Five steps to position a product or service

When defining your product or service offering, it is vital to understand what customer value you aim to deliver and to whom. However, this alone is not enough: a target position for the product and its brand is also needed in the market.

In 1972, Al Ries and Jack Trout published a series of articles, and later the book Positioning: The Battle for Your Mind. The authors presented a theory on how communication can position a product in a desired way. Later, Kotler clarified that positioning is a strategic process in which a company determines how its product, service or brand should be perceived by customers in relation to competitors.

How do you find the right product-market fit and position?

A company’s success depends on how well its product-market fit works. In other words, whether the chosen position is right and the solution lives up to the promise and image attached to it. The product, related services, and purchase process must deliver value that the customer is willing to pay for, and this value creation must surpass that of competing solutions. Scenarios are also an excellent tool for defining product-market fit and positioning.

These five steps will help you position your solution and ensure product-market fit:

1. Define your primary customer and understand how value is created

• Who is the product or service designed for?
• Who is the primary buyer, and who else uses the product or service or influences the decision?
• Which customer need or problem does the product solve?
• Is the value for the customer functional (meeting basic needs) or does it involve emotional or self-actualisation elements?
• What part of the value comes from the product itself, and what is delivered through the purchase process, service, or brand?

2. Map the competition and market

• s the product or service entirely new, disrupting the market, or competing with existing alternatives?
• Who are the main competitors?
• What attributes do customers associate with competing brands? What are the brand characteristics driving the market?
• Where does indirect competition come from? (For example, for an Italian restaurant, the main competitor may not be Kotipizza, but Ooni on a home terrace.)

3. Ensure differentiation

• What makes the product or service unique or more attractive?
• How does the product or its purchase process differ from competitors?
• Which functionalities do customers value in the product?
• What kind of product family supports success and strengthens the value delivered to the customer?
• What price point does the product hit?

4. Build the customer experience and brand

• What brand position are you aiming for with the product or service?
• What attributes do you want associated with the product?
• Is the product part of an established brand, and how does brand value extend to cover it?
• Or is this a completely new brand that must build recognition from scratch?
• How does the customer experience support the chosen brand position?
• How is the desired customer experience ensured?

5. Market and communicate the solution

• How will you communicate about the product or service to your target group?
• Which messages will appeal to and reinforce the chosen product and brand position?
• How will you reach your primary customer? Which channels should you use?

Even if a product or service’s position is not explicitly defined or led, every product on the market has a position.