build strong brand positioning, your company must look and sound like it belongs in its specific market. That means your corporate identity should align with what customers expect from a leader in your industry. A business’s branding (i.e., logo, color scheme) should reflect its persona and values. Likewise, the messaging should articulate its value proposition and unique benefit claims.
For instance, if you are a luxury brand, the visual identity should exude elegance and exclusivity. The company’s messaging should highlight its products’ superior quality, craftsmanship, and premium experience. The brand voice should communicate elegance and luxury to reinforce its desired position.
Consider Rolex, a brand synonymous with luxury watches. Rolex uses a crown logo, a gold-and-silver color scheme, and a sophisticated design. These elements convey a sense of prestige and high status. Rolex’s messaging emphasizes its watches’ meticulous craftsmanship, timeless style, and enduring value. This identity will appeal to affluent, status-conscious consumers.
Finally, it’s vital to maintain consistency across all customer touchpoints, such as your website, social media, advertising, packaging, and service.
Types of brand positioning strategies
In this section, we’ll explore how to position a brand using the four most common strategies.
Convenience-based positioning strategy
Research shows that over 70 percent of customers will pay extra if products are easy to access and readily available.
The customer experience plays a key role in this positioning strategy. That is why a positioning strategy focused on convenience often leverages accessibility and user-friendliness.
For example, your return policy could be simple, without complicated forms or restrictions. You may also offer free shipping and local delivery options. These policies and options make it easy for customers to find, order, and receive your products.
Price-based positioning strategy
A price-based positioning strategy focuses on offering products or services at a lower cost than competitors. This strategy appeals to price-sensitive customers who prioritize getting the best deal.
Brands can use this approach to attract cost-conscious consumers and gain an edge in price-sensitive markets. Walmart and Dollar Tree are examples known for low prices.
Companies must streamline operations, cut costs, and negotiate beneficial agreements with suppliers to use this strategy. They should also emphasize value for money to convey the benefits of choosing it over competitors. Standard methods for attracting customers include offering special promotions or discounts.
A price-based positioning strategy may not suit every business. It can lead to thin profit margins and make it challenging to maintain quality. Most consumers are skeptical of low-priced products, even if they don’t admit it. Studies show that the average consumer believes a higher price indicates better quality.
Niche service positioning
Niche marketing focuses on smaller groups of customers by customizing offers to match their needs and interests. Companies must define buyer personas for each customer segment to use this strategy. Developing personas makes it easier to zero in on unique customer types and create marketing messages for each.
When defining a market segment, be as specific as possible. The most common targeting characteristics are age, gender, location, and lifestyle. Also, consider detailed persona characteristics like psychographics.
After you have defined personas, leverage the media channels they use most to reach them. Creating targeted content for each niche segment will get higher responses. As an example, you can make your customer success stories relatable by using someone the target segment can relate to.
Some businesses hesitate to use this positioning strategy because they don’t want to miss out on a potential market segment. But by catering to smaller customer groups, companies can do a better job of meeting their needs.
Premium brand positioning
Premium brands create an emotional bond with customers instead of focusing on product features. The connection must be strong enough to offset the product’s premium price.
To create premium positioning, uncover your customers' deepest emotional drivers for buying. Then you can develop an experience with qualities leveraging these buying triggers.
The challenge of this strategy lies in avoiding the generic nature commonly seen in most offers. Many companies claim to offer superior quality or an exceptional customer experience. But these claims won’t impact the audience unless you can back them up. For example, you could use customer testimonials showing how your product improved their lives. This strategy would show your product’s emotional benefit and, thus, have more value in customers’ minds.
Do you need help developing a positioning strategy?
Building a competitive organization can be complex. Without a solid positioning strategy, you will lose valuable market share to your competitors. The Brand Auditors can give you the strategic guidance you need to prevent that from happening.
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Frequently Asked Questions About Brand Positioning Strategy
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