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Positioning The Battle For Your Mind by Al Ries & Jack Trout

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Positioning The Battle For Your Mind by Al Ries & Jack Trout

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Advertising is a brutal business where mistakes can be costly and positioning is a major part of advertising. Positioning is not what you do to a product but it is what you do to the mind of the prospect. The book explains how to get into the mind of your target customers. Read the summary of the book created by Prof. Sameer Mathur.

Advertising is a brutal business where mistakes can be costly and positioning is a major part of advertising. Positioning is not what you do to a product but it is what you do to the mind of the prospect. The book explains how to get into the mind of your target customers. Read the summary of the book created by Prof. Sameer Mathur.

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Positioning The Battle For Your Mind by Al Ries & Jack Trout

  1. 1. BOOK SUMMARY POSITIONING: The Battle For Your Mind 1 Al RIES JACK TROUT
  2. 2. INTRODUCTION 2 Today, communication itself is the problem “Failure to communicate” is the single most common reason given for problems (business/ government/ labour problems) that develop Advertising- A form of communication that, from the point of view of the recipient, is held in low-esteem; it is unwanted and unliked. But advertising is a superb testing ground for theories of communication
  3. 3. INTRODUCTION A new approach to communication is called “positioning”- a concept that has changed the nature of advertising Positioning starts with a product- A piece of merchandise, a service, an institution, a company or a person 3
  4. 4. INTRODUCTION Positioning is what you do to the mind of the prospect; it does not involve change as changes in name, price and package are basically cosmetic changes (not changes in the product itself) Positioning has changed the way the advertising game is being played- today we find comparatives in ad, not superlatives; anyone can get ahead using the positioning strategy 4
  5. 5. Positioning is not what you do to a product. Positioning is what you do to the mind of the prospect. 5 Protection Glamor Confide nce Sexual attractio n Quality
  6. 6. 1. What Positioning is all about 2. The Assault on the Mind 3. Getting into the Mind 4. Those Little Ladders in Your Head 5. You Can’t Get There from Here Contents 6
  7. 7. 6. Positioning of a Leader 7. Positioning of a Follower 8. Repositioning the Competition 9. The Power of the Name 10. The No Name Trap 11. The Free-Ride Trap 12. The Line Extension Trap Contents 7
  8. 8. 13. When Line Extension Can Work 14. Positioning a Company : Monsanto 15. Positioning a Country : Belgium 16.Positioning of a Product: Milk Duds 17.Positioning of a Service: Mallagram Contents 8
  9. 9. 18.Positioning of Long Island Bank 19.Positioning the Catholic Church 20.Positioning Yourself and Your Career 21.Six Steps To Success 22.Playing the Positioning Game Contents 9
  10. 10. Lesson 1 What Positioning Is All About: How to touch base with reality? 10
  11. 11. The basic approach of positioning is not to create something new and different; but to manipulate what’s already up there in the prospect’s mind (retying the connections that already exist) Today it’s an Overcommunicated Society- Per capita consumption of advertising in America today is abut $200 a year Strategies of past are no longer responsive; today impact of advertising is to seriously overstate the potential effectiveness of the message (an ego-centric view bearing no resemblance to marketplace realities) The only hope to score big is to be selective, to concentrate on narrow targets, to practice segmentation- in a word, “positioning” 11 1. What Positioning is all about
  12. 12. The mind, as a defence against today’s communication volume, screens and rejects much of the information offered to it The mind accepts only that which matches prior knowledge or experience; mind-changing is impossible with a weak force like advertising The Oversimplified Mind- The only defence in the overcommunicated society; it acts as a filter What we receive is influenced by the nature of our overcommunicated society where “glittering generalities” have become a way of life 12 1. What Positioning is all about
  13. 13. The best approach to take in our overcommunicated society is the oversimplified message In communication, less is more; so, jettison the ambiguities, simplify the message and select the material that has the best chance of getting through in order to make a long-lasting impression Own a word in the prospect’s mind- Volvo owns “safety”, FedEx owns “overnight” The enemy that is keeping the messages from hitting pay dirt is the volume of communication When communicating product advantages, things should be turned inside out- look for the solution inside the prospect’s mind (concentrate on perceptions of prospect and not realities of the product) 13 “Consumer is always right” 1. What Positioning is all about
  14. 14. Lesson 2 The Assault on the Mind 14
  15. 15. TRANSMISSION TRAFFIC JAM • With only 6% of world’s population, America consumes 57% of world’s advertising • 30,000 books published each year in America • 10 million tons of newsprint each year • Average American family is exposed to 795,000 television pictures a day • Code of Federal Regulations contains 80,000 pages and growing by 5,000 pages per year 15 REASONS MESSAGES ARE GETTING LOST • Transmission Traffic Jam • MEDIA Explosion- TV, radio, newspaper, magazine, posters and billboards • PRODUCT Explosion- 45,000 active registered trademarks and 25,000 getting added each year; 1,500 listed companies introduce 5,000 significantly new products each year • ADVERTISING Explosion- Doctors, lawyers, even churches advertise 2.The Assault on the Mind
  16. 16. 2.THE ASSAULT ON THE MIND You never get a second chance to make a first impression - Until you are ready to position yourself for the long term, you are better off if communication doesn’t take place To cut through the traffic jam in the prospect’s mind, use an oversimplified approach 16
  17. 17. 2.THE ASSAULT ON THE MIND Advertising is a brutal business where mistakes can be costly- To advertise effectively, you have to get on the same wavelength as the prospect Sensory overload - Beyond a limited amount of sensation, the brain goes blank 17
  18. 18. Lesson 3 18 Getting into the Mind
  19. 19. Positioning is an organised system for finding windows in the mind. It is based on the concept that communication can only take place at the right time and under the right circumstances. What is true in business is true in nature too. “Imprinting” is the term biologist use to describe the first encounter between a new born animal and its natural mother. 3. Getting into the Mind 19
  20. 20. The market place changed over the years 20 PRODUCT ERA (FIFTIES ERA) Advertising focused on product features and customer benefits- They looked for ‘USP’ With advanced technologies, it became difficult to establish that ‘USP’- Competition became fierce, with an avalanche of me-too products IMAGE ERA Successful companies found reputation or image was more important in selling than product features “Every ad is a long-term investment in the image of a brand”- David Ogilvy Me-too companies killed the image era POSITIONING ERA (EIGHTIES ERA) To be successful, a company needed to position in prospect’s mind considering its own strengths and weaknesses as well as those of its competitors Strategy became king – The key was getting first into prospect’s mind. 3. Getting into the Mind
  21. 21. For brand loyalty you get in the mind first and be careful not to give a reason to switch. People don’t remember the 2nd. Find something to be first in. It’s better to be a big fish in a small pond (then increase the size of the pond) than to be a small fish in a big pond Advertising lessons - The chaos in the market place 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 over communicated society. 3. Getting into the Mind 21
  22. 22. The Paradox: In an overcommunicated society, nothing is more important than communication 22 THE EASY WAY INTO THE MIND Be FIRST- Fix your message in a mind not burnished by someone else’s brand e.g. Michelob: first premium- priced American-made beer Build brand loyalty- By not giving them a reason to switch THE HARD WAY INTO THE MIND Being SECOND – A positioning problem as odds favour the first; First make sure you can’t find something to be first in 3. Getting into the Mind
  23. 23. Lesson 4 Those Little Ladders in Your Head 23
  24. 24. 24 VS. Like a computer, the human mind has a slot or position for each bit of retained information Like a computer, to put a new brand into mind, you must delete the old brand already occupying the category Unlike a computer (which accepts everything one puts in), the human mind only accepts information matching its current state of mind 4. Little Ladders in Your Head
  25. 25. Due to large volume of communications, (a) the mind rejects information that it does not compute (b) Accepts new information which matches its current state of mind (c) Filters out everything else. 4.Those little ladders in head 25
  26. 26. Very little mind changing occurs - You see/taste what you expect to see/taste Create the opposite expectation and product is in trouble Were the average consumer rational instead of emotional, there would be no role of advertising 26 HUMAN MIND- AN INADEQUATE CONTAINER Avg. human mind cant deal with more than 7 units at a time For low-involvement products, average consumer can usually name no more than one or two brands People can often remember positioning concepts better than names- ranking of people, objects and brands is a convenient method of organizing things 4. Little Ladders in Your Head
  27. 27. HUMAN MIND - THE PRODUCT LADDER 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 usually impossible task) or somehow relate its brand to the other company’s position Advertiser introducing a new category must carry in a new ladder. Difficult if the new category is not positioned against old one If you have a truly new product, it is often better to tell the prospect what the product is not, rather than what it is e.g.: ‘horseless’ carriage, ‘lead-free’ gasoline, etc. 27
  28. 28. 28 THE ‘AGAINST’ POSITION Competitor’s position is just as important as your own Avis started making money after 13 years of losses. when it admitted it was the No. 2 player; didn’t try to attack Hertz head-on; Avis was successful as it related itself to Hertz Establishing an ‘against’ position is a classic positioning manoeuvre; if a company isn’t the first, it has to be the first to occupy the No. 2 position
  29. 29. THE ‘UNCOLA’ POSITION Another positioning strategy is to worm your way onto a ladder owned by someone else By linking the product to what was already in the mind of the prospect, the ‘uncola’ position established 7Up as an alternative to a cola drink To find a unique position, look inside the prospect’s mind and not inside the product or yourself 29
  30. 30. 30 THE F.W.M.T.S. TRAP Successful positioning requires consistency Companies, however, fall into F.W.M.T.S. Trap often- ‘Forgot What Made Them Successful’ Avis was not destined to be No. 1 unless it could find a weakness in Hertz; old campaign related it to No.1 in prospect’s mind and generated natural sympathy for the underdog 7Up is also advertising its aspirations and its ads are no more effective If you want to be successful today, you can’t ignore the competitor’s position. Nor can you walk away from your own.
  31. 31. You don’t find an “uncola” idea inside a 7-Up can. You find it inside the cola drinker’s mind. Both Avis and 7-Up moved away from what made them successful and paid a price for it 4.Those little ladders in head 31
  32. 32. Chapter 5 You Can’t Get There from Here 32
  33. 33. 5. YOU CAN’T GET THERE FROM HERE The “Can Do” Spirit Refuses to Die A company can have a great product, a great sales force, a great ad campaign and still fail miserably if it happens to be in a “you can’t get there from here” position, no matter how much it is prepared to spend 33
  34. 34. 5. YOU CAN’T GET THERE FROM HERE 34 RCA EXAMPLE While it’s possible to compete successfully with a market leader, the rules of positioning say it can’t be done “head-on” In 1970, RCA entered into a head-on competition with IBM; it started publishing ads in the pages of business press; chairman predicted by year-end, RCA will be in a “firm No.2 position”; within a year, dough of $250 million hit RCA
  35. 35. 5. YOU CAN’T GET THERE FROM HERE 35 RCA EXAMPLE Best strategy for IBM’s competitors would be to take advantage of the positions they already won in the minds of their prospects and then relate them to a new position in computers
  36. 36. RCA was a leader in communications but did not take advantage of this position. IBM, Sun Microsystems and other companies invested most of their resources to dominate the Internet, the ultimate communication network. 36 5. You Can’t Get There from Here
  37. 37. Chapter 6 Positioning of a Leader 37
  38. 38. Establishing Leadership The first brand into the brain gets twice the long term market share of the No.2 brand and twice again as the No 3. brand. And so it goes. General Motors outsells Ford, Goodyear outsells Firestone, McDonald’s outsells Burger King. How do you get to be the leader? Actually it’s quite simple. Remember Neil Armstrong. You just get there first. 38 6. Positioning of a Leader
  39. 39. • Getting into the mind first • Reinforcing the original concept • Eg: “The real thing” ad campaign of Coca-Cola RUBBING IT IN • Adopt every new product development as soon as it shows signs of promise • General Motors spent $50 million to cover Wankel engines COVERING ALL BETS 39 6. Positioning of a Leader
  40. 40. • The understanding that power of organization is derived from power of product • Coca-Cola’s Mr. Pibb runs poor second to Dr. Pepper POWER FROM PRODUCT • Block competitors by moving rapidly to cover new products • Johnson and Johnson reduced prices to attack Datril REACTING RAPIDLY 40 6. Positioning of a Leader
  41. 41. STRATEGIES FOR MAINTAINING LEADERSHIP • Cover competitive moves by introducing new brands • It will be cheaper and more effective in the long run to introduce a new product than adopting line- extension • This strategy is followed by Procter and Gamble COVERING WITH MULTIBRANDS 41
  42. 42. STRATEGIES FOR MAINTAINING LEADERSHIP • Sometimes the name change helps bridge the gap from one era to the next • The Direct Mail Association changed its name to Direct Mail- Marketing Association as a recognition of the fact that mail was only one of the ways to do direct marketing BROADER NAME 42
  43. 43. FAILURES OF A LEADER: When a Market Leader isn’t the first in the new category, the new product is usually an also-ran • eg: Mr. Pibb of Coca-Cola remains a poor second to Dr. Pepper STRATEGIES USED TO MAINTAIN LEADERSHIP: • Use short-term flexibility for a stable, long-term future • Marketing leader moves the ladder into the mind with his brand nailed to only one rung 43
  44. 44. BENEFITS OF LEADERSHIP POSITION: • Enjoy the highest profit margin than any company serving that market • Attract best talent WHAT NOT TO DO? A market leader should not run ads that scream “We’re No. 1” 44 “Getting to the top is tough. Staying there is much easier”
  45. 45. Chapter 7 Positioning of a Follower 45
  46. 46. Most me-too products fail to achieve reasonable sales goals because the accent is on ‘better’ rather than ‘speed’. The attack should be launched while the situation is fluid, before the leader has time to establish leadership. Leaders can often cover a competitive move and retain their leadership, but followers cannot. 46 7. Positioning of a Follower
  47. 47. How to find an open spot in the prospect’s mind? The French have a marketing response “Cherchez le Creneau” or “Look for the hole” . 47 7. Positioning of a Follower
  48. 48. You Must have the ability to think Reverse, to go against the grain “Me-too” products fail because the emphasis is on “better” rather than “speed” Launch attack with massive advertising and a better name while the situation is fluid (before the leader has time to establish itself) 7. Positioning of a Follower 48
  49. 49. Strategies for finding Creneaus (holes in the prospect’s mind) The Size Creneau- “Think Small” for Volkswagen Beetle positioning The High Price Creneau- Price is an advantage if you are first in category like Chivas Regal The Low Price Creneau- A good choice for new products Potential Traps The Technology Traps: Even great technology fails if there is no creneau in the prospect’s mind The Factory Creneau – Mistake of filling a hole in the factory rather than that in the mind Everybody’s trap : Don’t want to tie down on specific positioning as they believe it limits their opportunities- a deadly idea if you want to build a position from nowhere 49 Sex (eg: perfumes), Time of Day, Distribution (L’eggs- sold at both supermarkets & mass merchandisers) 7. Positioning of a Follower
  50. 50. Chapter 8 Repositioning the Competition 50
  51. 51. Create your own creneau- reposition the competition. To move a new idea into the mind, you must first move an old one out. Sometimes you can’t find the creneau; there are hundreds of variations in each category. We’re better than our competitors” isn’t repositioning. It’s comparative advertising. 51 8. Repositioning the competition
  52. 52. CREATING YOUR OWN CRENEAU: Company must create the one by repositioning the competitors that occupy position in the mind All the mathematical arguments aren’t as effective as a simple observation that people can verify People like to watch the bubble burst Conflict (even personal ones) can build reputation overnight 52
  53. 53. CONCEPT BENEATH: Once an idea is overturned, selling the new idea is ludicrously simple. As a matter of fact, people will often search for the new idea to fill void eg: Tylenol bursting the aspirin bubble 53
  54. 54. EXAMPLES OF REPOSITIONING OF BRANDS Tylenol • Tylenol went out and burst Aspirin Bubble through anti-aspiring positioning Lenox • Royal Doulton gained a 6% market share by repositioning Lenox china- thought by many as an imported product American Vodkas Pringles 54 • Stolichnaya Gained market share by positioning it as a Russian vodka • Lost the market share just because of not knowing the rules of repositioning • You taste what you expect to taste • Though recently it followed “natural all” strategy, brands follow “Once a looser, always a looser” concept
  55. 55. DIMENSIONS OF REPOSITIONING 55 REPOSITIONING VS. COMPARATIVE ADS • “We are better than our competitors” is not repositioning • Comparative ads fail to reposition the competition • Do not put competitor as benchmark for your own brand IS REPOSITIONING LEGAL? • 1964: National Broadcasting Company dropped ban on comparative ads • 1974: American Association issued new guidelines representing a complete turn around • 1975: Independent Broadcasting Authority allowed knocking Ads IS REPOSITIONING ETHICAL? • You should relate your brand to other brands already there • The claims laid in the advertisements should be genuine and proved • To position, you need to tell customers how much better your product is compared to your competitors • Done honestly and fairly, it keeps the competition on toes
  56. 56. Chapter 9 The Power of the Name 56
  57. 57. 9. The Power of the Name The name is the first point of contact between the message and the mind. A bad name does not get better no matter how many years you have been using it. 57
  58. 58. HOW TO CHOOSE A NAME • Don’t look to the past for selecting a new name • In the past, the volume of communication was less and name was not important • It should not go “over the edge” – it should not become generic • Name should be appealing to people and should create a position in the prospect’s mind WHEN TO USE A MEANINGLESS NAME • When the product is new in the market and you are the first one to launch, for such a product any name would work DAVID AND MICHAEL AND HUBERT AND ELMER • Hubert and Elmer are generally considered as names of losers but David and Michael are popular names In the positioning era, the name plays a very important role 9. The Power of the Name 58
  59. 59. 9. The Power of the Name How Not to Choose a Name – Names get out of date. Time could also be a trade magazine in watch industry -> Newsweek is a better name for a newsweekly There are marginal differences in many product categories – a better name can lead to difference of millions of dollars in sales 59
  60. 60. THE AKRON TWINS • Two companies in the same field having similar names. In such a case, the larger is benefitted, i.e. the rich gets richer. Eg: Goodrich suffered for having a similar name with a larger competitor (Goodyear) THE TOLEDO TRIPLETS • 3 companies – Owens-Illinois, Owens Corning Fiberglas and Libbey Owens Ford are similar and creates confusion in customer’s mind. • In such cases, it is better to change the name because there is negative equity in a bad name THE TOO APPROPRIATE NAME • The choice of name in very important specially in the product category • Names of low calorie and low price products should be selected appropriately to suggest the benefits without going over the line 9. The Power of the Name 60
  61. 61. Chapter 10 The No-Name Trap 61
  62. 62. 10. The No-Name Trap Customers refer to companies phonetically. Companies look at themselves in a visually oriented way 62
  63. 63. • Use initials only when phonetic length is less than the original word • Eg. Gen-er-al E-lec-tric has 6 syllables; so people use G-E i.e. 2 syllables PHONETI C SHORTH AND • Companies using initials before reaching the top are less popular than the companies using names • Companies which are successful and well known should use initials- Eg.: IBM, P&G, etc. VISUAL SHORTH AND 63
  64. 64. • People must be aware of the name before they will respond to initials • Name helps companies position themselves in the mind • Positioning is a long-term proposition- Name decisions made today may not be fruitful until years in the future NO SHORTCUT TO SUCCESS 64
  65. 65. • Before storing an image in the mind, it is important to verbalize it • W-O-M is one of the primary communication mediums • Messages would “sound better” in print if they were designed for radio first THE MIND WORKS BY EAR • With time, nothing remains same; so a time comes when a company must change its name • Sometimes companies change their names because of marketing reasons- Eg: Mobil successfully forgot past and positioned itself against the future NAME OBSOLESC ENCE 65
  66. 66. • Become successful before using initials, when you reverse the procedure it never works. • Rush to adopt initials represents desire to be accepted • Fortunately many companies are realizing the dangers of no name trap THE CONFUSION BETWEEN CAUSE AND EFFECT 66
  67. 67. Chapter 11 The Free Ride Trap 67
  68. 68. 11. The Free-Ride Trap To establish a new position in the mind, one needs a new name and should not take a free ride on the existing name Two different strategies: Use corporate name or a New name- For a new product developed internally, the corporate name is used; for a product developed by external acquisition, the existing name is kept It is important to determine when to use the house name and when to select a new name 68
  69. 69. 11. The Free-Ride Trap If you get into the mind of the consumer first, any name will work, If not, we have to select an appropriate name A new product needs a new name. Overwhelming thinking is to use well known names for new products e.g. Xerox foray into computers using Xerox name destroyed billions of dollars 69
  70. 70. 11. The Free-Ride Trap Teeter-Totter principle – In the prospects’ mind, One name can’t stand for 2 distinctly different products. If one goes up, the other goes down- Eg. Heinz is now the No. 1 brand in ketchup but lost its pickle leadership position 70
  71. 71. 11. The Free-Ride Trap Anonymity is a Resource - Companies look for a free ride because they underestimate the value of anonymity An unknown company with an unknown product has more to gain from publicity than a well-known company with an established product 71
  72. 72. Chapter 12 The Line Extension Trap 72
  73. 73. 12. The Line Extension Trap Two ways of Looking at the Name – The consumer and the manufacturer see things in totally different ways. 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 73
  74. 74. Bayer invented Aspirin Anti Aspirin approach used by Tylenol Bayer Non Aspirin has a very tiny market share Dial Soap has the major market share Very Small market share in Deodorant market •Look at line extension from prospect’s view and work backwards •Brand Name becomes surrogate/substitute for generic Name •Get me Coke •Where is Bayer ? •Hand me the Dial •Educates the prospect that Bayer is brand name & not Superior aspirin Inside-Out Thinking Outside-In Thinking JC Penny Vs DieHard •Product name driven into consumer’s mind •Diehard Automobile battery-lasts 48 months •JCPenny- A very weak hook •The obvious name isn’t always the best CHAPTER 12: THE LINE- EXTENSION TRAP Protein 21 •The easiest way to kill a Brand is through line-extension Eveready •Once dominated battery market •Duracell outsells Eveready Johnson’s Baby Shampoo •Reverse line extension (broadening the base) can work- Johnson’s baby shampoo is the first and only baby shampoo being promoted as an adult product too; J&J didn’t line-extend and introduced adult shampoo 74
  75. 75. 12. The Line Extension Trap It is better to establish a position in the prospects mind first and then worry how to establish retail connection In positioning, the shortest distance between 2 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 biggest aid 75
  76. 76. 12. The Line Extension Trap Positioning is making your brand name stand for the generic. Yet line extension seems intuitively right & the only way to resist the temptation is to study the classic line-extension mistakes of marketing history Reverse Line Extension –Line Extension is usually a mistake but the reverse can work. Best example – Johnson’s baby shampoo has been line extended into an adult shampoo 76
  77. 77. Chapter 13 When a Line Extension Can Work 77
  78. 78. 13. When Line Extension Can Work Short Term Advantages : As Line-extension name is related to the original name, it achieves an instant recognition. Great business in first six months as the initial order pipeline gets filled Long Term Disadvantages : Line-extensions are easily forgettable - have no independent position in mind. They blur the position occupied by the original name. After initial six months as reorders don’t come in, things turn dark. 78
  79. 79. 13. When Line Extension Can Work A Name Is a Rubber Band: It will not stretch beyond a point. The more you stretch the weaker it becomes. How far a name can be stretched? Rules when to use the house name: Small volume products but not potential winners. In a vacuum, not in a crowded field. Small budget brands should bear. commodity products should bear not break through products. Off the shelf items should not bear house name 79
  80. 80. Short Term Advantages •Instant flash of understanding •Instant flash of Sales •Business looks great for first six months Long Term Disadvantages •No independent position in the mind of the customers •Satellites to the original brand •Catastrophic results The Shopping-List Test •Well Known brands - Kleenex tissue, Crest toothpaste, Listerine mouthwash, Lifesavers Candy, Bayer Aspirin and Dial Soap •Confusion occurs when one name stands for more than one product- Eg: Heinz, Scott, Protein 21, Kraft When to use House names •Expected Volume – Small Volume •Competition – Crowded field •Advertising Support – Small budget brands •Significance – Commodity products •Distribution – Items sold by sales reps Rules of the Road •Line Extension is a trap and not a mistake •Line extension works only when •Your Volume is small •No Competitors/ Foolish Competitors •No expectation to build a position •No advertising required Volkswagen •First automobile to capture the small car position in the customer’s mind •Then they thought big and sales collapsed •Lesson: Don’t try to change a human mind 13. When Line Extension Can Work 80
  81. 81. Chapter 14 Positioning a Company – Monsanto 81
  82. 82. Why Position a Company ? To occupy the best positions in the minds of prospective employees. Investors willingness to pay premium for a company depends on the strength of its position in buyers mind 14. Positioning a Company : Monsanto 82
  83. 83. How to Position a Company ? Name is associated with positioning. Names have locked them to their past reputations. Positioning boils down to some quality found across the product range. Diversification is not a right strategy to position. 14. Positioning a Company : Monsanto 83
  84. 84. The Monsanto Approach : Objective : To make Monsanto the leader and spokesperson for the industry. 1. Product Leadership : Monsanto is clustered together with Dow and Union Carbide in second place. 14. Positioning a Company : Monsanto 84
  85. 85. 2. Business Leadership : Monsanto was not the first to speak up for free enterprise. 3. Industry Leadership : Monsanto had the perfect position to improve its leadership position in chemical industry. 14. Positioning a Company : Monsanto 85
  86. 86. Monsanto Brought Chemical Facts to Life : Monsanto decided to speak up about chemicals. Told public about the benefits and risks of using chemicals. By being the first to speak for industry, Monsanto assumed leadership mantle. And Monsanto Got the Credit: Positive attitudes among general public increased from 36% to 42% in less than two years. Business Week mentioned Monsanto as spearheading the movement to build image of Chemical Industry. DuPont followed Monsanto 14. Positioning a Company : Monsanto 86
  87. 87. Chapter 15 Positioning a Country 87
  88. 88. Belgium wasn’t one of the preferred tourist destinations Sabena Belgian World Airlines, flying to Belgium, tried to induce travellers with food. But, even the best food in the world cannot induce someone to fly in an airline that is not going to a place where one wants to go 15. Positioning a Country : Belgium 88
  89. 89. Sabena had to make Belgium a place where a traveller wants to spend time (they tried to position the country, not the airline) They tried to relate Belgium to a destination that was already in the mind of the travelers They created a strategy that related Belgium to Amsterdam, a popular tourist stop which was ranked 3 stars by Michelin Guides 15. Positioning a Country : Belgium 89
  90. 90. Michelin ranked Belgium as having five-3 star cities. The campaign that was established was “In beautiful Belgium, there are five Amsterdams” Amsterdam and the Michelin Guide were two concepts already in the mind of the prospect traveler and helped to put Belgium on the map in tourism. Further, five cities to visit made Belgium a bona fide destination. Even TV ad was made to attract travellers 15. Positioning a Country : Belgium 90
  91. 91. However, organisational change at Sabena reduced commitment to the ad. The lesson: A successful positioning programme requires a major long term commitment by the people in charge There were a lot of political differences in Belgium, and other cities were asked to be included. This led to confusion. The lesson: Positioning may require you to oversimplify your communications 15. Positioning a Country : Belgium 91
  92. 92. Chapter 16 Positioning a Product – Milk Duds 92
  93. 93. Milk Duds were targeted mainly for the teenagers at the movie hall; They wanted to reposition the product to gain the market share by targeting younger kids The major insights that they found were: - kids were disappointed in the downgraded size of candy bars - kids felt their enjoyment time wasn’t worth the money they spent 16. Positioning a Product : Milk Duds 93
  94. 94. The value proposition: Milk Dud candy was a box of 15 individual slow chew pieces of chocolate candy Campaign: “When a candy bar is only a memory, you’ll still be eating your Milk Duds” This campaign was well related to the kids; The repositioning allowed them to sell more units than ever in the history of its sales 16. Positioning a Product : Milk Duds 94
  95. 95. The learning from this chapter: “THE SOLUTION TO A POSITIONING PROBLEM IS USUALLY FOUND IN THE PROSPECT’S MIND, NOT IN THE PRODUCT” 16. Positioning a Product : Milk Duds 95
  96. 96. Chapter17 Positioning a Service : Mailgram 96
  97. 97. Positioning a Service In a service, the dominant element is usually the words, the verbal element. Illustration: With a service like Mailgram, the primary medium was radio, a verbally oriented vehicle. 97
  98. 98. Positioning a Service Regardless of how much money is spent, regardless of how technologically interesting the service is, you have to relate to what’s already there. Rather than the positioning offering short term benefits, that offering benefits expected to last over a longer period of time should be preferred. 98
  99. 99. Chapter 18 Positioning a Long Island Bank 99
  100. 100. Positioning Long Island Bank To successfully position a regional service, the territory must be known. Illustration: For a bank like the Long Island Bank, the territory that really counts is in the mind of the banking prospect. “Mapping the prospect’s mind “ is normally done with a research technique called “semantic differential”. In this, the prospect is given a set of attributes and then asked to rank each competitor on a scale, generally from 1 to 10. 100
  101. 101. Positioning Long Island Bank To develop a strategy for positioning, those attributes are selected in which prospects ranked the service higher. That is, positioning theory says you must start with what the prospect is already willing to give you. The best positioning ideas are so simple that most people overlook them. 101
  102. 102. Chapter 19 Positioning the Catholic Church 102
  103. 103. Positioning Catholic Church Even an institution can benefit from good positioning. It is important to have a clear presentation of what the institution is about to position it right. A positioning exercise is a search for the obvious. Those are the easiest concepts to communicate because they make most sense to the recipient of a message. 103
  104. 104. Positioning Catholic Church Simplicity is not as attractive as complexity. Case Study: Not long ago the Catholic Church struggled with presenting a clear view of what the church was about and it lead to confusion among the people. The church had to figure out their role in the modern world in order to be trusted again. This role was proven to be the “teacher of the word.” After this was identified it had to be implemented and a positioning strategy was needed to be taken into action. The plan had to be executed but with much resistance from the management of the Catholic Church it never went through. 104
  105. 105. Chapter 20 Positioning Yourself and Your Career 105
  106. 106. 20. POSITIONING YOURSELF DEFINE YOURSELF- Most difficult part of positioning is selecting that one specific concept to make an impact in the prospect’s mind MAKE MISTAKES- Anything worthwhile doing is worthwhile doing lousy instead of waiting for doing it perfectly MAKE SURE YOUR NAME IS RIGHT- Common law grants the right to adopt any name as long as there is no intention to defraud or be deceptive 106
  107. 107. AVOID THE NO-NAME TRAP- Many fall victim to initialitus as they see top management using initials; one can afford it only if everyone knows him, otherwise, one needs to burn his name in top management’s mind; one actually needs a middle name to differentiate as one can’t burn in a name that is too common 107
  108. 108. AVOID THE LINE-EXTENSION TRAP- To have a clear-cut identity in public mind, even a famous last name should not be used FIND A HORSE TO RIDE- One must try smarter than harder; road to fame and fortune is rarely found within one’s own- self; keeping eyes open and finding a horse to ride is the best option 108
  109. 109. WHICH HORSES TO RIDE? • Worse is the company with less than average chances for growth • If you company is going nowhere, get yourself a new one; you ought to do considerably better than average • Place your bets on growth industries and tomorrow-type products • Soft services are growing at faster rates than hard products YOUR COMPANY 109
  110. 110. WHICH HORSES TO RIDE? • Work for the smartest, brightest and the most competent person • If your boss is going places, chances are that you are too YOUR BOSS 110
  111. 111. WHICH HORSES TO RIDE? • Big career breaks happen due to business friend recommendations • The more business friends you make outside your organization, the more likely you are to wind up in a big, rewarding job • Keep in touch regularly with all your business friends A FRIEND 111
  112. 112. • If you wait until an idea is ready to be accepted, someone else will pre- empt it • You must be willing to expose yourself to ridicule and controversy • Go against the tide- Never be afraid of conflicts AN IDEA WHICH HORSES TO RIDE? 112
  113. 113. • Faith in others and their ideasFAITH • It is possible (but not easy) to succeed in business / life all by yourself • Jockey with the best horse wins the race- pick yourself a horse to ride and then ride it for all it’s worth YOURS ELF WHICH HORSES TO RIDE? 113
  114. 114. Six Steps To Success Chapter 21 114
  115. 115. 3. WHOM MUST YOU OUTGUN? a) Try to select a position that no one else has a firm grip on b) Spend as much thinking about the situation from the point of view of your competitors as you do thinking about it from your own c) Don’t get involved in a head-to-head approach against a marketing leader 2. WHAT POSITION DO YOU WANT TO OWN? a) Figure out the best position to own from a long-term point of view b) Don’t try to be all things to all people - Narrow the focus of your expertise and be a specialist 1. WHAT POSITION DO YOU OWN? a) Positioning is thinking in reverse- ask what position you already own in the minds of the consumers b) In determining the state of the prospect’s mind, don’t let corporate egos get in your way 115 Six Steps To Success
  116. 116. 6. DO YOU MATCH YOUR POSITION? a) Positioning thinking restricts creativity b) Creativity by itself is worthless. Only when it is subordinated to the positioning objective can creativity make a contribution 5. CAN YOU STICK IT OUT? a) To cope with changes, take a long-term view in determining your basic position b) Positioning is a cumulative concept and takes advantage of advertising’s long- range nature c) A company should never weaken its basic positioning by line-extension 4. DO YOU HAVE ENOUGH MONEY? a) Today noise level is fierce from me-too products and me-too companies b) It takes money to build a share of minds, establish and hold a position there c) Reduce geographical scope of your problem (introduce new ideas on a market-by- market basis, select first location appropriately, roll out to other places after success) Six Steps To Success 116
  117. 117. THE ROLE OF THE OUTSIDER 117 WHAT THE OUTSIDER SUPPLIES? WHAT THE OUTSIDER DOES NOT SUPPLY? • An ingredient called ignorance or objectivity- By not knowing what goes on inside a company, the outsider is better able to see what is happening on the outside i.e. in the mind of the prospect • Outside-in thinking unlike the insiders • Magic- Some managers believe role of an advertising agency is to wave a magic wand which causes prospects to immediately rush out; the wand is called creativity. But today creativity is dead- The name of the game is POSITIONING
  118. 118. Playing The Positioning Game Chapter 22 118
  119. 119. • A word has no meaning until one uses it and fills it with meaning • Discard a leaky word (like “Volkswagen”- it doesn’t hold the concept of a medium-sized luxury car) • To be successful today at positioning, one must have a large degree of mental flexibility. He must select and use words with as much disdain for history books as for dictionary • Select words which trigger meaning you want to establish • Words are empty containers- To reposition you often have to change the container YOU MUST UNDERSTAND WORDS 119 Playing The Positioning Game
  120. 120. • Words trigger meanings buried in minds of people • Insane people try to make the world of reality fit what is in their heads; the same people constantly analyses the world of reality and then changes what’s inside his head to fit the facts • Most people are unsane- they make up their minds and find facts to “verify” the opinion as it is lot easier to change facts; often they accept word-of- mouth without bothering about facts at all • Power of psychologically right name- The mind makes the world of reality fit the name • Language is currency of mind- mind thinks with words and not abstract thoughts; with right choice of words, you can influence the thinking process itself • There are limits- If word is far out of touch with reality, mind refuses to use the word YOU MUST UNDERST AND PEOPLE Playing The Positioning Game 120
  121. 121. • The only permanent thing today is change; but the more things change, the more they remain the same • Today, a product’s lifecycle is much shorter than earlier days • The landscape is littered with debris of projects that companies rushed into in attempting to keep pace YOU MUST BE CAREFUL OF CHANGE 121 Playing The Positioning Game
  122. 122. • Change is a wave on ocean of time- In short term, the waves cause agitation and confusion; in long term, the underlying currents are much more significant • Take a long-range point of view to determine your basic business and stick with it • A company must point itself in the right direction • You have to be able to see between what works and what doesn’t • Learn to separate your efforts from the general movement of the economy • Be wary and patient- But when an opportunity arises, the company must move quickly YOU NEED VISION 122 Playing The Positioning Game
  123. 123. • Seize the initiative before competitor has chance to get established • Leader pours in the marketing money while the situation is still fluid • Establishing a leadership position depends not only on luck and timing but also upon a willingness to pour it on when others stand back and wait YOU NEED COURAGE 123 Playing The Positioning Game
  124. 124. • You must be brutally frank and eliminate all ego from decision-making process • One of the most critical aspects of positioning is being able to evaluate products objectively and see how they are viewed by prospects • You need someone to bounce your ideas off- positioning is a game best played by two people as it increases objectivity YOU NEED OBJECTIVITY 124 Playing The Positioning Game
  125. 125. • Only an obvious idea will work today due to an overwhelming volume of communication • Simple concepts expressed in simple words and used in a straight-forward way are the best • We must be suspicious of clever/ complicated idea as it will not work probably due to lack of simplicity • An ad should be simple enough so that it is the strategy YOU NEED SIMPLICITY Playing The Positioning Game 125
  126. 126. • Difficulty is in finding an open as well as effective position in the prospects’ minds • Find an opening near the centre of the spectrum- calls for great restraint and subtlety • You can have a positioning success and a sales failure- “Rolls-Royce thinking” • Secret to establish a successful position is to keep two things in balance- (1) a unique position with (2) broad appeal YOU NEED SUBTLETY Playing The Positioning Game 126
  127. 127. • Geographic roll-out emphasizes on building product in one market and moving on to another • Demographic roll-out emphasizes on building a product in a particular segment based on demographics and then moving on to other segments • Chronologic roll-out builds the brand among a specific age group and then rolls it out to others • Distribution is another roll-out technique YOU NEED PATIENCE 127 Playing The Positioning Game
  128. 128. • Don’t overlook the importance of worldwide thinking as a company owning a position in one country can use that position to wedge its way into another • As companies start to operate on a worldwide basis, they often discover they have a name problem YOU NEED A GLOBAL OUTLOOK 128 Playing The Positioning Game
  129. 129. • 2 kinds of marketing people- “We” people who have trouble understanding the concept that positioning is done in prospects’ minds, they believe with innovation, anything is possible, make dynamic speakers and drove for self-help seminars; “They” people see things more clearly, focus attention on competition as they seek out competitive weaknesses to exploit and learn to avoid competitive strengths, rapidly abandon the idea that superior people are the key to success • Levelling factor for human resource between two companies is the numbers- as a result not great difference in average personnel quality is observed between competitors • Outcome largely depends on which side has the better generals and, hence, the better strategy YOU NEED TO BE “THEY”- ORIENTED Playing The Positioning Game 129
  130. 130. • You don’t need a reputation as a marketing genius- in fact, it could be a fatal flaw; A product leader often attributes its success to marketing skill and tries to transfer that skill to other products, resulting in failure ultimately • Rules of positioning hold for all types of products- Companies going head-on against established competitors is suicidal; to move up the ladder one needs to follow the rules of positioning • Name of the game is positioning where only the better players will survive WHAT YOU DON’T NEED Playing The Positioning Game 130
  131. 131. REFERENCES Book Reference:  Trout , J., & Ries, A. (2013). Positioning: The battle for your mind. McGraw-Hill Education (India) Private Limited. Image References:  Sanidopoulos, J. (2009, Nov 17). Atheist admits human mind cannot be explained by darwinian mechanisms. Retrieved from http://www.johnsanidopoulos.com/2009/11/atheist-admits-human-mind- cannot-be.html  Bernbach, B. (n.d.). Retrieved from www.dna.co.vn  (n.d.). Retrieved from http://www.sodamuseum.com  (n.d.). Retrieved from http://news.google.com/newspapers?nid=1915&dat=19710224&id=fPAgAAAAIBAJ&sjid=xHMFAAAAIBAJ&p g=5235,3726985  (n.d.). Retrieved from http://www.ebay.com  The "monsanto protection act". (2013, April 5). Retrieved from http://universalcritique.blogspot.in  (n.d.). Retrieved from en.wikipedia.org /wiki/Personal_computer 131

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