A popular approach used by marketers to help sell products to specific market segments, product positioning refers to establishing a genuine or perceptual difference between your product or service and those of competitors. Product positioning may focus on tangible or intangible elements of your product. The positioning approach does offer a number of strengths, but it suffers from at least one major weakness, especially for smaller businesses.


Consumers face communication channels filled or even overfilled with marketing and advertisements. The fragmentation of consumer attention across an expanding number of communication channels, ranging from standard network television, streaming video and music online to massive multiplayer games and blogs, magnifies this problem. Positioning focuses on a particular group and highlights and simplifies the product elements that speak to that market segment, allowing the message to cut through the communication clutter.

Cost Savings

The narrowing down of the market segments that drive positioning can help reduce advertising costs by limiting the communication channels employed to deliver advertising. A business would likely forgo most or all online advertising on a product aimed at senior citizens, because that market segment spends a minimal amount of time online. On the other hand, a business could probably limit television advertising or focus on a small handful of channels for products aimed at the twenty-something crowd, because that segment spends comparatively limited time watching TV. The exclusion or limitation of any communication channel -- TV especially -- can mean a substantial savings in your marketing campaign.


First-to-market or first-to-category products tend to hold onto a massive piece of their market segments, even after competitors move into the field. A first-to-market or first-to-category product frequently becomes the premium product by default, and, within limits, this allows the business to set premium pricing levels over the long haul. If a business leverages economies of scale and the reduced learning curve on subsequent versions of the product, positioning as the premium can mean significant profits.


The expense associated with the research that normally precedes product positioning represents the main weakness of the approach. Larger companies often hire marketing firms to conduct extensive research, including surveys and in-depth focus groups, to pin down the right market segment and select the appropriate packaging, color schemes and even the most appealing word combinations. Most small businesses lack the resources to deploy a high-powered marketing research firm and must rely on less-formal methodologies to create product positioning. This may result in inadequate preparation and lead to a less-effective product positioning campaign.