Product Positioning

Positioning is the act of deliberately defining how a product is the best at something that a defined market cares a lot about. It is not a tagline, a mission statement, or a slogan. It is the strategic foundation that tells customers what a product is, who it is for, and why they should care — establishing a context that makes value self-evident.

“Positioning is the act of deliberately defining how you are the best at something that a defined market cares a lot about.”

— Obviously Awesome

When positioning fails, nothing else in the go-to-market works. Every campaign, pitch, piece of content, and sales conversation is contaminated by the foundational confusion.

“If we fail at positioning, we fail at marketing and sales. If we fail at marketing and sales, the entire business fails.”

— Obviously Awesome

Why Positioning Fails

Most positioning failures fall into two traps:

Trap 1 — The product became something else: The team built for one market, but customers use it for another. The positioning was never updated to reflect reality.

Trap 2 — The market changed: The product was well-positioned, but shifts in technology, competition, or customer preferences rendered the original frame obsolete.

In both cases, the root cause is the same: teams stick with “default” positioning rather than positioning deliberately.

“Context enables people to figure out what’s important. Positioning products is a lot like context setting in the opening of a movie.”

— Obviously Awesome

The Joshua Bell example makes this visceral: the same virtuoso performance earned $32 in a DC subway but commands thousands in a concert hall. The music didn’t change. The context did. A world-class product, poorly positioned, can fail entirely.

The Five Components of Effective Positioning

April Dunford’s framework decomposes positioning into five interlocking elements:

1. Competitive alternatives. What would customers do if your product didn’t exist? This is the actual competitive landscape from the customer’s perspective — often very different from how the company perceives it. In B2B, the most common competitive alternative is a spreadsheet and a manual process.

2. Unique attributes. The features or capabilities your product has that the alternatives lack. These are only meaningful relative to the competitive alternatives identified above.

“Strong positioning is centered on what a product does best.”

— Obviously Awesome

3. Value (and proof). Why a customer should care about your unique attributes — translated into business or personal outcomes. Value claims require proof; the company’s own opinion does not count.

“Feature: Something your product does or has. Benefit: What the feature enables for customers. Value: How this feature maps to a goal the customer is trying to achieve.”

— Obviously Awesome

4. Target market characteristics. The specific, identifiable characteristics that make a customer genuinely care about the value delivered. The target market is the customers who buy quickly, rarely ask for discounts, and tell their friends.

5. Market category. The frame of reference that tells customers what kind of thing the product is. Category choice triggers powerful assumptions about competitors, expected features, and appropriate price ranges.

A sixth optional component: relevant trends that help customers understand why the product matters right now — connecting to what’s already on their agenda.

The Three Positioning Strategies

Dunford identifies three distinct approaches for how to position relative to the market:

Head to Head: Compete directly for the existing market leader’s customers using their own criteria. Only appropriate when you genuinely have a superior product and the resources to unseat an incumbent.

Big Fish, Small Pond: Carve out a subsegment of an existing market where the general-purpose solution doesn’t meet specific needs. Win the niche, then expand. This is often the right play for challengers because:

“Dominating a small piece of the market is generally much easier than attempting to directly take on a larger leader.”

“Word-of-mouth marketing happens most naturally in tight market subsegments.”

— Obviously Awesome

Create a New Game: Define an entirely new category. The work is to first convince the market that the category deserves to exist — that the problem is real and significant — before positioning the company as its leader. This is April Dunford’s version of what Play Bigger calls category design.

The Circular Positioning Problem

Positioning has an inherent circularity: the right market category depends on target customers; target customers depend on the value delivered; value depends on unique attributes; unique attributes depend on competitive alternatives; and competitive alternatives are shaped in part by market category. Where to start?

Dunford’s answer: start with your best customers. They are the proof of concept for what the product actually is. They already get it, love it, and buy it. Understanding them precisely — what problem they had, what they compared you to, what value they gained — unlocks the rest of the positioning.

“Your best-fit customers hold the key to understanding what your product is.”

— Obviously Awesome

Positioning as Business Strategy, Not Marketing

A common mistake is treating positioning as a marketing function. Dunford is emphatic: positioning is a business strategy exercise that affects every function.

“While most people think of positioning as a marketing concept, a shift in positioning feels more like a shift in business strategy. Every department inside the company is likely to be impacted over time.”

— Obviously Awesome

The cross-functional impact:

• Marketing: Messaging, audience targeting, campaign development
• Sales: Target customer segmentation, account strategy
• Customer success: Onboarding and expansion strategy
• Product: Roadmaps and prioritization

The positioning exercise must be led by whoever owns the business strategy — usually the CEO or founder. Marketing cannot own it unilaterally.

Marty Cagan’s Product Management Perspective

Inspired connects positioning to the upstream work of product managers: the opportunity assessment. Before positioning can be meaningful, the product team must answer:

• What problem exactly will this solve?
• For whom?
• How big is the opportunity?
• What alternatives exist?
• Why are we best suited to pursue this?

Cagan’s insight: people buy products primarily for emotional reasons — fear, greed, loneliness, pride. The best positioning speaks to the dominant buying emotion of the target customer, then asks where else customers can get that emotional need met. That identifies the real competition.

“People buy and use products largely for emotional reasons. The best marketing people understand this, and the best product people ensure that their products speak to these emotions.”

— Inspired

Positioning and the POV

Play Bigger frames the external expression of positioning as a Point of View (POV) — a story about the world that makes the company’s existence feel inevitable. The POV must express different, not better. Positioning around “better” cedes authority to whoever already owns the category. Positioning around “different” forces a new choice.

“A POV tells a story with a beginning, middle, and end. It tells the world why this category and the company creating it are different. Different sticks.”

— Play Bigger

Maintaining Positioning Over Time

Positioning degrades. Markets shift. New competitors redefine categories. Dunford recommends reviewing positioning every six months, and immediately after any major competitive event.

“Great positioning rarely comes by default. If you want to succeed, you have to determine the best way to position your product. Deliberate, try, fail, test and try again.”

— Obviously Awesome

Related Concepts

• Category Design — The strategic discipline of creating the market context in which positioning operates
• Jobs to Be Done — The customer-need framework that anchors positioning to real behavior
• Product-Market Fit — The validation that the positioning is resonating