What Is Product Positioning?
Product positioning is the decision about how you want a specific group of customers to see your product, compared to whatever else they might use instead. It answers three questions: what problem do you solve better than anyone else, who exactly is that true for, and why should that person pick you over the alternative they'd otherwise use? Positioning is not the same as a tagline or a catchy slogan. It's the underlying strategic decision that a tagline, a landing page, or a sales pitch all get written from, once that decision has already been made.
Quick facts
- Positioning answers: who is this for, what would they use instead, and why are we the best choice for them?
- It's a strategic decision that comes before marketing writing, not the marketing writing itself.
- The most widely used modern framework comes from a book called Obviously Awesome, by April Dunford, and has five parts: competitive alternatives, unique strengths, the value those strengths create, the target customer, and the market category.
- A sign of bad positioning: your own sales team pitches the product differently in every single conversation, because there's no shared, agreed answer to "who is this really for, and why us."
- Positioning is closely related to, but different from, the Value Proposition Canvas and the Business Model Canvas.
The five-part positioning framework
| Part | The question it answers |
|---|---|
| 1. Competitive alternatives | What would your customers use if your product didn't exist? This is often not a direct competitor — sometimes the honest answer is "a spreadsheet," or even "nothing at all." |
| 2. Unique strengths | What do you have that those alternatives don't? |
| 3. Value | What does that strength actually let the customer do, or achieve, that matters to them? |
| 4. Target customer | Which group of customers cares most about that value? This should be a specific group you can clearly win with — not simply "everyone who could theoretically buy this." |
| 5. Market category | What existing, familiar idea should customers compare you to, so your value is obvious right away? Calling something a "project management tool" sets very different expectations than calling it an "AI work assistant," even if the product is similar. |
A template you can fill in yourself
For [target customer], who currently use [the alternative they use today],
[your product name] is a [market category] that [the key value you deliver],
unlike [the main alternative], we [what makes you different].
A worked example, using a made-up invoicing tool called Ledgerly, the same example company used elsewhere on this site:
For small B2B service businesses who currently manage invoicing using spreadsheets or general-purpose accounting software, Ledgerly is a purpose-built invoicing platform that gets invoices paid 40% faster through automatic follow-up reminders. Unlike general accounting software, Ledgerly is built only for invoicing, so setup takes 10 minutes instead of a full onboarding project.
Why positioning and messaging get confused
Messaging is the specific wording you use — the words on your landing page, in your sales deck, or in an ad. Positioning is the strategic decision that those words are supposed to express. Teams that skip positioning and jump straight to writing messaging tend to end up with phrases that sound nice but fall apart the moment someone asks a follow-up question. Phrases like "best-in-class," "all-in-one platform," and "powered by AI" are messaging with no real positioning behind them — which is exactly why you can find those same three phrases on thousands of completely unrelated products.
When you should redo your positioning
- You've expanded into a new group of customers who care about different things than your original customers did.
- A new alternative has shown up in the market — including customers deciding that "doing nothing" is now a real option, because something has shifted.
- Your sales team is pitching the product differently every time, because there's no shared, strategic answer to "who is this for, and why choose us."
- You've changed direction as a company, or shipped a major new feature that changes who your real competition actually is now.
Common mistakes teams make with positioning
- Writing the tagline before deciding the positioning. This produces messaging that sounds good in a meeting but falls apart the moment a prospect asks "compared to what?" — because there was never a real strategic answer underneath it.
- Trying to position a product for everyone at once. A positioning statement that tries to appeal to every possible customer usually ends up meaning nothing specific to any of them. Strong positioning deliberately leaves some potential customers out.
- Never revisiting positioning after the market changes. A positioning statement written two years ago, before a new competitor entered or the product changed significantly, can quietly stop matching reality — while the marketing and sales materials built on top of it keep repeating it anyway.
- Confusing your company's internal view of its strengths with what customers actually value. Positioning has to be grounded in what the target customer cares about, not just what the team is proudest of building.
How to sanity-check your positioning
A simple test: read your positioning statement to someone who fits your target customer profile but has never heard of your product, and ask them to explain, in their own words, who it's for and why they'd pick it over what they use today. If they can't do that in one or two sentences, the positioning likely isn't specific enough yet — either the target customer is too broad, the competitive alternative isn't the real one they'd actually consider, or the unique value isn't clearly tied to something they care about.
FAQ
Who created the positioning framework used most today? The five-part framework widely used in product and marketing teams today comes from April Dunford's book Obviously Awesome. It builds on older positioning ideas first written about by Al Ries and Jack Trout.
Is positioning the job of product management, or product marketing? Usually both are involved. Product management typically owns the underlying understanding of the customer and the real competitive alternatives. Product marketing typically owns turning that positioning into the actual words customers see. At a smaller company, one person often handles both.
How is positioning different from a value proposition? A value proposition focuses specifically on the benefit you deliver to the customer. Positioning is broader — it also defines exactly what alternative you're being compared to, and what market category shapes how customers understand you in the first place.
Do consumer products need formal positioning too, or is this only for business software? Yes, any product with a real choice of alternatives and a specific target customer benefits from this framework — though consumer positioning often leans more on emotional or lifestyle differences, while business-to-business positioning usually leans more on specific, practical differences.
How specific should the target customer in a positioning statement really be? More specific than most teams are initially comfortable with. "Small B2B service businesses that currently invoice through spreadsheets" is useful and specific; "small businesses" is too broad to guide any real decision. If the target customer description could apply to half the market, it isn't doing its job yet.
Does positioning need to change every time you add a new feature? No — only when a new feature changes who your real competitive alternative is, or meaningfully shifts which customer segment gets the most value from the product. Most feature launches don't require a positioning change; a genuine shift in target customer or competitive landscape does.