AN EFFECTIVE STRATEGY OF 42 YEARS: POSITIONING
The positioning strategy is based on a book of the same title by Al Ries and Jack Trout, written in the 1980s. Since the year it was published, this book has created a paradigm shift in communication strategies and influenced the communication and advertising strategies of companies’ brands. The reason for this was that up until then, there had only been a different feature of the product in the advertising strategies, and the ads were based on this feature, namely the “Unique Sale Promise” (USP).
However, by the 1980s, the physical differences between the products began to disappear. For this reason, the positioning strategy of “searching for an open hole in the mind” became very popular. Then, Al Ries began doing new releases with his daughter, Laura Ries. The book, which I summarize below, was originally written in China in 2022. Translated from the English version to Turkish. Authors include Al Ries, Laura Ries, Simon Zhang, and Meltem Heper. Meltem Heper is the representative of the Ries positioning company in Türkiye and has successfully expanded the examples in the book to include Türkiye. The foreword was written by Hulusi Derici, the owner of an advertising agency, Marka, who also happens to be a great advocate of the positioning strategy. I think this cult book is a must-read for all marketing professionals -I highly recommend it. I have shared with you some parts of the book that I agree with.
In their book, “Positioning in the 21st Century”, Al Ries and Jack Trout. argue that “There are categories and brands in the human mind. Some categories are dominated by the brands consumers prefer. Some are unfilled. Fields within these categories are positions. Some positions are filled with brand names while others are yet empty.” (*) Here is further information and my comments:
It is very difficult to seize a position already occupied by another brand. A priority positioning strategy seeks an open position in the mind to become the first brand to fill this space. For example, UniRoyal holds the position of “the tire company with the highest number of patents.” Most of the world’s most successful brands were created with a simple positioning strategy based on being the first to fill an available position in the mind. In Türkiye, there are such examples as Pınar in packaged milk, Efes in beer, Dalin in baby shampoo, and Ülker in biscuits, all of which hold the leading position thanks to the advantage of being the first in a new category. If a brand is a first, it will also be the leader in its category. Because most consumers have a strong perception embedded in their minds: The better brand in the market wins, and being the first makes the brand a leader, at least in the short run. And leadership is the strongest position one can achieve. However, we should not mistake being the first thing that comes to mind for being the first in the market! In any case, our greatest effort and success is about maintaining our leadership.
Ries lists the first three positioning principles as follows: (1) You don’t win in the market, but rather in the mind (2) Look for an open hole in the mind and be the first to create a new brand to fill this gap, aiming for leadership in your category (3) This leadership position is the strongest position you can have. He remarks, ‘Those who claim to be better than the leader will get nowhere.’ This reminded me of a colleague from the heart of Anatolia, who was a strict follower of technology and marketing, with a market share that was nothing more than fractions, yet called himself a “world brand.”
Major automakers made a mistake by moving their gasoline vehicle brands to the electric vehicle category. And, in our country, which can be likened to a paradise of Holdings, we often fall into the trap of brand extension. For example, Torku has created tremendous brand confusion by marketing a diverse range of products under the brand Torku, including biscuits, chocolate, sugar, milk, yogurt, cheese, and many others. Companies focused on a single brand are often leaders with a market share of over 50 percent because when you visit the websites of companies like Unilever or P&G, you see a tab for “Our Brands.” The websites of some other companies, such as Torku and Pınar, feature a tab called “Our Products.”
The main thing to pay attention to is that the stronger a brand is in its current category, the more problematic it becomes in brand extension, which is already a trap, as Coca-Cola Energy, Google Phone, and Kodak Digital did!
In physical wars, the aim is to claim a physical area. In marketing wars, the brand decides and takes action in one of the four war strategies depending on the target audience, the position of the competitors, and the position it owns, which are formulated as follows: (1) The first to claim an open space where there are no opponents is the sovereign leader; this area must be defended. (2) Those who want a share in this new field must find a weakness of the leader and use it. All leaders have a weak spot resulting from their position. Finding this weak spot and taking the opposite position is the surest way to secure a strong second place, especially without underpricing. (3) There is usually no room for a third in this space but attacking from the top, bottom, or flank does work, which results in the conquering of the territories out of their sight, surprising the leader and the second. (4) The last resort is to engage in guerrilla warfare by claiming very small areas that no one wants to deal with in that war, which is a huge opportunity today as it is quite possible to create micro brands and open up to the world. Once the leading brand is ingrained in the minds of consumers, it is almost impossible for a competing brand to replace it!
For example, let’s look at the energy drink brands KMX, TAB, and Full Throttle, launched by Coca-Cola to compete against Red Bull. If it’s too late to launch a new brand or if the competitor has already secured a strong position in the minds of consumers, the best thing that can happen in these circumstances is to represent the opposite of the leading brand so that the brand can be associated with the leading brand –‘the yin and yang of positioning’. This is because the brain files the words that are the opposite of those already stored in the mind. For example, while Red Bull and hundreds of other energy drink brands are sold in 8.3-ounce cans, the energy drink Monster was introduced in large 16-ounce cans, quickly becoming the second brand in the market. It may be said that THE OPPOSITE IS TRUER.
If there is no possibility of counter-positioning, another way to avoid falling into the trap of brand extension is to narrow the focus and attack from the top, bottom, or flanks to claim the territories where the leading and the second brands do not enter. For example, the position of Pegasus Airlines, the airline that makes flying accessible in our country. This type of marketing programs aim to create a unique distinction between the brand and competing brands rather than satisfying potential customers. Because then you win in the mind and the best way to achieve this is to have a unique idea that no competitor has.
On the other hand, the biggest opportunities today, where the entire world is conquerable thanks to digitalization, come in the form of being the big fish in highly “niche” segments that big companies will never be interested in and consider worth entering, like ultra-luxurious brands -i.e., brands that appeal only to the age group of 75 and above, or those that offer products only for the period from birth to the end of the first six months after it.
According to the book, which highlights that the strongest brands use names that are associated with existing positions in the minds, the first new brand in a new category should also create a new category name. Nothing beats this trio in marketing: (1) creating a new category, (2) creating a new category name, and (3) creating a new brand name. And every new category in the world is dominated by a new brand -not by an extension of an existing brand! Therefore, the best positioning strategy is to find a brand that evokes the category. For example, the brand Kleenex, which sells facial cleansing wipes, uses the term “kleen” instead of “clean.” However, the consumer tends to shorten long names. Therefore, alliteration, which is choosing a brand that repeats the sound of the brand’s category name, is another naming strategy, such as Coca-Cola, and DİDO.
This alliteration (linking words in the mind) is actually quite important. Because consumers decide on the category they want to buy before purchasing any brand. Once a consumer decides on a category, the first brand name that comes to mind will most likely be a brand that contains an alliteration with the category name. However, as it is becoming increasingly difficult to find an available website domain with the same name as the brand, compound words such as “Starbucks” consisting of “star” and “bucks” are used because the more links a word has in mind, the more memorable it will be. Another useful technique is to take two words like Eataly (eat and Italy) and then shorten and join them together to create a new brand name. However, the biggest problem with the name arises when the brand goes global. Since the English language and Latin alphabet have become the second language globally, particularly in the business world, if a brand name is not in English, then it has to at least sound good in English or be named in such a way that will leave no room for misunderstandings in an English-dominated business world.
Each category will eventually be dominated by only two brands. There is no room for a third, because many people choose between the two, thinking that the two leading brands are necessarily the best in their category. And, there are only two big brands in almost every category: – Cola: Coca-Cola and Pepsi – Energy drinks: Red Bull and Monster – And smartphones: iPhone and Samsung. If the brand is not one of the two market leaders, then there is a long-term positioning issue. One of the two brands is always perceived as the “leader” while the other is perceived as Number 2. Therefore, if the 2nd-position brand lowers its prices to maintain its market share, it will also reduce its net profit margin. So, price-based competition is like a double-edged sword for Number 2.
Perception is stronger than facts. But the Internet is different, and the winner takes all. That is, whoever takes the lead gets a disproportionately greater market share. This is why it is even more important to be the first brand in any new category. Because while there are a few brands to compare or choose from in a physical environment, it is not easy to switch to another place other than the usual brand on the Internet. So, it’s more important to WIN the battle on the Internet in your MIND! Because a mind is not big enough to store thousands of brands competing for a position. While in each category only two brands, namely, the leading and a second strong brand, will dominate the market ultimately, only one, that is, the leading brand, will do so on the Internet.
Categories constantly split up, and new categories emerge -for example, hybrid and electric cars. Just as the word “Brand” defines the marketing principle of the 20th century, the word “Category” defines that of the 21st, the authors suggest. Launching a new brand in a new category is almost always successful. But there are two kinds of new categories: 1) Transition categories that are very successful for a while and then disappear, such as fax (the transition product between mail and e-mail) and hybrid vehicles (the transition product between gasoline and electric vehicles). 2) Entirely new categories: A new category requires a new brand name rather than a new brand extension, and a good positioning strategy works better than good advertising!
On the other hand, as a category matures, the market shares of leading brands stabilize, as in Colgate being the leading toothpaste brand for 126 years, McVities the leading biscuit brand for 200 years, and Ülker the leading biscuit brand for 80 years. Consumers do not justify their choice to purchase a certain brand by saying that it is the first or the leading one in the category, yet they think that a leading brand is a better brand and always want to purchase the better brand’s products. Nevertheless, the results of a study conducted on 1,181 slogans suggest that there are very few brands among the first brands, the ultimate winners, in a category marketing themselves as a “leading” brand.
Over time, all categories split up. A leader trying to cover every aspect of a split-up category will inevitably face the risk of losing brand dominance. The better strategy would be to get rid of the excess, that is, prune the brand, to maintain the domination of a single position in the minds. Because, unlike many experts, the authors believe that many new categories and brands will emerge by way of division in the future. Those who deem an eventual merging of categories inevitable often cite the example of smartphones. Yet, smartphones are mobile devices used for surfing the Internet rather than making phone calls. So, the iPhone is essentially an iComputer.
In 2000, there were 17 million websites worldwide. Today, there are 1.1 billion -which is exactly 65 times as much. From a positioning perspective, the Internet doubles the number of potential categories. Because for every physical category, there is also an internet category based on the same product or service. New categories require new brand names. However, almost all big companies have tried to start a business on the Internet under the name of their existing brands -a mission that failed. Those who survived and succeeded have been the ones who created new brand names. With the advent of smartphones, the Internet also split into two categories: mobile-oriented and PC-oriented. Today, there are many opportunities to develop new mobile-only internet brands.
The most profitable organizations are multi-brand companies. Because single-brand companies continue to expand their product range to cope with new technological developments, which, in turn, weakens the brand. In contrast, a multi-brand company ensures that its existing brands maintain a narrow focus and launches new brands to cope with new technological developments: Torku and Pınar have products whereas Ülker and Eti have brands. One reason Amazon was the first to make USD 8.5 billion in sales within a decade from almost scratch is the mistakes its competitors made, which should have launched brands with a narrow focus. Amazon today makes most of its revenue from its web services. However, their most profitable operations are those under Kindle, Echo, Alexa, and Fire.
Using RHYMES, ALLITERATION, a memory-enhancing technique where each word begins with the same letter or sound, REPETITION, and REVERSAL in brand names makes them more memorable.
Images matched with the brand have a more direct and quick impact on the mind and convey emotional content that words do not. However, most brands generally adopt a verbal approach. Because if the brand does not have a narrow focus, it is almost impossible to develop a visual hammer to convey a particular idea.
All new brands that dominate the global market in the ultra-tech era are established with two positioning strategies: the Startup Strategy and the Brand Building Strategy. Making the right decisions matters a lot when developing a new category. If the goal is to penetrate minds with a new revolutionary product, then it is a must to give a new brand name to it. For example, in the rise of hybrid vehicles, Tesla dominates the category with a 68 percent market share with a new brand name in the electric vehicle industry. Apple is yet another company that demonstrates the power of ultra-technology. Because it did what needed to be done to build a strong brand – be the first to come up with a new category and/or use a new and unique brand. Its iPod, iPhone, and iPad developments all strengthened each other. But Apple is a company brand. Nobody says, “I bought an Apple” -they say, “I bought an iPhone”, an iPod, or an iPad. A primary positioning principle is that a new category requires a new brand. Here is another one: each category will eventually be dominated by two brands, namely the leading brand and the second brand (like Coca-Cola and Pepsi-Cola, Boeing, and Airbus). Such is human nature. Most people follow the crowd. But there are also the rebels who do not follow the crowd, wishing to be different. The second brand appeals to those who appreciate the unconventional and there are plenty of such rebels in each category. As Apple is considered the leading brand in the smartphone category, the rebels have migrated to Samsung.
In the 21st century, the easiest way to enter the consumer’s mind is not through advertising but through public relations. Social media boosts PR effectiveness. It is best to spark off with public relations and ignite with advertising. It’s about making it in the news and having people talk about you by way of public relations campaigns. But if you’re late to a market and lack effective PR, you don’t stand a chance. For example, Google launched its smartphone nine years after the iPhone. Here, the first thing Google should have asked itself is, “What distinguishes our smartphone from others?” Because it was its position that would define what the brand stood for and have been featured in the headlines about this new Google brand. Advertising should be used to keep the PR message alive. Once the influence of the PR program wears off, the company should use advertising to memorize the idea that the PR campaign conveys as a message. In summary, you kindle the fire with public relations and fuel it with advertising because advertising has little credibility on its own. What provides credibility is the media news and articles about a brand. So why did advertising lose its ability to build a new brand? The authors suggest two reasons for this: (1) Advertising volume has greatly increased. As advertisements grow in number, they become less effective. (2) Consumers have come to approach advertising promises with skepticism. Since all brands claim to be better, it is no longer easy to convince typical consumers that a brand is better than its competitors. But there is no such problem when it comes to public relations as the brand message is conveyed by the media, an independent source. What made advertising particularly effective in the 20th century was the word of mouth. Today, however, it has been replaced by the “word of fingers”. PR is also efficient because it is cheaper. That is why most successful brands are launched through public relations, not advertising. Behind the success of Tesla’s electric car in the 21st century is public relations. Tesla hardly advertised, but more news has been made about it than any other vehicle brand. Advertising should be used to leverage and defend brands created by public relations. There’s also a big difference between advertising and public relations: PR involves people while advertising doesn’t because it is about products and services. But another important point that should not be overlooked is that public relations will not last forever. Now, it is time to make advertisements that strengthen the brand and protect it from competitors’ attacks. Good ads do not convey news; they reinforce the brand’s current position in the minds. The brands taking over the world today are not extensions of old 20th-century brands. They are all new brands like Amazon, Google, Facebook, Tesla, and iPhone. The CEOs of these brands are also famous. They owe their reputation to public relations, which also includes social media. In the 20th century, advertising played a key role in brand building. Today, the situation is different: an information explosion prevails.
After the 20th century, an era when the emphasis was on “domestic,” the 21st century is a time of globalization for companies. The economy favors global companies rather than domestic ones. Most countries today are full of domestic chains. But remember: WINNING AT HOME BEFORE MAKING THE MOVE OF GLOBALIZATION IS A MUST!
Countries claim positions in the mind. As the global trend continues, we will see more examples of brands like BMW, Toyota, Samsung, Barilla, and Alibaba leveraging their own country’s positions. This will be most pronounced when a brand combines its “leadership” position with its country’s position. Because one of the most important principles of positioning is that customers believe the better brand wins in the market: if Italian pasta is better than American pasta, and if Barilla is Italy’s leading pasta, then it is better than all American pasta. But as the company moves from the domestic up to the global level, its smaller brands may disappear.
We have addressed some principles about branding, communication, and marketing above. Surely, while these hold, they are not absolute truths. For example, Ülker Chocolate Wafer is an exception to all these positioning rules. Halley, however, is a successful example that has applied all these positioning. In other words, there is no absolute rule other than honesty and quality in life, especially in trade. This is how science continues to develop, that is, by examining what is. We will keep reporting on the progress…
(*) Ries A. et al. (2022). 21. Yüzyılda Konumlandırma (Positioning in the 21st Century), TheKitap Publications, pp.197.
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