Understanding and Finding Your Competitive Market Positioning

The essence of entrepreneurship lies in the entrepreneur’s ability to identify and grab opportunities. Whether it’s through the creation of new products and services or modifications to existing ones, opportunities can take any form. 

While all that you do differently becomes a core part of your value proposition, the way it is perceived in the marketplace, with respect to all your competitors, becomes your competitive positioning. In other words, the value that you offer compared to others in the same field determines your position in the market.

Competitive positioning is essentially an extension of the competitive analysis because it adds and puts the differentiability factor in the spotlight. This is key not only for your understanding but also to know how customers will perceive your brand. 

It is no secret that customers today are extremely aware and make informed decisions. Starting from a small piece of furniture right up to buying a car, they know what they are looking for and a lot of what is available in the market.

If you are placed stronger than your competitors, more often than not, customers will know it themselves. That’s all the more reason to check if your competitive positioning is as strong as you want it to be.

Competitive Positioning Map

The best way to show your competitive positioning in the market is through a map. It is simple to construct but very importantly, takes into account the customers’ key preferences and places brands relative to those preferences. 

The competitive positioning map is made in conjunction with your competitive analysis and customer persona. 

The competitive analysis is a tool to understand the nature of rival firms and who your direct and indirect competitors are. The customer persona, on the other hand, is a representation of your ideal customer, one that is built after thorough research and discussions. Both these processes reveal information integral to the positioning map. 

Constructing a Competitive Positioning Map

Let’s have a look at the steps involved in the construction of a competitive positioning map.

Step 1

The first step is to use the information from your persona research to find the customer’s top two priorities. For example, if you run a cafe, your customer’s top priorities might be budget and hygiene. Other aspects like ratings and the number of menu items may come second to these.

Place each of these priorities on an individual axis on a grid, as shown below.

 

Step 2

Now, it’s time to use your competitive analysis data to place your competitors on the grid we created according to how well they satisfy the customer’s two priorities. As can be seen, all companies that are plotted in the lower-left corner are bad at fulfilling both criteria, whereas ones in the top-right corner are great at it.

This is how your map should look after the second step.

Step 3

Finally, it’s time to plot your position on the map. Keep in mind your value proposition and factors of differentiability against competitors. If both these aspects truly work in your favour, you will find yourself in the upper-right corner of the map.

If you find yourself on any other position of the map, you need to go back to the drawing board, do some more primary market research and rework your strategy. The goal is to always be in the upper-right corner, meaning you are successfully catering to your persona’s top priorities.

Here’s how your map should look in the end.

Bottomline

While having a strong competitive positioning is an attractive proposition, it is not worth rushing into it. Don’t shy away from a thorough research, not only for your rivals but also about your own company. 

Ask yourself about your values, ethos and what you eventually want to deliver. Tick all boxes objectively, based on facts and figures and not just because you feel you are better than the rest. 

As said earlier, your positioning will reflect in the customer’s choice as well. This positioning should be conveyed to them on its own. Listen to the feedback and your market, or you might end up with a harsh reality check.