No company can win if its products and services resemble every other product and
offering. As part of the strategic brand management process, each offering must represent the right kinds of things
in the minds of the target market. Although successfully positioning a new product in a well-established market may seem
difficult, Method Products shows
that it is not impossible.
Named the
seventh fastest-growing company in the United States by Inc. magazine back in
2006, Method Products is the brainchild of former high school buddies Eric Ryan
and Adam Lowry. The company started with the realization that although cleaning
and household products is a huge category, taking up an entire supermarket
aisle or more, it was an incredibly boring one. Ryan and Lowry designed a
sleek, uncluttered dish soap container that also had a functional advantage—the
bottle, shaped like a chess piece, was built to let soap flow out the bottom,
so users would never have to turn it upside down. This signature product, with
its pleasant fragrance, was designed by award-winning industrial designer Karim
Rashid. “The cleaning product industry is very backwards, and many of the
products have a 1950s language,” Rashid said, “They are cluttered with
graphics, too much information, and complicated ugly forms.
By creating a
line of nontoxic, biodegradable household cleaning products with bright colors
and sleek designs totally unique to the category, Method has crossed the line
of $100 million in revenues with a phenomenal growth rate. Its big break came
with the placement of its product in Target, known for partnering with
well-known designers to produce stand-out products at affordable prices.
Because of a limited advertising budget, the company believes its atractive packaging
and innovative products must work harder to express the brand positioning. The
challenge for Method now, however, is to differentiate beyond design to avoid
copycats eroding the company’s cachet. The company is capitalizing on growing
interest in green products by emphasizing its nontoxic, nonpolluting
ingredients.
As the success of Method products demonstrates, a company can reap the benefits of carving out a unique position in the marketplace. Creating a compelling, well-differentiated brand position requires a keen understanding of consumer needs and wants, company capabilities, and competitive actions. It also requires disciplined but creative thinking. In this chapter, we outline a process by which marketers can uncover the most powerful brand positioning.
Developing and Establishing a Brand Positioning
All marketing strategy is built on segmentation, targeting, and positioning (STP). A company discovers different needs and groups in the marketplace, targets those it can satisfy in a superior way, and then positions its offerings so the target market recognizes the company’s distinctive offerings and images.
Positioning is
the act of designing a company’s offering and image to occupy a distinctive
place in the minds of the target market. The goal is to locate the brand in the
minds of consumers to maximize the potential benefit to the firm. A good brand
positioning helps guide marketing strategy by clarifying the brand’s essence,
identifying the goals it helps the consumer achieve, and showing how it does so
in a unique way. Everyone in the organization should understand the brand positioning
and use it as context for making decisions.
Entertainment
Weekly When publisher Scott Donaton took over Entertainment Weekly, he
repositioned the magazine away from celebrity lifestyles to focus more directly
on entertainment itself and what actually appeared on the screen, page, or CD.
This updated positioning became a filter that guided the content and marketing
of the magazine: “Every event, sales program, marketing initiative gets poured
through that filter—the goal being to keep and enhance the things that are true
to who you are; kill the things that aren’t, necessarily; and create great new
things that are even better expressions of who you are.” Out was the glitzy
annual Oscar party at Elaine’s restaurant in New York City; in its place was a
week-long Academy Awards program at ArcLight Theater in Hollywood showcasing
all the best-pictures nominees and featuring a panel discussion with nominated
screenwriters.
A good positioning has a “foot in the present” and a “foot in the future.” It needs to be somewhat aspirational so the brand has room to grow and improve. Positioning on the basis of the current state of the market is not forward-looking enough, but, at the same time, the positioning cannot be so removed from reality that it is essentially unobtainable. The real trick in positioning is to strike just the right balance between what the brand is and what it could be.
The result of positioning is the successful creation of a customer-focused value proposition, a cogent reason why the target market should buy the product. shows how three companies—Perdue, Volvo, and Domino’s—have defined their value proposition through the years given their target customers, benefits, and prices
Positioning
requires that marketers define and communicate similarities and differences
between their brand and its competitors. Specifically, deciding on a positioning
requires: (1) determining a frame of reference by identifying the target market
and relevant competition, (2) identifying the optimal points of parity and
points of difference brand associations given that frame of reference, and (3)
creating a brand mantra to summarize the positioning and essence of the brand.
Determining a Competitive Frame of Reference
The competitive frame of reference defines which other brands a brand competes with and therefore which brands should be the focus of competitive analysis. Decisions about the competitive frame of reference are closely linked to target market decisions. Deciding to target a certain type of nconsumer can define the nature of competition, because certain firms have decided to target that segment in the past (or plan to do so in the future), or because consumers in that segment may already look to certain products or brands in their purchase decisions.
Identifying Competitors a good starting point in defining a competitive frame of reference for brand positioning is to determine category membership—the products or sets of products with which a brand competes and which function as close substitutes. It would seem a simple task for a company to identify its competitors. PepsiCo knows Coca-Cola’s Dasani is a major bottled-water competitor for its Aquafina brand; Citigroup knows Bank of America is a major banking competitor; and Petsmart.com knows a major online retail competitor for pet food and supplies is Petco.com.
The range of a
company’s actual and potential competitors, however, can be much broader than the
obvious. For a brand with explicit growth intentions to enter new markets, a
broader or maybe even more aspirational competitive frame may be necessary to
reflect possible future competitors. And a company is more likely to be hurt by
emerging competitors or new technologies than by current competitors.
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After having spent billions of dollars building their networks, cell phone carriers AT&T, Verizon Wireless, and Sprint face the threat of new competition emerging as a result of a number of changes in the marketplace: Skype and the growth of Wi-Fi hotspots, municipal Wi-Fi networks built by cities, dual mode phones that can easily switch networks, and the opening up of the old analog 700 MHz frequency used for UHF broadcasts |
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The energy-bar
market created by PowerBar ultimately fragmented into a variety of
subcategories, including those directed at specific segments (such as Luna
bars for women) and some possessing specific attributes (such as the
protein-laden Balance and the calorie-control bar Pria). Each represented a
subcategory for which the original PowerBar was potentially not as relevant |
Firms should identify their competitive frame in the most advantageous way possible. In the United Kingdom, for example, the Automobile Association positioned itself as the fourth “emergency service”—along with police, fire, and ambulance—to convey greater credibility and urgency. Consider the competitive frame adopted by Bertolli.
Bertolli Unilever’s Bertolli, a line of frozen Italian food, experienced a steady 10 percent growth in sales through the recent economic recession, in part due to its clever positioning as “restaurant quality Italian food that you can eat at home.” Targeting men and women with “discerning palates,” Bertolli has aggressively innovated with a stream of high-quality new dishes to keep target customers interested. In its marketing for the brand, Bertolli deliberately chooses to go to places “appropriate for a fine dining brand but not a frozen food brand.” Advertising “Spend a Night In with Bertolli,” the brand has advertised during the Emmys and Golden Globes award show telecasts and hosted celebrity chef dinners in Manhattan.
We can examine competition from both an industry and a market point of view. An industry is a group of firms offering a product or class of products that are close substitutes for one another. Marketers classify industries according to number of sellers; degree of product differentiation; presence or absence of entry, mobility, and exit barriers; cost structure; degree of vertical integration; and degree of globalization.
Using the market approach, we define competitors as companies that satisfy the same customer need. For example, a customer who buys a word-processing package really wants “writing ability”—a need that can also be satisfied by pencils, pens, or, in the past, typewriters. Marketers must overcome “marketing myopia” and stop defining competition in traditional category and industry terms. Coca-Cola, focused on its soft drink business, missed seeing the market for coffee bars and fresh-fruit-juice bars that eventually impinged on its soft-drink business.
The market concept of competition reveals a broader set of actual and potential competitors than competition defined in just product category terms. Jeffrey F. Rayport and Bernard J. Jaworski suggest profiling a company’s direct and indirect competitors by mapping the buyer’s steps in obtaining and using the product. This type of analysis highlights both the opportunities and the challenges a company faces. “Marketing Insight: High Growth through Value Innovation” describes how firms can tap into new markets while minimizing competition from others.
