Competitive Positioning – The Essential Guide for Marketers

Competitive positioning serves as the foundation of an effective marketing strategy. An effective positioning plan anchors all of your efforts to a common goal, and helps align your content, messaging and all the execution of marketing tactics. 

In the contemporary business world, competitive advantages and positioning are changing faster than ever. The forces of digital innovation and emerging technologies are leading to unprecedented disruption of product lines, market assumptions and incumbent’s positions.

If you’re working on a new marketing strategy, launching a new product, or looking for ways to improve your market share, read on – we’re going to break down how to effectively create a competitive positioning strategy.

What is competitive positioning?

Positioning was first defined by Al Ries and Jack Trour in their seminal book Positioning: The battle for your mind. This book explores the relatively simple idea that buyers have limited mental space, and that the key to capturing market share is to effectively ‘position’ your offering in their mind. 

Remember – this isn’t just about looking at what your company does well. An effective positioning strategy looks at both your own company’s strengths, as well as those of your competitors and the industry at large.

Positioning tends to be easier for B2C than B2B companies – for B2C it’s typically easier to know who your competitors are. B2B firms often face a myriad of direct and indirect competitors across many different markets.

Competitive positioning is all about differentiation. The ability to provide a unique product or service offering that is somehow different to your competitors. Effective differentiation means your company has a ‘brand’, and that brand means you are known for something in particular. 

Your brand could be any differentiating factor. It might be for having the lowest prices, best customer service or highest quality in the market. However, typically your brand is one single feature of your offering. 

It’s difficult to be known for the best quality and lowest prices, as these features are typically provided by different kinds of firms. And the mental spaces that each of these features occupies are not typically associated in the minds of a consumer. 

Competitive positioning analysis

Taking stock of your competitive position is an important first step to developing or improving your marketing performance.

Market share

Take a look at your market share. There are many different ways to estimate market share. This is never going to be completely accurate, but using the below example you can get a pretty good estimation of relative market share.

  1. Choose a time period (Year, quarter or multiple years). 
  2. Determine the company’s total sales over that time period. 
  3. Find the total sales of that company’s industry or vertical. 
  4. Divide the firm’s total revenues by all sales in that industry.

You can find revenue data from various sources like industry reports, trade bodies or even the company itself if they are public.

For smaller companies or industries, this data might be tricky to find. Instead try using a revenue per employee figure to estimate earnings. To do this just multiply employee headcount by $100,000. 

This can get you some good initial ideas of where a company’s revenue might sit. Obviously this figure can vary. For example companies in hospitality or retail are going to have far lower multiples than those in B2B information technology, for example. So think about the typical margins in your industry when coming up with a figure to multiply headcount by.

Benefits and pricing

Look at the benefits the products or services in your market offer. 

Are your features and benefits similar? What do they have that you don’t? Do they emphasize certain benefits that you don’t? 

List out your competitors benefits using questions like those above. 

Then take a look at pricing. Where do you sit on cost? Are you expensive or relatively cheap? 

Then look at pricing models. For services businesses do you charge by the hour or offer packages with predefined deliverables? For product businesses do you charge per unit, or offer bulk discounts? If you’re a software product do you use a subscription based model (e.g. SaaS) or offer licenses for certain amounts of time?

Pick your most relevant competitors in the space and compile the answers to the above question into a spreadsheet or journal for referencing later.

Industry-specific factors

Consider whether there are industry-specific factors that might affect your positioning. In some industries there might be one or two large firms that possess the majority of market share. 

In others there could be new technology that has completely disrupted incumbent players, or government regulation may be on the cusp of being passed that would restrict business activities.

Take a look at these broader macro factors, competitive positioning is not just about your strengths relative to direct competitors, but also your positioning relative to the environment in which potential customers will consume your product or service.

Unique value proposition

Finally, take a look at your unique value proposition (UVP). Your unique value proposition (or unique selling point/USP) is an unambiguous statement that outlines the how your firm solves the customers problem, and in what way that is different from your competition. 

This value proposition should be used extensively in your marketing efforts. Each messaging point for your business should use this statement in some way or another to embed your message into the customer’s mind.  

It takes a while to develop a UVP, but once you have one it can be used as a core pillar to base all of your messaging on. Remember also that UVPs are not static. The best firms constantly revisit, revise and question the assumptions that their UVP is based on.

A good value proposition is something unique from the competition, concise and easy to understand. Take a look at what your competitors UVPs are. This can be a great exercise to find gaps and opportunities to develop your unique positioning in a crowded market.

Competitive positioning maps

Once you’ve completed a competitive positioning analysis, you can start to build out a positioning map to see where your offering sits relative to your competitors.

Designate your market

Define what your market is, and what it isn’t. For example, if you make running shoes, don’t look at the entire market for shoes, instead break it down by product types and demographics. 

So look at the market for running shoes, then start to segment further by Demographic, Geographic, Psychographic and Behavioral segments. If you’re a B2B firm you should look at Firmographic fits. 

You should arrive at a tightly defined market on which to base your initial analysis. And remember, you can create multiple competitive positioning maps and analyses based on how you segment the market. For example it might make sense to break up positioning analyses based on different countries, regions or languages.

Map benefits and/or price

Once you have a market defined – map benefits on one axis, and price on another. From there you’ll have a matrix on which you can plot your competitors and effectively visualize competitive positioning in the marketplace.

How to use competitive positioning to gain advantage

Ok so you’ve done your analysis, and you have some nice data, charts and hopefully insights into your market position.

Now comes the fun stuff, based on this analysis you should get to work doing 3 things:

Messaging audits

Based on  your new understanding of your competitive position, how can you tweak your messaging to better differentiate yourself? 

Product or service audits

Are you offering the right product or service for the market? And if so, what features or benefits of your offering can be improved or focused on to build your brand in the mind of the consumer.

Channel audits

What’s the best channel to reach potential customers? If you sell to businesses should you consider doing B2B outreach, is social media relevant for your market segment? Run a number of experiments to see what works best for your business.


Competitive positioning is an essential, but often misunderstood, element of your marketing strategy. By taking stock of your positioning regularly, and importantly – clearly defining your position – you can create a well-defined marketing strategy that outperforms your competitors. 

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