The thinking process starts with evaluating your goals, starting with your position in the market.
DIFFERENTIATION
This is a concept that invites comparison. You're telling your audience you're different THAN ____ (insert key competitor).
So if you're a category challenger and are forced to position your brand in relation to the market leader, differentiation is the way to go.
DISTINCTIVENESS This is just about you and you only. It invites your audience (buyers, investors, public opinion, and anyone else who may be invested in your brand financially or emotionally) to think about your brand and its distinctive features.
It positions you as unique and doesn't focus on how you are different from others. It talks about how you're exceptional and the only choice your public should consider. Another way to look at this is the impact on your target audience.
DIFFERENTIATION cannot be passed down to your public audience. They cannot use your brand's differentiating points to differentiate themselves amongst peers because you are positioning your brand versus another brand while humans compete with other humans.
DISTINCTIVENESS works for you and can be passed on to your fans. They can latch onto your district attributes and feel special for using your unique brand. This gives them a social perception advantage and helps you monetize social desire and envy in return.
So if you want to position yourself as a challenger and emphasize that you're not #1, be different. And if you want to be seen as the only one in your audience's mind and live there rent-free, show that you are distinct and unique. Don't focus on comparing yourself to others.
Perceptual Positioning is not a marketing tactic to help you fight and overcome other competitors. Perceptual Positioning is a core business function. And, just like with your own self-development, you should always strive to be your best self and not compare yourself with others.
The best business strategy is not to focus on what other companies do and how you compare with them. It is to focus on winning the hearts and minds of your customers.