Positioning is the essence of marketing strategy, and some would say of all business strategy.
It’s about how your business is different from the others. It’s about what your business does for people that other businesses don’t do.
The positioning statement template
I’m not sure where this classic positioning statement template started, or whom to credit, but I’ve found it very useful for years of developing business plans.
“For [target market description] who [target market need], [how our business offering meets the need]. Unlike [key competition], it [most distinguishing feature].”
Here’s an example of that template in action for a social media consulting service, with the components separated:
“For [small business owners who want social media marketing but don’t have time to do it themselves], our social media services [do it for them without taking their time and effort]. Unlike [most social media consulting], [we don’t just advise; we do the work].”
Another example for a healthy fast food restaurant:
“For [busy people who want healthy foods but need fast meals], [we offer organic healthy fast foods]. Unlike [most fast foods offerings], we [offer fresh local ingredients, organic, grilled not fried, with a lot of vegetables and vegetarian options, and free-range meats].”
The examples show how the positioning statement sets the business and its offering apart from others. It implies strategic focus and a strategic match between target market, market need, and business offering. It’s a great tool to help you view your own business strategically, and to explain your strategy to outsiders when necessary.
I also like to explain positioning graphically with diagrams, like this simple one from Philip Kotler’s iconic textbook, “Marketing Management,” that shows positioning related to breakfast:
The diagram illustrates simple positioning related to breakfast. Breakfast can be slow or quick, and expensive or inexpensive. Pancakes might compete with hot cereal for slow and inexpensive, but bacon and eggs are different because they are slow and expensive. The instant breakfast doesn’t compete with bacon and eggs. That’s positioning.
To do your own positioning diagram, start with creative thinking about how you can divide your market in terms of variables that make strategic sense. In the example below I decided to organize the automobile market according to two factors: economical versus expensive, and practical versus fun. If I were looking to position specific cars with this, I’d put a luxury SUV on one extreme as practical and expensive; and a Mini-Cooper on another, as economical but fun.
I hope you can see how this kind of positioning diagram can lead to strategic thinking. What kinds of cars compete against the Mini-Cooper? What kinds of cars compete in the luxury SUV area? I hope you can also see how the positioning will help set marketing strategy, marketing messaging, and so forth.
We could take this diagram and develop a formal positioning statement for the Mini-Cooper:
For people who like fun-to-drive sporty cars but can’t afford to spend what a Porsche costs, the Mini-Cooper S offers a small car with great cornering and good acceleration that costs only about $30,000.
You may notice that the positioning diagram example here is a lot like the competitive matrix that appears in many business plans. That similarity is not an accident. The competitive matrix that appears in many plans and pitches is a direct descendent of the positioning diagram that Philip Kotler first popularized in the 1970s and 1980s.
What I wrote in an earlier discussion of the competitive matrix also applies here, with positioning:
“Don’t, please, discount [this] as an internal tool to help with strategy development and specifics of designing products.
For this use, you don’t worry about showing how what you have is better; you use it to look for holes in the market, and needs that aren’t covered, so you can lead product development toward solutions that are better business opportunities.”
Place it in your plan where it achieves your goal
So which do you include in your business plan: competitive matrix, positioning statement, positioning diagram, or two or even three of these components? As with so many elements of a good business plan, this depends on the exact goal of your plan and the nature of your business.
If your plan is to serve as background information for raising angel investment, then you’ll need a pitch deck; and either your positioning diagram or your competitive matrix will be one slide in the deck. Don’t give your investors both.
If you use the more trendy competitive matrix, include it in the part of the presentation that you’re using to explain and develop your product, product positioning, or marketing. Put it close to your relevant information, and be flexible, because the flow of a pitch depends on the specifics. If you use the more traditional positioning diagram, keep it close to strategy or marketing strategy.
Within the plan itself, in that case, include the formal verbal positioning statement as part of marketing strategy. Done right, it’s concise and communicates strategy very well. Set it aside as a “positioning statement.” That specific phrase will be meaningful to people who have studied marketing.
If you’re doing a lean business plan, use the positioning statement and the positioning diagram to help with strategy development. It fits into strategy or tactics, and concrete specific actions to react to your competitive positioning could easily be milestones.