STP 2 – Positioning

Competition in the market is almost always present, and to survive in this environment, effective positioning is essential. With strong positioning and meaningful differentiation, even if you can’t outperform your competitors, you can still coexist and succeed alongside them.

For example, many pencil manufacturers don’t aim to make customers choose only their products over competitors’. Instead, they focus on encouraging customers to buy their pencils in addition to others by positioning themselves effectively in the market.

How can we establish a strong market position? One effective process involves three key steps: (1) identifying competitors, and (2) selecting a competitive position.

Step 1: Identifying Your Competitors

To identify competitors effectively, it is essential to first understand the customer’s problem. This approach reveals not only direct competitors but also potential and substitute competitors. For instance, if we consider pizza as a product that satisfies the customer’s need for a delicious and quick meal, its competitors are not limited to other pizza shops. Hamburger chains and other fast-food providers also compete for the same customer need. Of course, we can also use Porter’s Five Forces to identify competitors (see Chapters 2–5).

Step 2: Selecting a competitive position

2-1. Crafting a Positioning Statement

Once we’ve identified competitors, the next step is to select a competitive position. A simple, useful, and widely adopted approach is to create a positioning statement.

A positioning statement clearly expresses how you wish to be perceived by a specific target market. It communicates the intended meaning of your brand and guides strategic decisions across your marketing mix.

A widely used format for crafting a positioning statement is:

Among [target market], [X] is the brand of [frame of reference] that [point of difference], because [reason to believe].

Each element of the positioning statement plays a distinct role:

• Target Market: Who are you trying to reach?
• Brand (X): What is your brand?
• Frame of Reference: What type or category does your product belong to?
• Point of Difference (POD): What makes your product stand out?
• Reason to Believe: What evidence or attribute supports your claim?

Example: Among [snackers], [Snickers] is the brand of [candy bar] that [satisfies your hunger] because [it’s packed with peanuts].

Another useful format is:

• Template: To [target audience], [X] is the brand of [competitor category] that [unique advantage or differentiator].
• Example: To value-conscious consumers of all income levels, Target is the brand of discount retailer that delivers great design at reasonable prices.

2-2. Perceptual Maps

A perceptual map can also be a valuable tool in crafting positioning. It visually represents how consumers perceive different brands or products along key dimensions—such as price, quality, innovation, or convenience. By analyzing where competitors are located on the map, businesses can identify gaps in the market, understand consumer perceptions, and position their brand in a distinct and meaningful way. This helps ensure that the positioning strategy aligns with actual customer insights and stands out in a competitive landscape.

Cautions for perceptual map

However, when using a perceptual map, certain cautions should be considered. For example, when a company identifies a “white space”—an area with few or no competitors—it may appear to be an untapped opportunity. However, this space might also lack customer demand or present technical or operational challenges. Therefore, companies should carefully evaluate whether the absence of competitors indicates a genuine market gap or an unattractive segment.

Furthermore, even if a “white space” appears to be an opportunity, it can be easily imitated by competitors—especially if the perceptual map is based solely on product features rather than on solving customer problems.

2-3. Focusing on Customer Problems

When companies focus on addressing the customer’s underlying problems instead of just highlighting product attributes, they can differentiate more effectively across various dimensions. This makes their positioning harder for competitors to replicate.

In the widely known article “Finding the Right Job for Your Product” by Clayton M. Christensen and colleagues, the authors present a compelling example from the furniture market. Many companies in this industry are stuck in a traditional positioning paradigm—mapping brands based on axes like breadth of selection, style, and price/quality.

However, the authors suggest that there are fundamentally different ‘jobs’—that is, core problems a customer needs to solve in a given situation—that customers hire furniture to do, and these jobs are not adequately captured by this conventional framework.

One such job arises when people move into a new apartment or starter home and need functional, affordable furniture immediately. IKEA targets this job with its in-stock, self-assembled furniture kits. These features are not seen as compromises but as advantages that suit the urgency and budget-consciousness of these customers. IKEA further supports this positioning by offering home essentials, self-service, and even in-store childcare to ease the customer experience—particularly for young couples.

In contrast, another job is furnishing a long-term residence with high-quality, stylish items. Customers who hire retailers for this job expect broad selection and are willing to wait for delivery. These two distinct jobs illustrate how companies like IKEA succeed by focusing on the job to be done rather than just competing on product attributes.