What is a Positioning Map and why are they Important?

To be successful in competitive markets, businesses need to differentiate themselves in ways that resonate with their target customers. One of the most powerful tools available for achieving this is the positioning map. This visual representation helps businesses see how they stand relative to competitors and identify gaps or opportunities in the market.

What is a Positioning Map?

A positioning map, also known as a perceptual map, is a visual tool used to display customer's perceptions of the business's market offerings compared to competitors.

At Execon, we have coded an Interactive Positioning Map that people can use to help develop a clear market position for their business.

Typically, it plots two key variables, often price and quality, on an X and Y axis where each product or brand is positioned on the map according to how it is perceived by the customers in the target market.

For example, in the smartphone market, one axis might represent price (low to high), and the other could represent innovation (basic to cutting-edge). By plotting competitors on this map, businesses can easily see how their products or services measure up in relation to others.

A key skill in developing positioning maps is to find determinant attributes that customers within the target market use to decide what products to purchase. While the default values are price and quality as these are typically very important, good positioning discovers what attributes customers actually use to determine their preferences.

Why Positioning Maps are Important

Positioning maps are important for the following reasons. The last reason is very practical as it makes ads much more effective.

1. Clarifies Market Position

A positioning map provides a clear visual representation of where your brand stands in the marketplace. By looking at the positioning map, businesses can understand how customers perceive their products and whether they stand out or blend in. Knowing your position can help guide strategic decisions on pricing, product features, marketing, and more.

2. Identifies Gaps and Opportunities

One of the primary benefits of a positioning map is its ability to highlight market gaps. Perhaps the market is oversaturated with high-end luxury products, but there’s a noticeable gap for mid-range products. If no competitor is serving a specific need or price point, businesses can spot an opportunity to innovate and fulfill unmet customer demand.

3. Aids in Competitive Analysis

Positioning maps are essential tools for competitive analysis. They help businesses visualize their direct competitors and assess how well they are doing in comparison. This information is critical when it comes to making adjustments to your offering or launching new products.

4. Supports Strategic Decision-Making

Whether you’re deciding to launch a new product, adjust your pricing strategy, or refine your brand messaging, a positioning map can provide valuable insights. It ensures that strategic decisions are based on the competitive landscape and customer perceptions rather than assumptions.

5. Improves Targeting and Segmentation

When businesses understand where they fit in the market, they can better identify the specific segments of customers they should target. If a business discovers it’s positioned as a luxury brand, it may want to focus more on affluent customers who value exclusivity. Alternatively, businesses positioned at a low price but high quality may target budget-conscious customers looking for value for money.

6. Assists in Communication and Branding

Positioning maps can also enhance your marketing and communication strategies. If you know your brand is perceived as innovative, you can highlight that in your advertising campaigns. Understanding how customers perceive your position enables more tailored and effective communication that aligns with your market positioning.

How to Create a Positioning Map

Creating a positioning map involves several steps:

1. Identify Key Attributes: Decide which variables are most relevant to your industry (e.g., price, quality, innovation, customer service).

   
   

2. Plot Your Competitors: Place competitors on the map based on customer perceptions or market research.

   
   

3. Plot Your Own Brand: Assess where your product or service fits within the market.

   
   

4. Analyze the Map: Look for clusters of competitors, gaps in the market, or areas of over-saturation.

Conclusion

Positioning maps are more than just visuals—they are strategic tools that guide businesses in making informed decisions about where they stand in the market and how they can improve.

By understanding where your brand is positioned, and where it could be, businesses can better serve their target audience, outmaneuver competitors, and uncover new growth opportunities.

Position your business wisely, and the results will follow.