Framework library · Competitive and market analysis
Competitive positioning map
A positioning map plots each competitor on two dimensions that buyers use to tell offers apart, such as price and depth of service, with bubble size for market share. Crowded areas show where competition will be on price. Empty areas are either an opening or a place no customer wants to be, and only buyers can say which.
Use it when
- You are entering a market or launching an offer and need to see where it would sit against the existing ones.
- Your offer is being compared on price alone and you want to see whether a different position is open.
- The team disagrees about who the real competitors are.
Avoid it when
- You do not know which dimensions buyers use. Find out first. A map on the wrong axes is precise and wrong.
- You need a map derived from customer data. A map placed by hand records judgement. A survey analysed with multidimensional scaling or correspondence analysis gives the customers' own map.
- Buyers weigh many dimensions at once. Use competitive benchmarking, which handles several weighted dimensions.
How to run it
Choose two dimensions buyers use to choose
Take them from interviews, lost-deal reviews or tender scoring. Pick two that do not simply move together; price and quality often do.
Define the ends of each scale
Write what 1 and 10 mean, in terms a buyer would recognise, before placing anyone.
Place each competitor with evidence
Use price lists, tender results, published service terms and customer comments, and note the evidence. Size each bubble by market share.
Add where buyers want to be
If research shows the combination a segment wants, add it as an item with no share. The distance from each competitor to it is the useful reading.
Read the crowded and empty spaces
Crowded areas mean competition on price. For each empty area, check that some buyers want it before treating it as an opening.
Work through it
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Mistakes to avoid
- Drawing the map on the dimensions where your own offer looks best rather than the ones buyers use.
- Treating every empty space as an opportunity. Some are empty because nobody will pay for that combination.
- Placing competitors on reputation rather than evidence, so that the map repeats the team's beliefs.
- Drawing one map for all buyers when segments value different things. Draw one per segment.
Where it comes from
No single originator. Perceptual maps came from marketing research that placed brands as customers see them, using factor analysis, discriminant analysis or similarity scaling; John R. Hauser and Frank S. Koppelman compared the three in "Alternative Perceptual Mapping Techniques: Relative Accuracy and Usefulness", Journal of Marketing Research 16(4), 1979. Al Ries and Jack Trout popularised the idea of positioning in "The Positioning Era Cometh", Advertising Age, 1972. Source.
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Further reading
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