Mikko Järvenpää, marketing geek, on positioning and differentiation:
Differentiation and positioning are strongly related. Differentiation is what makes you unique, it is your edge, how you differ (obviously). You can differentiate based on your technology, your experience, your niche market or your location. Features, benefits, quality, distribution can all be sources of differentiation. While it can be obvious to you how you are different from others, you still need to communicate your difference in order for it to work.
And how do you make it work? You need to position your difference in the mind of your target user or customer. This is a fancy way of saying that whoever you are marketing to must understand and remember your differentiation. And this the crux of the matter.
Excellent stuff, read the whole thing here. Here's another gem, in case you're not convinced yet:
Positioning can be explained in terms of psychology. We think in terms of representation. What is that person or company about? This is the most important thing in any elevator pitch. It has to stick. You want the person hearing it being able to recite it exactly the next day, regardless of how many they'd heard.
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