The new positioning
Insights on top business tactics
Description
Positioning is about focusing on a concept or term that encapsulates a company and its offerings in the consumer's mind, steering clear of trying to appeal to everyone. Each product or service possesses characteristics that attract consumers, such as cost, quality, flavor, value, or components. A well-positioned company chooses one of these traits and dedicates all its efforts to excel in that area. As a result, consumers start associating the company with that specific characteristic whenever its products are mentioned.
Positioning gives companies a competitive advantage by allowing them to concentrate their marketing on a singular, coherent message. Achieving this effectively and consistently over time enables a company to dominate a particular category in the consumer's perception. Ultimately, positioning aims for the company to become the top-of-mind choice for consumers thinking about that product category.
Table of contents
01Understanding positioning theory
Positioning is essentially a strategic approach that businesses employ to distinguish their offerings in a saturated market, ensuring their products capture the attention of consumers. This strategy, however, unfolds not within the physical marketplace but within the consumer's psyche.
Several critical reminders are paramount when considering the positioning strategy. Firstly, the human mind has a finite capacity for processing information, which limits the amount of data it can handle at any given time. Secondly, complexity and confusion are the mind's adversaries, while simplicity is its ally. Thirdly, the mind operates on an emotional level rather than a rational one, indicating a prevalent sense of insecurity. Fourthly, the mind is resistant to change, making the revival of familiar ideas more effective. Lastly, the mind's focus can waver, making it crucial to avoid diversifying a product line excessively.
In the late 1990s, the phenomenon of overcommunication became a significant challenge. The era was marked by an unprecedented influx of information, more than at any other period in history. However, this deluge of data did not necessarily translate into a more informed populace; rather, it led to increased confusion. Given this context, understanding the mental processing of information becomes crucial for positioning.
The mind's capacity is limited, leading individuals to filter out extensive, detailed marketing narratives as irrelevant noise. This distinction between data—mere facts and ideas without context—and information, which fosters understanding, is critical. In an age of overcommunication, people have developed selective filters to manage the information they encounter, deciding what to expose themselves to, what to focus on, and whether to retain or act on the information absorbed. The effectiveness of marketing messages, therefore, hinges on their ability to resonate with consumers through relatable analogies or familiar formats.
02Strategies for effective positioning
To optimize the marketing of a product or service, it's imperative to first ensure that the essence of your product is communicated verbally, even if it primarily relies on visual elements. This approach is grounded in the understanding that auditory information is processed more efficiently by the human brain compared to visual stimuli. Contrary to the widespread belief that visuals have a more profound impact, studies have shown that auditory information tends to have a more durable effect on memory retention. This common misconception may originate from a misinterpretation of Confucius's sayings, which have been inaccurately translated to imply that images are superior to words. In truth, auditory messages have a more lasting presence in memory, indicating that the brain gives precedence to auditory over visual information.
As a result, marketing strategies should give priority to verbal messages, ensuring they are both clear and engaging, while visuals should play a supporting role, enhancing rather than overshadowing the verbal message.
Another pivotal aspect of marketing is the naming of your product or service. A well-chosen name can significantly affect your product's positioning in the market by linking it with a particular benefit or unique selling proposition. This link can position your product as a leader in its category within the consumer's mind. If the perfect name is not available, consider negotiating for its rights or looking into sub-branding opportunities. It's also vital to ensure that the name is suitable across various languages to prevent limiting potential international expansion. Acronyms should be avoided as they can lead to confusion among potential customers. In situations where the existing name is not ideal, sub-branding can provide a viable alternative. This strategy involves retaining the corporate name while directing marketing efforts towards a more attractive product name, helping to lessen the adverse effects of an unfavorable name choice. Historical instances and political entities illustrate the significant influence that effective naming can have on public perception.
03Examples of positioning success
In the ever-changing business environment, companies that do not keep pace with market changes risk missing out on key opportunities. This gap can arise from a variety of reasons, such as rapid technological progress, unexpected changes in consumer tastes, increased global competition, and the enhanced sophistication of business leaders.
Therefore, the challenge for many businesses goes beyond simply establishing a market presence; it involves strategically repositioning themselves to meet future challenges. This often requires revisiting core strategies and ensuring that all members of the organization are aligned and moving together in a unified direction.
A prime example of successful repositioning is seen in the Lotus Development Corporation. Lotus initially made a name for itself with its Lotus 1-2-3 spreadsheet software. However, when Microsoft Excel emerged as a strong competitor, Lotus expanded its focus beyond spreadsheet software to the new category of groupware, designed to improve the efficiency of computer networks. By linking its past successes with its future aspirations through the positioning statement "First the spreadsheet. Now groupware," Lotus not only survived but also thrived, establishing itself as a leader in the groupware market. This case underscores the critical role of a CEO in steering a company through repositioning efforts, from maintaining the vision to resolving internal conflicts and engaging with the board of directors.
Related books
