Product Positioning

Product positioning is the practice of creating an identity for your product that outlines its benefits to your target audience and sets it apart from the competition.

Today’s markets are crowded spaces. With different products vying for your audience’s attention, presenting a clear vision of your product helps win customers. That’s where correct product positioning can help.

A well-positioned product presents itself as the solution to your customer’s pain points. It shows them why your product is better than your competitors’, so that they identify your offer as the best answer to their specific needs.

In this entry, we’ll discuss what product positioning is, why it’s important, and what goes into it. We’ll also look at how to position your product and some notable examples of effective positioning.

What Does the Term Product Positioning Refer To?

Product positioning is defining the image of your product in the eye of your target audience. It involves not just creating a perception of value for the customer but also finding ways to stand out amongst other similar offers on the market.

Achieving favorable product positioning can be done either by optimizing the product or by controlling the perception of your product using marketing. In the latter, product positioning differs from brand positioning, in that it focuses on attribute-driven competitive differentiation instead of emotional experience.

You can hone product positioning toward the desired outcome with both existing and pre-release products. For pre-release products, positioning involves designing the product with value differentiation in mind, or to target an underexploited niche. 

Why is Product Positioning Important?

Effective product positioning makes it easier to capture and retain a sustainable customer base. Customers want useful products, and they often try to get the best value available on the market. Great positioning empowers your product to sell itself.

Clearly defining how you position your product throughout your organization gives it a unified message. Aligning your product features, marketing, and customer communications with this messaging gives customers something to latch on to, enticing and keeping them loyal to your product.

Understanding the wants and needs of the segments of the market you are targeting also helps your organization work more efficiently. With product positioning as your guide, you can streamline product design to prioritize the features that matter most to your customers.

What are Some of the Elements of Product Positioning?

The various approaches to product positioning differ in the components they see as essential. In the book Obviously Awesome, product positioning guru April Dunford presents five elements as key to achieving positioning success:

Competitive Alternatives

Assessing competitive alternatives means more than knowing who your direct competitors may be. It involves studying the entire competitive landscape so you know what your customers might use in lieu of your product.

A view of the entire competitive landscape offers unique insights. For example, if your customers describe how you’ve cut their need to use four different products down to two, you might be able to secure more interest by positioning your solution to manage their entire siloed workflow.

Unique Attributes

Once you understand your competition, you must be able to clearly define what sets you apart from them. Clear product differentiation helps the customer understand why your solution offers more value than similar alternatives.


Your unique attributes may help you capture initial interest, but it is your entire value proposition that actually closes customers. Providing proof that other customers have found success by using your product makes it easier for new customers to accept your product as a remedy that addresses their pain points.

After enticing a customer, you need to keep them coming back. Your product should have the feature set to address their current concerns and offer solutions to other issues they might have further down the line.

Target Market Characteristics

Understanding your target market involves more than just getting to know who your product is for. It also implies the need to recognize traits that are shared among the segment of your target market that already loves your product. Some characteristics they might have in common include:

  • The pain points these customers are trying to address
  • How much they are willing to pay for a solution
  • Why they love using your product
  • How they use your product
  • What features matter most to them

Looking at the most passionate segment of your target market reveals strengths that might help you position your product in more unique and creative ways. For example, if your most fervent customers use your product in a specific way, it may be worth gearing your organization to support and market that specific use case to entice similar users.

Market Category

Every product should focus on a specific market category that you serve. When you describe your product’s category, you help your customers decide faster whether buying into your solution is right for them.

Describing your category also has another benefit: It forces you to look closely at all the categories your product potentially belongs to. In the process of doing this, you might find that your product offers a unique opportunity other solutions in the same space might have missed. Capitalizing on that advantage then puts you in the position to dominate in a niche.

Creating a Product Positioning Statement

The final result of the product positioning process is a statement that describes your stance. It takes all of the work you did into identifying and describing each element and condenses it into a few sentences.

Some templated examples of product positioning statements include:

  • We created [product] to give [target market] the [solution] they [want/need]. Our [category or solution] product uniquely solves [customer pain points] by offering [features] to provide [benefits].
  • For the [customer type] that [wants/needs], [product] is a [category or solution] specially crafted to solve this by using [features] to offer [benefits].
  • [Product] is the solution to the [customer pain points] for [target market] who [want/need] [solution]. We developed our [category or solution] to solve this problem uniquely by using [features] to drive [benefits].

You can use these templates to create your own product positioning statements. For example, we might arrive at this statement for our own product:

We created Userwell to give product managers the feedback management flexibility and simplicity they need. Our product feedback management product uniquely solves the complexity of gathering, analyzing and prioritizing, and implementing user feedback by offering an integrated platform to streamline the process and surface actionable insights.

Alternatively, you can craft statements from scratch to suit the specific needs and goals of your product.

Product positioning statements have organization-wide implications. For example, they tell product designers what features might be worth pursuing, they guide developers with prioritizing fixes, and they give clearer marketing direction.

Position Yourself for Success

Positioning your product correctly helps secure your place in a crowded market of competing solutions. Your product positioning statement is also the strategy that your organization will carry forward to drive sustainable demand.

Knowing this, you should never take shortcuts when trying to arrive at a suitable position. How you position your product can determine whether you sink or swim, so position it for success.