Book Review: Positioning

This is an overview of the book
Positioning: How to be seen and heard in the overcrowded marketplace
by Jack Trout and Al Ries

Author's Bios: Both gentlemen own marketing consulting firms but their real claim to fame is that they wrote this book. It's that important!

Key Point: It doesn't matter what you think your product is, it only matters what the prospect/customer thinks it is.

This book is widely considered a classic in the world of marketing books. Though it was originally published in 1981, the book is as relevant today as ever because it contains timeless principles. Positioning is considered the fifth P of marketing. Traditionally marketing has taught four other P's, they are: Product, Price, Place, and Promotion. Everybody, from all careers, can benefit from properly positioning themselves in the marketplace. Tom Peters once wrote a book called The Brand You. And in the modern economy, it's important to understand your distinction and your value proposition. Basically it's about answering the question, “Why should we go with you?” If you're answer is, “Because I work harder,” (or anything vague like that) you indeed need to read this post and do some more hard work.

We live in what the authors call an, “overcommunicated society.” With so much communication taking place the value of any single communication is reduced. To say it in a somewhat mathematical fashion, the value of any single communication is inversely proportional to the total volume of communications. For this reason one of the main axioms of marketing is repetition.

Every bit as important as repetition is positioning. Positioning is about the way your marketing message relates to what the population already knows or accepts. The authors say, “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.”

To cope with the shear volume of information people are forced to simplify things. We have neither the time nor the inclination to understand much about all the available and competing products. The authors write, “The average person will sit still when being told something which he or she knows nothing about. (Which is why 'news' is an effective advertising approach.) But the average person cannot tolerate being told he or she is wrong. Mind-changing is the road to advertising disaster.”

Now, you might not think you're in the advertising business. I would agree that you might not work on Madison Avenue. But, you most certainly are in advertising. You need to advertise your services if you wish to survive and thrive. It's called self-promotion and not a lot of people do it. A lot of people think if they just do a great job they'll get noticed and promoted. If you believe that, I'm sorry to burst your bubble, but it ain't true. Sometimes the people who make it to the top are butt-kissers. More often they're self-promoters.

As a rule, the first product or service to occupy a category (position) in peoples' minds will have the most success and be very hard to defeat. “In advertising, it's best to have the best product in your particular field. But it's even better to be first. IBM didn't invent the computer. Sperry-Rand did. But IBM was the first company to build a computer position in the mind of the prospect.” And please remember, you yourself are a product, indeed a brand. So you can use this information to your benefit. Here's something to think about. Perhaps you can carve out a specialty, in your profession, and be its first service provider. Think about it for a while. How can you segment your market so as to carve out a specialty for which you are the first to offer services? I'm not saying it is easy. But I am saying it's worth it.

Let me give you an example. In the 1980's a new segment appeared in the car market. It wasn't a new type of car, it was a new segment, created by marketers, to satisfy the desires of their customers. This new segment was the SUV. This type of car had been build for decades. But by labeling the car a sports utility vehicle, car manufacturers were able to draw a distinction between the SUV and the station wagon. I don't even have to example the distinction to you because the two positions are already well entrenched in your mind.

Now let me give you a few examples of products that dominate their position. When a person accidentally cuts them self, what do they put over it? A Band-Aid, right? Do you realize that Band-Aid is a brand name? We don't even have another name for it. Could you imagine cutting yourself and asking your friend for one of those, “Sticky gauze things”? Being that it was the first to the position, Band-Aid has become the generic name, which is an extremely difficult position to compete against. We don't wrestle with words like “blood stoppers” or “sticky gauze thingies” because we know they're called Band-Aids. And, as a result, the company is rolling in dough.

Some other examples are Kleenex, Xerox, Coke, etc. You can ask for a Kleenex or a tissue paper. You can tell someone to photocopy it or Xerox it. And when you're at a restaurant you might order a Coke to which the waiter will almost apologetically ask, “Is Pepsi ok?”

The book says, “Too many companies embark on marketing and advertising programs as if the competitor’s position did not exist.” One of the most powerful strategies is to position yourself, or your product, with respect to the category leader. A great example is Avis Rent-A-Car. Hertz was the first entry into the category and held a dominate position. So what did Avis do? Well, they lost money for 13 years in a row is what they did. But then they got smart and acknowledged Hertz's position. Avis embraced the fact that they weren't the market leader, and used that very fact to their advantage. Avis said they're second and because of that their tagline was, “We try harder.” One time they even said, “Rent from us. The line at our counter is shorter.” Classic positioning.

Ready for another example of the power of being first? Dr. Pepper completely dominates its position. Even with the very deep pockets of the Coca-Cola company, Mr. Pibb is a distant also. (I guess misters aren't as respected as doctors :P) As the authors say, “Almost all the advantages accrue to the leader.” But, that doesn't make them invincible. So, it is strongly suggested that, “A leader swallow his or her pride and adopt every product development as soon as it shows sign of promise.”

I have said a lot about being first because it's extremely powerful. So, again, I ask you to think about ways you can create a specialty, in your profession, and be the first to work that specialty. I'm not saying it's easy, I'm saying it's worth it.

One of the things that makes positioning so powerful, and real, is that, “Your eyes see what you expect to see.” Many studies have been done to confirm this. Do you know someone who swears by a certain kind of light beer? For example, maybe, Coors Light? Experiment after experiment has shown that this person wouldn't be able to pick their beer, out of a lineup, in a blind taste test. These people are loyal to the brand, not the taste. Especially in our overcommunicated society, branding is very valuable. You can't really change or improve the taste of light beer. However, you can create a story about your brand and affect the way your customers feel while experiencing your brand.

Brand name cold remedies work work better than generics only when the person can see the box or label. However, when the person doesn't know whether the medicine is a brand name or generic, the two work equally well. If you want, you can test this out for yourself. An interesting experiment to run is the following. Take an empty bottle of Grey Goose and fill it with charcoal-filtered vodka. Serve it to your friends and I bet no one calls you on it. The last handful of years has seen an explosion in the number of vodka products on the market. Very few people (and I mean VERY few) can tell the difference between them. Packaging play a big role in your decision. It also applies to wine as well. Here's the way most people choose a new wine to purchase. We first select the amount of money we want to spend on the bottle. Then we pick the wine with the best packaging (specifically the best label) at that price point. If you're honest with yourself I bet you do the exact same thing.

What about the power of a name? The authors write, “Hog Island in the Caribbean was going nowhere until they changed the name to Paradise Island.” Remember, this book was written in 1981. They make an interesting suggestion of what margarine could have been called. At the time margarine was struggling to get any traction and was simply viewed as imitation butter. The authors suggest, “What should margarine have been called? Why 'soy butter,' of course – a name in the peanut butter tradition.” This way the product would have been positioned in a positive light, instead of an imitating one. The book does advocate changing your name if you have a bad one saying, “There's only negative equity in a bad name.” I only include this to be thorough and complete with this report. Few people, outside of Hollywood, actually change their name.

This leads to the discussion of the line-extension trap. Branding is a difficult and finicky proposition. When your brand name has lots of equity it's tempting to use that name to develop other lines of products. Xerox, for example, made a critical mistake when they misunderstood the value of their brand. They extended their brand name onto a line of computers. They even went to far as to say the following in one of their ads, “This Xeroz machine can't make a copy.” Well, everyone knows that to Xerox is to copy, so what do we do with a Xerox machine that can't make copies? We don't buy it, that's what we do! Do you own a Xerox computer? Nope! They lost a lot of money on that blunder.

“Logic seems to be on the side of the extension,” the authors say. If a brand is so recognizable, why not put it on other products? The books say, because it doesn't work. Coca-Cola soda is fantastic. But would you buy Coca-Cola mouthwash? I doubt it. What's worse, being associated with mouthwash would damage Coke's soda position. Coke MEANS soda!

Another huge mistake, in the use of a name, is Bayer. As you probably know, Bayer is a brand name. But it's also the generic name for aspirin (or at least it used to be.) Along came Tylenol which has acetaminophen. Acetaminophen has the advantage of being metabolized in the liver which alleviates the sour stomach that can often come with aspirin (it's also the reason you don't want to take acetaminophen when you've been drinking a lot of alcohol.) With that great sour stomach advantage, Tylenol took a huge chunk of the market away from Bayer. So what did the Bayer people do? They came out with nonaspirin Bayer, which contained acetaminophen. And they completely shot themselves in the foot? How can you have nonaspirin aspirin? You can't. And Bayer heavily damaged the equity of their brand name. I just looked at the Bayer website and it seems the nonaspirin product has been discontinued.

A great example that ties in positioning, first-to-market advantage, and the line-extension trap is clear soda. The original was 7Up and it has a strangle hold on the category. Being first clearly (wink) has its perks. When 7Up arrived on the scene the cola market was dominated by Coke. And everybody knows that the color of Coke is brown. Coke had such a dominate position that it would have been foolish for 7Up to take them head-on. So what did the folks at 7Up do? They called it the “uncola” and people were able to accept it.

The power of positioning is very strong and it's wise to position your product in relation to the leader. What about Pepsi? Well, they didn't want to be left out of the fun so what did they do? They came out with Crystal Pepsi, a classic line-extension faux pas. Do you remember that stuff? Everybody knows that Pepsi is brown in color, so when you produce a clear Pepsi people didn't know what to make of it. It tasted just like Pepsi but it failed because it didn't gel with the commonly accepted wisdom (expectation) that Pepsi is supposed to be brown. Remember, you want to work with peoples' preconceptions, not against them.

The book says, “The classic test for line extension is the shopping list. Just list the brands you want to buy on a piece of paper and send your spouse to the supermarket: Kleenex, Bayer, and Dial...That's easy enough...The confusion caused when one name stands for more than one product is slowly but surely sapping the strengths of brands like Scot and Kraft...What's a Kraft? It's everything and yet it's nothing.” In mayonnaise Kraft can't compete with Hellmann's (Best Foods.) In salad dressing Wishbone kicks their butt. In fact, the place that Kraftco has the lead is a product they don't call Kraft. It's in cream cheese and they call it Philadelphia.

In a similar way marketers conduct the bartender test. If you ask for, “J&B on the rocks,” you get scotch. A “Beefeater martini” will be made of gin. And a bottle of Dom Perignon will definitely get you champagne. A guy walks up to the bar and says, “Give me a Johnnie Walker with a splash, The bartender asks, “Red Label or Black Label?” The man says, “Ahhh...the hell with it. Make it a Chivas.” Not surprisingly, Chivas outsells Johnnie Walker by a considerable margin.

Who do you think sells more pineapples? Dole or Del Monte? Even thirty years later, it's still a no-brainer!

As it turns out, Asian companies are notorious for their line-extension problems. Huge conglomerates are the norm in Asian business. An old marketing joke says that Hyundai makes everything except money. The phenomenon I've never heard the authors discuss is the British company Virgin. Richard Branson extends the hell out of the Virgin name and it works.

Geography matters too. We want wine from Napa, vodka from Russia, TV's from Asia and, if we're buying a watch or chocolate, we look to the Swiss. You wouldn't be surprised if the hippie you met said she's from Berkeley. And it makes sense that the surfer dude was raised in San Clemente. Incidentally, I use those two locations because that's where I'm from. So don't get too surprised when you meet me. Actually, you could make some predictions based on the fact that I'm from San Clemente via Berkeley. I seldom wear a tie but I do flip-flops on most days. There isn't a cuisine in the world I don't enjoy. And I write book reports even though I not in school. :)

In summary, the authors have said, “Don't try to trick the prospect. Advertising is not a debate. It's a seduction.” Please understand that the market is crowded with competition and you want to work with that fact, not against it. Position your product or service in relationship to what's already out there. The entertainment industry does a masterful job of this. When trying to sell the concept of a script Hollywood-types often give the new idea a tagline which people can relate to. This is called a “high-concept pitch.”

Just to give you an example, do you remember that movie Speed with Keanu Reeves and Sandra Bullock? They found that trying to explain the plot is a lot harder than just selling it as “Die Hard on a bus.” For another example, I'll give you one I'm familiar with. At LegalShield we do for attorneys what health did for doctors, a long time ago, and that's make them affordable for everyone. We're like a legal HMO. It's pretty neat.

Now, go forth and prosper.