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How to develop a differentiating Brand Positioning Strategy

Marketing strategy is always built on market segmentation, targeting, and positioning.

Businesses target specific groups of customers, satisfy them in a superior way, and distinctively position their unique offerings to these target customers.

High customer value leads to high customer satisfaction, which results in high repeat purchases and high profitability.

Contents

CHAPTER 1

Positioning a Brand

CHAPTER 2

Study your Competitors

CHAPTER 3

Identify Points of Difference

CHAPTER 4

Identify Points of Parity

CHAPTER 4

Develop your Brand Mantra

CHAPTER 1:

Positioning a Brand

Effective brand positioning strategy sets your business apart from other players in the market.

What all strong brands have in common is that they have a distinct brand positioning.

That’s why you should also position your brand.

What is brand positioning?

Brand Positioning is the strategy of presenting the offerings of a business in such a way that the brand develops a unique Brand Image in the minds of the consumers.

The goal of positioning is to create strong preferences by providing a high degree of customer satisfaction.

A good positioning strategy guides Brand Management by clearly stating the brand’s mission statement, the goals it helps consumers to achieve and to show it does so in a unique way.

Within a business, everyone should be aware of the brand positioning strategy and should use it as a context for decision-making.

It’s the bridge between your Brand Identity and Brand Image.

A handy way to test the effectiveness of brand positioning is the brand substitution test.

How does the brand positioning test work?

With the brand substitution test, you can test a marketing campaign (like an online banner, a promo video, a poster, a billboard).

Simply replace your brand with the brand of a competitor.

If the marketing campaign does not work, it’s a strong brand positioning.

Successful brands are distinctive.

CHAPTER 2:

Study your Competitors

In each market and every niche, there will be competitors with whom you’ll have to compete.

That’s why you need to study your competitors.

It’s almost impossible to win the competition if you don’t know who you are competing with.

Why should you know your competitors?

You should know your competitors to beat the competition.

To beat the competition, you must know who your opponent is.

Only if you are aware of your competitors, you can analyze them and develop effective market positioning strategies to gain market shares from them.

Otherwise you’d just be wasting your marketing efforts.

Also, this applies to small businesses as well as large corporations.

Which competitors should you analyze?

Brands which may come into question could be brands which offer products:

  • like your product (within the same product category) or
  • that could substitute your product.

On the one hand, identifying close competitors should be an easy task. 

Typically businesses know their closest competitors already.

On the other hand, potential or emerging competitors that might become a greater threat are a little bit more challenging to identify.

That’s why you extend the scope of possible competitors broader than just your current competitors.

How to identify your competitors?

In general, there are two approaches to examine competitors: 

  • Industry approach: businesses that offer the same product or a close substitute
  • Market approach: businesses that satisfy the same customer need

While every company has strengths and weaknesses, the method of competitive brand positioning is quite simple:

  • empower your own strengths and
  • attack your opponent’s weaknesses.

Once a company has identified its main competitors, including their strengths and weaknesses, it must examine what each competitor is seeking in the marketplace.

CHAPTER 3:

Identify Points of Difference (PODs)

If your product is better than your competitors’ product, there is a high chance that customers will also buy it more.

However, which factors give your product or service unique value in the minds of the customers?

You’re about to find out.

What are the points of difference?

Points of difference are essential elements of your brand positioning.

Your points of difference are attributes that consumers:

  • evaluate positively,
  • strongly associate with your brand, and
  • cannot find in a different brand.

Any type of attribute can be a point of difference, and strong brands usually have multiple of them.

How to identify points of difference?

While crafting favorable and unique attributes in an established market may be challenging, it is not impossible.

These are three proven criteria to identify relevant points of difference:

  1. Desirable to consumers: your brand must be relevant to consumers, so you must give them a reason to believe why they need an attribute
  2. Deliverable by the company: you need to give consumers a reason why your business can deliver the desired benefit
  3. Differentiating from competitors: attributes must be different and superior to relevant competitors

CHAPTER 4:

Identify Points of Parity (POPs)

H&M and Zara both offer affordable fast fashion, Walmart and Target offer a tremendous product range of groceries and Netflix and Amazon Prime both offer on-demand streaming of shows and movies.

In each product category, there are particular attributes that a product has to have.

That’s why it’s not only essential to establish differentiating points of difference, but equally important to match the competition on vital points of parity.

What are the points of parity?

Points of parity are attributes that are considered mandatory for a product category.

Without these attributes, a brand would lack critical functions

So you may share them with competitors.

An excessive degree of differentiation would result in a product or service with low customer value. 

A car simply has to have an ABS system, no matter if the brand is Ford, Audi, or Porsche. 

Otherwise it’s no option for consumers.

Points of parity are a way to prevent a brand from losing fundamental functions.

Why does a brand need points of parity?

As differentiation is the key to success, many brand strategists mostly focus on developing differentiators in which the brand stands out from its competitors.

However, to make sure that your brand is “good enough” to be considered by consumers, your brand positioning should include points of parity.

If the brand does not meet the minimum requirements in a central mandatory dimension, it is out of the question. 

It is eliminated from evaluation and has no chance with the customer because it cannot compensate for the severe lack of a crucial point of parity.

How to identify points of parity?

Points of parity come in three forms: 

  • Category Points of parity, 
  • Correlational Points of parity, and 
  • Competitive Points of parity.

Category Points of parity are attributes that consumers perceive as mandatory for a specific product category to be a sufficient offering.

They may change over time due to technological advances, legal developments, or consumer trends.

For example: some years ago an optical CD drive used to be a necessary attribute for computers. In today’s perception it’s not needed anymore due to technological advances in high-speed internet, 4G and 5G.

Correlational points-of-parity are attributes that could potentially be negative due to inversely related positive attributes.

If your brand is especially good at a particular attribute, consumers can’t imagine your brand also to be good at a contrasting attribute.

That’s the reason why few consumers trust a brand that claims to offer the best quality at low prices. Quality has its price.

Competitive points-of-parity are attributes designed to overcome your brands’ weaknesses in comparison to your competitors’ strengths (points of difference).

The goal is to be “good enough” at those attributes.

CHAPTER 5:

Develop your Brand Mantra

The final step in developing your brand positioning is the Brand Mantra.

It encapsulates your brand positioning statement.

To do so, you start by building strategic competitive advantages.

What is a competitive advantage?

A competitive advantage is the ability of a business to outperform in specific areas in which competitors cannot or will not match.

To identify possible unique selling propositions, marketers focus on the way customers benefit from the brand.

After that, attributes are matched to customer’s benefits, as they are used to prove why a business claims to deliver a specific benefit.

Every customer’s benefit that makes up your brand positioning needs support from the right points of parity and points of difference.

Finally, you summarize the most significant distinction in a Brand Mantra.

What is a Brand Mantra?

A Brand Mantra (also Brand Essence or Brand Promise; but not) is a short (3-5 words) summary of your brand positioning.

It communicates what the brand is (and what it not is).

A good brand mantra should:

  • communicate the category and 
  • clarify define what is unique about the brand.

At the same time, it should be memorable, credible, and relevant.

Most importantly: when people hear your Brand Mantra, there cannot be another brand but yours that comes into their minds.

It’s a crucial element of your brand strategy.

Therefore, Brand Mantra should not be confused with the aspirational Mission Statement or the rather advertising Brand Tagline.

To get an even better understanding, here are some high-quality examples of Brand Mantras.

What are great Brand Mantra Examples?

In his book The Ad-Free Brand Chris Grams asked branding expert Kevin Keller about his five favorite Brand Mantras of all time:

As you can see, all five Brand Mantras have a maximum of five words, communicate the category, and bring the uniqueness of the brand to the point.

For further reading on these five Brand Mantras see Chris Grams’ article on Medium, where Kevin Keller explains why these Brand Mantras ideally summarize the brand positioning of these five companies.

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