Why Brand Positioning Is Important for Health Products

Branding Pharmaceuticals & Medical Products

I examine the importance of brand positioning for health product companies.

As of 2021, the health product industry is in a time of crisis – or perhaps a time of opportunity, depending on whose perspective you share.

For incumbents, lower barriers to entry and the rise of ‘health and wellness’ have resulted in a surfeit of agile, aggressive competitors.  E-commerce platforms mean start-ups don’t need to wrangle a place on the shelves of retailers, and there’s also a lack of regulation around many types of health products.

The result?  Entrants are materialising at an exponential rate, fuelled by social media, micro-influencers, and anti-corporate sentiments.  The health product market has become a jungle, and cutting through the foliage is hard work.

In this article, we’re going to examine exactly how brand positioning can benefit health product companies, as well as look at a real-world example of two top Australian brands.

What exactly are ‘health products’?

Technically, the term ‘health products’ could cover any product related to health, but it’s come to mean consumables designed to support your health.

Some basic categories of health products include:

  • Probiotics
  • Functional foods
  • Herbal supplements
  • Dietary supplements
  • Fitness supplements
  • Medical cannabis or cannabis oil

Health products are different from medical devices (which are regulated non-consumables designed to treat medical conditions) and drugs (which are regulated consumables designed to treat medical conditions).

While plenty of health products may help prevent or treat health conditions, that’s typically not their advertised purpose – and most health products are either unregulated or lightly regulated by the TGA.

Why is brand positioning so important for health products?

In a densely saturated market with low barriers to entry, finding a competitive advantage is hard.  Often, these ‘advantages’ will be product features that bestow only a temporary benefit – being gluten-free, vegan, paraben-free, and so on, were, at one point in time, all ‘advantages’, but have now become industry norms.

Replicable features are never true competitive advantages, because other companies can easily mimic them with a little bit of R&D.  Instead, forward-thinking companies know that proprietary technology, irreplicable systems, and cost leadership are the desirables – advantages that competitors will have extreme difficulty overcoming.

But even companies with clear competitive advantages aren’t safe from change.  Why?  Because, in a globalised world, monopolies don’t exist.  Industry leaders rarely get to enjoy an uncontested seat on the throne – there are normally one or more serious rivals, each struggling to gain the upper hand.

At the same time, smaller companies and disruptive entrants nip at the flanks of these behemoths, gradually chipping away their market share.

This brings us to the importance of a good corporate strategy – a purpose reinforced by its parts.  Keeping a competitive advantage is a challenge, particularly when it’s tangible, like a patent, a location, or control over limited resources.  A strategy helps retain that advantage for as long as possible by coordinating other aspects of the business around a central goal.

One of those aspects is, of course, the brand.  A brand can be itself a competitive advantage, but that’s not what I’m going to talk about here.  We need to think about brands as strategic assets that help incumbents retain their competitive advantages, and help entrants gain market footholds.

What is brand positioning?

Before we go any further, I’ll take a moment to recap brand positioning.  I’ve talked a lot about markets and strategy so far, and it’s important to remember that strategic positioning and brand positioning aren’t the same.

Here’s a quick explanation from Fuchs and Diamantopoulos [1]:

Strategic (market) positioning refers to the competitive market standing of a firm against its competitors …

Brand (operational) positioning, on the other hand, focuses on (the process of creating and altering) perceptions of consumers about a firm’s products or brands.

Strategic positioning informs brand positioning, but they’re not the same thing.  I’ll borrow a definition I like for brand positioning from one of my other blogs: “[Brand positioning means] assuming a desired position in the audience’s awareness by owning a specific set of associations in the context of competition” [2].

Insights for health product marketers, direct to your inbox.

So … why do health products require good brand positioning?

As we talked about before, the health product industry currently suffers from the following:

  • Dense saturation
  • Few long-lived competitive advantages
  • Products without clearly demonstrable efficacy (which makes feature-based differentiation difficult)

Consequently, brand positioning is needed to cut through the noise and help health product brands gain valuable real estate – both in the minds of consumers, and in terms of market share.

The main outcomes of good brand positioning are decreased consumer sensitivity to both price and efficacy.  Being able to produce products that are able to generate more value, as well as having to worry less about their objective performance, is a distinct competitive advantage, and one that is well corroborated by various studies [3, 4].

Let’s look at the first outcome: decreased sensitivity to price.

Unless a company has a competitive advantage (certain processes, economies of scale, or suppliers, for example) that allows them to easily undercut competitors’ prices, price-based differentiation is typically undesirable.  Maintaining that differentiation is difficult – the company must constantly evaluate and optimise its every aspect.

When a brand successfully positions its products on the basis of value, though, this is reversed.  Consumers become less sensitive to price, and the company can change its pricing strategy from competitive to value-based, leading to better financial performance.

Decreased price sensitivity is closely related to decreased sensitivity to efficacy.  It’s important to note that when I say ‘efficacy’, I really mean ‘objective efficacy’.  Health product value (from a consumer’s perspective) is often not noticeable, and so, therefore, relies on the consumer’s perception of that value.

In other words: for the purposes of financial performance, it’s irrelevant how well the product actually works, but rather how well consumers think it works.  Your average consumer doesn’t have the means to test whether one magnesium supplement is absorbed better into their body than another – so it’s the job of marketers to create perceived value through good brand positioning.

This is really the premise of all marketing, but it bears repeating here, because, unlike many products, the efficacy/quality of health products is rarely discernible to consumers.  Consider Carpenter et al’s 1994 study on ‘meaningless differentiation’ [4].  They give the example of Alberto Natural Silk Shampoo, which is infused with real silk.  The silk, as admitted by the company, has no effect on hair – but the company’s feature-based positioning creates the illusion of efficacy, which translates into perceived value.

I’m certainly not suggesting that meaningless differentiation is a good positioning choice.  It’s useful, however, for showing that perceived value is really the central consideration – what do consumers think it does?

An Example: Swisse versus Cenovis

Swisse is a health product company with clear positioning: their products help you perform better.  If we were to classify it via a positioning typology, we would say that it has adopted an indirect benefit positioning.

It’s apparent in its advertising (focuses heavily on sports and athletes), its choice of advertising slots (often during sports matches), its brand representative (Chris Hemsworth, a highly successful, extremely fit celebrity), and even its product line names (‘Ultiboost’ – ‘ultimate boost’).

Let’s take a look at one Swisse product, Ultiboost Magnesium.

swisse magnesium

There’s nothing on the product packaging that positions it in any particular way.  No special features are called out.  The magnesium type, magnesium citrate, is declared in a minute font that most consumers wouldn’t notice.

Yet Swisse’s magnesium sells at almost 4.4 times the price per tablet, and nearly 8.8 times the price per dose, of Cenovis (a close competitor, and the third-largest dietary supplement brand in Australia).

cenovis magnesium

Why?  There are probably many factors, but one is certainly that Cenovis has no clear brand positioning.  Its logo is a leaf.  Its tagline is ‘Be Clever Healthy’.  Its ‘About Us’ page says “CENOVIS stands for family health”.  How is Cenovis differentiating itself?  It isn’t apparent to me, and I suspect it isn’t to consumers either.

If we look at the objective qualities of each product, we see that each Swisse tablet contains just 150 mg of magnesium, versus 325 mg of magnesium per Cenovis tablet.  Of course, Swiss tablets use magnesium citrate, whereas Cenovis tablets use heavy magnesium oxide and magnesium amino acid chelate – magnesium citrate absorbs better than magnesium oxide or chelate, so perhaps the two are more-or-less evenly effective.

Efficacy comparisons like these require clinical trials to work out, and, to be honest, it’s not really relevant, because neither brand positions themselves around their product features.  Swisse positions themselves around an indirect benefit; Cenovis doesn’t really seem to have a clear grasp on brand positioning at all.

So does Swisse’s magnesium outperform Cenovis’s financially?  It’s impossible to tell without company data, but being able to sell each tablet for 4.4 times the price of a competitor’s with over half the amount of active ingredients is impressive.  It’s also a good example of decreased sensitivity to price and efficacy.  Is Swisse more expensive?  Yes, by a large margin.  Is Swisse’s product objectively better?  Maybe, but also maybe not – consumers can’t tell.  So they evaluate based on positioning, an arena where Swisse will win every time.


Brand positioning is important for all industries.  For health product companies, though, it is critical.  Dense market saturation, few competitive advantages, and a lack of demonstrable product efficacy make strong brand positioning one of the best advantages possible.

With the right positioning, consumers are less sensitive to price and quality – when efficacy isn’t obvious, is they lean towards brands with clear positioning, and are willing to pay more for them.  Vitamins have been the central focus of this article, but the same holds true for every other health product as well.

Align your company around a good corporate strategy.  Position wisely.  Brand strongly.  Success will follow.


[1] Fuchs, C. & Diamantopoulos, A. (2010) Evaluating the effectiveness of brand‐positioning strategies from a consumer perspective. European Journal of Marketing. 44(11/12), 1763–1786. DOI: 10.1108/03090561011079873

[2] Janiszewska, K. & Insch, A. (2012) The strategic importance of brand positioning in the place brand concept: elements, structure and application capabilities. Journal of International Studies. 5(1), 9–19. DOI: 10.14254/2071-8330.2012/5-1/2

[3] Kalra, A. & Goodstein, R. C. (1998) The Impact of Advertising Positioning Strategies on Consumer Price Sensitivity. Journal of Marketing Research. 35(2), 210–224. DOI: 10.1177/002224379803500207

[4] Carpenter, G. S., Glazer, R. & Nakamoto, K. (1994) Meaningful Brands from Meaningless Differentiation: The Dependence on Irrelevant Attributes. Journal of Marketing Research. 31(3), 339. DOI: 10.2307/3152221

By Duncan Croker

Duncan is a copywriter with a background in editing and storytelling. He loves collaborating with brands big and small, and thrives on the challenges of hard marketing.