GuidesMarket researchCompetitive positioning: How to gain a winning edge

Competitive positioning: How to gain a winning edge

Last updated

3 April 2024

Author

Dovetail Editorial Team

Reviewed by

Hugh Good

There will be many factors at play in your quest to help your business stand out from the competition. From perfecting customer service techniques to streamlining communication across teams, you can position your organization to succeed in several ways. One of these is competitive positioning.

Competitive positioning is a key factor that helps you gain a winning edge. It’s how you can distinguish your company from other brands, winning more business and growing revenue. It can help your brand get ahead of the competition, guide your business model, help you in your sales and marketing efforts, and motivate your team.

This guide highlights the benefits of competitive positioning and how to create your own competitive positioning strategy for short and long-term success.

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What is competitive positioning?

Competitive positioning is a marketing strategy that focuses on determining how to differentiate your brand, service, or business in relation to its competition. By understanding your competitive context, you can determine the value of your products and services, analyze customer pain points and needs, better understand market research, and refine your operational intelligence.

The process of competitive positioning helps you get to grips with your competitors so that you can fine-tune your sales and marketing campaigns to win more business.

Benefits of competitive positioning

Successful competitive positioning offers many benefits. Most notably, a competitive positioning strategy can help guide your business decisions, enabling you to create more targeted sales and marketing campaigns.

Competitive positioning can also help build and maintain brand loyalty, establish brand relationships, and attract valuable employee talent.

Another advantage is gaining more customers. Customers are the heart and soul of every successful business, and when you can gain more new customers quickly, you’ll be poised to outpace the competition and thrive in your field.

Examples of strong competitive positioning

Most successful brands have examples of strong competitive positioning. Think of your favorite companies and brands and try to recall specific examples of how they differentiated themselves through sales and marketing.

These powerhouse brands were able to put their money where their mission statements are and set themselves apart from other companies:

Whole Foods Market

Whole Foods Market has earned a reputation as a grocery store for the health-conscious consumer. By specializing in organic produce, the company was able to align itself with its mission statement of health and wellness first by refusing to sell products with artificial colors and preservatives.

Customers know they can go to Whole Foods for food that helps them meet their wellness goals, which is due to the company’s strong competitive positioning.

It positions itself competing against Costco, for example. Costco’s business model focuses on bulk sales and membership-based warehouse shopping, offering a wide range of products at lower prices. In contrast, Whole Foods places an emphasis on organic, high-quality foods.

Axe

Many body care companies try to earn business from customers of all genders. Axe, however, gained a reputation as a brand solely targeting young male consumers and leaned hard into that differentiation. Many of the brand’s sales and marketing campaigns focus on how customers can use the products to become more attractive.

How to create a competitive positioning strategy

When creating your competitive positioning strategy, allow plenty of time for analysis and outlining. Don’t cut corners; devote time and resources to this task to set your business up for success.

Identify your goal

The first step in creating a competitive positioning strategy is to identify your goal. In most cases, this will include both short and long-term objectives.

If you’re hoping to launch a new product or complete a product update, include that in your strategy.

Loftier goals, such as improving customer service or providing more personalized experiences, should be included as well.

Identify your competitors

Next, identify your competitive set. This is essentially a group of businesses you perceive as direct competitors—in other words, it’s who you’ll be comparing your brand, business, or service against.

You and your team may think you know who your competitors are, but you may need to conduct research among your customers to understand who they would consider when choosing a product or service.

Evaluate your competitors

To understand your performance and what you need to do to improve, you’ll need to see what your competitors are doing.

Evaluate their sales and marketing strategies and try to learn what customers think about their products and services. These insights, known as competitive intelligence, can help you stay innovative and creative in your efforts and enable you to build and launch distinctive campaigns.

Create a perceptual map

A perceptual map, also known as a positioning map, is a graphical visualization of a market, category, or sector. It shows your current positioning through the eyes of your target customers and your relative strengths and weaknesses.

You can work from multiple perceptual maps, identifying gaps in the market, customer needs, and where your competitors stand.

You can include almost anything in a perceptual map, from attributes like price and quality to menu selection and restaurant decor.

Use a timeline

A timeline is an important part of almost every company initiative. Incorporate a timeline into your competitive positioning strategy so you can stay on schedule, track progress, and motivate your team.

A schedule also helps you set and assign clear priorities. Members of your team will know what they are responsible for and who they can go to with questions or concerns.

Find your niche

Think about what makes your products or services unique and lean into that.

Understanding your niche, or what you do really well compared to competitors, will enable you to improve your competitive positioning. You can also utilize these strengths in marketing campaigns, calling out exactly what makes your company one to invest in.

To ensure your strategy is working, conduct regular customer research to see what your target customers think of your products and services. Don’t be afraid to make changes or adjust as you go. Just be sure to keep your team members in the loop and avoid shifting priorities, which can frustrate your team.

Defending a winning position

Once you feel you’ve gained a competitive advantage, it can be tempting to rest on your laurels. However, you’ll need to become sharper than ever once you have reached this level.

Defend your winning position by remaining constantly vigilant, using competitive strategies that ensure you are always thinking and acting creatively. Having a solid understanding of the “zones” of competitive positioning can help align your thinking with this success-oriented mindset.

The high-value zone

The high-value zone is where you have achieved the goals outlined in your competitive strategy. You should use metrics and customer analysis to confirm this positioning and make the most of what you have earned.

Competitors will always be looking to join or replace you in the high-value zone. Defend your position and stay in this zone by thinking creatively. Forge strong brand partnerships, launch innovative new products, and utilize new ways to connect with and serve your customers.

The mid-value zone

Being in the mid-value zone can mean moving up or down with just one or two actions. In this zone, you should be actively looking for ways to win deals and score more business, which will allow you to move to the high-value zone and meet your organizational goals.

The competition will be fierce in the mid-value zone. Your competitors will try to outpace you and reach the next level first. However, resist the temptation to jump at every opportunity. Strong strategic thinking will serve you well here and enable you to identify what can help your business versus what might hurt it.

The low- and no-value zones

No business wants to be in the low- or no-value zone, but being here can make or break a company that needs to refine its offerings and hone its value proposition.

Perhaps you’re in these zones because you’re dealing with a slew of competitors or struggling to determine what your target customers really need.

Spend some time on your competitive strategy and think about what makes you unique. Lean into those advantages and utilize them as you go toe-to-toe with competitors and come out the other side.

FAQs

What is an example of a customer service positioning strategy?

A customer service positioning strategy focuses on how your products or services solve a customer problem.

For example, if your company sells kitchen products, your strategy could be a marketing communication that includes quick dinner ideas and how to spring clean a kitchen for a refreshed new look.

What’s the difference between competitive position and competitive advantage?

Competitive positioning is a marketing approach that brands can use to set themselves apart from competitors and gain favor among their target audience. Competitive advantage, on the other hand, is an element of a brand that allows it to outperform other companies in the same industry.

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