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Positioning (Trout Ries)

What is Positioning. Description
Positioning is a marketing method for creating the perception of a product, brand, or company identity. Starting from 1969, two young marketing guys, Jack Trout and Al Ries, wrote, spoke and disseminated to the advertising and PR world about a new concept in communications which they called positioning. The term was actually first mentioned in a paper by Jack Trout: Positioning is a game people play in today's me-too market place, Industrial Marketing, Vol.54, No. 6, June 1969, pp.51-55. Their 1981 book about Positioning: "The Battle for Your Mind" became a bestseller. Until then, advertising agencies had primarily been basing their media campaigns on internally conceived benefits of the client's product. According to Trout and Ries, "positioning is not what you do to a product. Positioning is what you do to the mind of the prospect. That is, you position (place) the product in the mind of the potential buyer". Since that time in marketing, positioning is the technique in which marketers try to create an image or identity for a product, brand, or company in the perception of the target market. What matters is how potential buyers see the product. It is expressed relative to the position of competitors. Typical positioning tools include graphical perception mapping, market surveys, and certain statistical techniques.

Competitive Edge and Positioning

A successful positioning strategy is usually based on a sustainable competitive advantage [1] of a company. Positioning can be based on several things, including: Product features Benefits, needs, or solutions Use categories Usage occasions Placing and comparing it relative to another product Dissociation of the product class

Three bases of positioning can be distinguished

1. Functional (solve problems, provide benefits to customers) 2. Symbolic (self-image enhancement, ego identification, belongingness and social meaningfulness, affective fulfillment) 3. Experiential (provide sensory stimulation; provide cognitive stimulation)

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Steps in Product Positioning. Process

Identify competing products Identify the attributes, also called dimensions, that define the product 'space' Collect information from a sample of customers about their perceptions of each product on the relevant attributes Determine the share of mind of each product Determine the current location of each product in the product space Determine the target market's preferred combination of attributes. These are called: an ideal vector. Examine the fit between: the positions of competing products, the position of your product and the position of the ideal vector Select the optimum position

Three Positioning Strategies by Youngme Moon

In an HBR article of May 2005, Youngme Moon introduced three variations of Positioning that can be used to break free from Product Life Cycle [2] thinking. Companies can change how consumers perceive them. By Positioning or often Repositioning their products in unexpected ways. Three positioning strategies that marketers use to cause a mental shift at consumers are Reverse, Breakaway, Stealth Positioning: 1. Reverse Positioning. This method removes "sacred" product attributes. Simultaneously new attributes are added that would typically be found only in a highly augmented product. For example IKEA is not delivering to your home the products which you have bought, and it offers no sales consultancy. But IKEA added: children drop-off, cafe, toys). Recommended for: Services companies. 2. Breakaway Positioning. This method associates the product with a radically different category. By manipulating the cues of consumers of how they perceive and categorize a product, a firm can change how consumers frame [3] a product. (ex. Swatch > no longer in category Swiss Watches, but in Fashion Accessories). Recommended for Packaged Goods companies. 3. Stealth Positioning. This variant gradually interests consumers for a new offering, by hiding the product's true nature. For example Sony's AIBO robot was positioned as a lovable pet. This shifted consumer's attention away from its major limitations as a household aide. It apparently even turned elderly people into early technology adopters. Recommended for: Technology companies. Book: Jack Trout and Al Ries - Positioning: The Battle for Your Mind Positioning Forum (6) New topic | Help [4] Reactions Rating
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How to Measure the Effectiveness of Positioning? [6] "In order to know how effective positioning is, positioning effectiveness should be measured. Two main groups of positioning measurements exist, namely company-based and customer-based. 1. Company-based positioning measurement approaches With these approaches, managers are surveyed on the positioning they are exerting. Afterwards, the information obtained will be linked to the financial performance (sales, profits, market shares) of the brand. 2. Customer-based positioning measurement approaches These approaches obtain information from customer surveys. The resulting information is used in several ways: 2a. One way is to determine whether the associations that we intended to establish in the mind of consumers are consistent with the actual perceived associations of the customers. Hereby it is assumed that efficient positioning is the degree to which there is consistency between what companies claim and the perception of the customers. 2b. The other way is using perceptual maps which determine a brands position in a virtual space, displaying how consumers perceive the good compared to other products in terms of for example properties and preferences. Source: Fuchs, C. and A. Diamantopoulos. (2012). Customer-perceived Positioning Effectiveness: Conceptualization, Operationalization, and Implications for New Product Managers*. Product Development & Management Association vol. 29, 229-244.

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Example of Perceptual Map

Example of Perceptual Map " React [7] Sit Back and Relax... [8] "Watching another firm enter a market first [9] and not entering yourself can be hard, but by doing this you can see what works and what doesn't. Sometimes a second mover strategy [10] is preferable. For example if you watch someone open up a bakery in the area you would like to start to work in, and it goes bankrupt in a month, you can see that it would not have been a good idea anyway and feel good that your money is safe. Of course being first can bring rewards too, but always research your market first to find gaps." 1

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React [11] Reverse and Stealth Positioning in Banking Institutions [12] "Competition drives the use of reverse positioning and stealth positioning techniques in business transactions in many service industries. For example banks use reverse positioning combined with stealth positioning for promotional checks to consolidate high interest rate balance under a lower rate or promoting credit cards with varying ceiling limits and discount points. These banking services influence the customers to engage in some kind of business relation. The stealth is seen in stimulating the urge and surge marketing to attain the sale target. A percentage of the new clients in the promotion period actually land into higher debt repayment because of payment irregularities." React [13] Reposition or Relaunch? [14] "I would like to know if repositioning is a good strategy or should we change the brand and re-launch the product? As Al Ries and Jack Trout have mentioned the most wasteful expense that a company could do is to try to change the mind of the prospect; it is almost impossible to ctrl alt del any information from a human mind." React [15] Example of Poor Product positioning [16] "Is there an example of confused positioning? What have been the market consequences to that?" React [17] What are the 22 Immutable Laws of Marketing by Ries and Trout ? Summary [18] "Another well-known publication by Ries and Trout is the 22 Immutable Laws of Marketing (1994): 1. The Law of Leadership - It is better to be first than it is to be better. 2. The Law of the Category - If you can't be first in a category, set up a new category you can be first in. 3. The Law of the Mind - It is better to be first in the mind than to be first in the marketplace. 4. The Law of Perception - Marketing is not a battle of products, it's a battle of perceptions. 5. The Law of Focus - The most powerful concept in marketing is owning a word in the prospect's mind. 6. The Law of Exclusivity - Two companies cannot own the same word in the prospect's mind. 7. The Law of the Ladder - The strategy to use depends on which rung you occupy on the ladder. 8. The Law of Duality - In the long run, every market becomes a two horse race. 9. The Law of the Opposite - If you are shooting for second place, your strategy is determined by the leader. 10. The Law of Division - Over time, a category will divide and become two or more categories. 11. The Law of Perspective - Marketing effects take place over an extended period of time. 12. The Law of Line Extension - There is an irresistible pressure to extend the equity of the brand. 13. The Law of Sacrifice - You have to give up something to get something. 14. The Law of Attributes - For every attribute, there is an opposite, effective attribute. 15. The Law of Candor - When you admit a negative, the prospect will give you a positive. 16. The Law of Singularity - In each situation, only one move will produce substantial results. 6 1 7 1

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17. The Law of Unpredictability - Unless you write your competitor's plans, you can't predict the future. 18. The Law of Success - Success often leads to arrogance, and arrogance to failure. 19. The Law of Failure - Failure is to be expected and accepted. 20. The Law of Hype - The situation is often the opposite of the way it appears in the press. 21. The Law of Acceleration - Successful programs are not built on fads, they're built on trends 22. The Law of Resources - Without adequate funding, an idea won't get off the ground One should consider the 22 readable chapters (about 4-5 pages each) as best practices of common sense marketing, not as iron rules. Excellent book to understand typical marketing issues and challenges, but the problem is that the authors in most cases do NOT explain how to achieve or implement a particular law." React
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Wikipedia - Positioning Premium Compare with Positioning: Marketing Mix [20] | Extended Marketing Mix (7-Ps)
[21] | Product/Market Grid [22] | Co-Creation [23] | Porter Competitive

Advantage [24] | BCG Matrix [25] | Product Life Cycle [26] | McKinsey Matrix [27]

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| Innovation Adoption Curve [28] | Profit Pools [29] | Four Trajectories of Industry Change [30] | Disruptive Innovation [31] | Framing [32] Return to Management Hub: Communication & Skills [33] | Knowledge & Intangibles [34] | Marketing [35] More Management Methods, Models and Theory [36]
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32. http://www.12manage.com/methods_tversky_framing.html 33. http://www.12manage.com/i_cs.html 34. http://www.12manage.com/i_ki.html 35. http://www.12manage.com/i_m.html 36. http://www.12manage.com/index.html

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