One of the fundamental issues to address when creating a company and product or service offering is how your offering will be positioned in the market relative to your customer. This question assumes you thoroughly understand your market – the competition (both direct and substitutes), customer problems or “pain points” and segmentation that will be the topics of other articles.

Positioning is how your offering fits in the minds of your customers and end users. Why is your product more desirable to them or better suited to their needs? Is it less expensive, easier to use? Does it solve a problem that is important to them? Does it work better than their current options? Does it provide them with intangible personal benefits – status, ego satisfaction, etc.?

This concept first came into widespread use by Alfred Sloan when he created General Motors. His stated approach was “ a car for every purse and purpose”. Chevrolet for the entry level, then Pontiac as one became more successful, followed by Buick and then ultimately a Cadillac once you make that big exit at a very high multiple. While this seems quaint in the face of GM’s current situation it led them past a dominant Ford in the 30’s. Then to over 50% market share in the US for many years in the 50’s through the early 80’s. Arguably it was lack of understanding of positioning that led to GM’s downfall. The Japanese competitors recognized and created a high value for reliability and practicality in small cars versus the style, power, size and brand focus of the American car companies.

A more current example is the Internet search market between Google, Yahoo and Bing. Google’s mission is to organize the world’s information and make it universally accessible and useful3. Bing is positioning themselves more narrowly on decisions: “When it comes to decisions that matter, Bing & decide.” Yahoo is trying to make themselves more human with their positioning focused on people: “To connect people to their passions, communities, and the world’s knowledge.”

Each of these companies has specifically focused their efforts to offer something unique to their customers. Have you?