Positioning is occupying your business in your customers’ mind. It defines how you want your customers to think about your products or services. It helps you be clear about what your business does, who you do it for and why believe you are different from others in your industry.
For example, an airline might use their pricing strategy to position themselves as a budget supplier. So are you Qantas or Jetstar? If you understand this you have a much better framework for which to make key decisions. Everything else, including your sales & marketing process will feed off it.
Use your location, your experience or packaging, to position your brand or products in your market. If you are unsure, get feedback from others, including your customers, around how they see your position in your market.