The positioning map exercise can be very helpful as you develop differentiation and positioning strategies for your products or brands. Positioning maps show how your brand is perceived by customers relative to competitors.

How it works
On the y-axis of the map you’ll create a range of price that is wide enough to include your lowest and highest priced competitors. On the x-axis you’ll identify a range of characteristics that differentiate your product and define it’s orientation. For example, one relevant x-axis range for SUVs might be “luxury” to “performance”. Keep in mind that you’ll probably need to create a couple charts to capture all the dimensions on which your product is differentiated.

An Example
In my example below, I’ve used “user-experience” and “features” as the range. Assuming, I’m a software company and my product is for high-end pro engineering users who are looking for more features, then my brand might be further to the right. The size of each brand circle represents market share. Here’s what a map might look like once it’s completed, click to see a larger version:

Analysis & Interpretation
In my example, you can see that one brand offers a simple and inexpensive offering that focuses on providing the best user-experience. This positioning has allowed them to become the single largest brand of the selection shown. You can also see that there’s a company that provides a super-premium product that has built its market position around a rich feature set. Clearly this is a smaller market, with one dominant brand and one small competitor. In the middle, there is significant competition and less differentiation. You can also see that company #1 is attempting to differentiate itself  with a low-cost feature oriented product.

Depending on the market you’re in, there may be room for several brands in each position range, or only one or two. Positioning maps can also be helpful just to wrap your head around the state of the market vis-a-vis fragmentation, consolidation, and diversification. As you develope a deep understanding of how your brand is positioned relative to the field, and as you develop positioning strategies, it can be helpful to imagine how this map might be animated over time. Draw arrows to indicate where you’re trying to take your brand. These maps are most useful when they are on the wall and being written on.