Brand fundamentalsSeptember 27, 2026

What Is Positioning?—Why Differentiation Alone Is Not Enough

Author: Daisuke Irikura (Representative Director, HUV DESIGN OFFICE Co., Ltd.) MBA / Former INPIT-registered brand specialist / Track record of over 100 branding seminars and consulting engagements for B2B small and medium-sized enterprises

What You Will Learn

Why positioning fails when it focuses only on finding differences from competitors
The two components: industry standards (PoP) and points of difference (PoD)
How to design points of difference across three layers: functional, emotional, and organizational
A B2B-specific approach to connecting positioning to a revenue model
Five practical steps for designing positioning

Conclusion (Summary)

Positioning is the activity of defining a market position where a company can demonstrate competitive advantage and distinctiveness, and giving that position meaning in stakeholders’ minds. Its essence is not simply pursuing differentiation, but meeting industry standards (PoP), designing points of difference (PoD) across three layers of value—functional, emotional, and organizational—and connecting that differentiation to a revenue model.

We often hear that differentiation from competitors is important. Yet pursuing differentiation alone can lead to positioning failure.

This article outlines how to design positioning properly and offers practical perspectives for B2B businesses.

What Is Positioning?—The Correct Definition

Positioning is fundamentally a strategy for establishing a brand’s position relative to competitors (Trout, 1995). It therefore requires an ideal balance of similarities and differences within a specific market and competitive environment.

Many companies mistakenly understand positioning as finding differences from competitors. In fact, it requires two elements.

① Industry Standards (Points of Parity: PoP) Similarities with competitors. These are the minimum requirements for being recognized as a company in a particular industry or category.

② Points of Difference (PoD) Clear differences from competitors. These are the core of the answer to “Why must it be this company?”

According to Keller, brand positioning requires four elements: a competitive frame of reference (the target market and the nature of competition); points of difference (PoD) as strong, favorable, and unique brand associations; points of parity (PoP) as brand associations that offset existing or potential weaknesses; and a brand mantra that expresses the essence of the brand (Keller, 2013).

Why Does Overlooking PoP (Industry Standards) Lead to Failure?

Many business leaders focus exclusively on points of difference (PoD). Yet a lack of points of parity (PoP) can be fatal.

PoP may not give people a reason to choose a brand, but their absence certainly gives people a reason not to choose it. For points of difference to work, the necessary points of parity must be in place (Keller, 2013).

Consider a B2B example. No matter how distinctive your service is, if you fail to meet industry standards—for example, by missing delivery deadlines or providing inconsistent quality—you will not even make the shortlist.

Meet industry standards first, then make your points of difference stand out. This sequence is fundamental to designing positioning.

How Do You Design Points of Difference (PoD) Across Three Layers?

Points of difference are designed across three layers of value.

① Functional Value What you can do. This includes functional strengths such as specifications, quality, delivery times, pricing, and track record. However, competitors can easily make the same claims at this layer, so its power to differentiate tends to be limited.

② Emotional Value How you make people feel. This includes feelings such as “I can leave it to them,” “They will think things through with us,” and “I can feel at ease.” B2B research by Lynch and de Chernatony demonstrated that emotional value has a significant influence on purchasing decisions (Lynch & de Chernatony, 2004).

③ Organizational Value What it means to do business with this company. This is a situation in which the very fact that a customer works with your company serves as a mark of credibility for that customer. It is the strongest form of differentiation, unique to B2B.

Many companies differentiate only at the functional value layer. Designing emotional and organizational value creates a reason why it has to be your company.

How Do You Connect Positioning to a Revenue Model?

Positioning is not simply about defining differentiation. You also need to design how that differentiation will generate revenue.

For example, if you adopt a position of specialized expertise, the revenue model works as follows.

Your company comes to mind for a specific category of challenges → More orders are placed specifically with your company
More orders are placed specifically with your company → Fewer price negotiations
Fewer price negotiations → Higher average order value
Higher average order value → Improved gross profit margin

Connecting positioning to a revenue model translates brand strategy into business performance figures.

What Are the Five Steps for Designing B2B Positioning?

① Define the Market Determine which market to compete in. Assess it based on market profitability (growth rate × competitor concentration) and fit with your company.

② Map the Competition Clarify your points of parity (PoP) and points of difference (PoD) relative to competitors. Keep in mind that a competitor’s PoD can become your company’s PoP.

③ Design Value Across Three Layers Design points of difference across the three layers of functional, emotional, and organizational value.

④ Define the Meaning for Stakeholders Design what your position means to each stakeholder group: customers, job candidates, employees, and business partners.

⑤ Connect It to a Revenue Model Design how differentiation will generate revenue.

Where Does Positioning Fit Within Brand Strategy?

Positioning belongs in the “design layer” of brand strategy.

Philosophy layer (MVV and brand identity): What the company exists for
Design layer (positioning, target audience, and value proposition): Who chooses you, for what, and why ← This is where positioning belongs
Activity layer (sales, recruitment, web, and internal adoption): How to implement it

Once positioning is defined, it becomes clear what your sales pitches, recruitment messages, and website should communicate. Conversely, even if you develop the activity layer, leaving positioning vague will result in diluted messages aimed in every direction.

This also connects to brand identity (the philosophy layer). If identity is the unchanging core, positioning is the design of how to place that core in the market.

Summary

Positioning is the activity of defining a market position where a company can demonstrate competitive advantage and distinctiveness, and giving that position meaning in stakeholders’ minds.

Rather than simply pursuing differentiation, meet industry standards (PoP), then design points of difference (PoD) across three layers of value: functional, emotional, and organizational. Connect that differentiation to a revenue model. This design process is the essence of B2B positioning.

Frequently Asked Questions

Q: Which should we define first, PoP or PoD? A: Start by confirming your PoP (industry standards). If you promote only your PoD (differentiation) without meeting PoP, you will not even make the shortlist.

Q: Can small and medium-sized enterprises differentiate through organizational value? A: Yes. In fact, their greater agility compared with large companies tends to make it easier to create organizational value rooted in a specific industry or challenge—value that only this company can provide.

Q: Once positioning is defined, should it remain unchanged? A: It needs to be reassessed when market conditions change. However, frequent changes undermine brand consistency, so regular reviews on a quarterly to annual basis are recommended.

What Is a Brand Guidebook?—The Brand as a Decision-Making Document
How to Create a Brand Identity—Why Design Comes After Analysis and Definition
What Is Brand Identity? To see where your brand stands today, try the free BRAND CHECK™. If you want to learn systematically, see our brand management course.

Translated from the original Japanese article. Read in Japanese

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