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How to position your business product

Position a product

It is important to position a product. As a first step in your corporate strategy, you determine the customer benefit of your offer. Now compare your offer with that of your competitors and determine the positioning of your products. A classic approach is positioning based on the criteria of price and quality. 

Create multiple positioning crosses that take up different properties of your offering. This shows how the products of the competition are positioned.

Clear and correct: your positioning

The customer benefits you provide are in competition with the offers of your competitors. With a clear positioning, you can quickly show your target customers how your product differs from competing offers or how your offer is to be classified in terms of price/performance compared to the competition.

The question is accordingly, which factors you determine the positioning of your products and how you can determine an optimal positioning. It is best to proceed step by step to position a product.

First step of positioning: determining competitors

Positioning is a relative consideration of the competition. The basis for a meaningful positioning is therefore to include the direct competitors (and especially competing products) in your analysis. Since you have the Market and competition have already analyzed, it should be relatively easy for you to determine the main 3-10 direct competitors and their products to position a product.

Second step of positioning: price/performance

Once you have identified the direct competitors, you can put your product in relation to the respective competing products. You can use a positioning cross to represent the positioning of each product. It is important that you include 2 product properties – one price factor and one quality factor – in the analysis:

  • X-axis of positioning: price factor
    For positioning, it is important to determine a monetary factor. This can be e.g. the price per unit (piece, litre, kg, hour, etc.).
  • Y-axis of positioning: quality factor
    In addition to the price, you should also make qualitative statements about the offer. A quality factor can be, for example, the holding time, but also design, user-friendliness or taste are possible criteria that may be relevant for your positioning.

We believe that a company can only be successful in the long term if the price is in an optimal relationship to quality/performance. We therefore recommend that you first create a peis/performance positioning cross.

It becomes difficult when you choose a positioning where you demand an overpriced price for a moderate quality.

Finding niches thanks to positioning

Positioning crosses are also well suited for Uncovering market niches. With the help of the positioning crosses, the detergent industry has found that there was no product for colourful laundry in the power-to-use detergent segment. Perhaps you too will find an undiscovered market niche when determining the positioning!

The goal is …

… that you clearly define the positioning of your products in your business plan. It would be ideal if you integrated 1-3 positioning crosses in the business plan, each representing the positioning of your products. 

Based on the positioning, you can then select the Corporate strategy to decide. However, the positioning also forms part of the next chapter in the business plan, the Marketing, the basis.