How to Find the Ideal Product Positioning with Perceptual Mapping | by Anthony Murphy | Dec, 2022

Perceptual Mapping is perhaps one of my favourite competitive analysis and Product Positioning tools.

I wrote a guest blog on Product Positioning for LogRocket you can learn more about it here.

But to summarise for the purposes of this article, I define product positioning as defining where your product fits in the market relative to its competitors as it is perceived by your customers.

Product positioning is the act of defining where your product fits in the market relative to its competitors as it is perceived by your customers.

There are a few key things in that definition.

• “where your product fits in the market”: means that we are looking at its position in the market, where it fits — what it is and what it is not.
• “relative to its competitors”: meaning that it is key to understand your competitors and how your product compares to them.
• “perceived by your customers”: positioning is about how products and services are perceived by the market and your customers — this last one is particularly key. More on this in a sec.

Product Positioning is not the same as Differentiation.

Your product’s positioning must work with its differentiation, but they’re not the same thing.

The simplest way I like to describe the differences is:

• Differentiation = tangible
• Positioning = perceptual

A product’s differentiation is primarily the tangible differences. For example, does your product offer features that your competitors don’t?

Positioning, on the other hand, is perceptual. It has little to do with the actual features and functionality.

For example, how is your product perceived? Is it seen as a luxury? High-end? or budget? Is it seen as something that has a higher quality than your competitors? Or perhaps you’re perceived as fun and more innovative.

That’s Product Positioning! It’s about how your product is perceived by the market relative to your competitors.

This is a critical difference to understand. Product people often get too narrowly focused on differentiation — they’re looking for physical ways to differentiate their product from their competitors. And whilst that is important, you can often have more exponential gains by looking at how your product is positioned.

No one decides not to buy a Ferrari because it doesn’t have a heads-up display or because it doesn’t have wireless charging — rather, they buy it (and pay exorbitant amounts for one) because it’s a Ferrari!

Ferrari have done an exceptional job of positioning their products and brand in a way that carries a certain perception. One that is highly desirable regardless of actual physical features.

“To be successful in a particular market a product must occupy an ‘explicit, distinct and proper place in the minds of all potential and existing consumers’…relative to other rival products…” — Wikipedia

Ok, back to Perceptual Mapping…

So what is Perceptual Mapping?

Perceptual Mapping, also known as market mapping, is a diagrammatic technique used to visualise the relative positioning of competitive products.

Perceptual maps are typically in the form of a 2×2 matrix where you map our competitive products relative to each other based on specific dimensions.

Perceptual maps are a powerful tool when it comes to defining your product’s positioning, as they can help you identify gaps, underserved positions in the market and positions to avoid where they may be over-crowded.

The first step to creating a Perceptual Map is to identify the dimensions that you want to compare products against.

For example, you may want to compare products based on whether they are:

• Cheap vs Expensive
• Low quality vs High-quality
• Youthful vs Mature
• Fun vs Serious
• Small vs Large

There is no right or wrong way to do this. What you choose as your dimension will depend highly on your industry, market, competitors, products and customers.

You may also decide to create multiple perceptual maps with different dimensions to get different perspectives on the market. You can also create a multi-dimensional perceptual map, although this does my head in and I’d much rather create two maps rather than try to make a 3D one.

It’s important that your perceptual map is informed by research — namely, competitive analysis and customer research. Using this data, you will need to determine what attributes are important for your customers and how they perceive products in the market.

I often do competitive and market analysis before creating a perceptual map. This helps with firming up what dimensions I want on the map and supports each product’s positioning on the map with data.

You can also validate your perceptual map through perception-based customer interviews if you like. These are where you may ask perception-based questions or perform activities like card sorting.

So how do you use a perceptual map to help define product positioning?

I recently created my own perceptual map recently as part of defining Product Pathways —’ a 100% online, self-paced learning platform for Product People.’

There are many different dimensions I could have created for the perceptual map. However, the ones I went with here were the course duration (i.e. is it a multi-day ‘foundations’ course covering multiple topics or one that is narrow, focused on perhaps a single topic). For the x-axis, I looked at whether the training was largely self-paced or instructor-led.

Now not an exact science and some of the providers here stretch across both however, I placed them based in a quadrant based on what their majority offering were at the time.

Saturated position in the market:

From here, you can see that there is clearly a majority position in the market — this is often referred to as a saturated position.

Now, this doesn’t mean that it’s a bad positioning — in fact, it strongly supports that it’s a strong positioning in the market — however, if you’re not already well established there, it is a hard position to play in with so much competition.

With so much competition, products here often have to rely more on things like differentiation, marketing, price, branding, etc to compete.

Unsaturated position in the market:

You may find that there are areas on your perceptual map which are either vacant or have few players in there. This is often referred to as unsaturated market positions or underserved positions.

Often when creating new products and services, you seek out unsaturated positions and markets because it’s often far easier to differentiate and penetrate since there are fewer competitors.

However, just because a position in the market is unsaturated doesn’t mean that it’s where you should immediately position yourself.

There could be many reasons why that position in the market is unsaturated. It might not be a viable positioning or the market for such positioning might be too small. Therefore these positions, although desirable, still need investigating.

Finding the ideal positioning:

So the final question becomes — how do I use this to find the ideal product positioning?

The beauty of perceptual maps are that they help you map out the market to inform your positioning. You still need to ultimately decide on where you want to play and where you don’t. Meaning that there isn’t a hard and fast rule. As mentioned before, you may want to enter a saturated market — but in doing so, you know you need to execute your value proposition and unique differentiation to stand out from the crowd. On the other hand, whilst desirable, unsaturated markets may turn out to be non-viable.

The other layer that needs to come into the picture is your strategy. Not just your product strategy but also your company strategy, brand and vision.

What positions in the market align with your strategy? Which don’t?

Sometimes the latter is easier to do — disgrading the positions that don’t align can help you identify what positioning does.

For example, with Product Pathways, I didn’t want it to be live-instructor-led training. That was a strategic choice I made (not least to start with… perhaps in the future), but that ruled out the right side of the perceptual map.

Then looking at the perceptual map, I realised that the deep-dive type courses were underserved. Based on the discovery that I had done prior, I could map this back to data points from my discovery interviews — people often want help with specific topics, like stakeholder management, facilitation, and prioritisation; however, they don’t know where to look without taking a multi-day or week courses where the majority of the course isn’t relevant. Finally, many resort to 1:1 coaching as there isn’t anything else available.

Given these data points, I have confidence in the fact that there is a gap in the market for deep-dive courses on specific topics, and hence combined with my product strategy, I have chosen to position Product Pathways in the bottom left — as deep-dive courses that are 100% online and self-paced.

Perceptual maps are a fantastic tool for defining your product positioning. They have often helped me gain clarity on the market and how competitors are positioned. I’ve also used them to help audit and reassess an existing product positioning — i.e. has a once unsaturated position in the market suddenly become saturated? Do I need to reposition to remain competitive?

However, remember that this is designed to be an input into your positioning. It won’t hand you the answer.

It may be dangerous to place yourself blindly in an unsaturated position in the market. Remember that you still need to combine your perceptual map with your strategy, discovery, market and competitive analysis, as well as your value proposition and differentiation.

Happy perceptual mapping!