According to Trout and Ries, "positioning is not what you do to a product. Positioning is what you do to the mind of the prospect. That is, you position (place) the product in the mind of the potential buyer". Since that time in marketing, positioning is the technique in which marketers try to create an image or identity for a product, brand, or company in the perception of the target market. What matters is how potential buyers see the product. It is expressed relative to the position of competitors. Typical positioning tools include graphical perception mapping, market surveys, and certain statistical techniques.

Competitive Edge and Positioning

A successful positioning strategy is usually based on a sustainable competitive advantage of a company. Positioning can be based on several things, including:

· Product features

· Benefits, needs, or solutions

· Use categories

· Usage occasions

· Placing and comparing it relative to another product

· Dissociation of the product class

Three bases of positioning can be distinguished

1. Functional (solve problems, provide benefits to customers)

2. Symbolic (self-image enhancement, ego identification, belongingness and social meaningfulness, affective fulfillment)

3. Experiential (provide sensory stimulation; provide cognitive stimulation)

Steps in Product Positioning. Process

· Identify competing products

· Identify the attributes, also called dimensions, that define the product 'space'

· Collect information from a sample of customers about their perceptions of each product on the relevant attributes

· Determine the share of mind of each product

· Determine the current location of each product in the product space

· Determine the target market's preferred combination of attributes. These are called: an ideal vector.

· Examine the fit between: the positions of competing products, the position of your product and the position of the ideal vector

· Select the optimum position

Three Positioning Strategies by Youngme Moon

In an HBR article of May 2005, Youngme Moon introduced three variations of Positioning that can be used to break free from Product Life Cycle thinking. Companies can change how consumers perceive them. By Positioning or often Repositioning their products in unexpected ways. Three positioning strategies that marketers use to cause a mental shift at consumers are Reverse, Breakaway, Stealth Positioning:

1. Reverse Positioning. This method removes "sacred" product attributes. Simultaneously new attributes are added that would typically be found only in a highly augmented product. For example IKEA is not delivering to your home the products which you have bought, and it offers no sales consultancy. But IKEA added: children drop-off, cafe, toys). Recommended for: Services companies.

2. Breakaway Positioning. This method associates the product with a radically different category. By manipulating the cues of consumers of how they perceive and categorize a product, a firm can change how consumers frame a product. (ex. Swatch > no longer in category Swiss Watches, but in Fashion Accessories). Recommended for Packaged Goods companies.