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Wednesday
Sep262012

What Position is Your Positioning In?

David Olgivy, one of the most noted and respected marketers of the international advertising firm Olgivy and Mather, once made a list of what his agency had learned following the occasion of placing a billion dollars in advertising.  After listing thirty points, he concluded that "of all we have learned, far and away the most important is positioning." 

 

We define Market Positioning as that place in a specific market where a company or product is between the customer and the competitor.  If well positioned, a company can obscure a direct line-of-site between a customer and a competitor.

 

Many good companies and fine products fail each year due to poor positioning.   Many times, executives and business owners never fully realize why they fail.   In most cases, failure is due to incorrect positioning. Positioning often fails because of incorrect execution of the positioning process. A successful positioning program encompasses five areas:  Strategy, Pricing, Quality,  Service Levels, and Image.

 

Properly implementing all of these five areas is fundamental in correctly positioning any company or product. This process can be likened to erecting a building. A poor foundation will haunt your structure with problems that will continue for years after you have moved in. Without taking care to properly prepare the foundation, additions and improvements will be very costly down the road.

 

Similar to building's foundation, proper positioning must be built in sequence (you cannot pour the cement until the forms have been set). First, a company's strategy must be determined. Pricing, quality, and service relate to each other so closely that they must be considered together.

 

 

 

Once these are completely defined, image can be developed to support the positioning. ("Image" applies to the intentional aesthetic development of names, logos, store fronts, displays, letterhead, appearance of personnel, office signage and furnishings, as well as all communications.)  Unfortunately, some think that image development, as the last step, is insignificant and conclude that it can be "skimped on."  Others believe that their product is so well positioned that consumers will beat a path to their door. Tragedies result when all of the elements involved in positioning are well developed, yet a company's image remains "ho hum."  Image is the hub around which all other elements rotate. Without a well-defined image, there is nothing special distinguishing a company as outstanding. Skimping over image development is a grave mistake; one that is made all too often. In addition, a successful product with poor positioning is easier to copy or steal. Successful, market-driven companies position their products based upon carefully listening to customers' needs, as well as to carefully defining their image.

 

Finding outside help to define the first four elements is more difficult than locating an agency equipped to adequately carry out image development. Very few small businesses see the value of spending time and money creating image. As a result, they fall short in their attempts to accomplish the feat on their own. In fact, few companies possess "inside talent" capable of accomplishing the image phase of the positioning process.

 

Unfortunately, the convenience of "desk-top publishing" has created a false confidence in many who believe that keyboard knowledge makes them instant professionals. Just owning a grand piano does not make one a concert pianist. Likewise, music lessons do not always ensure prodigious results! Too much is at risk. Being a successful marketer with your company or product is not the same as giving a recital for your aunts or uncles! At concert time, you need to look professional!

 

Nationally known marketing consultant and best selling author Jay Conrad Levinson agrees in the important role positioning plays in success. He says that 20% of his clients spend a correct amount on the production of image materials, 40% spent too little, while 40% spent too much, feeding their egos while not adequately addressing the product positioning strategy.

 

Spending more does not always ensure success. Some positioning strategies do not lend themselves to slick, over-produced support materials. This type of strategy would be an inappropriate way to market an environmental product aimed at a target group of old hippies.

Many times, small companies and well established, slow growing larger businesses fall into the penny pinching trap. These companies are willing to step over dollars to pick up dimes. This frugal management group is composed of well meaning, value based businesses people who miss the point. These business owners assume that their customers don't need nice brochures, or believe that they can't afford the costs of production. Their notion is that "our sales people can talk them through it."

 

While there is a baseline-value expressed through these assumptions, the point of proper image positioning is frequently misunderstood. Once a company's image is determined, it must be supported in a consistent way. The cost of image development applies to the long-term period for which it will be used. The tendency of this group is to cut corners when funding "getting the image right." Unfortunately, the end result is often the production of pieces that are not representative of the imagery, nor of the quality that their purchase should entitle them to.

 

Image development is a foundational element in proper positioning. Without a strong foundation, a building will eventually shift, causing the doors to be out of square, and the roof to sway. The truth of the matter is that logos, packaging, and other image building materials will be used for many years to come. Costs are insignificant, when averaged over time. As in the construction industry, correcting mistakes is much more costly after a building is finished. It is best to do it right from the beginning.

 

Proper image positioning creates an impression of the company or product that is in complete concert with the price, quality, and strategies of the company or product. A company's image must be dictated based on the positioning between these three elements, not the owners or executives short term cash flow, personal egos, or general lack of appreciation of how to best communicate to future customers.

 

Marketing Positioning is the overriding key to effectively communicating to existing and potential customers. Correct positioning makes the difference between good companies and good growing companies. No one will buy your product unless they understand what it is and why it is better than another. Positioning is the primary tool.

 

Positioning is the foundation upon which success is built. Without a strong foundation, a building will eventually shift, causing the doors to be out of square, and the roof to sway. Without a strong emphasis on positioning development, a company's direction will shift like a building erected on unstable ground. Solid understanding of a company's image is pivotal to correctly positioning a company for success. It is much easier to build with care from the ground up; correcting mistakes is much more costly after the fact.

 

June 1997

Ron Burgess