Positioning Summary (Review & Book Notes)

Positioning is one of those key business concepts that nobody really understands. In this book you’ll learn what positioning is, why should you care about it, and how businesses use it. Although it’s more geared towards corporations, it’s still relevant for any type of business. A classic book that any marketer should read.

Authors: Al Ries, Jack Trout

Originally published: 1980

Pages: 224

Genre: Business

Goodreads rating: ⭐️ 4.02/5

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Positioning Defined

Positioning starts with a product. A piece of merchandise, a service, a company, an institution, or even a person. Perhaps yourself.

But positioning is not what you do to a product. Positioning is what you do to the mind of the prospect. That is, you position the product in the mind of the prospect.

So it’s incorrect to call the concept “product positioning.” You’re not really doing something to the product itself.

Positioning is the first body of thought that comes to grips with the difficult problem of getting heard in our overcommunicated society.

What Positioning is All About

To be successful today, you must touch base with reality. And the only reality that counts is what’s already in the prospect’s mind.

To be creative, to create something that doesn’t already exist in the mind, is becoming more and more difficult. If not impossible.

The basic approach of positioning is not to create something new and different, but to manipulate what’s already up there in the mind, to retie the connections that already exist.

Today’s marketplace is no longer responsive to the strategies that worked in the past. There are just too many products, too many companies, and too much marketing noise.

The Overcommunicated Society

In our overcommunicated society, to talk about the “impact” of your advertising is to seriously overstate the potential effectiveness of your message. Advertising is not a sledgehammer. It’s more like a light fog, a very light fog that envelops your prospects.

In the communication jungle out there, the only hope to score big is to be selective, to concentrate on narrow targets, to practice segmentation. In a word, “positioning.”

The Oversimplified Message

The best approach to take in our overcommunicated society is the oversimplified message.

In communication, as in architecture, less is more. You have to sharpen your message to cut into the mind. You have to jettison the ambiguities, simplify the message, and then simplify it some more if you want to make a long-lasting impression.

You look for the solution to your problem not inside the product, not even inside your own mind.

You look for the solution to your problem inside the prospect’s mind.

In other words, since so little of your message is going to get through anyway, you ignore the sending side and concentrate on the receiving end. You concentrate on the perceptions of the prospect. Not the reality of the product.

By turning the process around, by focusing on the prospect rather than the product, you simplify the selection process.

Getting Into the Prospect’s Mind

Positioning is an organized system for finding a window in the mind. It is based on the concept that communication can only take place at the right time and under the right circumstances.

The easy way to get into a person’s mind is to be first.

In advertising, the first product to establish the position has an enormous advantage. In advertising, it’s best to have the best product in your particular field. But it’s even better to be first.

There are positioning strategies to deal with the problem of being No. 2 or No. 3 or even No. 203.

But first make sure you can’t find something to be first in. It’s better to be a big fish in a small pond (and then increase the size of the pond) than to be a small fish in a big pond.

The chaos in the marketplace is a reflection of the fact that advertising just doesn’t work the way it used to.

Messages prepared in the old, traditional ways have no hope of being successful in today’s overcommunicated society.

The Positioning Era

Today it has become obvious that advertising is entering a new era—an era where creativity is no longer the key to success.

The fun and games of the sixties and seventies have given way to the harsh realities of the eighties.

To succeed in our overcommunicated society, a company must create a position in the prospect’s mind, a position that takes into consideration not only a company’s own strengths and weaknesses, but those of its competitors as well.

Advertising is entering an era where strategy is king. In the positioning era, it’s not enough to invent or discover something.

For many people or products today, one roadway to success is to look at what your competitors are doing and then subtract the poetry or creativity which has become a barrier to getting the message into the mind. With a purified and simplified message, you can then penetrate the prospect’s mind.

The Advertising Problems in the Overcommunicated Society

One prime objective of all advertising is to heighten expectations. To create the illusion that the product or service will perform the miracles you expect. And presto, that’s exactly what the advertising does.

But create the opposite expectation and the product is in trouble.

In our overcommunicated society, the human mind is a totally inadequate container.

According to Harvard psychologist Dr. George A. Miller, the average human mind cannot deal with more than seven units at a time. Which is why seven is a popular number for lists that have to be remembered. Seven-digit phone numbers, the Seven Wonders of the World, seven-card stud, Snow White and the Seven Dwarfs.

To cope with complexity, people have learned to simplify everything.

This ranking of people, objects, and brands is not only a convenient method of organizing things but also an absolute necessity to keep from being overwhelmed by the complexities of life.

The Product Ladder

To cope with the product explosion, people have learned to rank products and brands in the mind. Perhaps this can best be visualized by imagining a series of ladders in the mind. On each step is a brand name. And each different ladder represents a different product category.

Some ladders have many steps. (Seven is many.) Others have few, if any.

A competitor that wants to increase its share of the business must either dislodge the brand above (a task that is usually impossible) or somehow relate its brand to the other company’s position.

Yet too many companies embark on marketing and advertising programs as if the competitor’s position did not exist. They advertise their products in a vacuum and are disappointed when their messages fail to get through.

Moving up the ladder in the mind can be extremely difficult if the brands above have a strong foothold and no leverage or positioning strategy is applied.

An advertiser who wants to introduce a new product category must carry in a new ladder. This, too, is difficult, especially if the new category is not positioned against the old one. The mind has no room for what’s new and different unless it’s related to the old.

That’s why if you have a truly new product, it’s often better to tell the prospect what the product is not, rather than what it is.

The “Uncola” Position

Another classic positioning strategy is to worm your way onto a ladder owned by someone else. As 7-Up did.

By linking the product to what was already in the mind of the prospect, the “uncola” position established 7-Up as an alternative to a cola drink.

To find a unique position, you must ignore conventional logic. Conventional logic says you find your concept inside yourself or inside the product.

Not true. 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.

Positioning Consistency

More than anything else, successful positioning requires consistency. You must keep at it year after year.

How to Go Against an IBM

How do you go against a company with a position like IBM?

Well, first you have to recognize it. Then you don’t do the thing that too many people in the computer field try to do. Act like IBM.

A company has no hope to make progress head-on against the position that IBM has established. And history, so far, has proved this to be true.

A better strategy for IBM’s competitors would be to take advantage of whatever positions they already own in the minds of their prospects and then relate them to a new position in computers.

In truth, outright failure is often preferable to mediocre success.

An alsoan can easily be tempted to think that the answer to the problem is trying harder. A company stuck with a losing position is not going to benefit much from hard work.

The problem is not what, but when, The extra effort, if it is going to be of much help, should be applied early to establish the precious posture of product leadership.

Establishing Leadership

History shows that the first brand into the brain, on the average, gets twice the long-term market share of the No. 2 brand and twice again as much as the No. 3 brand. And the relationships are not easily changed.

When a marketing leader isn’t first in a new category, the new product is usually an alsoan.

Strategies for Maintaining Leadership

Question: Where does the 800-pound gorilla sleep? Answer: Anywhere he wants to.

Leaders should use their short-term flexibility to assure themselves of a stable long-term future. As a matter of fact, the marketing leader is usually the one who moves the ladder into the mind with his or her brand nailed to the one and only rung. Once there, what should leaders do and not do?

What not to do

As long as a company owns the position, there’s no point in running advertisements that repeat the obvious. “We’re No. 1” is a typical example.

Much better is to enhance the product category in the prospect’s mind. IBM’s advertising usually ignores competition and sells the value of computers. All computers, not just the company’s types.

Why isn’t it a good idea to run advertising that says, “We’re No. 1”?

The reason is psychological. Either the prospect knows you are No. 1 and wonders why you are so insecure that you have to say so. Or the prospect doesn’t know you are No. 1. If not, why not?

Maybe you have defined your leadership in your own terms and not the prospect’s terms. Unfortunately, that just won’t work.

You can’t build a leadership position on your own terms. “The best-selling under-$1000 high-fidelity system east of the Mississippi.”

You have to build a leadership position in the prospect’s terms.

What to do

The essential ingredient in securing the leadership position is getting into the mind first. The essential ingredient in keeping that position is reinforcing the original concept.

Unfortunately, leaders often read their own advertising so avidly they end up thinking they can do no wrong. So when a competitor introduces a new product or a new feature, the tendency is to pooh-pooh the development.

Leaders should do the opposite. They should cover all bets. This means a leader should swallow his or her pride and adopt every new product development as soon as it shows signs of promise.

Power from the Product

“Only when our office copying success has been repeated, not once, but several times,” said the Xerox chairman early on in the company’s diversification game, “can we fairly reach the conclusion that this organization has the kind of power that can be relied upon again and again.”

This is the classic mistake made by the leader. The illusion that the power of the product is derived from the power of the organization.

It’s just the reverse. The power of the organization is derived from the power of the product, the position that the product owns in the prospect’s mind.

Positioning Multibrands

Most leaders should cover competitive moves by introducing another brand. This is the classic “multibrand” strategy of Procter & Gamble.

It may be a misnomer to call it a multibrand strategy. Rather it’s a single-position strategy.

Each brand is uniquely positioned to occupy a certain location in the mind of the prospect. When times change, when new products come and go, no effort is made to change the position. Rather a new product is introduced to reflect changing technologies and changing tastes.

Leadership is not the end of a positioning program. It’s only the start. Leaders are in the best position to exploit opportunites as they arise. Leaders should constantly use the power of their leadership to keep far ahead of the competition.

Positioning a Follower

What works for a leader doesn’t necessarily work for a follower. Leaders can often cover a competitive move and retain their leadership.

But followers are not in the same position to benefit from a covering strategy. When a follower copies a leader, it’s not covering at all. It’s better described as a me-too response.

Why Products Fail

Most products fail to achieve reasonable sales goals because the accent is on “better” rather than “speed.” That is, the No. 2 company thinks the road to success is to introduce a me-too product, only better.

It’s not enough to be better than the competitor. You must introduce your product before someone else has a chance to establish leadership. With a more massive advertising and promotion launch. And a better name.

Yet the opposite normally occurs. The me-too company wastes valuable time on improving the product. Then the launch is made with a smaller advertising budget than the leader’s. And then the new product is given the house name, because that’s the easy way to ensure a quick share of market. All deadly traps in our overcommunicated society. How do you find an open position in the prospect’s mind?

Crenaus

The French have a marketing expression that sums up this strategy rather neatly. Cherchez le creneau. “Look for the hole.” Cherchez le creneau and then fill it. That advice goes against the “bigger and better” philosophy ingrained into the American spirit.

To find a creneau, you must have the ability to think in reverse, to go against the grain. If everyone else is going east, see if you can find your creneau by going west. A strategy that worked for Christopher Columbus can also work for you. Let’s explore some strategies for finding creneaus.

The High-Price Creneau

High-price creneaus seem to be opening up in many product categories. As our throwaway society sees the urgent need for conversation, there’s a new appreciation of a quality product designed to last.

Price is an advantage, especially if you’re the first in the category to establish the high-price creneau.

Some brands base almost their entire product message on the high-price concept.

Too often, however, greed gets confused with positioning thinking. Charging high prices is not the way to get rich. Being the first to (1) establish the high-price position (2) with a valid product story (3) in a category where consumers are receptive to a high-priced brand is the secret of success. Otherwise, your high price just drives prospective customers away.

Furthermore, the place to establish the high price is in the ads, not in the store. The price (high or low) is as much a feature of the product as anything else.

If you do your positioning job right, there should be no price surprises in the store. Your ads don’t have to quote exact prices, although sometimes that’s a good thing to do. What they should do, however, is to clearly position your brand in a particular price category.

The Low-Price Creneau

Instead of high price, the opposite direction can also be a profitable tack to take.

In evaluating price as a possible creneau, keep in mind that the low-price creneau is often a good choice for new products like facsimile equipment and videotape players. Products customers believe they are taking a chance on.

The high-price creneau is often a good choice for old, established products like automobiles, watches, and television sets. Especially those products for which customers are not happy with existing repair services.

When you combine all three price strategies (high, standard, and low), you normally have a strong marketing approach.

Other Effective Creneaus

Sex is one. Marlboro was the first national brand to establish a masculine position in cigarettes, one reason why Phillip Morris’s Marlboro brand has climbed steadily in sales. From fifth place in sales to first place in a 10-year period.

In positioning a product, there’s no substitute for getting there first.

When you use sex to segment a product category and establish a position, the obvious approach isn’t always the best.

Age is another positioning strategy to use. Geritol tonic is a good example of a successful product aimed at older folks.

Time of day is also a potential positioning possibility. Nyquil, the first night-time cold remedy, is one example.

Distribution is another possibility. L’eggs was the first hosiery brand to be distributed in supermarkets and mass merchandise outlets. L’eggs now is the leading brand, with sales in the hundreds of millions.

Another possibility is the heavy-user position.

The Technology Trap

Even a great technical achievement of a research laboratory will fail if there is no creneau in the mind.

Don’t try to trick the prospect. Advertising is not a debate. It’s a seduction. The prospect won’t sit still for the finer points of verbal logic. As the politician said, “If it looks like a duck and walks like a duck, I say it’s a duck.”

The Everybody Trap

Some marketing people reject the “cherchez le creneau” concept. They don’t want to be tied down to a specific position because they believe it limits their sales. Or their opportunities.

They want to be all things to all people.

Years ago, when there were a lot fewer brands and a lot less advertising, it made sense to try to appeal to everybody.

In politics it used to be suicide for a politician to take a strong position on anything. Don’t step on anybody’s toes.

But today in the product arena and in the political arena, you have to have a position. There are too many competitors out there. You can’t win by not making enemies, by being everything to everybody.

To win in today’s competitive environment, you have to go out and make friends, carve out a specific niche in the market. Even if you lose a few doing so.

Today the everybody trap may keep you afloat if you’re already in office or already own a substantial share of market. But it’s deadly if you want to build a position from nowhere.

Creating Your Own Creneau

With a plethora of products in every category, how does a company use advertising to blast its way into the mind? The basic underlying marketing strategy has got to be “reposition the competition.”

Because there are so few creneaus to fill, a company must create one by repositioning the competitors that occupy the positions in the mind.

In other words, to move a new idea or product into the mind, you must first move an old one out.

Once an old idea is overturned, selling the new idea is often ludicrously simple. As a matter of fact, people will often actively search for a new idea to fill the void.

Never be afraid to conflict either. The crux of a repositioning program is undercutting an existing concept, product, or person.

Conflict, even personal conflict, can build a reputation overnight.

Repositioning a Brand

For a repositioning strategy to work, you must say something about your competitor’s product that causes the prospect to change his or her mind, not about your product, but about the competitor’s product.

The late Howard Gossage used to say that the objective of your advertising should not be to communicate with your consumers and prospects at all, but to terrorize your competition’s copywriters, and there’s some truth in that.

In politics or packaged goods, the rule is once a loser, always a loser.

In some small corner of the brain is a penalty box marked “loser.” Once your product is sent there, the game is over.

Go back to square one and start all over again. With a new product and a new game.

Repositioning vs. Comparative Ads

“We’re better than our competitors” isn’t repositioning. It’s comparative advertising and not very effective. There’s a psychological flaw in the advertiser’s reasoning which the prospect is quick to detect. “If your brand is so good, how come it’s not the leader?”

A look at comparative ads suggests why most of them aren’t effective. They fail to reposition the competition.

Rather, they use the competitor as a benchmark for their own brand. Then they tell the reader or viewer how much better they are. Which, of course, is exactly what the prospect expects the advertiser to say.

Is Repositioning Ethical

In the traditional approach, you ignored competition and made every claim seem like a preemptive claim. Mentioning a competitive product, for example, was considered not only bad taste but poor strategy as well.

In the positioning era, however, the rules are reversed. To establish a position, you must often not only name competitive names but also ignore most of the old advertising rules as well.

In category after category, the prospect already knows the benefits of using the product. To climb on his or her product ladder, you must relate your brand to the brands already in the prospect’s mind.

How to Choose a Name

What worked in the past won’t necessarily work now or in the future. In the past when there were fewer products, when the volume of communication was lower, the name wasn’t nearly as important.

Today, however, a lazy, say-nothing name isn’t good enough to cut into the mind. What you must look for is a name that begins the positioning process, a name that tells the prospect what the product’s major benefit is.

A name should not go “over the edge,” though. That is, become so close to the product itself that it becomes generic, a general name for all products of its class rather than a trade name for a specific brand.

Choosing a name is like driving a racing car. To win, you have to take chances. You have to select names that are almost, but not quite, generic. If once in a while you go off the track into generic territory, so be it. No world champion driver has made it to the top without spinning out a few times.

A strong, generic-like, descriptive name will block your me-too competitors from muscling their way into your territory. A good name is the best insurance for long-term success. People is a brilliant name for the gossip-column magazine. It’s a runaway success. The me-too copy, Us magazine, is in trouble.

When to Use a Coined Name

Only when you are first in the mind with an absolutely new product that millions of people are certain to want can you afford the luxury of a mean-nothing name.

Then, of course, any name would work.

So stick with common descriptive words (Spray ’n Wash) and avoid the coined words (Qyx).

As a guide, the five most common initial letters are S, C, P, A, and T. The five least common are X, Z, Y, Q, and K. One out of eight English words starts with an S. One out of 3000 starts with an X.

Bringing the Product Out of the Closet

The first step in overcoming negative reactions is to bring the product out of the closet. To deliberately polarize the situation by using a negative name like soy butter.

Once this is done, it allows the development of a long-term program to sell the advantages of soy butter vs. cow butter. An essential ingredient of such a program is “pride of origin” which the soy name connotes.

There is only negative equity in a bad name. When the name is bad, things tend to get worse. When the name is good, things tend to get better.

The No-Name Trap

“I’m going to L.A.,” the corporate executive will say. “And then I have to make a trip to New York.” Why is Los Angeles often called L.A., but New York is seldom called N.Y.?

“I worked for GE for a couple of years and then went to Western Union.” Why is General Electric often called GE, but Western Union is seldom called WU?

General Motors is often GM, American Motors is often AM, but Ford Motor is almost never FM.

Phonetic shorthand

The principle at work here is phonetic shorthand.

Ra-di-o Cor-poa-tion of A-mer-i-ca is 12 syllables long. No wonder most people use R-C-A, three syllables long.

Gen-er-al E-lec-tric is six syllables long, so most people use G-E, two syllables.

Gen-er-al Mo-tors is often GM. A-mer-i-can Mo-tors is often AM. But Ford Mo-tor is almost never referred to as FM. The single syllable Ford says it all.

But where there’s no phonetic advantage, most people won’t use initials. New York and N.Y. are both two syllables long. So while the initials N.Y. are often written, they are seldom spoken.

Los An-ge-les is four syllables long, so L.A. is frequently used. Note, too, that San Fran-cis-co, a four-syllable word, is seldom shortened to “S.F.” Why? There’s a perfectly good two syllable word (Frisco) to use a shorthand for San Francisco. Which is why people say “Jer-sey” for New Jersey instead of “N.J.”

When they have a choice of a word or a set of initials, both equal in phonetic length, people will invariably use the word, not the initials.

What about FDR and JFK? The irony of the situation is that once you get to the top, once you are well known, then initials can be used without ambiguity. Franklin Delano Roosevelt and John Fitzgerald Kennedy could use initials only after they became famous. Not before.

The next thing to go is the name of the company. What starts out as visual shorthand to conserve paper and typing time ends up as the monogram of success.

IBM, AT&T, GE, 3M. Sometimes it seems that membership in the Fortune 500 depends upon having a readily recognized set of initials. The moniker that tells the world you have made it.

If you select the company next up in size from every initial company on the Fortune 500 list, you will find the following: Allegheny International, American Motors, Amstar, Bristol-Myers, Celanese,

Which list of companies is better known? The name companies, of course.

Which companies are likely to grow faster? Again, the name companies.

To test this point, we conducted a survey of both “name” and “initial” companies using a Business Week subscriber list. The results show the value of a name.

The average awareness of the “initial” companies was 49 percent. The average awareness of a matched group of “name” companies was 68 percent, 19 percentage points higher.

No shortcuts to success

A company must be extremely well known before it can use initials successfully. Apparently the use of the initials “GE” triggers the words “General Electric” inside the brain.

Invariably, people must know the name first before they will respond to initials. The Federal Bureau of Investigation and the Internal Revenue Service are extremely well known. So we respond instantly to FBI and IRS.

But HUD is not recognized nearly so quickly. Why? Because most people don’t know the Department of Housing and Urban Development. So if HUD wants to become better known, the department must first make the name Housing and Urban Development better known. Taking a shortcut by using only the initials HUD won’t help very much.

Positioning is like the game of life. A long-term proposition. Name decisions made today may not bear fruit until many, many years in the future.

You can’t use the initials of a company that is only modestly successful (the cause) and then expect it to become rich and famous (the effect).

It’s like trying to become rich and famous by buying limousines and corporate jets. First, you have to become successful in order to have the money to buy the fringe benefits.

In some ways, the rush to adopt initials represents a desire to look accepted even at the cost of a loss in communications. It also represents the copycat thinking prevalent in some management circles.

Many companies are saddled with obsolete names through no fault of their own. But before you throw away a name in favor of meaningless initials, see if you can find another “name” that will do the job you want done.

With a good name, your positioning job is going to be a lot easier.

The Conglomeration Era

In the product era life was simpler. Each company specialized in a single line. The name told it all. Standard Oil, U.S. Steel, U.S. Rubber, United Airlines, Pennsylvania Railroad.

But technological progress created opportunities. So companies started branching into new fields.

Enter the conglomerate. The company that specializes in nothing. By development or acquisition, the conglomerate is prepared to enter any field in which it thinks it can make a buck.

Take General Electric. GE makes everything from jet engines to nuclear power plants to plastics.

The Two Naming Strategies

Because companies grow by two different strategies (internal development or external acquisition), two different “name” strategies evolved. Corporate egos dictate the strategies.

When a company develops a product internally, it usually puts the corporate name on the product.

When should a company use the house name and when should they select a new name?

One reason why the principles of name selection remain so elusive is the Charles Lindbergh syndrome. If you get into the mind first, any name is going to work. If you didn’t get there first, then you are flirting with disaster if you don’t select an appropriate name.

New Product, New Name

When a really new product comes along, it’s almost always a mistake to hang a well-known name on it.

The reason is obvious. A well-known name got well known because it stood for something. It occupies a position in the prospect’s mind. A really well-known name sits on the top rung of a sharply defined ladder.

The new product, if it’s going to be successful, is going to require a new ladder. New ladder, new name. It’s as simple as that.

Yet the pressures to go with the well-known name are enormous. “A well-known name has built-in acceptance. Our customers and prospects know us and our company, and they will be more likely to accept our new product if we have our name on it.” The logic of line extension is overwhelming and sometimes very difficult to refute.

Yet history has destroyed this illusion.

Xerox spent almost a billion dollars for a profitable computer company with a perfectly good name, Scientific Data Systems. Then what did Xerox do? Of course, they changed the name of the company from Scientific Data Systems to Xerox Data Systems.

The Teeter-Totter Principle

When you look into the prospect’s mind, you can see what went wrong.

It’s the teeter-totter principle. One name can’t stand for two distinctly different products. When one goes up, the other goes down.

Xerox means copier, not computer.

You knew that any Xerox machine that couldn’t make a copy was headed for trouble. When Xerox folded its computer operations, it wrote off an additional $84.4 million.

The Importance of Anonymity

In dealing with media, you must conserve your anonymity until you are ready to spend it. And then when you spend it, spend it big. Always keeping in mind that the objective is not publicity or communication for its own sake, but publicity to achieve a position in the prospect’s mind.

An unknown company with an unknown product has much more to gain from publicity than a well-known company with an established product.

The Line Extension Trap

When the marketing history of the past decade is written, the single most significant trend will have to be line extension. That is, taking the name of an established product and using it on a new one.

Logic is on the side of line extension. Arguments of economics. Trade acceptance. Consumer acceptance. Lower advertising costs. Increased income. The corporate image.

Inside-out Thinking

Logic is on the side of line extension. Truth, unfortunately, is not.

Line extension is a result of clear, hard-headed, inside-out thinking that goes something like this:

“We make Dial soap, a great product that gets the biggest share of the bar-soap market. When our customers see Dial deodorant, they’ll know it comes from the makers of the great Dial soap.”

“Furthermore,” and this is the clincher, “Dial is a deodorant soap. Our customers will expect us to produce a high-quality underarm deodorant.” In short, Dial soap customers will buy Dial deodorants.

Bayer “invented” aspirin and marketed the leading brand of analgesic for many years. The people at Bayer couldn’t fail to notice the progress made by the “anti-aspirin” approach used by Tylenol.

So Bayer introduced an acetaminophen product called “Bayer nonaspirin pain reliever.” Presumably people who had been buying Tylenol and other acetaminophen products would now switch back to Bayer, the leading name in headache remedies.

But neither strategy worked.

Outside-in Thinking

Both Dial and Bayer hold strong positions inside the prospect’s mind.

But what does it mean to own a position in the mind? Simply this: The brand name becomes a surrogate or substitute for the generic name.

“Where is the Bayer?”

“Hand me the Dial.”

The stronger the position, the more often this substitution takes place. Some brands are so strong they are practically generic.

From a communication point of view, the generic brand name is very efficient. One word serves in place of two. When you have a generic brand name, you can afford to ignore the brand and promote the category.

From the prospect’s point of view, line extension works against the generic brand position. It blurs the sharp focus of the brand in the mind. No longer can the prospect say “Bayer” if he or she wants aspirin. Or “Dial” for soap.

In a sense, line extension educates the prospect to the fact that Bayer is nothing but a brand name. It destroys the illusion that Bayer is a superior form of aspirin. Or that Dial is deodorant soap rather than just a brand name for a deodorant soap.

What actually gets driven into the mind is not the product at all but the “name” of the product, which the prospect uses as a hook to hang attributes on.

In positioning, the shortest distance between two points is not necessarily the best strategy. The obvious name isn’t always the best name.

Inside-out thinking is the biggest barrier to success. Outside-in thinking is the best aid.

The Two Ways of Looking at the Name

The consumer and the manufacturer see things in totally different ways.

The great strength of a generic brand name is this close identification with the product itself. In the consumer’s mind, Bayer is aspirin and every other aspirin brand becomes “imitation Bayer.”

But notice what happens when the same customer is asked to buy a product called “Bayer nonaspirin.” If Bayer is aspirin, how can Bayer also be nonaspirin?

Bayer timedelease aspirin, Bayer decongestant cold tablets, Bayer nonaspirin pain reliever. Each extension of the Bayer line undercuts the brand’s aspirin position.

As you might expect, Bayer’s total share of the analgesic market keeps falling.

Reverse Line Extension

While line extension is usually a mistake, the reverse can work. Reverse line extension is called “broadening the base.” One of the best examples is Johnson’s baby shampoo.

By promoting the mildness of the product to the adult market, the company has made Johnson’s baby shampoo one of the leading brands of adult shampoo.

Notice the characteristics of this broadening-the-base strategy. Same product, same package, same label. Only the application has changed.

If Johnson & Johnson had line-extended the product and introduced Johnson’s adult shampoo, the product would not have been nearly as successful.

The Line Extension Disadvantages

After the initial recognition of a line-extension brand, the prospect is never quite sure there is such a product.

Easy come, easy go. Line-extension names are forgettable because they have no independent position in the mind. They are satellites to the original brand name. Their only contribution is to blur the position occupied by the original name. Often with catastrophic results.

Where there are no brands or weak brands, you can line-extend. But as soon as strong competition arrives, you’re in trouble.

It will stretch, but not beyond a certain point. Furthermore, the more you stretch a name, the weaker it becomes. (Just the opposite of what you might expect.)

How far should you stretch a name? This is an economics call as much as a judgment call.

Let’s say you have a line of canned vegetables. Do you have a brand name for peas, another for corn, and still a third for string beans? Probably not. Economically, it wouldn’t make sense.

The Rules of the Line Extension

We call line extension a “trap,” not a mistake. Line extension can work if.…

But it’s a big if. If your competitors are foolish. If your volumn is small. If you have no competitors. If you don’t expect to build a position in the prospect’s mind. If you don’t do any advertising.

The truth is, many products are sold, few are positioned. That is, the customer will pick up a can of peas without having a going-in preference, or position, for a brand of peas. In this case, any well-known brand name is going to do better than any unknown name.

And if you work for a company with thousands of small-volume products (3M is a typical example), you obviously cannot have a new name for every one.

So we offer some rules of the road that will tell you when to use the house name and when not to.

Expected volume. Potential winners should not bear the house name. Small-volume products should.
Competition. In a vacuum, the brand should not bear the house name. In a crowded field, it should.
Advertising support. Big-budget brands should not bear the house name. Small-budget brands should.
Significance. Breakthrough products should not bear the house name. Commodity products such as chemicals should.
Distribution. Off-the-shelf items should not bear the house name. Items sold by sales reps should.

Why Positioning Evens the Big and Small Companies

Most people think that the bigger, more successful companies have the better people. And the smaller, less successful companies have the leftovers.

So if your company occupies the top rung of the product ladder in the prospect’s mind, you can be sure that the prospect will also think that your company has the best people.

If you’re not on top and you tell the prospect you have the better people.… Well, that’s one of those inconsistencies that doesn’t usually get resolved in your favor.

If Ford really has the better ideas, why doesn’t it use them in the marketplace to overtake General Motors instead of using them in its advertising to impress the public?

This is not a question of fact. (Ford could have the better ideas and still be in second place.) This is just a question that springs up in the prospect’s mind.

Looking into the Mind

The first step in any positioning program is to look inside the mind of the prospect.

Most positioning programs are nothing more or less than a search for the obvious. Yet the obvious is easy to miss if you zero in too quickly on the product itself.

The solution to a positioning problem is usually found in the prospect’s mind, not in the product.

Positioning a Product vs a Service

What’s the difference between the positioning of a product (like Milk Duds) and the positioning of a service (like Western Union’s Mailgram)?

Not much, especially from a strategic point of view. Most of the differences are in techniques.

Visual vs. Verbal

In a product ad, the dominant element is usually the picture, the visual element. In a service ad, the dominant element is usually the words, the verbal element.

Mapping the Prospect’s Mind

“Mapping the prospect’s mind” is normally done with a research technique called “semantic differential.”

In semantic differential research, the prospect is given a set of attributes and then asked to rank each competitor on a scale, generally from 1 to 10.

Conventional wisdom is not positioning thinking. Positioning theory says you must start with what the prospect is already willing to give you.

Positioning Oneself

If positioning strategies can be used to promote a product, why can’t they be used to promote yourself? No reason at all.

So let’s review positioning theory as it might apply to your own personal career.

Define yourself

What are you? People suffer from the same disease as products. They try to be all things to all people.

The problem with this approach is the mind of the prospect. It’s difficult enough to link one concept with each product. It’s almost impossible with two or three or more concepts.

The most difficult part of positioning is selecting that one specific concept to hang your hat on. Yet you must, if you want to cut through the prospect’s wall of indifference.

What are you? What is your own position in life? Can you sum up your own position in a single concept? Then can you run your own career to establish and exploit that position?

Most people aren’t ruthless enough to set up a single concept for themselves. They vacillate. They expect others to do it for them.

“I’m the best lawyer in Dallas.”

Are you? How often would your name be mentioned if we took a survey of the Dallas legal community?

“I’m the best lawyer in Dallas” is a position that can be achieved with some talent, some luck, and a lot of strategy. And the first step is to isolate the concept that you are going to use to establish that long-term position. It’s not easy. But the rewards can be great.

Make mistakes

Anything worthwhile doing is worthwhile doing lousy. Your reputation will probably be better within the company if you try many times and succeed sometimes than if you fear failure and only try for sure things.

Find a horse to ride

The truth is, the road to fame and fortune is rarely found within yourself. The only sure way to success is to find yourself a horse to ride. It may be difficult for the ego to accept, but success in life is based more on what others can do for you than on what you can do for yourself.

The first horse to ride is your company. Where is your company going? Or more impolitely, is it going anywhere at all?

No matter how brilliant you are, it never pays to cast your lot with a loser. Even the best officer on the Titanic wound up in the same lifeboat as the worst. And that’s if he was lucky enough to stay out of the water.

You can’t do it yourself. If your company is going nowhere, get yourself a new one.

The second horse to ride is your boss. Ask yourself the same questions about your boss as you asked yourself about your company.

Is he or she going anywhere? If not, who is? Always try to work for the smartest, brightest, most competent person you can find.

Yet some people actually like to work for incompetents. I suppose they feel that a fresh flower stands out better if it’s surrounded by wilted ones. They forget the tendency of top management to throw the whole bunch out if they become dissatisfied with an operation.

Two types of individuals come in looking for jobs. One is inordinately proud of his or her specialty. He or she will often say, “You people really need me around here. You’re weak in my specialty.” The other type says just the opposite. “You’re strong in my specialty. You do a terrific job, and I want to work with the best.”

Which type is more likely to get the job? Right. The latter person.

The third horse to ride is a friend. Many business people have an enormous number of personal friends but no business friends.

Most of the big breaks that happen in a person’s career happen because a business friend recommended that person.

The more business friends you make outside of your own organization, the more likely you are to wind up in a big, rewarding job.

It’s not enough just to make friends. You have to take out that friendship horse and exercise it once in a while. If you don’t you won’t be able to ride it when you need it.

The fourth horse to ride is an idea. Everyone knows that an idea can take you to the top faster than anything else. But people sometimes expect too much of an idea. They want one that is not only great, but one that everyone else thinks is great too.

There are no such ideas. If you wait until an idea is ready to be accepted, it’s too late. Someone else will have preempted it.

To ride the “idea” horse, you must be willing to expose yourself to ridicule and controversy. You must be willing to go against the tide.

You can’t be first with a new idea or concept unless you are willing to stick your neck out. And take a lot of abuse. And bide your time until your time comes.

“One indication of the validity of a principle,” according to psychologist Charles Osgood, “is the vigor and persistence with which it is opposed.” “In any field,” says Dr. Osgood, “if people see that a principle is obvious nonsense and easy to refute, they tend to ignore it. On the other hand, if the principle is difficult to refute and it causes them to question some of their own basic assumptions with which their names may be identified, they have to go out of their way to find something wrong with it.”

The fifth horse to ride is faith. Faith in others and their ideas. The importance of getting outside of yourself, of finding your fortune on the outside, is illustrated by the story of a man who was a failure most of his life.

The sixth horse to ride is yourself. There is one other horse. An animal that is mean, difficult, and unpredictable. Yet people often try to ride it. With very little success.

That horse is yourself. It is possible to succeed in business or in life all by yourself. But it’s not easy.

Like life itself, business is a social activity. As much cooperation as competition.

So remember, the winningest jockeys are not necessarily the lightest, the smartest, or the strongest. The best jockey doesn’t win the race.

The jockey that wins the race is usually the one with the best horse. So pick yourself a horse to ride and then ride it for all it’s worth.

Positioning Your Business

How do you get started on a positioning program?

It’s not easy. The temptation is to work on the solution without first thinking through the problem. Much better to think about your situation in an organized way before leaping to a conclusion.

To help you with this thinking process, here are six questions you can ask yourself to get your mental juices flowing.

Don’t be deceived. The questions are simple to ask but difficult to answer. They often raise soul-searching issues that can test your courage and your beliefs.

1. What position do you own?

Positioning is thinking in reverse. Instead of starting with yourself, you start with the mind of the prospect.

Instead of asking what you are, you ask what position you already own in the mind of the prospect.

Changing minds in our overcommunicated society is an extremely difficult task. It’s much easier to work with what’s already there.

What you must do is to find a way into the mind by hooking your product, service, or concept to what’s already there.

2. What position do you want to own?

Here is where you bring out your crystal ball and try to figure out the best position to own from a long-term point of view. “Own” is the key word. Too many programs set out to communicate a position that is impossible to preempt because someone else already owns it.

3. Whom must you outgun?

If your proposed position calls for a head-to-head approach against a marketing leader, forget it. It’s better to go around an obstacle rather than over it. Back up. Try to select a position that no one else has a firm grip on.

You must spend as much time thinking about the situation from the point of view of your competitors as you do thinking about it from your own.

Prospects don’t buy, they choose. Among brands of automobiles. Among brands of beer. Among brands of computers. The merit, or lack of merit, of your brand is not nearly as important as your position among the possible choices.

Often to create a viable position, you must reposition another brand or even an entire category of product.

4. Do you have enough money?

A big obstacle to successful positioning is attempting to achieve the impossible. It takes money to build a share of mind. It takes money to establish a position. It takes money to hold a position once you’ve established it.

If you don’t spend enough to get above the noise level, you allow the Procter & Gambles of this world to take your concept away from you. One way to cope with the noise-level problem is to reduce the geographic scope of your problem. To introduce new products or new ideas on a market-by-market basis rather than nationally or even internationally.

With a given number of dollars, it’s better to overspend in one city than to underspend in several cities. If you become successful in one location, you can always roll out the program to other places. Provided the first location is appropriate.

5. Can you stick it out?

You can think of our overcommunicated society as a constant crucible of change. As one idea replaces another in bewildering succession.

To cope with change, it’s important to take a longange point of view. To determine your basic position and then stick to it.

Positioning is a concept that is cumulative. Something that takes advantage of advertising’s longange nature. You have to hang in there, year after year. Most successful companies rarely change a winning formula.

With rare exceptions, a company should almost never change its basic positioning strategy. Only its tactics, those short-term maneuvers that are intended to implement a longterm strategy.

The trick is to take that basic strategy and improve it. Find new ways to dramatize it. New ways to avoid the boredom factor.

Owning a position in the mind is like owning a valuable piece of real estate. Once you give it up, you might find it’s impossible to get it back again.

6. Do you match your position?

Creative people often resist positioning thinking because they believe it restricts their creativity. And you know what? It does. Positioning thinking does restrict creativity.

Do your advertisements for yourself match your position? Do your clothes, for example, tell the world that you’re a banker or a lawyer or an artist? Or do you wear creative clothes that undermine your position?

Creativity by itself is worthless. Only when it is subordinated to the positioning objective can creativity make a contribution.

Playing the Positioning Game

You must understand the role of words

To be successful today at positioning, you must have a large degree of mental flexibility. You must be able to select and use words with as much disdain for the history book as for the dictionary.

You must know how words affect people

Words are triggers. They trigger the meanings which are buried in the mind.

Language is the currency of the mind. To think conceptually, you manipulate words. With the right choice of words, you can influence the thinking process itself.

You need vision

Change is a wave on the ocean of time. Short-term, the waves cause agitation and confusion. Long-term, the underlying currents are much more significant. To cope with change, you have to take a longange point of view. To determine your basic business and stick with it.

To play the game successfully, you must make decisions on what your company will be doing not next month or next year but in 5 years, 10 years. In other words, instead of turning the wheel to meet each fresh wave, a company must point itself in the right direction.

You must have vision. There’s no sense building a position based on a technology that’s too narrow. Or a product that’s becoming obsolete. Or a name that’s defective.

You need courage

When you trace the history of how leadership positions were established, from Hershey in chocolate to Hertz in rent-a-cars, the common thread is not marketing skill or even product innovation. The common thread is seizing the initiative before the competitor has a chance to get established. The leader usually poured in the marketing money while the situation was still fluid.

You need objectivity

To be successful in the positioning era, you must be brutally frank. You must try to eliminate all ego from the decision-making process. It only clouds the issue.

One of the most critical aspects of positioning is being able to evaluate products objectively and see how they are viewed by customers and prospects.

You need simplicity

You need subtlety

The difficulty is finding an open position that’s also effective.

What you must do is to find an opening near the center of the spectrum. You must be slightly conservative in a field of liberals or slightly liberal in a field of conservatives.

This calls for great restraint and subtlety. The big winners in business and in life are those people who have found open positions near the center of the spectrum. Not at the edge.

The secret to establishing a successful position is to keep two things in balance:

A unique position with
an appeal that’s not too narrow.

You must be willing to sacrifice

The essence of positioning is sacrifice. You must be willing to give up something in order to establish that unique position.

In positioning, smaller may be better. It is usually better to look for smaller targets that you can own exclusively rather than a bigger market you have to share with three or four other brands.

You can’t be all things to all people and still have a powerful position.

You need patience

Instead they look for places to make the brand successful. And then roll it out to other markets.

The geographic roll-out is one way. You build the product in one market and then move on to another. From east to west. Or vice versa. The demographic roll-out is another.

The chronologic roll-out is the third way. You build the brand among a specific age group and then roll it out to others.

Distribution is another roll-out technique.

Conclusion

To repeat, the first rule of positioning is: To win the battle for the mind, you can’t compete head-on against a company that has a strong, established position. You can go around, under or over, but never head to head.

The leader owns the high ground. The No. 1 position in the prospect’s mind. The top rung of the product ladder. To move up the ladder, you must follow the rules of positioning.

In our overcommunicated society, the name of the game today is positioning.