In most positioning strategies, an explicit or implicit frame of reference is one or more competitors. In some cases the reference competitor(s) can be the dominant aspect of the positioning strategy. It is useful to consider positioning with respect to a competitor for two reasons. First, the competitor may have a firm, well-crystallized image developed over many years. The competitor’s image can be used as a bridge to help communicate another image referenced to it. If someone wants to know where a particular address is, it is easier to say it is next to the Bank of America building than to describe the various streets to take to get there. Second, sometimes it is not important how good customers think you are; it is just important that they believe you are better than (or perhaps as good as) a given competitor.

Perhaps the most famous positioning strategy of this type was the Avis “We’re number two, we try harder” campaign. The message was that the Hertz company was so big that they did not need to work hard. The strategy was to position Avis with Hertz as major car-rental options, and therefore to position Avis away from National, which at the time was a close third to Avis.

Positioning with respect to a competitor can be an excellent way to create a position with respect to a product characteristic, “especially price and quality. Positioning with respect to a competitor can be accomplished by comparative advertising, advertising in which a competitor is explicitly named and compared on one or more product characteristics.

So how should you go about formulating your positioning plan? There are essentially 2 ways of going about it.

(a) Market Positioning.
(b) Psychological Positioning