Web Copy Blog

Web Copy Blog header image 2

The law of positioning

2,815 Comments · advertising laws

“Positioning” must be among the most repeated words in the advertising lexicon rivaled only by “research,” “morph” and “it wasn’t my fault.

What’s most remarkable is that marketing survived so long before Al Ries and Jack Trout coined the term and explained their concept.

But once they did, everything changed. If they’d patented the word, they’d be rich as Bill Gates.

Since then, an understanding of good poisoning has made many people wealthy. It’s not a panacea, but is indispensable.

Poisoning solves the dangerous Grime of Being in the wrong place at the Right Time, Developed to find ways of finding room for new products in highly developed markets, poisoning became a major educative concept in the world’s developing markets.

Much has changed in the world of marketing since the concept was first aired, and no one is better placed than Al Ries himself to explore how positioning has evolved, and how savvy marketers have become in using it to carve out the richest territory.

Most days, the best-selling advertising book at Amazon.com is positioning: The Battle for your Mind by Jack Trout and yours truly.

What’s surprising about this is that the book was published 22 years ago.
For more than two decades, poisoning has been a hot topic in the advertising community, and not always favorably.

Bill Bern Bach Wrote an article denouncing the poisoning concept and David Ogilvy said, “phooey on positioning. “What is positioning and why does it generate such a love/hate relationship?

The poisoning concept challenges an idea that is the heart and soul of the advertising community: that the primary function of advertising is to communicate. “Tell more, sell more” sell more” was the old advertising adage.

Advertising as a form of communications is an idea deeply embedded in the corporate psyche.

Many advertising departments are now calling themselves the “Marketing Communications Department” or “Marcom” for short, too bad. The name encourages advertising people to go in exactly the wrong direction.

Advertising is not communication; advertising is poisoning. The best advertising communicates little about the product or service.

What the best advertising does, however, is to establish and reinforce a position in the prospect’s mind.

Marketing people used to talk about the 4ps: product, price, place, and promotion. Now they talk about the 5ps, the original four plus positioning.

And no company could launch a new brand without first writing a positioning. And no company could launch a new brand without first writing a position statement.

When you study these poisoning statements, you can see where marketing people have gotten off track in general.

They are written from the company’s point of view “We want to position our brand as the premier product in the category.” What’s wrong with a positioning statement like this? Everything. It leaves the prospect out of the equation.

A positioning statement should be formulated from the prospect’s point of view: “There’s an open hole in the mind for a premium product in the category.

The Open Hole
Price is the easiest hole in the mind to understand and it’s one of the easiest holes to fill.
Haagen-Daze’ decision to introduce a more expensive line of ice cream set up the “premium” ice-cream position for the brand and made Haagen-Dazs one of the enduring marketing successes of the past several decades.

What Haagen-Dazs did in ice cream, Heineken did in beer. It was the first brand to occupy the high-priced beer position in the mind.

Then the folks at Anheuser-Busch decided that if Heineken was the first high-priced imported beer, then they could occupy the position as the firs high-priced imported beer, a position that the Anheuser-Busch Michelob brand occupies today.

Rembrandt in toothpaste, Evian in water, Orville Redenbacher in popcorn, Rolex in watches, Mercedes-Benz in automobiles: these and hundreds of other brands owe their success to being the first brand to occupy the high-price position in the mind.

High price is only one of the open holes in the mind. Low price is another. What Haagen-Dazs Heineken and Mercedes did at the high end, brands like Wal-Mart and South west Airlines have done at the low end.

Minds can change. Stolichnaya was the first vodka to occupy the high-priced position in the mind. As time went on and the Cold War heated up.

Americans were turned off by a Russian vodka like Stolichnaya. So Absolute moved smartly into the high-priced vodka position. Today. Absolute outsells Stolichnaya in the US by about three to one.

How many price holes are there in a typical mind? It depends on the category. Normally there are three.

The regular brand, the low priced brand and the high-priced brand. When you own three brands that occupy all three positions, you can be said to win the Triple Crown of Branding.

Anheuser-Busch, for example, has Busch, the largest-selling, low –priced beer; Budweiser, the largest-selling regular beer; and Michelob, the largest-selling high-priced beer.

In some categories, there is room for an “ultra high-priced” brand. Today, Grey Goose Vodka, for example, is growing faster than Absolut and is not far behind Stolichnaya in sales, and is sure to pass the Russian brand sometime in the future.

“Country of origin” is another obvious hole in the mind. Toyota was the first to fill the Japanese imported-car hole and became the leading brand.

They did it again with Lexus, which became the leading high-priced Japanese automobile brand.

Corona was the first to occupy the Mexican hole in the beer drinker’s mind. Beck’s was the first to occupy the German hole.

Some consultants have called this positioning strategy, “the first-mover advantage,” but that is not so. It’s an advantage, but it’s not the reason that most leader brands got bo be leader.

It’s the “first minder” advantage. That is, the brand that gets into the mind first is the winner, not necessarily the brand that is first in the category.

• Duryea was the first automobile on the road, but never got into the mind. Ford was the first automobile in the mind.

• MITS Altair 8800 was the first personal computer, but never got into the mind. Apple was the first personal computer to get into the mind.

• Du Mont made the first television set; Hurley, the first washing machine. But these and many other brands failed to get into the minds of their prospects. You don’t win in the marketplace. You win in the mind.

The New Category
Sometimes there are no open holes in the prospect’s mind and you have to create one. We call this positioning strategy; “create a new category you can be first in.”

Gatorade, for instance, was the first sports drink. Developed in the 1969s by a team of doctors to add the Gators football team at the University of Florida the band now does over $2 billion in worldwide sales.

PowerBar was the first energy bar and now dominates this fast growing market. Some critics, of course, think this is just wordplay.

PowerBar to them is just a candy bar with a different name to help consumers assuage their guilt feelings about eating a candy bar.

May be there is little actual difference between a candy bar and a powerBar, but not so in the mind. Consumers consider them to be two different categories.

Red Bull was the first energy drink. Introduced in Austria in 1987, Red Bull now does more than $1 billion in worldwide sales.

Zima was the first… well, what was Zima the first of? The label said “ClearMalt”, but nobody knew what that meant. The television announcement ads were no help either. “What’s in it?” asked a bartender.

“It’s a secret, It’s something different,” replied a mysterious pitchman in his white suit and black hat.

Zima failed to establish a new category and sales remain disappointing. When you want to create a new category and then fill that hole, your need to focus your efforts on selling the category, not the brand.

What’s a computer spreadsheet? Almost no one knew what a spreadsheet was until Visi-Calc introduced the first spreadsheet for personal computers such as the 8-bit Apple machines.

And then they sold the benefits of the new spreadsheet category. Lotus 1-2-3 was the first spreadsheet for 16-bit machines like the IBM PC.

And Microsoft’s Excel was the first spreadsheet for the company’s Windows operating system. Digital Equipment was the first minicomputer.

Dell was the first personal computer sold direct to consumers. Palm was the first handheld computer. Michelin was the first steel-belted, radial-ply tire.

Prince was the first oversized tennis racket. And the Callaway Big Bertha was the first oversized golf driver.

These and many other brands became enormous successes by “creating a new category they could be first in.”

The Number-two Brand
Consumers like choice. Sometimes you can build a powerful brand just by giving consumers an alternative to the leading brand.

But What strategy can best deliver the number-two position? May be if we can produce a better product than the leader,” goes the thinking. “we won’t necessarily overtake them, but we will wind up in the number two position.”

This is the worst possible approach for a prospective number two band why? Because the better product cannot win in the marketplace even if consumers expect it to win.

As a matter of fact, there is a strong axiom, or belief, in the minds of consumers that “the best product or service wins in the marketplace.”

After all, this is so logical and so obvious, who could possibly disagree?
I could, that’s who. There’s a paradox in marketing.

While everyone believes that the better product will win in the marketplace, the worst possible strategy for any company is to try to produce a “better product.”

Why is this so? Because the leader in your field has already created the perception of producing the better product.

If you try to claim that your product is better, the prospect thinks, “No, it can’t be better; otherwise it would be the leader.”

Yet what do most companies try to do? They try to (1) produce a better product and (2) communicate that difference to customers and prospects. While it’s easy to do (1), it’s almost impossible to do (2).

Is Royal Grown cola a better tasting cola than coca-cola? Royal Grown thinks so and their research shows that 57% of prospects prefer the test of Royal Crown cola to coca-cola Classic. That’s a pretty big difference.

Yet, the better tasting cola (Royal Grown) has only 2% of the cola market. What they need to do, you might be thinking, is to communicate that difference. Well they’ve tried that and it doesn’t work.

“That can’t be,” the prospect thinks. “If Royal Crown were the better-tasting cola, it would be the leader, not coke. There must be something wrong with the research.”

Actually, the Royal crown company hired an independent research organization to conduct one million taste tests comparing its product with Coca-cola. Would 10 million tastes tests have made a difference?

No. You believe what you want to believe and if you believe that the better product wins in the marketplace, then you think coca-cola must be the better product because it is the leader.

Then how do you become a strong number-two brand? You become the opposite of the leader.

Coca-cola is the old, established brand which means that your parents drank coca-cola. So Pepsi-cola said, “You don’t want to drink what your parents drank, you’re the Pepsi Generation.”

Listerine was the “bad-tasting” mouthwash that Killed germs and odor in your month. So Scope became the “good tasting” mouthwash and a strong number two brand.

Home Depot is the leading “home-improvement” store, but its crowded aisles and jammed shelves appeal more to men than women.

So Lowe’s became the home-improvement store for women, with its clean layouts and wide aisles.

Windows is the computer operating system you buy from Microsoft. Linux, the fastes-growing computer operating system, is “open source software,” or free.

Duality is a fundamental characteristic of a human mind. Say “black” and people also think “white.” Say “and people also think “women.” Say “large” and people also think “small.”

Your best chance of occupying that number0two position is to try to become the opposite of the leader,

In every category, the mind has an open hole for a number-two brand, just waiting for someone to occupy it.

The Specialist
Every coffee shop in American sells coffee, but they also sell hamburgers, hot dogs, French fries, apple pie, doughnuts, and dozens of other foods and beverages.

So Starbucks specialized in coffee and became a very successful brand. So did McDonald’s, which specialized in hamburgers.

And Dunkin’ Donuts which specialized in doughnuts. And subway which specialized in submarine sandwiches.

The largest air-cargo company in America was Emery Air Freight. What Kind of services did Emery offer?

Everything – large packages, Small packages, overnight delivery, inexpensive two – and three – day deliveries.

So Federal Express specialized in “small packages, overnight” and became a much more successful brand than Emery.

Enterprise Rent-Car specialized in the “insurance replacement” business and became the largest car-rental company in America.

In mature categories (such as automobiles) where most of the segments have well-established brands, the best way of positioning your brand is by emphasising a single attribute.

Volvo did it with “Safety.” And BMW did it with “driving.” In essence, they each became a specialist in the safety and driving categories.

It’s almost always possible to build a brand by occupying a specialist position inside consumers’ minds. The only real question is, “is the category going to be big enough?”

Left-handed golf clubs might be a specialist position, but perhaps it’s not a big enough market for a brand to exploit.

The Channel Brand
Hanes was the largest-Selling Panty-hose brand in department stores in America, but Hanes had a problem.

Women were not shopping at department stores frequently enough. So the company wanted to expand its distribution.

Supermarkets were the logical choice. (Women visit a supermarket almost twice a week.) So Hanes developed a second brand for supermarket distribution only.

The “L’eggs” name was particularly good choice because it was a double entendre (legs and eggs).

To reinforce the name, the product was packaged in a plastic container that looked like an egg. L’eggs, the first supermarket panty-hose brand, became the largest-selling panty-hose brand in the country.

The internet has created many opportunities to create channel brands. Amazon.com, eBay, Monster.com, Salesforce.com are just some of many successful “Internet-only” brands.

Paul Mitchell has become a $600 million hair and skin-care brand by focusing on the professional hair-salon channel.

Ping did the same with golf clubs by focusing on the MCM (multi-level marketing) channel.

One of the most under-used methods of building a brand is the “channel” brand. As new channels are introduced, they create many opportunities to do just that.

The Gender Brand
Sometimes you can build a brand by focusing on half the market.

• Marlboro became a big brand by positioning itself as the first cigarette for men.

• Virginia slims became a big brand by positioning itself as the first cigarette for women.

• Right Card became a big brand by positioning itself as the first deodorant for men.

• Secret became a big brand by positioning itself as the first deodorant for women.

The “Bad Name” Problem
Complicating the search for an open hole in the mind is the issue of the name. You can’t put a square peg in a round hole and you can’t fill a hole in the mind with a bad, or inappropriate, name.

Ralph Lifshitz was a young fashion designer in New York who aspired to better thing. So he changed his name to Ralph Lauren and made his Polo brand into the most successful fashion brand in the world.

Could he have accomplished his goal with the name polo Ralph Lifshitz? Of course not.

Marion Morrison wanted to become a cowboy movie star so he changed his name to john Wayne and became the most successful motion-picture star ever. Could he have accomplished his goal with the name Marion? Of course not.

Many Asian names will not work outside of Asia. Names like Daewoo, Daihatsu and Matsushita are difficult to pronounce and difficult to spell outside of Asia.

When the Tokyo Tsushin Kogyo company started to market its products in the US, the company changed its name to Sony.

A good move. Many Asian companies that want to establish worldwide brands will have to do the same.

The “One Name, Two Holes” Problem
Then there is the problem of trying to use the same name to fill two different holes. Xerox, the leading brand of office copier, tried to get into the mainframe computer market with the Xerox name. It was a disaster.

IBM, the leading brand of mainframe computers, tried to get into the personal computer market with the IBM name.

The company has lost hundreds of millions of dollars trying to fill two holes with one name.

Are there successful examples of line extension? Sure, but these generally happen in weak markets where no single brand dominates the category.

Or they happen with weak brands with little identity in their categories. In other word, if your brand doesn’t stand for anything in one category, you can move it to another category where it won’t stand for anything either.

But when brands have a strong position in the mind, they can’t be moved. Could Coca-cola beer successfully challenge Budweiser? Silly question.

The “Moving-the-Hole” Problem
Some Companies think they can change what their brands stand for.
So Volkswagen is trying to sell a $100,000 automobile called the Phaeton. And Mercedes-Benz is trying to sell $20,000 A-class Vehicles.

You can deepen a hole, you can broaden a hole, but the one thing you can’t do with a hole is move it.

When a brand is strongly established in the mind, it can rarely, if ever, be moved to a new location.

You can’t go wrong, however, if you take your mind off your product, your brand, and your company and focus instead on the mind of the consumer. That’s where you can win and that’s where you can also lose.
Keywords: positioning, advertising, ad, brand,


2,815 Comments so far ↓

Leave a Comment