Tuesday, February 13, 2007

Segmentation, Differentiation and Positioning (Part 3 of a Series)


Recalling the old adage, “If a tree falls in a forest, and there’s no one there to hear it, does it make a sound?” – the differences we design into a product will remain there even if no one is there to observe them. But positioning is different. A product is positioned, but it is positioned in the mind of the customer – therefore, unlike differentiation, without a customer – a product cannot be positioned. Yet the positioning that we as marketers communicate is supported by the differentiation we have created.

Al Ries and Jack Trout, in their seminal work, Positioning, write, "Consumers are like chickens. They are much more comfortable with a pecking order that everybody knows about and accepts." Marketers create that pecking order through positioning. Positioning is simply the strategy marketers employ in order to rank a product in the consumer's "pecking order." For another perspective on this, Engel and Blackwell write that positioning is the sum of "marketing strategies designed to influence the location of a brand or store in the minds of potential customers."

At its core, Positioning is mostly a communications strategy – as marketers, we use communications tactics to position our product in the mind of the consumer in a way that will maximize our profits from that product. Such communications may include tactics such as advertising, public relations, and guerilla marketing (for example, seeding and propagating word-of-mouth - communication tactics will be addressed later in the course). By repeatedly exposing the consumer to strong messages that are congruent with our positioning strategy, our product will come to occupy the desired position in the consumer’s mind.

The real challenge in positioning is selecting the core attributes of a product that will be most effective in encouraging consumer trial and, later, motivating brand loyalty. Such attributes are developed from the variables identified in the differentiation phase. The number of attributes used to promote a product varies. While some marketing experts advocate the use of a single differentiating attribute to position a product (known as a unique selling proposition, or USP), there is no golden rule. Consider, though, that given the barrage of messages consumers are exposed to, there is a very tangible limit to what they are likely to remember - by some accounts, consumers in urban areas are subject to as many as 15,000 messages daily. If you can define your product as clearly superior in its category based on a single attribute, your positioning messages will be all the more powerful.


To achieve such clarity in positioning, the attributes you select to highlight should leverage your product's competitive advantages. This is why differentiation is essential to successful positioning. Picking up on the cake mix example discussed in a previous note in this series, imagine you are trying to market a new kind of cake mix. Your cake may be very moist, but it seems that all cake mixes claim to produce moist cakes. Moistness, therefore, is not a differentiating attribute, nor is it a competitive advantage. Positioning your cake mix as "very moist" will not get you that unique space in the consumer's mind which you are trying to capture. Also, remember that some aspects of your product are simply not important to your customer - for example, the type of cardboard you use for packaging; however, that same cardboard may ensure that your product stays fresh longer, and freshness is probably something that is very important to your customer. Your positioning must leverage your product's competitive advantages while honing in on what is important to your customers.

Another important guideline to remember when developing a communications strategy to promote your product’s positioning is that the consumer is not stupid – if your car is not the fastest to accelerate from zero to sixty, don’t say it is. Your work should always be honest and ethical – your company’s most valuable asset is its reputation, and if consumers feel you are broadcasting deceiving messages, they will quickly migrate to competing brands as your reputation falters. While many marketing campaigns are short-term, you must maintain a long-term focus and not sacrifice the future for the present.

ragingacademic


Feel like getting into the nitty gritty of positioning?

Try the following books:

Ries, Al, and Jack Trout. Positioning: The Battle For Your Mind. New York: McGraw Hill, 1981.

Porter, Michael E. “Chapter 4 - Differentiation.” Competitive Advantage. New York: The Free Press, 1985.


References

Engell, James F., and Roger D. Blackwell. Consumer Behavior. Chicago: The Dryden Press, 1982.

Kotler, Philip. Marketing Management - The Millennium Edition. Upper Saddle River, New Jersey: Prentice Hall, 2000.

Ries, Al, and Jack Trout. Positioning: The Battle For Your Mind. New York: McGraw Hill, 1981.

No comments: