Chapter 2 – Positioning and the Brand

Estimated Reading Time: 18 minutes

When people hear your company name, what images or ideas come to their mind?  More importantly, are these images the ones you want people to have?  What people think about your company is perhaps the most important element not just in marketing, but in business in general.

Positioning and its close cousin — brand — are the two of the most important assets your organization owns.  Positioning is the place (or position) your product, service or company holds in the mind of a customer.  Brand is how they feel about your product, service, or company.  Positioning is more cerebral, while brand is more visceral, even emotional.  Take how men might choose a beer in a bar.  Heavy or light?  Budget or premium?  Positioning is how they view the beers on display in that context.  A beer’s brand can convey a lot of other things – sportiness, exclusivity, worldliness, to name a few.

Marketers need to understand both positioning and brand to help sell their products.   We like to think of positioning as making sure your product is in the running, and the brand as the deal closer.  A strong brand attracts buyers, brand loyaly is a long-term, strategic asset that will continue to drive your business.

Despite this reality, many companies do not pay sufficient attention to their brand – what it means, and what is required to maintain it.  This behavior seems strange because most businesspeople are envious of highly successful brands like Apple, Coke, and Mercedes.   The problem is that, although brand is vital to market success, it is a topic that falls somewhere between elusive (for those being kind) to soft (for the cynics who like to make or count things).  Most CMOs melt into a puddle when asking a gimlet-eyed board of directors to fund branding because they are not able to effectively articulate its unequivocal value.

Understanding the importance of positioning and the brand and effectively conveying this understanding to your organization’s leaders is imperative, because these elements create strategic advantage in the market.  This chapter will cover both in detail and explain how companies can use them to get an edge on their competition.

Positioning

Positioning is sometimes referred to as the fifth P, along with product, price, place, and promotion.  (Recall our discussion of McCarthy’s model in Chapter 1.)  A product or company’s position is how potential buyers perceive that product or company.  Positioning is expressed relative to the position of the product or company’s competitors.   In marketing, positioninghas come to mean the process by which marketers try to create an identity in the minds of their target market for their product, brand, or organization.   As the masters of positioning Jack Reis and Al Trout explained, positioning is the process of creating an impression in a consumer’s mind[1].

The “positioning era” began in the early 1970s.  Somewhere between the influential article “Positioning Is a Game People Play in Today’s Me-too Marketplace,” by Reis and Trout in Industrial Marketing in 1969 and an ad placed in The New York Times in 1971 by advertising giant David Ogilvy that proclaimed, “The results of your campaign depend less on how we write your advertising than on how your product is positioned,” a fundamental  shift had occurred, one that focused more on the position a product staked out in the market rather than simply the image it sought to convey.

To understand the impact of this shift, we need to briefly review the evolution of modern advertising.  In the 1950s, advertising was very much focused on the product itself, as well as its features and benefits.  With the increase in products and advertising generated by post-WWII prosperity, however, advertising the product was no longer sufficient.  There was a glut of similar products in the prospective customer’s mind.  Efforts to address this problem led to the emergence of the “image era” of advertising, starting in the 1960s.  In the image era, successful companies found their reputation or “image” was more important in selling a product than any specific product feature.    Reis and Trout identify David Ogilvy as the “architect of the image era.[2]”  Ogilvy saw each advertisement as an investment in the long-term image of a brand.  Two of his more notable accounts that employed this strategy were Rolls-Royce and Schweppes.

But with too many companies jumping on the image bandwagon, an “image glut” formed in the marketplace, with no real distinction among similar products.    Reis and Trout noted that “just as the ‘me-too’ products killed the product era, the ‘me-too’ companies killed the image era. As every company tried to establish a reputation for itself, the noise level became so high that relatively few companies succeeded.[3]”As a result, there was a pressing need for a new approach.  An answer to that need emerged: positioning.

Table 1 lists some common approaches to positioning.  Note the use of superlatives – best, fastest, most.

Approach	Example
The best / Best quality	Stradivarius violins
Best value (“Bang for the buck”)	Ikea
Aspiration / Most luxurious	Rolex
Must-have	American Express
Fastest	Domino’s

Table 1: Common approaches to positioning

Positioning is the relative competitive comparison a product, or company, occupies in a given market as perceived by the target customer.  Consequently, if a product is the leader in an existing category, then it has the leadership position.  If it is not, then it can be positioned as the up-and-comer.  Or, the company can create a new category in which the product can be the leader.  An example of a company that employed this strategy with great success is Volvo.  Realizing that they were entering an extremely crowded market, Volvo created a new category for its product — the safest car. Not the fastest or the most luxurious.  But the safest.

Reis and Trout also emphasize that the mind has limited capacity; that is, it contains only a finite number of slots or positions for products to occupy.  Among the vast number of products on the market, yours needs to occupy one of these slots.

To combat this crowding problem, sometimes a marketer needs to create a little room in the customer’s mind – elbow their way in, so to speak.  This approach is called de-positioning  and refers to efforts to change the identity of competing products, relative to the identity of your own product, in the collective minds of the target market.  Some marketers prefer de-positioning to positioning, and usually do so by claiming that some significant change in the market has transformed their product into the new number one.

A great example of effective de-positioning is the competition between Apple and Microsoft.   Apple’s 2006 “Get a Mac” campaign featured two actors named “Mac” and “PC” who anthropomorphized their computer namesakes.   Mac was a younger, thinner, casually dressed twentysomething who was able to accomplish things easily.  In contrast, PC was heavier, stodgier, wore glasses, and was more than a little dorky.  Anything Mac could do would take PC longer, if he could do it at all.  Apple used the campaign to change the definition of the personal computer, from simply one designed for use by an individual to one that had to be easy to use.  Put simply, Apple added the dimension of ease of use to the equation.  Apple was easy.  PC was hard.   Ease of use was paramount.  Apple was number one.  The Mac’s market share increased 42% during the time the campaign ran[4].  In 2009, AdWeek named “Get a Mac” the campaign of the decade.

Company A	Position A	vs.	Company B	Position B
Subway	Healthy fast food		McDonald’s	Value
Nike	Athletic performance		Vans	Hip, “Off the wall”
FedEx	Peace of mind		UPS	The logistics experts
BMW	Driving pleasure		Volvo	Safe and secure

Table 2: Examples of positioning relative to competition

Developing the Positioning Statement

A positioning statement is a short statement that demonstrates the value of what you offer, how it differs from your competition, and how it has a meaningful impact on your target audience.  The positioning statement is an internal tool that you use to communicate your positioning.  It codifies the customer benefit and the uniqueness of your product, service, brand, or company.  It is the basis for all of your marketing messages and communications, including the development of a tagline.  Other groups within your company can use the positioning statement to help them with their work.  Your advertising team or agency, for example, can utilize the positioning statement as input to develop your advertisements.  Understanding the target buyers, the value they see in your product, and how your product or service differs from competing products or services are essential components in creating a tagline that your target customers can identify with.

Developing a positioning statement requires a lot of hard work.  The individuals involved need to question basic assumptions concerning XXX, exchange opinions, resolve differences and, most difficult of all, arrive at a final decision on a specific direction.  Companies that lack the discipline needed to develop positioning and stick to a direction — and to the strategy that supports that direction —risk diffusing their marketing effort.  The result is wasted time and, ultimately, wasted market opportunity.

The usual process for creating a positioning statement combines interviews with key stakeholders and internal meetings.  Key stakeholders can include executives, founders, sales reps, and anyone you think really understands your customers and market.  But even more important, and often missed, are interviews with customers, partners, and even prospects, if you can find them.  Because the ultimate goal of positioning is to create a position in the mind of your customers or the market at large, understanding how your customers feel is essential to creating an effective statement.

Going further, you need to pay particular attention to your customers’ needs — what they are seeking in a product like yours, and how they perceive your product as different.   A very difficult challenge in the positioning process occurs when customers feel differently about your product, service, or company than your executives do.  Who is right? Do the customers just not get it?  Or, is the company not delivering?  Perhaps the company has never clearly articulated its position.  As difficult as these discussions can be, this process can be a crucible from which something better can emerge.

After you have collected all of this feedback, the process of crafting the statement starts.  Ideally, you should appoint a small group to complete the task – otherwise the process may never end.  In the initial meeting the group should collect as many ideas on the position of the company as possible.    Their next task is to take a stab at crafting the actual statement.

The positioning statement should be an honest reflection of your product, service, or brand.  The key to a good statement is specificity: Capture what your company delivers and how it differs from the competition.  In addition to being informational, the statement can also be aspirational.  For example, if your company has a three-year plan to add features to a product, grow your footprint, capture market share, or achieve some other objective, the positioning statement can reflect these goals.

There are two widely used templates for positioning statements:

For (target audience), (product/service/ brand) is the (frame of reference) that delivers (benefit/differentiator) because only (product/service/brand name) is (reason to believe).

For (target audience)who wants/needs(reason to buy your product/service/brand),the (product/service/brand name)is a(frame of reference)that provides (your key benefit).Unlike(your main competitor), the(product/service/brand name) provides (your key differentiator).

The positioning statement must convey the purpose and impact of your business quickly yet convincingly.  For this reason, both templates are short and concise.  The second template more directly addresses your key differentiator and the contrasts with your competition.

Regardless of which template you use, your positioning statement needs to include some basic components:

• Target Audience – thedemographic or psychographic description of your desired customer. This is who your product, service, or brand is intended for, and it includes customers who most closely represent your product, service, or brand’s most fervent users.
• Product/Service/Brand – what you’re marketing. This might seem like a simple step, but take a few moments to reflect on exactly what you are attempting to position. Is it the product or service itself? Or, is it your company?
• Frame of Reference – the category or market in which your product, service, or brand competes.  Establishing a frame of reference helps provide context for your brand and relevance to your customers.
• Benefit/Differentiator – the most compelling and motivating benefit your brand offers your target audience relative to your competition.
• Product/Service/Brand Name – the name of the product, service, or brand you are positioning. 
• Reason to Believe –proof that your product, service, or brand delivers what it promises.

Here is how we position this book:

For professional marketers who need to learn fundamental marketing skills, this book is a professional development tool that provides easy-to-understand and pragmatic advice to help them get their job done. Unlike searching through blogs or reading dozens of marketing texts, this book boils it down to provide a convenient and authoritative overview that can be applied directly to the job at hand.

After you have crafted your statement, it is essential that you test it.  If the statement is going to inform your go-to-market plan and guide your marketing efforts, then it has to hold up.  To ensure that the statement works, you need to ask a number of critical questions:

• Is the statement clear?
• Does it focus on and motivate the core target audience?
• Does it provide a distinctive and meaningful picture of your product, service, or brand?
• Does it differentiate your brand from the competition?
• Is it credible?
• Does it allow for future growth?

The Brand

Now that we’ve covered positioning, let’s talk about brand.  Exactly what is a brand?  This sounds like a simple question.  After all, it’s a term that’s bandied about in marketing conversations all the time.  However, people frequently don’t truly appreciate what a brand is, what it isn’t, and how it impacts marketing and sales.

Brand is one of the most misunderstood terms in marketing.  In addition, it has multiple interpretations.  Brand is frequently confused with positioning.  The two terms are closely related, perhaps even two sides of the same coin.  Nevertheless, there is a distinct difference between the two.  Positioning is the place (or position) your product, service or company holds in the mind of a customer.  Brand is how they feel about your product, service, or company. Here’s how Marty Neumeier, author of The Brand Gap, explains it: “A brand is a person’s gut feeling about a product, service, or company.”

As illustrated in Figure 1, a brand needs to be unique, valuable to a customer, and defensible.  It also has to be genuine, which, in our opinion, is the most important component.  A brand has to feel right; it must be believable.  Equally important, a brand needs to make an emotional connection with a buyer.  For instance, consumers make an emotional connection with Coke, Mercedes, Rolex, Starbucks, and other great brands.

Another way to understand a brand is to think of a person.  People have physical bodies.  They also have personalities, reputations, beliefs, and a certain character.  When you think of a person, you no doubt think of all of these things, probably unconsciously.  Products and companies are much the same.  There is the physical instantiation of a product – its “body” – that can be anything from a bar of soap to an aluminum can filled with soda to a fast convertible.   In your mind you probably have already associated products with these examples.  Ivory, Coke, and Porsche, perhaps?  That’s the power of a brand.

Like people, brands have personalities. Some are serious.  Some are playful.  Some are a bit boring but reliable.  Brands have reputations, too.  They can be friendly, customer oriented, on time, or any number of other things.  Note that we are highlighting positive characteristics.  However, brands can inherit negative characteristics over time, due to inattention or poor business execution by the brand’s creator.  Finally, brands, like people, can age.  They can become old, tired, and irrelevant – which is why they need to be maintained.  The Oldsmobile brand – the name itself a liability –  was retired by General Motors in 2004.

Before we proceed with this discussion, we need to distinguish between a brand and a logo, because even many marketers confuse the two.  A logo is a symbol or other small design adopted by an organization to identify itself, its products, or its services.   A logo is a part of the brand identity.  Along with supporting colors, fonts, and other graphical elements of the brand identity, a logo helps a consumer spot Starbucks from a mile down a Hong Kong street, or make an advertisement feel as though it was created by Apple.  Although a logo can be the most recognizable component of a brand, there is much more to a brand than a logo.  You don’t feel the way you do about Apple because of the logo.

We are all influenced by brands.  When we purchase products we make decisions that reflect our feelings toward particular brands, what we know of them, and what we’ve come to expect if we have already purchased a product or service from that brand.

Two important concepts related to brands are brand promise and brand equity.  Brand promise refers to what people have come to expect from a product or company.   It is the sum of people’s interaction and experience, or what they have heard from others if they are not a customer.  It’s what convinces customers to keep coming back, or perhaps to try a product for the first time.  It’s also what might keep them away.  On May 11, 1996, ValueJet Flight 592 from Miami to Atlanta crashed into the Everglades.  The DC9 disappeared from the radar and into the wilds of the Everglades resulting in the loss of 110 people. The company is now known as AirTran.  The damage to consumer confidence was so bad the company renamed itself.

Brand equity is the set of assets (and liabilities) linked to a brand’s name and symbol that adds to or subtracts from the value of a product or service.    These assets are grouped into four major categories:

• Brand name awareness
• Brand loyalty
• Perceived quality
• Brand associations.[5]

Having strong brand equity means that people have heard of you, will buy from you again if they are existing customers, will consider buying from you if they are not, and will remain loyal as you extend your brand with new products.

It’s clear that brands are valuable.  But, how can this value be measured? Interbrand, a global branding consultancy, pioneered brand valuation.  They created a process that takes into account the financial performance of the brand – either a company or a product, the role of the brand in the purchasing process, and the overall strength of the brand, measured using a methodology from Interbrand or other brand monitoring firms.  Table 3 displays the values of the top ten global brands, based on Interbrand’s 2011 report.  Are these the brands you expected to see?  Why or why not?

Rank	Previous Rank	Brand	Region/Country	Sector	Brand Value ($m)
1	1	Coca-Cola	United States	Beverages	71,861
2	2	IBM	United States	Business Services	69,905
3	3	Microsoft	United States	Computer Software	59,087
4	4	Google	United States	Internet Services	55,317
5	5	GE	United States	Diversified	42,808
6	6	McDonald’s	United States	Restaurants	35,593
7	7	Intel	United States	Electronics	35,217
8	17	Apple	United States	Electronics	33,492
9	9	Disney	United States	Media	29,018
10	10	HP	United States	Electronics	28,479

Source: Interbrand, “Best Global Brands 2011”

Table 3: Ranking and value of top ten global brands

Building and Maintaining a Brand

Every organization needs to pay attention to its brand.  The degree to which your organization’s management values its brand will depend primarily on two factors: the size of your organization, and the industry you are in.  Smaller organizations tend to devote less attention to their brands than larger organizations.   Consumer products and service businesses tend to appreciate their brands more than other businesses.

How should an organization build and maintain its brand?  A basic approach is for management to insist on manufacturing or providing great products or services and to ensure that every employee is living up to the organization’s values.  For people looking for a more structured approach, David Aaker, a marketing professor at the University of California at Berkeley and the author of Building Strong Brands, has developed a comprehensive brand identity planning model, which we reproduce in Figure 2.   The planning starts with a strategic analysis of customers, competitors, and the company itself.

At the heart of Aaker’s model is a four-fold perspective on the concept of a brand. To help ensure that a firm’s brand identity has texture and depth, Aaker advises brand strategists to consider the brand as:

• A product
• An organization
• A person
• A symbol.

Each perspective is distinct. The purpose of Aaker’s system is to help brand strategists consider different brand elements and patterns that can help clarify, enrich, and differentiate an identity.   Once a company has defined its brand, the marketing team should create a detailed brand identity document and communicate it to other members of the organization, including the CEO and other executives.

To understand how Aaker’s system works, look at the “Brand Identity” box, and think of a famous brand.  Let’s use Harley Davidson as an example.  Can you visualize the product – a Harley Davidson motorcycle – and think of what makes it unique?  You could probably fill a page.  How about the organization?  “Independent” and “American” come to mind.  In addition, there is a certain type of person you associate with a Harley – tough, independent.  And, of course, we are familiar with the Harley Davidson logo, which many customers tattoo on their body.  Talk about brand loyalty!

Maintaining your brand requires a lot of work, across many disciplines across multiple departments inside and outside of marketing.  It involves a lot more than simply advertising or public relations.  In fact, it’s not just about marketing. It’s about your product, how your customers feel about your salespeople, whether they got a good deal, and how often they hear about you.  If you think about it, maintaining your brand focuses on how your customers experience the Four Ps we discussed in Chapter 1.

One reason that maintaining your brand can be so challenging is that there are so many factors that can impact your brand.  Figure 3 presents the most critical factors in a visual format.  The different sizes of the boxes represent emphasis – or importance –  which will vary depending on your business.  Reliability might be the most important factor for an airline or broadband Internet supplier.  Advertising is probably more important than product quality for bar soap.   Companies that sell to other businesses though a direct sales force need to make sure their salespeople are well informed and responsive.

As you think about managing your brand, don’t forget about groups like technical support or customer service – how they treat customers is a reflection of your brand.  Finally, bad customer experiences can have a dramatic impact on your brand.  As an often invoked Warren Buffett caution goes, “It takes 20 years to build a reputation, and 5 minutes to ruin it.”

Finally, with the rise of social media, consumers have a much greater voice than ever before.  Companies can no longer control their message and their brand image via conventional PR and advertising.  Rather, marketers need to devise strategies to mediate and influence consumers who write or comment using social media.   Some marketers refer to this process as “managing the dialogue” about the brand, which is very different from controlling the brand image.  Companies have taken to monitoring social media, looking for potential influencers, and “putting out fires” with unhappy customers as fast as possible.  Good customer service and a small gift or waived fee can turn even the angriest customer into a champion.  We will discuss this concept further in Chapter 7.

Identity Systems

An identity system, sometimes called the corporate identity, codifies the visual expression of an organization’s brand.   The logo constitutes the bulk of the identity, and it should be able to stand on its own.   However, the full identity encompasses far more than the logo.  The following list identifies the key components of an identity system.

• Logo – an image, like the Nike “swoosh,” or a wordmark, like thescript Coca-Cola, that represents a brand, company, or organization.
• Visual Elements – additional graphical elements – whether lines, shapes, icons, or cartoon characters – may be part of the identity, and can be used across a range of media.
• Color Palette – consistent use of colors is important to an identity.  Imagine if McDonalds turned blue or Starbucks suddenly became red.
• Sounds – a jingle is a short tune used in advertising and for other commercial uses. Though less common today, some jingles, like Roto-Rooter’s, have survived long enough to become critical to the identity.   More recently, a short sequence of notes – referred to as chimes or tones or audio trademarks – has become popular.  Intel ‘s four-note tone, NBC’s three-note chime, and ESPN’s six-note da-na-na, da-na-na are unmistakable.
• Package Design – sometimes the package itself is distinctive enough to support the identity.  The most famous example is the Coca-Cola “contour” bottle, which is trademarked.   Coke even prints it on their soda cans!
• Document Design –the physical appearance of reports, white papers, letters, email templates, data sheets, and brochures reinforces the identity.  For this reason it should be specified.  Critical design elements include margins, logo placement, acceptable and unacceptable types of graphics, and fonts.  Some companies even have a font created exclusively for them.

In addition to these basic components, business identities can incorporate other features. For example, restaurants, airlines, and other service businesses express their brand with their uniforms.  Store design – including lighting and music – can reflect the corporate identity.   For retail businesses, the design of the signs, storefront, and store interior constitutes what is known as trade dress.  Trade dress is so critical to brand identity that it is legally defined as defensible intellectual property.

Applying the identity system consistently is very important.   Marketing teams should create a style and a usage guide that clearly specifies how to accomplish this task.  Guides should contain the following information:

• The proper and improper use of logos, in a variety of applications, such as print, online and signage
• How and where visual elements are used
• When certain colors of the palette are used

In addition, they should include as much additional detail as the organization feels appropriate.  Marketing Communications, Corporate Communications, and/or the branding team usually have responsibility for maintaining the proper use of the identity.  This role has earned these departments the affectionate nickname “brand police.”

Case Study

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Learn More

• Brand Relevance: Making Competitors Irrelevant, David Aaker, Jossey-Bass, 2011
• Building Strong Brands, David Aaker, Free Press, 1996
• Purple Cow, Seth Godin, Penguin Books, 2007
• The Brand Gap, Marty Neumeier, New Riders, 2006
• Positioning: The Battle for Your Mind, Al Ries and Jack Trout, Warner Books, 1982