When Andrew Benin started his olive oil company, Graza, he knew he was entering a saturated industry. “[Olive oil] is in every single pantry. It has massive household penetration,” Andrew says on an episode of Shopify Masters. But there was an opportunity to stand out with market positioning.
“There was no brand affinity,” Andrew explains. “That was the opportunity to say, well, there’s a different way of doing this, a different way of positioning something that everyone already knows about—different quality to access at scale that a certain price point makes accessible.” Three years later, Graza was valued at $240 million.
Whether you’re entering a competitive market or an emerging category, effective market positioning can help your business. Ahead, learn exactly what market positioning is and why it’s important, plus discover the different types of positioning strategies you can use for your own brand.
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What is market positioning?
Market positioning is the practice of establishing a unique place for your business within your larger industry. Developing an effective market positioning strategy involves identifying what can set you apart from competitors and conveying that differentiator to your target market.
Why is market positioning important?
Successful market positioning can provide a number of benefits, including:
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Enhanced brand awareness. With a differentiated brand and a strong identity comes more brand recognition. Strong market positioning helps companies pinpoint what makes them unique and translate that into branding.
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Improved customer acquisition. A strong market positioning strategy makes it easier to explain what makes your brand and products unique, helping you attract prospective customers.
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Enhanced customer loyalty. Through cultivating a specific niche in the marketplace, you’ll establish yourself as the go-to destination for your specific type of product or service. Plus, when a target customer comes back time and again, they might even bring new customers along with them, as loyal customers lead to more word-of-mouth marketing.
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Increased sales. More customers and increased brand loyalty translate directly to higher sales, meaning more for your bottom line.
Market vs. brand vs. product positioning
Market positioning, brand positioning, and product positioning are all related, and you’ll want to think through each to create an effective marketing strategy for your business. While they all relate to how a customer will perceive your business, there are a few key differences:
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Brand positioning. When you create a brand positioning strategy, you’ll focus on developing a unique brand identity. This means solidifying your brand values and brand personality to convey what your brand stands for.
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Product positioning. This hones in on specific products and what sets those individual products or services apart from those of competitors.
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Market positioning. This takes a broader view: What makes your business as a whole different from rival companies? This will likely inform both your product and brand positioning, since you might launch new product lines or craft your brand identity based on your market positioning.
Types of market positioning strategies
- Price-based positioning
- Value positioning
- Quality positioning
- Luxury positioning
- Competitive positioning
- Usage positioningBenefits positioning
- Benefits positioning
- Availability positioning
- Novelty positioning
There’s no one-size-fits-all approach to market positioning. When it comes to effective market positioning, a company can combine multiple positioning strategies. Those types of market positioning can include:
Price-based positioning
Price-based positioning presents your company as an affordable option in your industry. It requires a pricing strategy focused on discounts or low prices across the board.
Take Element Brooklyn, a fragrance brand that offers affordable refills for luxury soaps and candles from brands like Byredo and Loewe. For example, the company suggests using its $27 Desert Bloom Body Soap, which comes in a 34-ounce pouch, to refill a 16.9-ounce bottle of Aesop’s Geranium Leaf Body Cleanser ($53).
Element’s price-based market positioning is clear from ads like the one below, which reads: “Refill your fancy soap bottles … For a fraction of the cost.”
Value positioning
Value positioning involves marketing your brand at the intersection of affordability and quality. You might not offer the least expensive or the highest quality products, but you provide the best value on the customer’s dollar.
Jewelry brand Hey Harper takes this approach. The company sells waterproof stainless steel jewelry coated with 14-karat gold PVD, a technology that creates a durable thin gold plating.
Since Hey Harper’s products aren’t solid gold, they’re significantly less expensive than products from competitor jewelry brands. However, Hey Harper offers a lifetime color warranty on its jewelry, protecting customers against the tarnishing and fading that often comes with gold-coated jewelry. This positioning provides customers with clear value: They receive the benefits of solid gold jewelry (no tarnish) without the price tag.
Quality positioning
This market positioning strategy highlights the quality of your products. Quality positioning emphasizes areas like product craftsmanship, manufacturing, and materials.
Shoe brand Labucq uses this strategy. The brand highlights its commitment to quality on its About page, where the company mentions “premium Italian leathers,” “technical expertise,” and “attention to detail.”
Labucq also emphasizes its product quality on product pages, which feature a slideshow of artisans crafting each pair of shoes by hand.
Luxury positioning
Luxury market positioning appeals to consumers looking for premium products. Instead of focusing on affordability, you’ll work to establish your products or services as high-quality and exclusive. This often means not only creating premium products, but creating premium customer experiences.
Take chocolate brand Compartés. The chocolatier uses unique product packaging design to make even its most accessible product, a chocolate bar, feel luxurious.
“When I first came up with the chocolate bar packaging, I went to Whole Foods and all these markets to see what was selling,” Compartés CEO Jonathan Grahm says on an episode of Shopify Masters. “Normally, if you want a salted caramel bar, you would have caramel and salt pictured on it. You wouldn’t have the crazy lips design that I have
“People eat with their eyes first,” Jonathan explains. “Using fashion as an inspiration—it’s something that everyone can relate to and it also pops off the shelf next to other brands.
And that’s something that’s uniquely Compartés.”
In addition to the packaging, Compartés uses product photography to convey an air of luxury. On social media, its chocolate bars are pictured alongside models decked out in jewelry. Light reflects off the chocolate’s aluminum wrapper, sparkling just as brightly as the gemstones and implying a similar level of luxury value.
Competitive positioning
Competitive positioning is a brand positioning tactic that highlights your brand’s advantages over rival brands. Those advantages could relate to product quality or features, or they could relate to price.
Perfume brand Dossier uses a competitive positioning strategy to highlight its price advantage over rival fragrance companies. Product listings include the name-brand competitor product alongside those products’ prices, emphasizing how much less expensive the Dossier versions are.
Source: Dossier
Usage positioning
Usage positioning allows companies to focus on the real-life applications of their products. It works well for brands that want to create products for a specific use case.
Here’s an example from the alarm clock company Clocky. The brand’s signature product rolls around the room when its alarm goes off, forcing users to wake up and catch it. The brand clearly showcases this use in its product photography and product description.
Benefits positioning
This highlights the unique benefits your product provides. These benefits might be beyond what customers expect. For example, weighted blanket brand Bearaby doesn’t just promise the benefit of comfort, it also highlights benefits like reduced anxiety and better sleep, citing academic studies.
Availability positioning
Availability positioning focuses on the logistic ease of your brand for consumers. Your business might be available at a specific time or place (like a corner store that’s open around the clock) or provide products that are easy for customers to use.
Take Aerflo, which sells portable carbonation canisters that let customers drink sparkling water on the go. In addition to its own bottle-carbonator combination, Aerflo sells canisters that fit the popular Hydro Flask water bottles. This lets customers add an Aerflo lid to their existing bottles.
“As we looked at the options that [sparkling water drinkers] have, single-use or countertop systems, we just felt like they were both lacking,” Aerflo cofounder John Thorp says on an episode of Shopify Masters. “It was a pretty exciting opportunity to come in and design something new that would, to us, deliver a better way, totally without compromise.”
Novelty positioning
Novelty positioning works well for businesses that are especially innovative, compelling consumers by sheer force of being groundbreaking or offering cutting-edge technology.
For example, Bola Grills sells a unique tabletop grill and uses its ecommerce site to highlight the product’s special features, like a “spacecraft-grade anodized aluminum inner shell” and rotatable cooking grates. The company also notes the product’s long development process, alluding to its one-of-a-kind design.
This works because Bola Grills’s signature product actually has features that consumers can’t find elsewhere. On an episode of Shopify Masters, founder David Levy explained that he was inspired to create his product after becoming frustrated that he couldn’t grill and join tableside conversations with guests at the same time.
“After those guests left, I started looking for tabletop grills,” Ben says. “There [were] some out there, but none with the versatility that I like in my cooking.”
How to develop a market positioning strategy
- Conduct a competitive analysis
- Determine your target audience
- Identify your value proposition
- Set your brand identity
- Craft your messaging
- Track the impact
- Reposition as needed
Developing an effective market positioning strategy doesn’t happen overnight. Here are the steps you can take to one that works:
1. Conduct a competitive analysis
To learn where you can stand out in the market, you need to understand where your competitors already are. You can do this by conducting a competitive analysis. Note that conducting a competitive analysis isn’t just important for market positioning: It’s also an essential step in creating a marketing plan. A marketing plan template like the free one from Shopify can walk you through it.
Ultimately, a competitive analysis helps you identify market gaps. You can then position your company to fill those gaps.
Take Graza. After researching competitors in the olive oil market, founder Andrew Benin saw an opportunity for a mid-range olive oil.
“On one side, things were really luxurious. And on the other side, things were really pared-back and private label, with no investment in product quality or brand,” Andrew says. “There is a price point in between. There is a brand positioning that is different. There is a quality that is high-end at scale, that isn’t fluffed up.”
2. Determine your target audience
Identifying your target audience is essential when developing a market positioning strategy. You can look at the customers of rival brands to understand who might buy your products, use surveys or focus groups to engage with potential customers, or conduct an audience analysis to better understand your current customers.
An audience analysis involves collecting customer data through your website or social media channels, then analyzing it to understand your customers’ purchasing patterns, demographic details, hobbies and interests, and motivations for buying.
Once you’ve analyzed your data, you’ll want to create buyer personas to better understand who’s in your target market. This can help you better visualize and understand your customer data.
You’ll include information like age, gender, location, and interests for specific imaginary consumers. Use a buyer persona template to get started.
"Free target persona template
Get to know your customer’s motivations, interests, and needs so you can create an experience they’ll love.
Download template3. Identify your value proposition
After you’ve conducted a thorough competitive analysis and decided on your target audience, the next step is identifying your value proposition. What does your brand bring to the table that competitors don’t, and how can you make that point of differentiation resonate with your target audience?
Graza, for example, focused on value positioning, emphasizing both quality and affordability. To do this, the brand chose to launch with plastic packaging instead of more expensive glass. (Graza has since added glass bottles at a higher price point.)
But the plastic bottles didn’t feel cheap. They were opaque, which helps with quality, and they had a unique squeeze top which positioned them as a usage advantage to glass. They also featured fun, hand-drawn illustrations to fill the branding void Andrew identified among competitors.
4. Set your brand identity
Build upon your unique value proposition to craft a brand identity that highlights your strengths. Brand identity encompasses the visual traits that define your brand (like your logo and brand colors) as well as your brand personality and brand values.
A great visual brand identity is instantly recognizable, like Graza’s signature green squeeze bottles and cheeky illustrations. “It feels friendly,” says Andrew. “Even if you don't know the people behind it, there’s a friendliness being emoted.”
5. Craft your messaging
Consistency is key when developing a market positioning strategy. Create a messaging strategy and deploy it across different marketing channels to ensure everyone in your target audience is receiving the same message.
Keep the heart of your messaging the same across campaigns, too. For example, campaigns to generate leads and drive traffic to your online store should share the same core messages, even though they have different goals. Just make sure to tailor your messaging to each platform.
For example, Bombas positions itself as a socially conscious sock brand and promises to donate a pair of socks for every pair purchased, but it communicates this message differently on different sites. On Instagram, the brand highlights this message in graphics and Reels that viewers can consume quickly. In this one, marathon runner @chelseazruns tries two pairs of Bombas socks:
On its website, Bombas explains its policy in more depth with a series of graphics and accompanying paragraphs that detail each step of the donation process.
6. Track the impact
Collect feedback from consumers through surveys or focus groups to determine if your messaging and overall market positioning is moving the dial. Let the results inform whether or not you need to shift your positioning and marketing strategies.
You can also track how different messages perform by conducting A/B testing on the different channels where you promote your business. You could test two different versions of a webpage, for example, or test open rates with two different email subject lines.
You might also explore how different messages resonate with customers at different parts of the marketing funnel. You might find that emphasizing price works for customers at the top, but as customers move along to the bottom they might want to hear more about product quality.
7. Reposition as needed
Your market positioning strategy may change over time as market trends change or as your product or service evolves. For example, you might find that as your company scales, you can afford to charge lower prices. You might then decide to adopt a price-point market positioning strategy.
You might also find that your positioning doesn’t work for a specific consumer group or sales channel. Beauty brand Three Ships, which sells all-natural products with a commitment to ingredient and sourcing transparency, quickly realized that their market positioning didn’t work for Target.
“There’s no opportunity for us to educate at the shelf on how Three Ships products are different from this product that’s $8.99,” Three Ships cofounder Laura Thompson says on Shopify Masters. “What we learned through that was that it’s much better for us to be the more affordable price point at a more premium prestige retailer than to be the more premium product at a mass retailer.”
For Laura, this means focusing on stores like Ulta and Sephora, where average prices are higher. Here, Three Ships can use a value market positioning strategy: Consumers can get a top-notch product that’s less expensive than those of competitors.
How do you determine market position?
You can determine market position based on what your brand offers that distinguishes itself from competitors. Conduct a thorough competitive analysis to find gaps and help you understand what sets your company apart, then use that to craft your messaging.
What is involved in market positioning?
A company’s unique selling point and value proposition can take many forms, including price point, quality usage, availability, and novelty, among others. Once a company identifies its competitive advantage, it can craft marketing content to drive the message home.
What is an example of a market positioning strategy?
There are several types of market positioning strategies, and the best approach will vary by company. For example, technology brands like Apple employ a novelty positioning approach, winning over audiences with innovative one-of-a-kind gadgets.
