This is a function of the marketing team.
Product positioning is the work of making decisions about who the product is for, what it does for them, how much it costs, and how to present the product. Is it cheap or expensive? Common or luxury? Typical or exotic? Boring or exciting? Can you get it online or do you have to be somewhere to get it? And wherever you get it, does it feel like a convenience store or a luxury boutique?
Who is it for – this would be the target market, the ideal customer profile, or the perfect-fit customer.
What it does – this would be the product or service and the features and benefits.
Pricing structure – flat price, or in tiers, or with add-ons, etc. to account for cost of goods and also possibly enable target audiences with different budgets to pay what they can (some will get premium, some won’t, some will use a discount coupon, etc.)
Pricing – how much you actually charge for each component of the pricing structure (might be just one component if it’s flat price)
How to present it – this would be decisions like cheap or expensive, mass-produced or custom, basic or sophisticated, plain or luxury, traditional or modern, etc. Your product positioning adopts a specific point of view about your product — how it solves the problem, how it’s different from other products in the marketplace, and how it makes the customer feel.
Product positioning is the discipline of defining how a product is understood and valued in the mind of a specific customer, relative to alternatives. It clarifies who the product is for, what problem it solves, why it is different, and why that difference matters. Effective positioning does not describe features; it frames relevance. It connects the product to a clear use case, anchors it to a meaningful outcome, and establishes the criteria by which buyers should evaluate it.
For example, is it the best value? The highest quality? The least expensive? The fastest to deliver? The most effective? The most fun to use?
Strong positioning aligns the product with a particular context and set of priorities, rather than trying to appeal broadly. By deliberately choosing what the product competes against—and what it does not—it simplifies buying decisions and increases perceived value. When positioning is precise, marketing becomes more efficient, pricing becomes defensible, and customers can quickly self-identify as a good fit. Poor positioning, by contrast, forces the product to compete on vague claims or price, even if the underlying offering is strong.
Changing positioning can be difficult to impossible — sometimes it works and sometimes it not only fails but also the original customers don’t move with it and the company ends up just losing business to competitors. If the company is considering a change in positioning, it might be better to consider introducing a new product with that positioning or even an entirely new brand with a new product and its own positioning.
Once the product positioning is decided, you need to check that every step in the sales route reinforces the positioning. Check how each message is presented to the target market. They must all be consistent with the product positioning — their style and their substance.
Think about cost constraints. You already did market research which tells you what other products are in the market that would be substitutes for yours (direct competitors) or alternatives (indirect competitors), which means you know the prices at which those products sell. You know that if you are going to position your product as higher quality you may be able to charge more, or if you are going to position your product as the inexpensive one then you will have to charge less than the competition. These product positioning decisions, together with the nature of the product that you’re describing, place cost constraints on what it takes to design and manufacture (possibly) the product, because if you know you have to sell something for $10 or less to be competitive, it wouldn’t make sense for it to cost $11 to make, you’d lose money on every unit. It wouldn’t even make sense for it to cost $9 to make because manufacturing is not the only cost you’ll have, so you’d still lose money on every unit.
Compass
Return to revenue activities.
Return to business plan revenue.