Positioning Strategy

An exasperated CEO stood up in the board meeting and exclaimed, “Is that all you marketing know how to do, compete on price?!”

In today’s marketplace where everybody’s competing for the same shrinking budget and differentiation is hard to come by, marketers often think of price as their only lever.

That’s just incompetent marketing, plain and simple.

There are lots of ways to differentiate a product. You can even create the perception of differentiation, if you’re creative enough. It’s called product positioning and it’s something of an art.

Here are Five fundamental product positioning principles that will help you destroy the competition:

1. Find a product attribute that captures the customer’s imagination. It’s so easy to get trapped in the same old box of features and benefits. If you can’t differentiate that way, look at the problem with fresh eyes and fresh data. Find a new attribute that can get customers excited and focus your positioning around it.
2. Market share gains are expensive. There’s simply no way around this. Market share comes at a heavy cost and your product planning and positioning must reflect that or your P&L will suffer and you’ll end up back at the drawing board. The cost is a function of how entrenched the leaders are and the perceived “switching cost” for customers.
3. Reinvent the “customer experience.” Nothing matters more, and it’s not just for Internet and B2B. Just as with product attributes, you can shake up the competitive landscape by rethinking the customer experience in new terms. What’s important to customers changes as a function of time and market conditions. Take advantage of it.
4. Only target up, not down the totem pole. Publicly and to customers, always position your product relative to the market leader. It elevates your product in terms of customer perception. That said, train your sales force (and other internal groups) on features - benefits versus all competitors. That’s a whole different story.
5. Infrastructure (or ecosystem) as a competitive barrier. This is an important and often ignored aspect of product planning and positioning. Many products and services, especially in technology, require related companies and industries to support them in some way. If you get enough support for your product, it can be an extraordinarily effective competitive barrier that you can use in positioning.

Here’s a great example that utilized four of the five principals. When Toyotaentered the luxury automotive sector with the Lexus brand, it 1) made “ergonomics” and “quality” the new “performance” and “luxury,” 2) initially undercut the competition to gain entry and early market share, 3) created a low-stress and more respectful showroom experience, and 4) targeted Mercedes andBMW - up the totem pole.

Apple also uses positioning strategy extraordinarily well.

Samsung has done a great job with their product positioning. They focused on their strengths of innovations in technology and design to overtake Sony in consumer electronics.

Subway Sandwiches "EAT FRESH" have done a good job with their positioning. They're leveraging on their 'fresh, natural food' strength to edge out the competition in the fast food market.

on the other side in today’s marketplace, positioning has multiple problems:

1) Positioning is immeasurable: You can’t say “our positioning has improved our sales by 5 % or as a result of our positioning strategy, our brand is 12% better than competitions. Furthermore, it is impossible to measure the ROI or benchmark positioning.

2) Positioning is only suitable for mass markets. Yet branding today is about segmentation and communicating and engaging with those segments via relevant channels and with messages that resonate specifically with those segments or niche markets. Does this mean that a company should develop different positioning for different niches?

3) Positioning is suitable for mass markets with limited competition and limited consumer access to media and information. Today, consumers can get any information they want on anything from anywhere.

4) The wikipedia definition is a top-down, company knows best, hierarchical marketing approach. Yet we live in a C2C environment in which consumers define brands.

5) Positioning is one-way. The company knows best and you must listen to us. We tell you how our products are positioned. Bu today, if you are not entering into 2 way conversations with consumers you are about to join the brand graveyard.

6) Positioning was developed for the US mass market of the 1970’s. But we’re in a globalized world now, with much more competition and more knowledgeable consumers.

7) Positioning is competition, not customer driven. The basic premise of positioning is that you want to be number 1 or number 2 in a category in a prospect’s mind. If you can’t be number 1 or number 2 in an existing category because of competition, you make your own category. In today’s congested marketplace, the investments required to develop a new category are enormous. Furthermore, besides the difficulty and expense of creating your own category, you are also letting your marketing be driven by the competition rather than consumer demands for value.

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Positioning (marketing)

From Wikipedia, the free encyclopedia

http://en.wikipedia.org/wiki/Positioning_%28marketing%29

Nissan:::Interactive sidewalk

Nissan’s 360 Convention came at the end of a successful launch year for the Nissan Qashqai. The month-long event in Portugal, attended by automotive journalists from around the world, provided a great opportunity to gain further exposure for the Qashqai model.

Nissan wanted to make an impact from the moment the journalists’ planes touched down. Identifying the arrivals section of the airport as an area often associated with waiting and boredom, Nissan decided to liven the experience up, not only for the journalists, but the general public too.

A 34 metre-long sidewalk was installed in the arrivals lounge of Lisbon airport. Motion activated, it simulated the black and white paving stone effect of a Portuguese pavement, gradually disappearing to reveal the Qashqai model and logo.

Over 700 000 travelers passed over the interactive walkway, including the 650 journalists originally targeted. A large media buzz surrounded the walkway’s installation and reinforced Nissan’s reputation as a brand with an innovative communication strategy.

BRAND:

Nissan

BRAND OWNER:

Renault Nissan

CATEGORY:

Automotive

REGION:

Portugal

DATE:

Apr 2008 - May 2008

MEDIA AGENCY:

OMD

MEDIA CHANNEL

Thomas Cook:::Gloating holiday widget

Using direct online sales channels had proved successful at driving up sales for Thomas Cook's flight portal flythomascook.com (FTC), but the approach hadn’t impacted on brand awareness or lead to a more meaningful relationship with consumers.

Users tended to only come into contact with FTC at the point sale. FTC decided to capitalise on what it termed as ‘holiday gloating’ – the phenomenon of building up to a holiday, bragging about when you’re going, where you’re going and what you’ll do when you’re there.

Targeting the social networking-savvy 18-34 age group, FTC created the Holiday Widget. The widget could be downloaded to the user's social networking profile and personalised with all of their essential ‘gloating’ information such as the destination and the weather conditions. What’s more, when the user was actually on holiday, they could upload comments and photos from their phone or PC – perfect for creating ‘holiday envy’.

Released in September, FTC achieved 13,800 widget downloads in its first 6 weeks; it was Facebook’s second most downloaded application in October. It also drove additional traffic to FTC’s website that resulted in an 8% year on year increase. All the costs of the campaign were covered by week 1

BRAND:Thomas Cook

BRAND OWNER:Arcandor

CATEGORY:Travel/Airlines

REGION:UK

DATE:Sep 2008

MEDIA AGENCY:Arena BLM

MEDIA CHANNEL

Nomis :: Vangaurds

Client:Nomis Sports Innovations
Agency:Johannes Leonardo
In lead markets Johannes Leonardo knew that 80% of people who try on Nomis boots buy them. With retail store shelves dominated by the big sports brands they needed to get boots to customers without the hype and seduction of the retail environment. Nomis Vanguards were introduced - a fleet of mobile retail stores, 50 vans across 6 countries. The vans were driven by brand advocates made up former coaches and players to get the Nomis message and product out to onto the pitch - where players could put the boots to the ultimate test

Tetris game::: TVC's case study"Happy 25th birthday!"

Tetris is 25 years old today!

Google have changed their home page logo in honour of the Tetris birthday:

and other sites are running retrospectives - check out the Telegraph's Tetris gallery here.

There is no doubting the impact that Tetris had on driving the gaming market. Created by Russian computer engineer Alexey Pajitnov, Tetris has sold more than 70 million copies and been systematically re-worked and re-released for almost every video-game platform of the past 20 years.

Over time the influence of Tetris has also reached into popular culture in a number of areas - the Telegraph gallery showcases Tetris fashion and Tetris furniture too:

Tetris fashion

Tetris Kitchen

and Tetris was so popular that it even resulted in Doctor Spin having a UK hit record with a dance version of the Tetris theme music, seen here on Top Of The Pops in October 1992 (!):

Happy birthday Tetris!

It's been 25 years since Alexey Pajitnov, then a 29-year-old artificial intelligence researcher, came up with Tetris while working at the Soviet Academy of Sciences in Moscow. "A quarter of a century later," the Guardianreports, "it has a legitimate claim to being the videogame that has truly conquered the world. In all its forms, Tetris has sold more than 70 million copies around the globe; it has spawned architecture, art and music; it has earned multiple Guinness World Records; and is regularly voted one of the top games of all time." It's also enjoyed its share of goofy ads. .

Nissin Ufo Noodles website

Nissin Ufo Noodles

It's also interesting to see such an unusual artistic approach to food marketing. No fancy perfect pictures of the food, but rather a colorful chaotic browsing through illustrations and animations.

Maybe because the only way to make instant yakisoba noodles appealing is to avoid showing the product and rather focus on the aesthetics of the digital experience :-)

via

[Agencies] Small Vs. Big

1. Nimble. Because we don’t have a lot of people to get in the way of progress, we can turn on a dime for a client. They like that.

2. Loyal. Genuinely and to a fault. We need our precious clients to be successful, or else we’ll we’ll cease to exist. So we tend to act like we’re their partner. And really, we are.

3. Honest. Maybe too much at times. The rest of my team jokes about how “blunt” I can be with a client. Hey, if their hours suck, their staff is surly, the inventory dated, or the prices too high, someone needs to tell them…might as well be a “partner”. I care. (See Number 2.)

4. Efficient. Time is money. We’re small and don’t have the luxury of waxing poetic about a piece of creative for months. We study the issues and then work hard to sell something. Isn’t that what advertising is supposed to do, after all?

5. Hungry. We don’t eat till someone sells something. And we all know it, so we take nothing for granted.

6. Cost-conscious. Small agencies “feel the pain” of our small clients. We have to make money, but we don’t nickle and dime a client for every breath we take on their behalf.

7. Ego-less. Well, somewhat. If you think you’re the smartest one in the group, then you can’t work in a small shop. Arrogance just doesn’t work. Collaboration does.

Doritos Loves Love 2009

Augmented Reality and social networking have been fused together in a lovefest for Doritos Brazil. Packs of Doritos Sweet Chilli - the latest flavour - bear a QR code directing users online to ‘release’ aDoritos Lover, a sweet and unique little cartoon like monster. The campaign, created by Cubocc, Sao Paulo has seen some fantastic results so far with 23,000 lovers already being freed in a week.http://www.doritos.com.br/sweetchili/

Upon being released, the Lovers are added to their owner’s Orkutprofile - the largest social network in Brasil - as a special app. Owners can take pictures of their Lover, create birth certificates or even put the unwanted Lovers up for adoption!

The most exiting part though is that the Lovers have a mind of their own... with built in AI, Lovers will interact with others online and can randomly ‘introduce’ their owners to other Doritos Lovers owners... amazingly, there are over 18 trillion possible Doritos Lovers combinations!

This follows news this week that the hugely successful and equally love driven ‘Bring slow dancing back’ Doritos campaign created by BBDO Argentina has been awarded a Platinum Sol, the highest acclaim of the Iberoamerican Festival of Advertising Communication. BBDO’s win marks the first time in the history of the festival that an Argentinean agency has been awarded the acclaim. Look out for the campaign at this year’s Cannes festival too.

Wataniya Telecom:::Open your mind

Published in Epica Book Twenty One, Europe’s Best Advertising. ISBN 13: 978 2-88479-106-9.

Client: Wataniya Telecom.

Agency: Impact & Echo BBDO

Country: Kuwait – 2009

New Media:::Movistar

GM ReBirth

GM is filing for bankruptcy and guess what? They owe a ton of money to the ad industry and are probably responsible for tons of Detroit ad folk losing their jobs. Way to go, gas-guzzlers. Maybe the Hummer brand should have seemed like a bad idea sooner?

Here's B|Net's breakdown;

• Starcom MediaVest Group: $121 million
• Publicis Groupe: $25 million.
• Interpublic: $16 million
• McCann Erickson: $4.6 million

Total: $167 million

Source: http://industry.bnet.com/advertising/10002410/publicis-interpublic-owed-167-million-in-gm-bankruptcy/

Why GM Failed

Why do you think GM collapsed? A company which was started in 1909 went on to stay well ahead in the automobile industry for 100 years collapsed. I understand it is not all of sudden. What happened to their financial management?

GM is a very interesting case. Yes, it is certainly one of the great titans of U.S. industry and it's not any fun to see them go into bankruptcy.

There have been several opinions put forward at to why this all happened:

• GM makes cars people don't want


• GM is too slow to innovate because of its size


• GM is too bureaucratic and unable to adjust to changing markets


• GM's dealer network is too large


• GM sold off its formerly profitable financing business GMAC

GM stopped making a profit. The reason any company exists is to make a profit. When companies stop making a profit they fail. We measure profit using the income statement.

GM stopped making profit in 2005. Since that time GM lost more than $90 billion through the 1st quarter of 2009.

"why did those losses happen?" the key to GM's losses has to do with sales and fixed costs..

The problem for GM was that when the sales slowed down, they had trouble cutting costs because most of their costs were fixed. In other words, a lot of their costs did not go down as their sales went down. In most manufacturing companies, when sales go down, some of the bigger costs go down as well ,GM has tremendous fixed costs related to their union contract. Closing a plant, for example, did not necessarily mean the workers lost their jobs. Company pensions and legacy health care costs were fixed as well. So when sales went down, many costs stayed fairly constant. And that led to losses.

As the losses mounted and the economy struggled, these losses became so significant that GM could not survive as a viable business. In spite of billions of dollars of government support, the only solution for GM is to declare bankruptcy and try to lower those fixed costs through a court process.

Job 1 at GM

With the declaration of Chapter 11, GM is poised to enter a new era. The core of the transformation strategy is a separation of "New GM" from "Old GM." Essentially the company will be split in two with the assets of the old being sold or otherwise liquidated. So far, we know that several smaller units such as Hummer and Saturn will be disposed of, as well as one long-time GM brand — Pontiac. Up to 20 factories also will be sold or closed. More than a 1000 dealerships are likely to shut their doors.

In the auto industry the term "Job 1" is used to denote the first car of a new model that comes off the assembly line. It's a time when all the work to create the right product and the right process either comes together or doesn't.

So it seems fitting to use the idea of Job 1 as a metaphor for what the new leadership team at GM needs to get right during the transition period. What is Job 1 at GM? They need the right brand and platform architecture to drive the company forward. Because what has hobbled GM for a decade or more was an outdated architecture that was the legacy of the founding and growth of the company.

When GM was founded in 1908, it was a startup seeking to compete with a behemoth, the Ford Motor Company. Ford had changed the game in automobile manufacturing by introducing mass production techniques, notably the assembly line, supported by a fully integrated supply chain (Ford owned forests and coal mines). But Ford lacked the desire to customize its products to meet the needs of its customers, offering the Model T in, as Henry Ford famously put it, "any color as long as it's black."

Following a near collapse during the 1921 recession, GM was reorganized under CEO Alfred Sloan in 1923. Rather than meet Ford head on, Alfred Sloan and his team created a brand architecture, a five-model product line that ranged from the inexpensive Chevrolet to the premium Cadillac. Customers that bought a Chevy as their first car traded up as they became more affluent. To support this strategy, GM focused on styling and increased apparent customization through trim options that kept the core platform the same, but made the varieties built on it seem very different. (They also out-sourced much more component production to suppliers than did Ford and built dealer networks).

By the late 1920's, GM had become the dominant automaker in the US, forcing Ford to completely change the way it did business. GM became so successful that it virtually had to start competing with itself, ultimately leading to a proliferation of brands and a separation of the production networks and dealer networks for the company's various offerings.

And therein lies the heart of the problem that has laid GM low today — lack of a rational brand and platform architecture that would allow the company to compete with the likes of Toyota and Honda. The success of Toyota is founded on many factors, notably, its excellence in product design and manufacturing. But the heart of its success really rests on its simple brand architecture. You have Toyota cars for the masses, Scion for the young-and-hip, and Lexus for luxury buyers. And that's it. Toyota vehicles are built on a relatively small number of "platforms" — the chassis, suspension and drive train on which the shell is placed — that permit the company to offer a wide array of seemingly "different" vehicles. And the company pays a lot of attention to sharing parts between platforms to keep production volumes up and costs down.

The upshot? Brand and platform architecture are Job 1 for the new leadership team. Unless the New GM emerges with a simple, rational brand architecture, supported by the right approach to platform design and parts sharing, the company simply will not be able to compete with world class competitors, and we will continue to witness the decline and fall of a Giant