Your competitive analysis spreadsheet is a strategic liability. It’s a neatly organized list of companies that look just like you, operate just like you, and sell products just like yours. But the competitor that will disrupt your business isn’t on that list. It’s the one solving your customer’s underlying problem in a way you never considered. The taxi industry didn’t see Uber coming because they were too busy watching other taxis. This strategic myopia is the single greatest threat to established brands. To survive, you must trade your microscope for a telescope. This is the core principle of frame of reference marketing: a method for seeing the entire universe of solutions your customer considers, not just the sliver you currently occupy.
Why Your Competitive Frame of Reference Is Too Small
A frame of reference approach engages an outside-in perspective to generate a better understanding of a business’s customers and what they need, creating a market or context in which a brand is positioned. It considers the wider set of products, services, brands, beliefs, and identities that hold the customer’s attention, to recognize the full range of products with whom the company competes. Here, frames of reference can be understood as a broadening of a brand’s identity and capabilities and the ability of a product and company to meet specific consumer goals. These can include need states like seeking a healthier choice, enjoying authentic goodness, easy relaxation, lively engagement, and many others – ideas that may seem abstract in nature, but are effective ways to create substantial value for customers. By understanding the range of actors and products that a target consumer engages with and uses through this approach, companies can more holistically understand what pain points still exist for customers, as well as where their business might have an opportunity to expand their offerings — sometimes through a broader brand ecosystem strategy that extends beyond the product itself.
The Building Blocks of Brand Positioning
Brand positioning isn’t a static statement you write on a whiteboard. It’s a dynamic system of signals that tells customers where you fit in their world—and why you deserve to be there. The old model of simply choosing a category and listing features is obsolete. Today, effective positioning is built on two core components: what makes you a credible player in the first place, and what makes you the only player that truly matters. This requires a deep understanding of both the market landscape and the customer’s internal landscape, creating a brand experience that feels both familiar and uniquely valuable. It’s the art of belonging to a conversation while simultaneously leading it in a new direction.
Establishing Table Stakes: Your Points of Parity
Before you can win the race, you have to be in it. Points of Parity (POPs) are the non-negotiable features and benefits that qualify your brand to compete. They are the table stakes. As Bottomline Marketing notes, a brand’s “frame of reference” is what helps customers instantly understand what you do and who you compete against. Think of it as category membership. If you’re launching an electric vehicle, having a certain range and charging capability isn’t a differentiator; it’s a requirement. These are the attributes consumers expect, and without them, your brand is simply not a viable option. Meeting these expectations doesn’t make you special, but failing to meet them makes you irrelevant.
Defining Your Winning Edge: Your Points of Difference
While parity gets you in the game, difference is how you win it. Your Points of Difference (PODs) are the unique and desirable attributes that set your brand apart from the competition. This is your winning edge. It could be superior design, a revolutionary technology, an unparalleled service model, or a powerful emotional connection. These aren’t just minor tweaks; they are meaningful advantages that your target audience values and that your competitors cannot easily replicate. As Chron points out, you can even highlight a shared benefit if your version is demonstrably better, turning a point of parity into a point of difference. This is where true brand strategy shines—by identifying and amplifying the one thing that makes you the only choice.
From Category to Demand: Making Your Product Essential
The ultimate goal of positioning is to move beyond simply fitting into a category and instead become essential to the customer. This requires shifting your perspective from the company outwards to the customer inwards. As we at Vivaldi believe, using a frame of reference helps you understand your customers by seeing the world from their point of view. It’s not about asking, “How can we sell this product?” but rather, “What problem in their life does our brand solve?” When you frame your brand around a customer’s goals—like seeking convenience, achieving a health goal, or finding a moment of joy—you stop competing on features and start creating genuine demand for the solution you offer.
Understanding the Customer’s Mind
The most critical truth in marketing is this: your brand doesn’t exist in your headquarters or your marketing briefs. It exists in the customer’s mind. And that mind is not a clean, logical spreadsheet where consumers rationally weigh pros and cons. It’s a chaotic, crowded, and highly selective space. Every day, people are bombarded with thousands of messages, and their brains have developed powerful filters to ignore almost all of them. To build a brand that matters, you can’t just shout louder. You have to understand the subtle psychological mechanisms that determine what gets in, what gets twisted, and what gets remembered.
Your Brand Lives in the Customer’s Mind
Perception is reality. When a consumer encounters your product, they don’t see it as it is; they see it as they are. As Wikipedia’s entry on the topic explains, people “choose, organize, and understand information to make sense of things” based on their unique collection of past experiences, existing beliefs, and cultural context. Your brand isn’t a product or a service; it’s a bundle of associations, feelings, and mental shortcuts that have been built over time. Every single touchpoint—from an ad to a customer service call to the product packaging—is an opportunity to shape that perception. The goal of a strong business strategy is to manage these associations with intention, ensuring the brand that lives in the customer’s mind is the one you designed.
Why Most Marketing is Ignored: The Three Mental Filters
Think of the human brain as the world’s most ruthless bouncer, standing guard at the velvet rope of consciousness. It has to be. To prevent total overwhelm, it actively filters out nearly everything it encounters. Your marketing message isn’t just competing with other brands; it’s competing with emails from the boss, a new TikTok trend, and what to make for dinner. To get past the bouncer, you must first understand the three main filters it uses to decide who gets in and who gets ignored. These filters—selective attention, distortion, and retention—explain why most marketing efforts fail before they even have a chance to persuade.
Selective Attention
The first filter is simple: people only see what they’re looking for. We are wired to notice things that are immediately relevant to our current needs, problems, or interests. This is selective attention. As one source puts it, “People only pay attention to ads that interest them and ignore others.” If you’re not in the market for a new car, you’ll likely drive past a dozen dealership billboards without consciously registering a single one. The challenge for marketers isn’t just to be loud; it’s to be relevant at the precise moment a consumer’s attention is available.
Selective Distortion
Even if your message gets through the first filter, it faces a second challenge: confirmation bias, or selective distortion. This is the tendency for people to interpret new information in a way that confirms their pre-existing beliefs. If a loyal customer of Brand A sees a study showing Brand B is superior, they might dismiss the study as flawed or funded by the competition. They will literally change the information they receive to protect what they already believe. You are never communicating to a blank slate; you are communicating to a mind that is actively trying to fit your message into its existing worldview.
Selective Retention
Finally, what little information makes it past the first two filters must survive the third: selective retention. We are far more likely to remember messages that align with our existing attitudes and beliefs. We remember the good points about brands we like and the bad points about brands we dislike. This is why a single fantastic customer experience can create a lifelong advocate, while a single negative one can be impossible to forget. The goal is to create positive, reinforcing messages and experiences that are strong enough to be stored in long-term memory.
Work With Beliefs, Not Against Them
Given these powerful mental filters, the most common marketing mistake is trying to directly challenge a customer’s deeply held beliefs. It’s an exhausting, expensive, and almost always losing battle. As marketing resources explain, attitudes are a person’s ingrained feelings toward something, and they are incredibly difficult to change once formed. A far more effective strategy is to work *with* existing beliefs, not against them. Instead of trying to convince someone they are wrong, anchor your brand to a belief they already hold. This requires a profound understanding of your audience—their values, their worldview, and their motivations. By aligning your message with their internal currents, you don’t have to fight for attention; you are welcomed in.
How to Map Your True Competitive Landscape
Lay’s provides an excellent example for consideration. In the mid-2000’s, Frito Lay was struggling to maintain its competitive edge where it had once reigned supreme – in order to better understand their current market position and where they had room to grow, Vivaldi’s frame of reference approach helped to dive into the activities, behaviors, needs, and context to study the frame of reference in which snacking moments happen every day. For Lay’s, a primary product is potato chips. Understanding the narrow industry of potato chips is an important starting place for creating a broader frame of reference that offers revealing insights about Lay’s and their competitors, as well as their customers. However, potato chips alone are not Lay’s only competitors. By thinking critically from a broader frame of reference, this approach creates a larger window of “pleasurable everyday snacks” as the market in which Lay’s was competing and could possibly expand into with more offerings. 
Moving layer by layer into the broader frame of reference surrounding Lay’s, the next, broader swath of the market consists of salty snacks, extending to items like cheese stick, pretzels, and pork rinds. From there, other salty snacks fall into a following layer of the frame of reference, including items like nuts and seeds, snack bars, and dips. Moving further, the next, extended layer of frame of reference includes sweet snacks (dried fruit, candy, gum, marshmallows), other macro snacks (cereal, canned fruit, peanut butter), and then finally, meal replacement (instant breakfast, nutrition bars, and weight control products). This broader category of “pleasurable everyday snacks” creates a more holistic market of competition for understanding Lay’s, enabling the business to understand what emotional drivers bring customers to their products.
Brands That Redrew the Map
The most resilient brands don’t just compete more effectively; they redefine the category itself. They understand that the competitive landscape isn’t a fixed map but a dynamic territory shaped by customer needs, behaviors, and alternatives. By zooming out from a narrow product-centric view to a broader, customer-centric frame of reference, they uncover new avenues for growth and build moats that competitors, stuck in the old paradigm, can’t cross. Translating this insight into action often requires a well-crafted go-to-market strategy that reflects the customer’s true frame of reference. The following examples showcase companies that didn’t just win the game—they changed how it was played entirely.
Arm & Hammer: From Baking Ingredient to Deodorizing Platform
Arm & Hammer brilliantly pivoted from a single-use product to a multi-category platform by reframing its core value. Instead of seeing itself as a company that sells baking soda, it recognized it was in the business of selling freshness and deodorizing power. This strategic shift in its frame of reference allowed the brand to stretch far beyond the kitchen pantry. The underlying asset—sodium bicarbonate—became the engine for a vast portfolio of products, including toothpaste, cat litter, and laundry detergent. The brand stopped competing with other baking ingredients and started competing with any product that promised a cleaner, fresher home, transforming a simple commodity into a household name synonymous with clean.
Motel 6: Competing Against a Free Couch, Not a Cheaper Room
Motel 6 understood a fundamental truth about its customers: its biggest competitor wasn’t another budget hotel, but the free option of staying with friends or family. This insight completely redrew their competitive map. The brand wasn’t selling a cheap room; it was selling a simple, clean, private, and hassle-free alternative to sleeping on a relative’s sofa. This allowed them to focus their messaging on the core benefits of reliability and comfort without needing to compete on amenities with higher-priced chains. By defining its value against a non-commercial alternative, Motel 6 carved out a distinct and defensible position in the market, speaking directly to a powerful customer need state.
Proflowers: Shifting from Selling Flowers to Selling Thoughtfulness
Proflowers recognized that customers weren’t just buying flowers; they were buying a way to express an emotion. They were in the business of facilitating thoughtfulness, not just horticulture. By adopting this broader frame of the “gifting business,” Proflowers was able to expand its offerings to include chocolates, gift baskets, and other items that helped customers convey care and affection. This move elevated the brand from a transactional flower delivery service to a trusted partner for life’s important moments. The shift was from a functional value proposition (fresh flowers delivered) to an emotional one (making it easy to show you care), creating a much deeper and more resilient customer relationship.
How to Turn Customer Insight Into Product Innovation
To generate a conversation about how your business can grow by using a broader target customer context and beyond narrow product categories starts with asking: what does the company traditionally offer? And then, moving to an outside-in approach, asking what customers truly care about and what category at a broader, more abstract level your company and product occupies? Followed by: who are the competitors in this expanded category? These questions can help to generate important insights to grow offerings, become more competitive, and consolidate positioning.
A Workshop for Finding Your True Competitive Set
Redefining your competitive landscape isn’t a theoretical exercise confined to the boardroom. It’s a hands-on, collaborative process that requires diverse perspectives from across your organization. The goal is to break free from internal biases and legacy thinking to see the market through your customer’s eyes. By assembling a cross-functional team—from marketing and sales to product development and customer service—you can pool your collective intelligence to build a more accurate and actionable view of the world you compete in. This workshop approach transforms an abstract strategic concept into a practical tool for growth.
Step 1: Pool Your Collective Intelligence
Your first move is to gather the people who interact with your customers and the market at different touchpoints. Each team member holds a unique piece of the puzzle. Sales knows the alternatives customers mention in negotiations; customer service hears about the makeshift solutions people use when your product falls short; product teams see the feature requests that hint at broader needs. By bringing these voices together, you can initiate a business strategy transformation grounded in reality. The objective is to understand the full range of products and services a customer uses to achieve a goal, revealing pain points and clear opportunities for expansion.
Step 2: Map Every Possible Battlefield
With your team assembled, begin mapping the competitive terrain in concentric circles, starting from your core product. For a brand like Lay’s, the innermost circle is other potato chips. But that’s just the beginning. The next layer out includes all salty snacks, like pretzels and cheese sticks. Moving further, you encounter all “pleasurable everyday snacks,” a category that includes everything from candy to nutrition bars. This method forces you to map your true competitive landscape by focusing on the customer’s need—in this case, a satisfying snack—rather than your product’s specifications. Each layer represents a different battlefield where you could potentially compete.
Step 3: Prioritize Your Arenas of Play
Once you have mapped every possible battlefield, the next step is to make strategic choices. A brand cannot be everything to everyone, and attempting to compete in every adjacent category is a recipe for failure. Analyze each ring of your competitive map and ask: Where do we have a credible right to play? Where does our brand’s equity give us an advantage? Which arenas offer the most significant growth potential? This critical evaluation helps you move from a broad map of possibilities to a focused set of priorities. It’s about identifying the arenas where you can not only compete but win.
Step 4: Commit to a Strategic Direction
The final step is to translate your prioritized arenas into a committed strategic direction. This involves aligning the entire organization around the new, expanded view of the market. It starts by asking fundamental questions, such as, “What business are we really in?” For Lay’s, the answer shifted from the potato chip business to the everyday snacking business. This new frame requires changes in product innovation, marketing messages, and distribution channels. Committing to a direction ensures that your newfound insight doesn’t just remain a clever workshop output but becomes the blueprint for your company’s future growth and organizational culture.
The Two Traps That Derail Strategy
The journey to redefine your competitive frame is filled with potential missteps. Many leadership teams start with the best intentions but fall into common traps that render their strategy ineffective. These aren’t minor errors; they are fundamental flaws in thinking that can lead to missed opportunities and vulnerability to disruption. Understanding these traps is the first step toward avoiding them. The two most common are the Goldilocks Dilemma—defining a frame that is too broad or too narrow—and the failure to look beyond the traditional boundaries of your industry for the real competitive threats.
The Goldilocks Dilemma: Defining a Frame That’s Just Right
Your competitive frame of reference must be just right. If it’s too narrow, you become myopic, focusing only on direct, look-alike competitors while ignoring the real alternatives your customers consider. This is the classic taxi industry mistake of worrying about other taxi companies while Uber was redefining the market. Conversely, if your frame is too broad, it becomes strategically useless. A brand like Lay’s defining its competition as “all food” would have no focus. The key is to adopt an outside-in perspective that identifies a context that is both expansive enough to reveal new opportunities and specific enough to guide concrete action.
Ignoring the Real Threat: Looking Beyond Your Industry
The most dangerous competitors often don’t look like you. They come from outside your industry and solve the same underlying customer need in a completely new way. Blockbuster saw other video rental stores as its competition, not a DVD-by-mail service that would later become a streaming giant. As the Lay’s example shows, the competitive set expanded layer by layer from potato chips to the much broader category of “pleasurable everyday snacks.” True strategic insight comes from recognizing that you are not competing on product features, but for a share of your customer’s life and the underlying emotional drivers that guide their choices.
A Frame of Reference is a Compass, Not a Map
Ultimately, a competitive frame of reference is not a static map you create once and file away. A map shows you the terrain as it exists today, but markets are dynamic, and customer behaviors are constantly shifting. Instead, think of your frame of reference as a compass. It provides a constant sense of direction, helping you orient your brand and strategy as the landscape changes. It allows you to interpret new trends and technologies through the lens of the fundamental human needs you serve. By focusing on the emotional drivers that bring customers to you, you can build a brand and innovation strategy that is not only relevant today but also resilient enough to adapt to the future. The goal isn’t to have a perfect picture of the market; it’s to have a reliable tool for making smart decisions in a world of constant motion.
Frequently Asked Questions
This sounds great in theory, but where do I actually start? The best first step isn’t a massive research project. Gather a small, cross-functional team—someone from sales, product, and customer service—and ask one simple question: “If our product vanished tomorrow, what would our customers do instead?” The answers will reveal the true alternatives you’re competing against, moving you beyond your direct competitors and into your customer’s actual decision-making process.
How is defining a ‘frame of reference’ different from just identifying our market category? Think of it this way: your market category is the aisle your product sits in at the store. Your frame of reference is the customer’s entire shopping list and the underlying need that brought them to the store. A category is defined by product features from the company’s perspective, while a frame of reference is defined by the customer’s goal. It shifts the focus from “what we sell” to “what problem we solve.”
Is this a one-time project, or something we should be doing regularly? This isn’t a static document you create once and file away. Your frame of reference is a strategic compass, not a map. Markets and customer behaviors are always changing, so you should treat this as a living part of your annual strategic planning. Revisit it whenever you see a major shift in technology or consumer behavior to ensure your brand is still pointed in the right direction.
My team is laser-focused on our direct competitors. How can I get them to buy into this broader perspective? Instead of presenting it as an abstract marketing exercise, frame it as a crucial tool for both risk management and growth. Use the taxi industry’s failure to see Uber coming as a cautionary tale. Show your team that the biggest threats—and the most significant opportunities—often come from outside your traditional competitive set. This approach isn’t about ignoring competitors; it’s about seeing the entire field so you’re never caught by surprise.
We’re not a huge brand like Lay’s or Arm & Hammer. How does this apply to a smaller business? This thinking is arguably even more critical for smaller or emerging businesses. You likely can’t outspend the giants in a head-to-head battle within a defined category. Your advantage lies in agility and insight. By identifying and owning a specific customer problem that larger players have overlooked, you can carve out a defensible niche. This approach allows you to compete on being smarter and more relevant, not just bigger.
Key Takeaways
- Focus on the customer’s problem, not your product category: Your brand competes for a share of your customer’s life, not just a share of the market. By understanding the underlying goal a customer is trying to achieve, you can identify your true competitive set and uncover new arenas for growth.
- Anchor your brand to existing beliefs, not against them: The human brain is wired to filter out, distort, and forget information that challenges what it already holds true. Instead of trying to change minds, the smartest strategy is to connect your brand’s value to a belief your customer already possesses.
- Shift from a product frame to a need-state frame to innovate: The path to growth lies in redefining the business you’re in. By mapping the competitive landscape from the customer’s perspective (e.g., “pleasurable snacks” instead of “potato chips”), you can identify unmet needs and create a clear roadmap for innovation.