What is Product Positioning? Examples & Strategies

So you’re about to bring a new product to market.

You’re smart enough to have done your competitive research. You know you’re not the only solution on the market, but you’re not that sure how to tell prospective customers how you’re different.

‍“Airbnb for [insert vertical here]” ain’t gonna cut it.

You need to figure out your product positioning, which, to be fair, is easier said than done.

So, now that we’ve said it, we’re going to help you, uh, done it…

In this guide, we’ll share two powerful frameworks for developing product positioning, with real-life examples for each. We’ll also cover six unique ways to differentiate your product offering in a crowded market, and give some product positioning examples.

But let’s start with the simplest question:

What is product positioning?

What is product positioning? 

Product positioning is about defining how your product fits in the competitive marketplace and how you differentiate it from competitors’ offerings.

You can think about product positioning as how you want your customers to perceive and consider your product relative to competitors.

For example, you might want customers to perceive your product as:

• A suitable low-cost solution
• An industry-specific version of a popular tool
• The most well-rounded and feature-rich solution available

Product positioning is generally steered by the PMM (product marketing managers) as one of many aspects they own in their role as a product leader.

Of course, it's not the only thing they own.

PMMs should also be responsible for obtaining and analyzing customer feedback, steering product strategy, and keeping an eye on the competitive landscape. All of this feeds back up into effective product positioning in a neat little loop.

The importance of product positioning 

We’ve answered the main question (What is product positioning?). But why is it important?

Good product positioning helps customers determine whether your product is the right fit for them or not.

Think about it like this.

You might have a total addressable market (TAM) of 10 million customers. But they aren’t all going to be your customers. You don’t even want all of them to be your customers.

You’ve built a product with specific features and functions that appeal to a specific subset of that TAM.

For instance, if your goal is to build a best-in-class tool, then the section of your market that is looking for a low-cost solution isn’t your target audience.

Your product positioning helps promote that message.

It says to your target buyer, “We’re for you!” while simultaneously saying, “Hey, we’re not for you.” to those customers for whom you’re not a fit.

Sure, this limits the number of inbound leads flowing to your sales team. But it means that the leads that are coming in are more likely to meet your ICP (ideal customer profile). This, in turn, means they’re more likely to close.

Product positioning vs. messaging 

Before we dive into the process of determining product positioning, let’s clarify something.

Positioning and messaging are two terms that often get used interchangeably.

While they’re definitely related, they are not the same.

When you give an answer to the question, “What is product positioning?” messaging shouldn’t really be a part of it.

Positioning is strategic and behind-the-scenes. It answers the question, “What do we want customers to think about our product?”

Messaging is more tactical, and it's what customers actually see. It's present in assets like ad copy and website content.

‍Positioning flows down into messaging.‍

Take Warmly as one of the best product positioning examples.

They’ve positioned themselves as an SMB-facing alternative to expensive account-based marketing tools like Demandbase and ZoomInfo.

They want their brand's customer perception to align with this idea — a fast and affordable alternative to big brand names. 

Their messaging reflects this positioning, with their website copy speaking to an important startup goal: the need to see ROI quickly.

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Understanding the distinction between product positioning and messaging is crucial for any business looking to communicate effectively with its audience. 

While positioning sets the strategic direction, guiding what customers should think about a product, messaging brings that positioning to life in tangible ways through various communication channels.

So, how do you get started?

2 options for creating product positioning 

While there’s no “one-size-fits-all” way of figuring out product positioning (though looking at product positioning examples is a good start), there are a couple of frameworks circulating that many PMMs choose to take advantage of.

Let’s look at the two most commonly used.

1. The product positioning statement 

This one is the classic framework for determining and communicating your product positioning.

The product positioning statement is divided into four key components:

1. The audience
2. Their pain point(s)
3. Your competitors are alternatives in the market
4. The differentiated benefits

First, you’ll simply work through each of the four components in order.

For instance, if your product is a CRM for insurance agents, a brief breakdown of the four components might look like:

1. The audience: Health, life, and home insurance agents 
2. Their pain point(s): CRM solutions that don’t speak their language or are too focused on the SDR>AE use case
3. Your competitors are alternatives in the market: A, B, and C competitors 
4. The differentiated benefits: Deep integrations with actuarial table suppliers and insurance underwriters 

Then, you’ll want to turn that into a statement:

‍Ala Eddine Abid, Product Marketing Manager at Vndit.io, shares a great framework for this on Reforge:

‍[YourProduct] provides [industry-specific business] with a cutting-edge SaaS solution that [primary benefit or value proposition]. Our platform is designed to [key differentiates or unique selling points], empowering [target audience] to [desire outcome or goal].

Using that example, we might come up with something like:

‍InsurForce provides insurance agencies with a cutting-edge SaaS solution that is custom-built for the insurer use case. Our platform is designed to integrate tightly with underwriters and actuarial tables, empowering insurance salespeople to work effectively and easily maintain their customer database.

2. The five-component waterfall framework 

If that last model didn’t feel like a fit, this framework from April Dunford, business consultant, and positioning expert, might be more up your alley.

Actually, her position on the positioning framework (see what we did there) is quite the opposite. She’s vehemently against it and instead uses a five-component framework that digs into:

1. Competitive alternatives: What customers would buy if you didn’t exist.
2. Unique features: Features you have that others don’t.
3. Value: What customers get out of your product.
4. Target customers: Who ends up buying your product.
5. Market category: Where you’re trying to win.

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The point of this exercise is explicitly not to come up with a single statement like we did in the first framework.

Instead, the output should be more like a table, with the five categories and questions on the left and your answers to each on the right:

The key benefit of this approach is that the positioning table becomes the input to your various marketing strategies and external messaging.

For example, you can use:

• Answers from the “Target customers” section to set up your ad targeting
• Answers from the “Competitive alternatives” section to design battle cards for the sales
• Answers from the “Value” and “Unique features” section to formulate marketing messages

6 product positioning and differentiation strategies

Beyond knowing the answer to “What is product positioning?” it's a good idea to have some strategies under your belt for doing it.

Good product positioning helps potential customers decide whether or not your product is right for them.

Think of it like a self-qualification process, so your sales reps don’t have to deal with a bunch of customers who don’t require your thing.

With this in mind, differentiating your brand from competitor products should be a key focus.

Here are six product positioning strategies strategies for differentiation.

1. Price 

Price positioning is the classic differentiation strategy.

In most cases, this means pricing your product lower than anyone else on the market.

It's an easy way to capture anyone whose primary goal is to cut down on expenses, but it will mean you’ll need to have your pricing intelligence locked in and pay careful attention to how competitors react.

If one or more competitors also choose this strategy, it can result in a race to the bottom.

It's not always about low prices, however.

Some companies apply a competitive pricing differentiation strategy by charging more than anyone else. 

This is known as luxury or premium pricing and is based on the idea that consumers use price as a proxy for quality and so often assume that the most expensive product is the best one.

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2. Quality 

Quality as a positioning strategy seeks to cement in customers' minds that your product is of a high standard.

It goes hand-in-hand with luxury pricing, though the two can operate separately.

The main idea here is that your marketing messaging speaks to quality components, longevity, and/or a premium look and feel.

This is one of the product positioning strategies that really needs backing up. If you choose quality as a differentiation strategy but don’t actually offer a high-quality product, you’re unlikely to see long-term success.

3. Vertical 

This product positioning strategy is about taking a broad existing category, such as CRM software, and marketing your solution as the best option for a given use case.

This is becoming more common in software as businesses in saturated markets look for a way to stand out.

For instance, it's not uncommon to see CRMs targeting real estate, lawyers, insurance, and non-profits, even though they all offer the same broad feature set.

4. User group 

User groups and verticals are similar product positioning strategies.

However, the difference with targeting a user group is that you’re speaking to a person’s role within a field rather than the field more broadly.

An example of the user group differentiation strategy in action might be a project management tool designed specifically for college students (as opposed to the broad education use case, which would be an example of the vertical-focused strategy).

5. Values 

Using your customers’s core values as the driving force behind your positioning can be a seriously effective strategy.

Say, for example, that you’ve identified a segment of your market highly motivated by environmentally friendly and sustainable goods.

By positioning yourself as the most environmentally focused option (and following through with the commitment in your product design), you could be well positioned to capture that market segment.

6. Availability 

The last of our six product positioning strategies is availability.

That is, through what channels can people buy your product?

Dollar Shave Club used this as a differentiator when it initially launched as a direct-to-consumer e-commerce brand.

Where other shaving brands only sold their products in stores, Dollar Shave Club served a market that wanted to order online.

You can also combine availability with another product positioning strategy. 

For instance, your product might not only be the only one in its category available for purchase online, but it may also be the cheapest solution since there’s no retailer to take a slice of the pie.

Good product positioning comes from determining the best strategy to differentiate your brand and offerings from competitors. 

These strategies, from pricing and quality to targeting specific user groups and aligning with customer values, provide ways to carve out a unique market position. 

By understanding and leveraging these positioning strategies, you can attract the right customers, mitigate competition, and ultimately drive growth and success.

From competitive intelligence to product positioning 

So, what is product positioning?

Product positioning helps you carve out a section of the market and pre-qualify customers before your sales team gets involved.

But the best product positioning examples don’t come from throwing a dart at the wall.

To choose the best strategy, careful market and competitive research will be required first, allowing you to understand what motivates customers, how your competitors are positioning their own products, and where some white space exists.

For example, you might find that there is space for a premium product in your market.

Ignition’s product management suite offers an automatic and affordable solution for competitive intelligence. Dive into market and competitor research today.