The concept of brand equity outlines four stages of its development, namely:

  • Development of brand identity,
  • Development of brand meaning,
  • Development of consumer perception of the brand,
  • Development of relationships between the brand and consumers.

Although the concept clearly identifies the goals that marketers should pursue at each stage and the tools to be used, from a practical point of view, the concept does not provide clear guidance on how to achieve the goals of each stage. More detailed information on the concept of brand capital can be found by this link.

In contrast to the concept, positioning is a practical method of achieving results in the process of applying the concept of brand equity within the first two stages. More precisely, positioning is a set of practical measures to create in the minds of consumers a set of associations that anchor the brand to a particular product category or need, and distinguish the brand from others as having unique advantages.


So, what practical measures and tools make up brand positioning?

1) The first step in positioning is defining the target market. When defining the target market, marketers must get answers to the following questions, which are critical to further building the positioning:

  • What specific market or segment will be targeted?
  • Why this particular market or segment? That is, what is the market size and growth potential?
  • What is the nature of the competition in the market or segment? That is, do brands compete within the segment/market or with other categories that satisfy a similar need?
  • Is it possible to accurately identify the target needs or perceptions of consumers? That is, is it possible to identify effective associations?
  • Are there clear communication channels? That is, is it possible to convey associations to consumers?
  • What response do marketing activities elicit from the target audience? That is, is effective marketing promotion possible in the defined market or segment?

This part of the work is analytical, requiring information gathering and analysis skills.

To determine the target market from the perspective of association building, marketers use two tools - market segmentation and cross-category competition analysis.

Segmentation is the division of the market into smaller groups of consumers who have similar needs and behaviors, with the aim of developing the most effective positioning and marketing mix for each group.

For example, the potential market for a dental clinic in any residential area includes all residents of the area. However, the owner of a clinic in one area may focus on a higher proportion of children under 10 years old and, as a result of segmentation, develop a positioning as a children's clinic. In another area, there may be a higher proportion of elderly people, where the owner may position the clinic as specializing in restoration and implants. Another owner, through segmentation, may see that there is a higher proportion of wealthy people in the area and few clinics in the higher price segment, providing the opportunity to earn more by positioning the clinic in the premium segment.

Market segmentation can be based on many characteristics - each business decides for itself which characteristic will be most effective. From a methodological point of view, segmentation is divided into descriptive (age, gender, income, family, values, type of activity, etc.) and behavioral (ways and conditions of product use, product price, places of purchase, loyalty, preferences, leisure, etc.).

Another tool for defining the target market is the analysis of the cross-category competition analysis, which involves expanding the potential market to adjacent categories that satisfy similar needs in order to expand the coverage of positioning and marketing mix.

For example, a bicycle rental point in a park area can position itself as a point with the highest quality, stylish and comfortable bicycles for safe cycling in the park. However, is this the optimal positioning? Many people visit the park during leisure time, but do they come specifically to ride a bicycle? Some people will ride a catamaran on the lake, some will sit on a bench in a cozy place, some will play badminton, some will ride carousels, and some will find another way to satisfy their basic need - to get pleasure in their free time. Therefore, the positioning of the bike rental should be much broader than just a bike ride. It should be based on satisfying the basic need and evoke such associations that consumers choose a bike ride as a way to get pleasure in their free time. Across-category competition analysis in terms of the basic need will make the positioning more complete and qualitative, leading to an increase in customer flow.

2) After choosing the target market, marketers must take the next step - studying the positioning and marketing mix of competitors, which should provide them with the following information:

  • What product attributes, functional or emotional, do consumers consider absolutely necessary for a product of this category? That is, what associations about the product are the points of parity?
  • What advantages of key competing products, whether functional or emotional, do consumers perceive as unique to key brands and motivate them to buy those products? That is, what advantages of key brands are the points of differentiation?
  • What marketing elements and programs are used by key competitors to communicate with consumers?
This part of the positioning work is also analytical and requires skills in gathering and analyzing information.

In practice, studying the positioning and marketing mix of competitors can be done in two ways - subjective collection and analysis of information by the in-house marketers, or objective collection and analysis through professional marketing research. The second method is much more expensive and provides higher quality, but almost inaccessible to most small and medium-sized businesses for financial reasons.

3) After determining the target market and forming a list of parity and differentiation points for competing brands, the analytical stages of positioning can be considered complete. The next step is the creative stage, where marketers develop the positioning of own brand. Creative agencies are typically hired for this development, or marketers rely on their own experience and expertise.

In practice, marketers develop the visual elements of the brand (logo, slogan, promotional materials, website, social media pages, jingle, etc.) and the first marketing campaigns (outdoor advertising, media advertising, online advertising, social media content, etc.) to closely link the brand and product category, using the points of parity identified in the previous stage. In this way, they create the first consumer associations ragarding the product - the brand belongs to a certain category of products and satisfies certain needs.

The next step is to neutralize the competitive advantages of other brands, meaning to turn the differentiation points of competitors into parity points. In simple words, at this stage marketers aim to catch up to competitors and claim that their own brand is not inferior to the market leaders.

4) The final step is the development and implementation of own points of differentiation through the marketing mix. Once again, it should be reminded that differentiation points are attributes and advantages that consumers consider unique to only one brand, perceive positively and are willing to buy.

The points of differentiation are the most important element for the success of brand positioning and must meet 2 groups of criteria:

  • Attractiveness (relevance to consumer needs, uniqueness and advantage over competitors, reliability and trust),
  • Realism (correspondence of the product to declared functions, ability to prove and maintain declared characteristics).

Integration of the developed points of parity and differentiation into the intstruments of marketing mix completes the process of initial brand positioning. In fact, we have described the analytical and creative stages of positioning, but it is impossible to say that marketers stop there and leave the brand unattended. This would be a really big mistake.


In reality, the marketing process further involves:

  • Continuous monitoring of positioning through research,
  • Correcting conflicting associations (e.g. low price and high quality, popularity and exclusivity, etc.),
  • Expanding and deepening associations,
  • Defending against attacks from competitors who try to neutralize the points of differentiation,
  • Higher-level positioning (determining perception maps, key values, brand core and DNA).

Also, in a separate article on positioning issues, we raised the issue of creating secondary brand associations. In many cases, when launching a new product, it is only secondary associations that help to quickly increase the brand's equity and client base.

Achieving the commercial objectives of a company through effective marketing requires a deep understanding of the market situation, consumer needs, the ability to analyze and explore alternatives, and a creative approach to problem-solving. Our company has extensive experience in defining optimal marketing strategies for our clients' businesses, creating a strong brand and market positioning, as well as developing a marketing mix and implementing the chosen strategy. You can familiarize yourself with the services and solutions our company offers on the "Services" and "Solutions" pages, respectively.
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