The hype on digital tools has lead us to the world, where word “positioning” is instantly connected with SEO strategies and being visible in Google. Well… this article is not about it at all.
The very accurate description of what strategic positioning is has been coined by Al Ries and Jack Trout years back:
„Positioning is not what you do to a product. Positioning is what you do to the mind of the customer.”
Examples? Think about motocycles and freedom. Does any brand appear in your mind? Is it Harley Davidson? How about a safest car? For many many years this title has been connected to Volvo. Even after they stopped advertising it. Positioning is about perception.
It’s better to be first in the mind than in the marketplace. Al Ries
Have you ever heard of a concept of first-mover advantage? Well, frankly speaking it is not exactly about being first-mover. It is about being first in customers’ perception.
For most people, the first smartphone that revolutionized the market was an iPhone (2007). However, iPhone was not the first – there were some products that connected functions of cell phones and PDA’s many years before as for example IBM’s Simon which was launched in 1992 (!).
The smartphone featured a monochrome LCD touchscreen measuring 4.5 inches by 1.4 inches, and it came with a stylus.
mBank in Poland is known by public opinion as first Internet bank in Poland. In fact, it was the third e-banking solution on the market. First was PBG (Powszechny Bank Gospodarczy) two years before mBank (1998 vs 2000). It wasn’t successful anyway, Chile mBank has grew from a small Internet bank to one of the biggest market players in Poland. It is an universal bank by now, but the perception of customers is still very clear: technological, innovative bank.
Competing with leader who was first in the market is very tough. Promoting the use of product that is similar to competition may result in increasing their sales. Because your brand will come as the second. Do you know who was the first person who walked on the moon? I guess you do. How about the second? Third? Seventh?
You need to take position
Customers do not care. The commoditization is happening in most of the industries as products and services are very similar. Lack of difference means that they will not be loyal unless they feel a connection with your brand. And the battle for their mind is great as you compete not only with companies from your industry, but with everything. With Converse, Apple, Coca-Cola, Facebook and many more. How can you position yourself?
Search for differentiation by focusing what you are good in. All your competitors are fighting for low-cost? Think of focusing on customer service and quality. Don’t take shortcuts, analyse the market and deeply know your target customer.
There are certain industries and markets that lack positioning. Banking sector in Poland is one of them – most of the banks are alike, they do not differ much on the image, products or… anything. Finding a differentiation in such an industry can be very beneficial as it makes it much easier to stand out of the crowd. Be the most innovative provider in your category, or the most personal, or agile. Or just make it easier to use your services. Become the cheapest one. The fastest. Most customercentric. Most…whatever works for you in terms of your target customers needs.
Others, such as most of the FMCG categories, are known for a very well organized management of brand portfolios in terms of positioning on the market. Finding your place on the market like this requires very well thought out process.
There is a variety of possibilities when it comes to positioning. Just a few examples:
- Position and own the category benefit
- Volvo: Safety
- Walt Disney Company: Magic
- Position the product and the consumer
- U.S. Army: Be all you can be
- Dove: Real beauty
- Harley Davidson: Freedom
- Position how the company does business
- WalMart: Always the lowest price
- Position against the competition
- Avis: We’re #2. We try harder
- Seven-Up: The Un-cola
- Apple: Think different
Source: Positioning: The Battle for Your Mind, Al. Ries, Jack Trout, 2001
How does the positioning process look like?
The process of creating positioning consists of two big parts. What they include greatly depends on specifics of the industry and whether brand/company is already functioning on the market or it is not.
First one is analysis:
- Analysis of the market: benchmarking the competition (in sector as well as substitutes for the product/service): their positioning, strategies, marketing communications;
- Analysis of the customer: customer expectations and needs, their pains when it comes to using the product;
- Analysis of the trends: forecasts and trends – market trends, consumer trends, technology trends etc.;
- Analysis of the organization: inteviews with top management, analysis of strategic plans, goals etc.
Second one is action:
- Defining strategic assumptions for brand: deciding what brand should be and what should it be not, considering target customer;
- Creating positioning concepts and possibilities: usually using workshop with employees all across the organization assisted by top management, creating a long list of ideas for positioning;
- Selection of the best concepts: choosing a few concepts with most potential and testing them on customers – using focus groups, interviews, or whatever possible (ex. using lean startup methodology to test the ideas quickly);
- Creating a strategic document on positioning;
- Transfering the strategic view into operational actions (customer service, product development, channels, marketing communication).
The last one is vital. You can prepare the best ever positioning on paper, but if you execute it poorly, nobody will ever catch the idea. And as I have mentioned in the very beginning – it is all about customer perception.