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Positioning Matrix

A Positioning Matrix is a graphical tool for visualizing the position of a product or service within the context of the overall market for similar products and services. In other words, a positioning matrix helps to show the position of a target product or service, relative to other products or services in the same market.

A typical positioning matrix consists of four squares and two labeled axes—the items in the squares are the names of products or services. The position of those products or services, relative to the labels on the axes, determines the strength of the relationship between the product in the box and the attribute labeled on an axis.

Typically, the further away a product or service is from a label on an axis, the weaker the relationship is between the product and the attribute labeled on the axis.

Positioning Matrix
Typical Uses

A Positioning Matrix is typically used to help present or explain a new product or service offering to investors and customers—it helps define the market that the product or service intends to serve and helps underscore the differences between the target product and other competing products. Positioning matrices are often used as tools to assist in the task of product and service differentiation, a step component of the marketing process.

Best Practices
  • Determine your market. Before you begin figuring out where to position your target product in the context of a market, you have to define that market clearly.
  • Outline the primary products in your market. Once you've determined what your market is, you need to begin outlining the other competing products in your target product's market.
  • Determine the core factors in your market. In order for a positioning matrix to be meaningful, you have to establish factors of differentiation—these factors vary by market. The easiest way to determine what factors are in a given market is to consider what the tradeoffs are, relevant to the purchase of each product that you want to include on your positioning matrix. If you purchase solution A over solution B, what do you lose and what do you gain? Cost? Quality?
  • Label the core factors onto your axes. Once you've determined what the core factors that differentiate all of the key products in a given market are, label them onto your axes.
    • Note: Labeling the axes is by far the most difficult part of drawing a positioning matrix. It takes some organizations years to determine what the proper labels are for their axes. The suggestion given above is a good one-size-fits-all way of determining some labels for your axes, but it may not be the best way for all businesses.
  • Map the products in the market into their relevant quadrants. Once your axes are labeled with proper market-differentiating factors, begin assigning the products that you outlined earlier to their specific quadrants.
    • Example: In our example above, drawing products that are more difficult belongs in the bottom two quadrants; products that are more artistic belong in the right two quadrants; and the products that are more strongly business-oriented belong in the left two quadrants. From there you can see how we divided up the players in our competing spaces.
  • Review the diagram. Look over the diagram and make sure that all of the products and services in your matrix are placed in their correct quadrants.
  • Produce a written positioning statement describing your target product. Once you've visualized your target product's position, relative to the other competitors in your market, write a short "positioning statement" that summarizes that market position.
    • Example: "SmartDraw is easier to use than Visio® and more strongly business-oriented than PrintShop® or Adobe PhotoShop®."

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