Creating a Positioning Matrix for Your Brand: Explanation and Examples
Positioning Matrix Meaning and Definition
The definition of a positioning matrix is:
A positioning matrix is a strategic tool that allows a brand to determine its positioning relative to competitors and identify opportunities for differentiation.
What is a Positioning Matrix
A positioning matrix is a matrix, a rectangle containing one horizontal and one vertical axis. These axes represent the two most important elements of differentiation in the market and are used to place brands or companies. The axes also divide the matrix into segments, creating quadrants that allow brands to be categorized. Naturally, a brand’s position in the matrix reflects its positioning relative to the competition.
Positioning Matrix Kotler
Kotler’s positioning matrix – developed by one of the founders of contemporary marketing – remains a widely used variant. Price and quality are the axes upon which he classifies brands, which might look something like this:
Kotler’s positioning matrix: price and quality are the axes
Kotler, and much of the marketing literature, focuses on the marketing of consumer goods, specifically Fast Moving Consumer Goods (FMCG) like detergent, for example. This may not be the right positioning matrix for contemporary brands to use, unless you are also selling detergent or fruit juice. Your competitive field is likely more complex than just price and quality.
Why Create a Positioning Matrix?
We create a positioning matrix to find opportunities for differentiation from our competition. This is intended to help us, for example, gain a larger market share or improve our margin.
However, the biggest opportunities for differentiation aren’t about percentage differences in price or slightly higher quality. The greatest opportunities for differentiation are found when you reinvent your product or service. Apple reinvented the mobile phone, Tesla turned our concept of electric driving on its head. These are now two of the most valuable brands in the world. This principle also applies in B2B, where IBM continuously reinvents itself and changes what it stands for.
In the book Blue Ocean Strategy, INSEAD professor W. Chan Kim argues that brands should not seek to beat their competition but rather create a new market in which they are the undisputed leader. Consider the traditional circus and Cirque du Soleil; both are circuses in a tent, but it’s clear that the two concepts are worlds apart.
Do you see how this difference in positioning doesn’t fit neatly onto the axes of price and quality?
Positioning Matrix Axes
Samsung and Apple: two brands that view differentiation in the same market differently
The axes of the positioning matrix are, of course, determined by you. What factors are the most important elements for differentiation in your market? This makes the axes the biggest pitfall in using the positioning matrix.
For Apple, differentiation might revolve around design and ease of use, while Samsung’s mobile division might emphasize camera and screen quality. Both companies lead in their own matrix, but Apple takes the lion’s share of the profits. Which matrix then best represents what is distinctive in the market?
Positioning Matrix for Companies
In the case of a corporate strategic issue, we always invest a lot of time in determining the right axes for the positioning matrix for our clients. We analyze the competition and available market information to determine what the (future) most important factors for differentiation are. In consultation with the client, we then determine the axes.
In such situations, it’s also common for us to create multiple positioning matrices so that the client can test their market view. This helps, for example, in making strategic decisions regarding investments, product development, and acquisitions.
Positioning Matrix in Marketing: Objectivity is Crucial
But usually, a client needs a marketing positioning matrix. With this, we map out the landscape from a purely marketing perspective with the aim of determining the desired marketing strategy. In this case, many corporate strategic choices and assumptions are taken as given.
Objectivity is crucial in this regard. Every team has blind spots concerning their own brand and biases against the competition. What matters is how the target audience views their brand. Therefore, we almost always use the same axes in a marketing positioning matrix: medium and message. The Positioning Matrix then looks as follows:
An empty Merkelijkheid Positioning Matrix
Make no mistake, there are plenty of extremely successful brands that feel right at home in the Ego/Conservative quadrant. It’s not about where your brand is located in the model, but whether it has found a unique position within it. Objectively looking at your own brand and market is difficult, which is why we have chosen the following axes:
Positioning Matrix Axis: Medium
The horizontal axis ranges from conservative to progressive, referring to how you conduct your marketing. Does the brand use new techniques and technology, try new things, or is it forward-thinking in another area? Then the brand is progressive. If the brand primarily uses traditional marketing tools and media, then it is conservative.
Positioning Matrix Axis: Message
The vertical axis runs from Ego to Social and revolves around the brand’s message; are you primarily focused on yourself or is someone else the focus? Being focused on oneself is not wrong, as many people prefer to choose the biggest/best/most famous brand simply because they appreciate that certainty. However, in many markets, an Ego attitude is the norm, so a brand distinguishes itself with a more social message.
Of course, this positioning matrix is subjective, as they all are. But by choosing these more objective axes, you can look at your own market without blinders. Let’s take an example, supermarkets, and show you that it’s entirely possible to quickly come to a clear market view.
Positioning Matrix Example: Supermarkets
The following image is an example of a positioning matrix:
Positioning Matrix for Dutch Supermarkets with Newcomer Online Supermarket Picnic
Albert Heijn is a leader in the supermarket market but as a market leader, it often focuses on itself. Big competitor Jumbo is much more social but its background (and target audience) is also more conservative. The discounters have a conservative marketing approach (flyers, advertising, design) and continue to emphasize their low price level.
Challenger Picnic, the online supermarket, is positioned at the top right of the matrix, for example. They sell exclusively via an app, also take back packages, and are not strict about deposits. In addition, they tell you how much rain you’ve avoided, how much CO2 you’ve saved, and that you’re spending less money because they don’t have physical stores. Sounds like they found a gap in the market, doesn’t it?
Positioning Matrix of competition
A crucial step in placing competition in your positioning matrix is research and analysis. Before starting the research, discuss as a team which marketing and communication aspects will be considered in the positioning. It’s essential that each competing brand is measured in the same way. Otherwise, it will be difficult to compare later on. For clients in B2B, for example, we look at:
- Social media activity (LinkedIn, Twitter, Facebook, Instagram)
- Website design and texts
- Blogs and articles
- Trade show stands
- Advertisements in trade magazines
- Online advertisements
Only after this has been set out for all competitors, and your own brand, can you start to analyze. Ask yourself, what are the norm and average in this market, and where does this brand stand in relation to that? By going through this process as a team, you come together to a clear market view with the positioning matrix.
B2B Positioning Matrix Example
Positioning is becoming increasingly important in B2B environments as well. Therefore, the positioning matrix is also gaining more attention in B2B. The example below is the B2B market situation of one of our clients.
Positioning Matrix Example from B2B Practice
Especially in more traditional (B2B) markets such as industry or business services, the above market view often occurs. Here we see the following:
- The market leader (1) wants to maintain its market share (ego) and therefore uses proven marketing tools, channels, and methods (conservative)
- The number 2 in the market challenges the market leader and thus positions itself more socially but does not want to contrast too much with the market leader
- A number of smaller players choose their position based on the positioning of the big two
Our client noticed that they were unable to sufficiently convey their unique selling points to the market. The above matrix explained why. Driven by the personal motivation of the CEO, they chose to behave more progressively and convey a more social message.
In the future, this should be further pursued; the company should act even more socially. But changing a positioning never happens in huge steps, as the impact on the organization and the target audience would be too significant. A brand gradually moves towards the positioning it wants to adopt.
Using the Positioning Matrix in 7 Steps
You fill in the marketing positioning matrix according to the following steps:
- Select Competitors: Consider including new competitors who may currently have a small market share.
- Determine What to Investigate: Decide on the aspects of marketing and communication to be analyzed.
- Conduct Competitor Research: Gather data on your competitors.
- Analyze the Outcomes of the Competitor Research: Review and interpret the data collected.
- Place Competitors in the Positioning Matrix: Map out where each competitor stands in relation to others.
- Place Your Own Company in the Positioning Matrix: Identify where your brand fits within the competitive landscape.
- Discuss Opportunities for Differentiation: Evaluate where there are chances to stand out and what implications these have for your positioning, marketing, and behavior.
Do you need assistance or would you appreciate expert guidance through this process? Merkelijkheid can provide you with the support you need to create and implement a strong positioning for your brand. Please schedule an appointment through our contact page.
Brand Positioning Matrix
The positioning matrix originated from the concept that a brand is associated with a product. Coca-Cola battled Pepsi, Persil against Robijn, and Nutella against Duo Penotti. But what if a brand represents a much more complex combination of products and services? In such cases, the positioning matrix is often a useful tool for strategically examining a specific product-market combination. However, looking at the positioning of a brand as a whole often requires more.
We’ve gathered various positioning models on a handy page where you can also find links to more extensive resources. A model that often helps us in practice is the brand archetype model; take a look at that as well.
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