E-commerce Product Positioning: Definition, Key Elements and Top 6 Strategies for 2020

By Eric Ogero June 10, 2020
E-commerce Product Positioning: Definition, Key Elements and Top 6 Strategies for 2020

This is a complete guide to product positioning.

In this new guide you’ll learn exactly how to position your product in a competitive environment, including:

  • Definition
  • Key elements
  • Best strategies
  • Lots more

Ready?

Let’s get started.

Whether you’re a well-established enterprise organization or a small startup, and whether you’re planning to launch your very first or 100th product, there is always a substantial list of priorities and to-do’s to tend to before your product hits the market.

Some of these include:

How do you plan to sell your product?

What assets, digital or otherwise, do you need to create and promote the product?

What’s the most efficient and cost-effective way to distribute the product?

Who do you need to bring onboard to ensure high customer service satisfaction?

And so much more.

It’s tempting to try and address all these questions at the onset.

In fact, many business owners spend a significant chunk of their time and resources trying to do exactly that.

Often times this leads to poor product performance and dismal revenue as this should not be the top priority.

Instead, your priority should be trying to learn exactly where your product fits in the market, how the product can be differentiated from similar existing products i.e. its uniqueness, and why customers should invest their hard earned money to buy your item i.e. what existing problem does it solve?

This, in a nutshell, is what is referred to as product positioning.

It is the most important aspect that should be considered if a product is to be successful in a competitive market both in the short and long term.

A brief Look at:

What is Product Positioning?

As outlined above, product positioning is about understanding where your product fits in the market, the features that differentiate your product, and then communicating how the commodity is better than existing products, or how it provides a superior solution to the existing alternatives.

Effective product positioning is about establishing a spot in the competitive landscape in order to stick out from the crowd.

It’s about creating an impenetrable position that competitors can’t just overshadow thus guaranteeing longevity and long-term profitability.

Many businesses erroneously consider this to be “marketing” and put it in the backburner or simply assign it to the marketing department as a run-of-the-mill marketing task.

This approach rarely works out in their favor.

On the contrary, the position of a product should not be an afterthought. It should be engineered into the product itself from the get-go to build a strong competitive advantage.

Below are a few of the best strategies a business can use to position its product(s) in an ultra-competitive environment.

1. Cater to a Specific Niche

This is commonly referred to as niche marketing. It is considered one of the most effective product positioning strategies because it targets a very specific section of the market that is more likely to connect with the product and actually buy it.

By focusing exclusively on one group it allows a product or brand to differentiate itself, appear as a unique authority, and resonate more deeply with its target customers.

Oftentimes niche markets are segments of larger industries that are ignored or not sufficiently catered to.

By building your product/brand to serve this underserved segment and solving their problems you are likely to find great success.

An excellent example of a brand that managed to do this in their industry is Divvies.

There are literally hundreds of businesses that sell sweet and flavored pastries such as brownies, cupcakes and cookies.

Most people can easily satisfy their sweet cravings by choosing from dozens of such brands.

However, a certain group of people who suffer from allergies, or have negative reactions to food made from nuts and animal products don’t have the same luxury.

Divvies recognized this underserved segment in the pastries industry and created food products that cater exclusively to this population.

Selling cakes, pretzels, and pies is not a unique idea. But selling them as nut and vegan-free options in a highly saturated market allowed Divvies to differentiate themselves and establish a loyal customer base.

Editors note: I reached out to Rafal and Sean and here is what they had to say:

Rafal Kloc Marketing Manager @ LiveSession says that you won’t get far without in-depth research of both your competitors and your target audience.

First, you need to spot a niche, ideally a narrow yet profitable one. Find the main pain points of your potential customers and focus on creating a solution that answers these needs.

With this strategy, you’ll be able to position your product as something that fills a significant gap in the market.

Also Sean Doyle Co-Founder, Principal, Director Of Strategy at Fitzmartin says that the key to positioning any product/company/service is the same, because every market is competitive. Successful companies create a position around a few simple ideas:

Be an expert. Be great at what you do. There is no sustainable position for an inferior product or service.

Speak to the needs/wants of your customers. Point of view is everything. There should be no ambiguity in how you are able to solve the customer’s wants/needs/problems. Remember always, it’s not about you.

In everything you do, speak to your position with clarity. If something doesn’t support your position, don’t do it.

Your position must reflect your core values, the things you are unwilling to compromise. And everyone on your team must know, understand and reflect those values.The idea of positioning is easy. Executing it is hard and requires discipline to sustain it over time.

2. Differentiate Your Product

Once you’ve settled on a particular niche, as a business owner you need to learn how to differentiate your product from the massive sea of products in a variety of other ways that will pique your customers’ interest and help your product stand out in a positive light.

This can take a variety of different forms.

Here are a few key ways to make your product unique in the eyes of your customers.

A. Add a personal touch

Small personal touches on a product can make a huge difference in attracting your target customers.

This is because shoppers are humans, and as humans we generally tend to seek in-person (emotional) experiences and connections.

One super effective way to establish this connection is by showing how your product is made.

If it’s a food product you can produce a video showing the ingredients used and the processes followed until the final stage.

For non-edible products you can show the manufacturing, assembling e.t.c processes and how the product is packed and shipped.

Video demonstrations are usually the best to convey this. However, you can use infographics, or articles and blog posts with simple words that can easily be understood by the general population.

One business that best embodies this strategy is RetroPlanet. In a short blog post the company showed off the actual equipment they use to produce their wall decals.

They capped off the post with a short 11 second clip of their printer in action.

This transparency helped their product gain great credibility.

Editors note: I reached out to Roger and here is what he had to say:

Roger Dooley author of Friction and Brainfluence says that today, the key to getting new customers and keeping them is simplicity and convenience.

Removing every bit of friction not just from the ordering process but from product search, customer service, account management, etc. will set you apart from your competitors.

Of course, there are a number of ways to position your brand – low price, high performance, luxury/status, social responsibility… even humor.

The important thing is to be different in SOME way that customers remember.

B. Be socially responsible

Try making your business socially responsible.

Sometimes all a product needs is a business with a good social reputation to make it in the market.

According to a Nielson survey, 50% of shoppers are willing to pay more for commodities and services from companies that have established programs that give back to the community.

People will respond positively to your product once you show them that you are really concerned about them instead of just making profits.

Social responsibility can be expressed either through establishing charitable foundations, supporting community programs by promising to donate a certain percentage of all product sales, providing business employees with fair wages and benefits such as tuition assistance, e.t.c

C. Use price to distinguish your product

This doesn’t necessarily mean selling the product for the cheapest price, although in some scenarios it is sometimes a viable way to go about it.

However, unless you can afford to wage a price war a race to the bottom is not the best route to take.

Instead, take advantage of the variety of pricing models in the market to win over your target demographic.

You can offer lower prices for orders above a certain quantity i.e. sales discounts. Similarly, you can separate your markets and charge each segment differently depending on the economic status of each region.

Done right, you should be able to attract a large customer base with the lower revenue from one region being balanced off by the higher revenue from the well-to-do areas. 

On the flip side, you can even choose to charge higher prices if your product is of much higher quality than that of your competitors.

Do your research. Sample the different pricing models and choose one that is most compatible with your product and industry.

Editors note: I reached out to Rachel and here is what she had to say:   

Rachel Foster CEO and B2B copywriter at Copywritertoronto says that both businesses and consumers are cutting their spending and buying only the essentials.

To protect your profit, customers must view your product as a must-have—not a nice-to-have.

You may need to rethink your positioning so that you can meet your customers where they are now.

How does your product provide them with value and help them solve the problems that they face today?

Update your existing content, or create new content, that reflects your customers’ new pain points and goals.

D. Modify your product regularly

Check this out.

On the surface, 52 Teas is just an ordinary company that brews tea. That is, until you realize they brew a completely new brand of tea each week!

This company devised a unique way to position their product by basically impressing their customers with a different brand of tea every single week– which is a huge step-up from most tea brewing companies that tend to produce and market the same product and only occasionally introduce something new.

What’s also impressive about 52 Teas is they allow their customers to participate.

Their unique weekly brews are based on the suggestions they get via emails and social media.

While most businesses cannot alter their products weekly, or even monthly for that matter, it’s worth looking into your product to determine if it is in the unique category where this is possible.

If this is possible in the tea brewing industry, chances are it’s possible in a variety of other industries as well, including yours!

Editors note: I reached out to Guillaume and Jessie and here is what they had to say:

Guillaume Moubeche Co-Founder & CEO @ lemlist says that In his experience, three factors were crucial in positioning lemlist in a super competitive industry.

First, you want to have a clear differentiator early on, something that makes you stand out.

It’s also important to help your customers become successful and grow their business by using your product consistently over time.

If you can help them do that, then breaking through the noise becomes easier.

After that, continue to improve your product and bring even more value (that’s why we built the biggest community around sales automation).

Finally, you want to create a loveable brand and protect it at all costs.

Jessie Paul, CEO at PaulWriter advises that a successful Recession marketing strategy is to grow by taking away marketshare from others.

Any product today has to be sensitive to its “COVID Context” – ie how relevant is it to the customer’s current world view, and is it more relevant than its competition.

Second, we have to consider the Recession Relevance. How can we make the product relevant to the businesses and individuals that continue to have money to spend?

Here’s a template that will help map the COVID Context and Recession Relevance ( https://paulwriter.com/what-can-you-sell-in-the-covid-recession).

Success stories are plentiful. Apple launched the iPod and iPhone at a time when there was an economic downturn.

Lego survived the 2008 crash by expanding to global markets.

And Kellogg’s overtook Post during the Great Depression by outspending them as if nothing was wrong.

E. Provide a bonus product

Try offering your customers a bonus every time they purchase a unit of your product.

Just look at the Amazon example below.  

Notice, once you buy the fanny pack you automatically receive a “multi-purpose scarf” absolutely FREE. The message is super clear, you get two items for the price of one.

Depending on your industry and target customers, this subliminal messaging can go a long way in helping boost your product position and sales.

Take away: Think of a small item that you can either produce locally at an extremely low price, or buy, or cheaply outsource, that you can easily throw in with your main product.

This extra item provides a nice incentive and causes people who would have otherwise ignored your product to take notice and even make a purchase.

3. Target New Markets

There are some business environments that are simply oversaturated. While you may successfully break into such markets you may not fully realize the customer numbers and revenue you seek, at least not for a long time anyway.

In such a case, don’t just focus on a niche market in one region. Instead, try also casting your nets wide to other regions and marketplaces to spread your risk, increase your product exposure, and ultimately your revenue.

For instance, if you were planning to cater only to a specific audience in your country it might be helpful to also consider selling to the same niche group overseas.

Before taking this leap though, start by conducting market research to determine how your product will be received in the different regions to avoid wasting time and resources.

You can do this through interviews, marketing tests, and market surveys e.t.c. This will help you shed light on the best strategies to use to successfully break into the new environments.

Editors note: I reached out to Benun and Harpreet and here is what they had to say:

According to Ilise Benun founder of marketing-mentor, you have to analyze and understand the positions that your competitors are staking out and then find the gap in the marketplace that you satisfy and own that position.

For example, I coach creative professionals and I have 3 main competitors, each of whom has a style, a featured service and a message they are sending loud and clear.

All I have to do is identify my unique style, service and message as distinct from theirs.

That will make it easy for all of our prospects to choose the best fit for themselves.

According to Harpreet Munjal, Founder of LoudGrowth, you must know the uniqueness of your product then start positioning your product based on that.

During the competitor research, also figure out the strengths and weaknesses of their products and compare them to yours.

You’ll find one that will make your product unique than your competitors.

Then you must know your targeted audience and use their language to connect deeply and emotionally with them.

4. Simplify and Tagline

A Slogan or a tagline is an excellent way to communicate your product to potential customers.  

Look at the following examples.

L’Oreal – “Because you’re worth it.”

Nike – “Just do it.”

Target – “Expect more pay less.”

Coca Cola – “Open Happiness”

A slogan makes your product stand out by making it come across much sexier.

In a world with declining attention spans, a short snappy slogan tells customers exactly what they need to know about your product without having to read through your entire positioning statement.

Done well this can spark a wildfire of sales and create a long lasting impression.

5. Use Influencer Marketing

Consider hiring influencers in your target market to increase your product’s recognizability.

This will go a long way in helping your product thrive in a competitive space. That’s because such influencers take advertising to a whole new level.

While they are providing exposure for your product to your target audience, you are also benefiting by banking on the trust and credibility they’ve established over the years to get your product positive recognition.

But in order for this to happen you need to select the right influencers.

Make a list of people who have amassed a following in your industry, and then carry out research to narrow down your list.

Afterwards, establish contact with your top picks with a budget in mind.

6. Craft a tailored Value Proposition

Finally, it’s no secret that delivering a clear value proposition to your targeted customers is one of the best ways to position your product.

As an entrepreneur you need to take time to create a customized value proposition that’ll enhance your product’s authority and confidence to your customers.

When crafting your value proposition, you need to factor the below characteristics for success:

  • Clear
  • Concise
  • Unique
  • Relevant
  • Customize needs
  • Keep your message objective
  • Have unique identifiers

Editors note: I reached out to Jim, Ricky and Gee and here is what they had to say:

According to Jim Brodo Chief Marketing Officer at Advantexe the best strategy is to deliver a clear value proposition to your targeted customers:

  • Know your targeted customers – It is your business. It is also your business to know who your best customers are.
  • Deliver a clear value proposition – The value proposition must be understandable in 1-2 sentences.
  • Select the right channel – Based on 1 &2, you must choose the best delivery method (Email? Pay-per-Click? Banner Ads?) and do it well.
  • Provide a call-to-action that is not overwhelming – Click here for more information.
  • Follow-up – Customers are overwhelmed. It may take up to 3 outreaches to get through.

Ricky Wolff Founder Markletic says that a competitive market, it’s best to position your product based on the business value it delivers to your audience.

Many companies market products that are feature-based. However, value-based positioning will make sales cycles easier and result in larger transactions.

According to Gee Ranasinha CEO and founder of Kexino we shouldn’t confuse strategy with tactics.

The terms are not interchangeable, and mean very different things.There can only ever be one strategy, of which there can then be any number of tactics to deliver on that strategy.

See https://kexino.com/marketing/difference-between-strategy-and-tactics/ for more information.

To answer your question, perhaps the biggest single mistake we see entrepreneurs and small businesses make is failing to deliver a credible and compelling customer value proposition in their messaging.

The only way to stand out from seemingly-similar competitive offering is by delivering – and communicating – a differentiated value position that customers can appreciate.

Supposing customers value the fact your widget is available in red, while everyone else sells them in blue. Or that your product is so well made it lasts twice as long as the competition’s.

Now, this is where many businesses go wrong. The important part of customer value communication isn’t simply that you sell a red version.

It’s about how buying a red widget means the customer doesn’t have to waste time/money/effort painting the blue one they bought elsewhere.

Similarly, selling a widget that lasts twice as long isn’t the ‘value’. It’s the reduced downtime from using a more durable product that increases customer profits.

The aim is to frame your features in terms of customer benefit. It’s not about what your product or service does. It’s about what it does for them.

Where the overwhelming majority of businesses fail is to effectively articulate a commercial differentiation advantage.

Without a customer-benefits led value proposition, customers cannot see a difference between your product and your competitor’s.

Over to You

Generally speaking, it’s difficult to break into a highly competitive market. However, that is not always the case.

This post has covered definitive actions you can take that will help you become successful with your product in different markets.

Play your cards right and you’ll be rewarded with a healthy customer base and revenue to boot, perhaps even more than your competitors.

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Eric Ogero

Eric Ogero is a freelance copywriter & blogger. As a writer he is very passionate about helping business owners and entrepreneurs succeed, both online and offline, by providing practical advice and solutions. You can read more of his insightful posts over at Ericogero.com, or follow him on twitter @ericogero.

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