Positioning Services in Competitive Markets

Point of difference — the most compelling benefit offered by the brand that stands out from its competition (e.g., largest network of professionals and recruiters to help advance your career, develop your business acumen, industry knowledge, and personal development).

•Reason to believe — proof that the brand can deliver the promised benefits (e.g., our network is many times bigger than that of our nearest competitor).

There are four basic elements to writing a good positioning statement,13 and this is illustrated in the LinkedIn example:

•Target audience — the specific group(s) of people that the brand wants to sell to and serve (e.g., professionals as primary target customers, and employers and advertisers as secondary target audiences).

•Frame of reference — the category that the brand is competing in (e.g., in the social networking space).

Roger Brown, “How We Built a Strong Company in a Weak Industry”, Harvard Business Review, February 2001,

Traditionally, demographic segmentation (e.g., based on age, gender, and income) has frequently been used. However, this often does not result in meaningful segmentation as two people in the exact same demographics can exhibit very different buying behaviors (e.g., not all 20-year-old middle-class males feel and behave the same way). As a result, psychographic segmentation has become more popular as it reflects people’s lifestyles, attitudes, and aspirations.

As competition intensifies in the service sector, it is becoming more important for service organizations to differentiate their products in ways meaningful to customers. This is especially true for many mature service industries (e.g., banking, insurance, hospitality, and education), where for a firm to grow, it has to take market share from its competitors or expand into new markets.

To succeed in our over-communicated society, a company must create a position in the prospect’s mind, a position that takes into consideration not only a company’s own strengths and weaknesses, but those of its competitors as well.

Al Reis and Jack Trout
Thought leaders who coined the term “positioning”
as related to marketing