What is brand positioning?

Brand positioning is the occupation of a defined position in the relevant market in order to differentiate oneself from the competition in an attractive way for target groups.

Brand positioning definition

Brand positioning is the strategic placement of a brand in the market in order to effectively utilize its uniqueness and relevance for the target group. Precise positioning sets a brand apart from its competitors and creates a clear identity that builds trust and loyalty among consumers and business customers. Effective brand positioning takes into account factors such as target group needs, the competitive landscape and your own value proposition in order to convey a clear and consistent brand message.

Why is brand positioning important?

The right positioning in the field of market participants is essential for the success of a brand in order to differentiate itself from competitors. It shows what the brand stands for. Brand positioning is crucial to a company’s success in today’s highly competitive market environment: in Germany alone, over 75,000 new brands were registered in 2023. Clear and differentiated positioning enables a brand to attract the attention of the target group and build long-term customer loyalty. Through precise positioning, a brand can clearly communicate its uniqueness and added value, which creates trust among consumers and positively influences purchasing decisions.

Examples of brand positioning strategies

Brand positioning through values

According to the Ipsos Global Trend Report 2023, 79% of respondents believe that companies can both make a profit and support social causes. Additionally, 63% of consumers are willing to pay a premium for brands that demonstrate social responsibility. These statistics highlight the significant influence of brand values on brand perception. It can therefore make sense for certain brands to base their positioning on such values.

Brand positioning example Dove Dove sets itself apart through its body care products by focusing on the natural and true beauty of women. The brand’s positioning strategy emphasizes how all women can accept their authentic selves through the use of its products. By challenging conventional beauty ideals and body images, Dove promotes a culture of inclusion and diversity. Dove has not only changed the advertising industry, but has also increased its own sales. Dove built a brand that is estimated to be worth USD 6.47 million in 2023, compared to just USD 4.1 million in 2016) (Statista, 2023).

Brand positioning through product innovation Innovation in product development opens up further opportunities for brands to establish a unique position in the market. By developing new solutions to meet the needs of consumers, brands can create their own niche.

Brand positioning example Oatly  The story of the Swedish brand Oatly, which specializes in the production of oat-based products, begins in the 1990s when researchers at Lund University in Sweden began to develop oat milk. They developed an innovative process called the “Enzyme Process”, which breaks down the oat fibers to create a smooth texture and natural taste. Oatly has since become a leader in plant-based milk alternatives and is also positioning itself as a competitor to traditional dairy products. Oatly is known for its commitment to sustainability and environmental protection. Oatly is often seen as an innovator in the food industry because they not only produce a high-quality plant-based product, but also stand out with their transparent and provocative brand identity.

Brand positioning through emotional benefits A brand does not always offer rational benefits that differ from those of the competition. In this case, it is worth working out an emotional added value, communicating this and positioning the brand as a result. An emotional benefit is an intangible added value or feelings that the target group experiences when interacting with the brand and its offering.

Brand positioning example Disney Disney describes itself as the “happiest place on earth”. The entertainment company stands for the joy and wonder that it offers through its films, productions and communication and has thus achieved a special position with its target group.

Brand positioning through pricing Pricing is another way of positioning a brand. The price level influences the perception of the quality and value of the brand’s offering. Depending on the positioning strategy, a brand can be perceived as a premium option or as a low-cost alternative.

Aldi brand positioning Discounter instead of supermarket. Aldi established itself as a popular brand in the low-cost retail sector by focusing on a limited product range and an effective supply chain – goods were presented directly on pallets, for example. The founders’ idea led to an innovation in food retailing and enabled the company to reduce the cost of running stores and offer food cheaper than the competition. With this concept, Aldi appeals to price-conscious consumers who are looking for low-cost alternatives.

Brand positioning through service Pricing is another way of positioning a brand. The price level influences the perception of the quality and value of the brand’s offering. Depending on the positioning strategy, a brand can be perceived as a premium option or a value-for-money alternative.

Edeka brand positioning Edeka has successfully established itself as a premium brand in food retailing by focusing on high-quality products, first-class customer service and a pleasant shopping experience. By emphasizing freshness, quality and variety, Edeka stands out as a leading provider of food in the premium segment. With a wide range of organic products, gourmet specialties and exclusive private labels, Edeka appeals to discerning consumers who are willing to pay a premium for first-class products and service.

Brand positioning depends on resources A brand strategy is useless if the brand cannot meet its own expectations – and thus those of potential customers – because the corresponding resources or culture are not available. The desired positioning must therefore always be compared with the company’s own resources

Negative example: Galeria Karstadt Kaufhof brand positioning Galeria (formerly Galeria Karstadt Kaufhof), once one of Germany’s leading department store chains, serves as a striking example of how an inadequately supported brand strategy can fail. Despite several rebranding attempts and the introduction of new concepts, the company failed to succeed in the highly competitive retail market. The strategic efforts were undermined by a lack of investment in digital transformation, outdated stores and a lack of clear differentiation in the product range. Without the necessary resources, the brand remained stagnant and increasingly lost its appeal to customers, ultimately leading to repeated financial difficulties and store closures. Galeria thus vividly illustrates that even the best brand strategy is doomed to failure if it is not supported by adequate investment and infrastructure measures.

Brand positioning in 5 steps

Brand positioning is an essential step for any company to differentiate itself in the market and create a clear identity. In this process, the unique position of a brand is defined, emphasizing its relevance to the target group.

1. Define and understand the target group

Potential customers with their needs, desires and challenges are an essential part of the positioning process. With the help of a target group analysis, it is possible to discuss which brand characteristics fulfill the needs and wants of the desired target group. Ultimately, the aim is for customers to perceive the brand and its offering as relevant to them.Sinus-Milieus for B2C target group analysisThe Sinus-Milieus social model serves as a guide for target group analysis in the B2C sector. The Sinus-Milieus combine people with similar values and social situations into groups of like-minded people. Depending on the value orientation or educational standard, the factors that motivate the target group (to make a purchase decision) change. It is not necessarily just a question of income level. If you can locate the relevant target group in one or more Sinus-Milieus, the insights gained into lifestyle and purchasing behavior will help with brand positioning.

2. Analyze the competition

A competitive analysis helps to understand your own position in the market and to make strategic decisions based on this. In order to be able to evaluate competitors, it is helpful to define criteria in advance on the basis of which the competition is assessed:

Fields of competence: Areas of expertise comprise the identification of the strengths and functions of services or products in comparison to those of the competition. This includes the evaluation of performance, quality, functionality, innovation and special sales arguments.

Pricing: Pricing refers to the strategies that a competitor uses to set its prices. This takes into account not only the pure product prices, but also any discounts, special offers or additional services that can influence the overall value for customers.

Target group approach: The target group approach describes which specific target groups a competitor addresses and which specific needs and interests they have. This includes the analysis of marketing messages, advertising channels and customer communication.

Brand presence: The brand presence encompasses how the brand presents itself to the outside world. This includes the brand identity, including the brand design and its application at the relevant touchpoints: Website, social media, print, advertising campaign.

3. Identify unique benefits

Identifying a unique benefit is crucial for every brand in order to stand out from the competition and to be able to adopt a promising positioning. Target group analysis provides the basis for this. By thoroughly analyzing the needs, challenges and desires of the target customers, you can identify the added value that the brand can offer to the relevant target group. When determining the benefits, the aim is to identify the connectivity and advantages of your own brand. It is important not to limit yourself to the functional benefits of the products or services, but also to consider emotional and social aspects. The SWOT analysis is a method for evaluating the internal strengths and weaknesses of a brand as well as the external opportunities and threats in its market environment. This analysis enables companies to evaluate their competitiveness. The SWOT analysis begins by identifying internal strengths and weaknesses, such as unique resources, expertise, brand reputation or operational challenges.It then examines external opportunities and threats, such as changing market conditions, new technologies, regulatory developments or competitive activities.By systematically analyzing these factors, companies can better understand their position in the market and take targeted measures to optimize their business success.

4. Discuss your own current positioning

Once you have analyzed your target group, evaluated the benefits of your service and located the competition in the positioning cross, it is time for a realistic self-assessment. Where does the brand currently position itself?What are the company’s strengths and weaknesses?How has the brand communicated so far? A SWOT analysis helps to classify the company in the market and to know the opportunities and risks of the market. Based on the defined axes and in relation to the competition, the actual positioning of your brand results.positioning crossA proven tool that helps to visualize and understand the competitive landscape is the positioning cross. A positioning cross is used to identify conurbations and niches in the market. The axes are defined with variables relevant to the corresponding market. The market competitors are then located in the positioning cross. This method analyzes the differences between competitors on the basis of two key dimensions, such as pricing compared to product quality or breadth of product range compared to target group focus.

5. Define target positioning

A completed positioning cross shows pictorially how market competitors position themselves and how your own brand is located. It becomes clear where conurbations arise, i.e. where many competitors have the same or similar positioning and where so-called white spots, i.e. unoccupied areas, arise. Important: In order to turn strategic ideas into concrete reality, it is essential to realistically evaluate your own possibilities. What can and will the brand achieve?Empty promises and unrealistic claims should be avoided at all costs.

White spot definition A “white spot” refers to an unoccupied or underutilized position in the market that is occupied by few or no competitors. It is an opportunity for brands to position themselves in an untapped market segment through unique offerings and to stand out from the competition.The current positioning is a snapshot of the brand and makes it clear how strong the company’s competitiveness is. If you can already occupy a market niche for yourself, the positioning serves to effectively develop the market. However, if you are in the same spot as many other companies, it is worth questioning your own positioning and repositioning yourself.

To determine the target positioning, you need to look at your own brand strategy:

  • Why is the brand where it is now?
  • How have competitors displaced you?
  • Where does the brand want to be in the future?
  • How should the brand be perceived in the future?
  • What potential can be exploited?

Once the brand objectives and current positioning have been defined, it is important to develop the desired positioning through targeted measures. This ranges from an adjustment or expansion of the service portfolio to a brand refresh or a comprehensive rebranding.

Positioning statement

A positioning statement describes the positioning plan of a brand. It comprises four key aspects: the target group, the relevant market, the benefits of the brand and the unique selling proposition that sets the brand apart from its competitors. A good positioning statement is simple and clearly formulated. This ensures that employees understand the statement and can apply and communicate it accordingly.

Conclusion: Taking a stand

Focusing and positioning yourself sharply is often a challenge for brands and companies. With the market as a space, a clear focus on relevant features helps to create a unique position. Which characteristics need to be made strong in order to stand out? Brand positioning requires recurring evaluation, as the market and living environments are constantly changing and may require rebranding. As brand consultants, we discuss the internal structures of your brand in order to use the findings to create a basis for storytelling and brand design.

    Dr. Birgit Joest

    Co-Founder, Strategy Director