PRODUCT POSITIONING

WHAT IS PRODUCT POSITIONING?

• It all started with a couple of guys named Trout and

Reis. Beginning in 1969 and then into the early 70s,
these two young marketing geniuses, Jack Trout and
Al Ries, wrote, spoke and disseminated to the
advertising and PR world about a new concept in
communications called positioning. Until then,
agencies had primarily been basing their media
campaigns on internally conceived benefits of the
client's product.
The game had changed. If you wanted to
reach your prospect, the focus of your
campaign could no longer be based on
internally conceived benefits,- what
management thought was cool , the target
was now the mind of the prospect. You had to
focus on the perceptions of the prospect. You
had to find a place in the mind of your public
in which to put your product.
Trout and Reis described positioning as follows:

"... positioning is not what you do to a product.

Positioning is what you do to the mind of the
prospect. That is, you position (place) the product in
the mind of the prospect."

L Ron Hubbard
Business management expert,

The unfamiliar is rapidly introduced or communicated

by comparing it to a familiar.
 THE EASY WAY TO POSITION A
PRODUCT
The easy way to position a product is to get into the mind first
Ex: Coke in COLAs. Bayer in aspirin. Disney in theme parks. Kleenex in
tissues. Philadelphia in cream cheese. Webster in dictionaries and
Gillette in razor blades.

The advantage is that people start to relate other products to the leader.
Ex: The "against" position taken by Avis against Hertz. They wisely
didn't try to take Hertz head on, they said
"Avis is only No. 2 in rent-a-cars, so why go with us? We try harder."
WHAT IF YOU'RE NOT FIRST?
"To find a unique position, what you must do is look inside the
prospect's mind.
You won't find an 'uncola' idea inside a 7-Up can. You find it inside
the cola drinker's head." Said Trout and Reis.
Ex:
VW took an immensely successful "small and ugly position" in the
late 60s and early 70s (They have recently returned to after trying
unsuccessfully to move out of the small position. VW means small
car).
• At the other end of the price spectrum, a few brands with
a "top-of-the-line/luxury position" are; Rolls Royce in
automobiles, Ritz Carlton or the Four Seasons in
hospitality, Chivas Regal in scotch, and Sax Fifth Avenue
in retail, Tiffanies in Jewelry, Mont Blanc in pens.
• Head and Shoulders took a huge bite out of the
shampoo market with the "anti dandruff" position.

But this is not easy

Internet users will be besieged with 3,000 advertising

messages every single day--about 1,000 on line and
2,000 off line. Assuming 16 hours a day of ears and
eyeballs, that's 3 ads a minute ALL DAY LONG
 NARROWING THE FOCUS
You strengthen your brand by narrowing your focus.

Chevrolet used to be the number one selling car in America. It

had a "reliable and reasonably priced" position. In 1986 they sold
1,718,839 cars. But expanding their line and trying to be all
things to all people undermined the power of the brand. Chevys
are all over the spectrum today with countless sub-brands and
now they sell less than a million cars a year. They have fallen to
second place behind Ford.
• In the mid 90s, Levi Strauss had 31 percent of the blue jean
market. Then, in an effort to appeal to a wider market, they
introduced a number different styles and options--baggy,
zippered, wide-leg and so on. Today they have 19 percent of the
market.
What happens when your focus is narrow
• Delicatessen shops have a history of selling "everything".
Fred DeLuca narrowed the focus to one type of
sandwich--submarine. Subway has grown to be a huge
success--the eighth largest fast-food chain in America
with 13,000 units worldwide.

• The Children's Super mart used to sell all kinds of

children's furniture and toys. They wanted to grow. They
narrowed their focus and changed their name. Toys R Us
now sells 20% of the toys in the US.
 Product Positioning Surveys
Finding an exact position for a product or service
is done by conducting surveys of a company's
customers and prospects

Positioning lets you create a place for your product

in the mind of your prospect. Without it, your
marketing, advertising and Public Relations money
is at risk. With it, the sky's the limit.
5 Steps to Improving Your
Company’s
Market Positioning
 The Perils of Poor Positioning
Symptoms of weak companies:

• Margins are low

• Product introductions are rough on company internal
operations and launches never seem to meet expectations
• Significant competitors are numerous and keep
increasing
• Training sales people becomes more difficult—they
don’t seem to get it
• Company professionals suffer from burnout
 Positioning is More
Important than Ever
Even small market niches are usually served by at least
2-3 competitors

In stable markets, each of these companies owns and

defends a segment of the market. And even though the
companies are prospering, it is rare for management to
be satisfied with their market niche. Large companies
want to take over smaller niches, and small companies
want to get a piece of the big market.
 Strategy Behind Good
Positioning
The fundamental idea behind positioning is the idea of competitive
advantage. When two forces meet, the overwhelming force wins.
Ex: A football game.

The next idea behind positioning relates to customers’ inability to

think of your company in more than one way.

The choice :
Do you compete where you can dominate? Or, do you want to face
the double penalty of leaving your core market undefended while
you pursue markets that you can never dominate?
 THE FIVE STEPS
Step 1: Research the Competition

You need to develop a strength and weakness profile of the

competition
Ex:” We are the leading supplier of spray paint equipment."

Another important area is their future products and

development plans.
Ex: Software companies usually give about a year’s notice
of future platforms and products
Step 2: Research Customers

The most valuable asset you have is your share of mind and
positioning with your customers

It is important to structure your research properly

Ex: Most high-tech and industrial markets have a few large

customers who account for most of the sales.

If you have the budget, it can be beneficial to use a qualified

outside researcher,
 Step 3: Research your Company

Company research is best done after the competitive and customer research

• What you need to find is the truth about your company and how it really works.
• In objective terms, who is directing the future?
• Are there unrecognized strengths?
• What accounts for the good and bad points brought up by the competitors and
customers?
• And a really important question: What product lines account for most of the
revenue?

You should interview all senior management, other managers, key

professionals, and line personnel.
Step 4: Decision to Focus

1. Look at where you make your money:

If 80% of your revenue is in a certain area, then that is
the natural area on which to focus.

2. Leverage your differences:

Your uniqueness is what gives you an advantage.

Ex: If you have a big expensive sales force that gives you
pains, you should think twice before you downsize,
because it may be the major source of market strength.

3. Under-focus is a much more likely problem than

over-focus
4. Try to avoid change:
Change if you must, but the best positioning strategy is
one that uses your current strengths—not some
speculative strength you hope to have in the future. The
most important and hard to change part of your
positioning is the perceptions of your customers and
prospects.

5. Avoid obvious mistakes:

Technology continues to evolve. If you don’t keep up,
you lose. So don’t use the positioning argument to lag
behind. Rather, use your positioning strategy to help
meet technical requirements. Staying current is much
easier if you focus.
Step 5: Spread the Word

The fastest way to spread the word is to involve all the

key people in the decision making process.
 Mapping Methods in Marketing

Perceptual Maps Preference Maps Joint Space Maps

Similarity-based Ideal-point model External analysis

methods (unfolding model) using PREFMAP-3

Attribute-based Vector model Simple “joint space

methods maps” using
modified perceptual
mapping methods
 Common

• Toshiba 1960CT
Easy setup
Slow

Performance

Light
Value
•Ι Β Μ 701 C
“Butterfly”

Elegant

Looks
 Interpretation

The arrow indicates the direction in which

that attribute is increasing (The attribute is
decreasing in the direction opposite to the
arrow).
The length of the line from the origin to the
arrow is an indicator of the variance of that
attribute explained by the 2D map. The
longer this line, the greater is the importance
of that attribute.
 Attributes of Laptops on a Perceptual Map

(Plain)

Common

• Toshiba 1960CT
Easy setup
Slow

Performance

Light
Good
•Ι Β Μ 701 C Value
“Butterfly”

Elegant

Looks
 Interpreting Perceptual Maps

• Attributes that are both relatively important and

close to the horizontal (vertical) axis help interpret
the meaning of the axis.
• To position a laptop on each attribute, draw an
imaginary perpendicular line from the location of
the laptop onto that attribute. (These are shown by
dashed lines on the map).
 Perceptual Map of Beer Market
(only Brands)

Old Milwaukee
•
Budweiser
• Beck’s •
Meister Brau • Heineken
• Miller •
•
• Coors
Stroh’s

• Michelob
• Coors
Miller • Light
Lite
•
Old
Milwaukee Light
 Perceptual Map of Beer Market
(Only attributes)
Popular
Full Bodied Heavy with Men

Special
Occasions
Blue Collar Dining Out Premium
Good Value

Budget Premium

Popular
Pale Color with
Women
On a
Budget Light Less Filling
Light
 Perceptual Map of Beer Market
(both products & attributes)
Heavy Popular
Heavy with Men
Old Milwaukee
Full Bodied
•
Budweiser
• Beck’s •
Meister Brau Special • Heineken
• Miller • Occasions
Good Value
Blue Collar
• Dining Out Premium
• Coors
Stroh’s
Budget Premium
• Michelob
• Coors Popular
Pale Color
Miller • Light with
Lite
On a
• Women
Old
Budget Milwaukee Light Light Less Filling
Light
 Two Preference Models
Ideal-Point Preference Model Vector Preference Model

Increasing
Preference

Preference

Decreasing
Preference

Ideal Point
Attribute Attribute
(eg, sweetness) (eg, service speed)
Limitations of Preference Mapping

• Provides a static model—ignores dynamics of customer

perceptions.

• Interpretation is sometimes difficult.

• Does not incorporate cost or likelihood of being able to achieve a

desired positioning.

• Does not incorporate a “probability model” to indicate goodness

of a map.

• Generally, need about 6 to 8 products to make the technique

useful.