Guide to Strategic Positioning (Definitions, Benefits and Tips)

Strategic positioning refers to how powerful the brand is in the customers’ minds, what the company’s message is, and how the organization sees itself in the market. Selling a great product or service isn’t enough to ensure a company’s success.

02 01 04 What is strategic positioning

Why is strategic positioning important?

Companies can use strategic positioning as a key tool to increase profits. Finding ways to stand out from competitors may be a crucial component in developing the mission and operating principles of new businesses. Additionally, strategic positioning can assist existing businesses in growing by increasing the volume of products they produce and the market they serve. The ability to articulate how a company differs from its rivals may also be a helpful strategy for business executives to attract investors and media coverage.

What is strategic positioning?

With the help of better customer value creation, an organization can set itself apart from rivals through the use of strategic positioning. This could give them a competitive edge over other businesses in a similar industry and ultimately boost business profits. Along with conventional sales tactics like raising the caliber of the product and developing more expedient procedures, strategic positioning can be effective.

Here are three major examples of strategic positioning strategies:

1. Cost leadership

Cost leadership is a business strategy that involves setting the lowest price point for a product within your sector. For instance, if most sporting goods retailers charge $70 for cleats, a business could employ cost leadership by offering the same pair of shoes for $60. The less expensive price distinguishes that business from rivals and might draw in more customers. In order to maintain competitive pricing, other businesses may eventually adjust their prices accordingly.

It is advantageous to have one of the lowest production costs in the industry when engaging in cost leadership. The company may be able to set a lower price point for customers while still remaining profitable if the cost to produce the product is less than average. Maintaining product quality is also essential to keep customers happy and promote additional sales. In some circumstances, a business may lower the price without considering the cost of production and rely on additional sales generated by the lower price point to make up the difference.

2. Differentiation

A business strategy called differentiation entails developing a premium good or service and charging more for it. This makes differentiation, in some ways, the antithesis of the cost leadership strategy. It involves marketing to customers who are willing to pay more for a product or experience they believe to be superior. This might imply enhanced product quality, first-rate customer support, or a rise in the buyer’s social standing as a result of the purchase. A business may combine marketing tactics with product development innovations to practice differentiation.

By developing high-end or niche products that are not yet being produced by other businesses, differentiation can lessen competition. This distinguishes the business and might aid in the development of a branded identity for their line of high-end goods and experiences. Additionally, since customers may value the option to choose special treatment, it can help increase customer satisfaction.

3. Focus on niche markets

Finding a niche market that competitors aren’t yet attempting to sell to and offering a specialized service or product made especially for customers is another example of strategic positioning. It’s helpful to first conduct market research to understand various potential niche markets and the merchandise or marketing preferences of consumers in that market before you can do this. Consider whether a cost leadership strategy or a differentiation strategy would be best for focusing on a specific niche market, and use the right strategy pairing.

Benefits of strategic positioning

In addition to the primary objective of expanding a company’s reach and profit, strategic positioning has other advantages. Some other benefits are:

Tips for strategic positioning

Here are some pointers to assist you in developing an efficient strategic positioning procedure:

Practice solution-oriented thinking

It may be helpful to think about the industry challenge you’re trying to solve when developing a strategic positioning platform. This might inspire you to develop a plan that gives customers new value while also differentiating your brand from rivals. A business might host a brainstorming session centered on issues facing the industry to start this process. They may then work to innovate based on those ideas.

For instance, a company that makes clocks might take into account that people can’t see the hands of the clock at night and produce clocks with glow-in-the-dark hands and numbers. This both provides a solution to a problem that the traditional industry faces and distinguishes the business with a niche product. In the future, they might be able to develop it into a full product line or create specialized branding and advertising to support innovation.

Write a positioning statement

It’s helpful to document the plan as a positioning statement when creating a strategic positioning plan. This statement explains the intent of strategic positioning tactics. It might contain information on the intended market, a pricing plan, or other unique selling points. The position statement should be between one and four sentences. It is also helpful to use clear language. You can use the following steps to create a positioning statement:

Once you have formulated a positioning statement, you can use it to inform the development of more precise project objectives and guidelines. This position statement can also be an effective tool when pitching fresh concepts to investors, business leaders, or the board of directors.

Reevaluate often

A business strategy known as “strategic positioning” may change and expand over time as the company does. Every time a business develops a new product or launches a new service, it might be beneficial to include a strategic positioning discussion in the early stages of the project. This can assist businesses in concentrating their time and effort on initiatives that may be most likely to be profitable and successful. They could also use it to create more strategic, goal-oriented, and laser-focused project plans.

It’s also important to keep in mind that other businesses employ strategic positioning. This means that in order to stay competitive, it might be necessary to change your strategic positioning tactics. For instance, a business may engage in cost leadership by lowering the price of a specific product. Other businesses may lower their prices in an effort to regain those customers once they realize that their customers are changing their purchasing decisions based on price. This implies that the business maintained by the company that initially lowered its prices may need to adjust once more or adopt a new strategy.


What is a strategic position example?

  • Stand for something. …
  • Focus on profitability. …
  • Offer consumers a unique set of benefits. …
  • Perform core activities differently. …
  • Specialise. …
  • Ensure that all activities reinforce the company’s strategy.

What are the types of strategic positioning?

Instead of going head-to-head with Pepsi’s Gatorade to win over the target audience, Coca-Cola wants to promote Powerade as a cheap alternative to that brand in the sports drink market. Customers who purchase Gatorade are willing to pay more for a premium sports beverage.

What are the three types of strategic positioning?

Competitive positioning, product positioning, situational positioning, and perceptual positioning are the four main categories of positioning strategies.

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