Author: Al Ries & Jack Trout
Reading time: 15 minutes
Synopsis
The book Positioning (1980) is named after a new marketing idea. Al Ries and Jack Trout developed this idea in the 1970s. It explains how to place a product in the market. This helps it get a big share of customers and keep it. The book talks about different ways companies can do this. They can make their product well-known to customers. They can also use competitors’ weaknesses and benefit from new trends.
What’s in it for you: Understand the power and pitfalls of marketing.
Have you ever wondered how brands like Apple or Coca-Cola became so successful? Or how Burger King grew its fast-food business so much, even though it started after McDonald’s? The answer to these and many other questions is: Positioning.
The idea of Positioning first appeared in the 1970s. It’s about how to place a product well in the market and in customers’ minds. At that time, old advertising methods were not working anymore. The best-selling book Positioning became one of the most famous marketing strategy books of recent decades. Everyone who wants to do good marketing should read it.
In the next Blinks, you will learn more about the power of marketing. You will also discover many tricks that make your ads work well. This is true even if your customers are unsure about new products. Learn about the most important thing in advertising – attention – and find out how to get and keep it for a long time.
You will learn, for example:
- what the ‘product ladder’ and its steps are,
- why it is best to be the first in a market, and
- what you can do if you are only the second one to enter a market.
Blink 1 – Consumers’ attention is a rare resource.
We live in a world full of communication. We get a lot of information from mass media. It is a huge flood. We use a ‘mental filter’ to deal with it. This filter reduces the information to a level we can understand.
It’s the same for potential customers’ attention. Their attention is becoming rarer and harder to get. There is more competition for it. Because of this, advertising companies spend more money, and the amount of advertising keeps growing. In the USA alone, people spend about $376 on advertising per person each year. This is where over 57% of all global advertising is seen. An average American family watches TV for about 7.5 hours a day. This means they see around 750,000 TV images daily. But TV is not the only place for ads. Customers see ads even at breakfast, for example, on a cereal box or a milk carton.
To deal with all this advertising, customers create a list in their minds. It’s like a mental ladder where they place known brands and products. The brand with the best marketing strategy is on the top step. Less successful brands are lower down. Others fall off completely. Customers usually buy products that are higher up on their mental product ladder.
If you think about operating systems for mobile phones, you probably think of Android and iOS first. This is because these two systems were the first to be advertised well. They reached the top spot on our mental ladder. Soon, they took almost the whole market.
If you want your product to be seen in the crowded world of advertising, you must position it well in customers’ minds. They should recognize it right away.
Blink 2 – A product or company’s name decides if it sticks in customers’ minds.
A product or company name is like its main sign. It is very important for its overall success. The name is like an arm that helps your product grab onto the steps of the mental ladder in customers’ minds.
When choosing a name, pick words that are easy for customers to understand and remember. For example, ‘Esquire’ was once a popular men’s magazine. But it lost its leading position to ‘Playboy’. Everyone knows what a ‘Playboy’ is. But what is an ‘Esquire’? The name that people could relate to more easily won.
You should also avoid the ‘no-name’ trap. Only very successful companies can shorten their names without confusing customers. For example, International Business Machines became IBM. Otherwise, customers will only remember the short form if they know what it means. A company is truly famous when its customers know only the short name, not the original words. Most people probably don’t know that LG stands for Lucky GoldStar. Or that HTC means High Tech Computer.
It’s a good idea for names to be close to the product itself. They should tell you what the product category is. Newsweek is a good example. This makes it more likely that the product name will become a common word. For instance, instead of saying ‘Please hand me a tissue,’ you might say ‘Can you give me a Tempo?’ This is a great achievement for any product name.
You must choose your product or company name carefully and creatively. It can have a big impact. It can help you succeed or hold you back.
Blink 3 – The fastest brand gets the leading position.
The easiest way to get into customers’ minds and become a market leader is to be the first in the market. This is how Coca-Cola and Polaroid secured a strong place in customers’ minds.
The first person or company to get into people’s minds is not easily forgotten. Everyone knows the name Columbus. But who remembers the explorers who came after him in America?
The first one in a market holds a strong position. It is hard to remove them. For example, Coca-Cola was the only leader in the soft drink market for decades. But of course, the products from a market leader can also become old-fashioned. This happened with Polaroid.
The first company to discover a market usually sells twice as much as those who follow. Coca-Cola was the first product to take over the soft drink market. All brands that came after, like 7Up or Dr Pepper, seemed like copies. Customers prefer original products over copies. So, these later brands did not achieve the same success as Coca-Cola.
The first company in a market also shapes what customers think and expect from a product type. So, competitors must meet these expectations. They also need to find their own place against the leader’s strong position. This is very hard to do.
But what strategies can later companies use to be successful?
Blink 4 – Even latecomers can succeed with smart positioning.
We have seen that market leaders are always in a better starting position than their followers. Even if a follower makes a better product, customers still trust the market leader first.
If you can’t be first in the overall market, there is a solution. Find a small part of the market, a niche. Become a leader there. Create your own market. It’s best to get ideas from your competitors’ strengths and weaknesses. This will make your position stronger. It will also show that you are not just copying others.
Apple is a great example of this. When Apple started, other companies like IBM were also making home computers. But these computers looked quite ugly. Apple focused on design. This made its products attractive, especially to rich buyers who liked beautiful things. This way, Apple found and filled a market gap. This led to its huge success.
Another strategy is for the number two company in the market. The car rental company Avis greatly increased its profit. It did this by clearly positioning itself against the market leader with this slogan: “Avis is only number two in car rentals, so why should you rent from us? We try harder.” With this, Avis reminded customers of their mental product ladder. It placed itself on the second step, right after its competitor Hertz. At the same time, Avis showed how it was better than the market leader.
Sometimes, a follower can also win by changing the market leader’s position in people’s minds. For example, in the USA, the pain reliever Tylenol took over from Aspirin as the leader. Tylenol did this by showing Aspirin’s possible side effects, like nausea and asthma, in its ads.
So, even if you are not the first to take over a market, there are strategies to still be successful.
Blink 5 – Some strategies last forever, others use current trends.
Another way to make a product stick in customers’ minds is to look at current trends. This means looking at popular ideas or what people like at a certain time – the ‘spirit of the age’. But you need to know when an idea is no longer modern or useful.
The Marlboro cigarette brand was successful because of an ad campaign from the 1960s. Its very manly pictures made customers link the brand with the idea of ideal masculinity, which was popular then. Some decades later, the tobacco company Lorillard also used manly images in its ads. But who knows this brand today? Unlike Marlboro, Lorillard’s campaign did not fit the ‘spirit of the age’. The idea of masculinity it showed was old-fashioned. So, the copy failed.
Once you find a good marketing strategy and become a market leader, ask yourself: How can I keep this position for a long time? How can I grow in the next five to ten years? Don’t get discouraged by short-term problems. Don’t quickly change the marketing strategy that made you successful.
The car rental company Avis had great success with its ‘eternal second’ strategy. But when Avis changed its marketing strategy and tried to be number one, the company suffered a big setback.
So, you need to have a good feel for the ‘spirit of the age’. If your strategy has worked well for many years, don’t change it for the next new trend. However, you should also keep an eye on these trends. This is especially true when you have a completely new product.
Blink 6 – A product does not just ride on the success of the one before it.
Every new product needs new positioning in the market to be successful. Even the long-time market leader Coca-Cola had a big marketing failure with Mr. Pibb. This was a new drink that followed Dr Pepper. The company thought it could relax because it was a leader. It thought the new product would just benefit from the success of older products. But this is not how positioning works.
In customers’ minds, one name can only be linked to one product. If you market two products with similar names, one will certainly fall off the product ladder. In our example, this was Mr. Pibb.
Avoid the ‘brand extension trap’. Don’t use an existing product’s name for a new product. For example, the maker of Dial Soap had the biggest share in bar soap. But they failed badly in marketing with Dial Deodorant.
Often, the name of the original product also suffers in such cases. What customers really remember is the name and what it stands for. But if you use the name for another product, you break the image you built in customers’ minds. This hurts their trust in the link between the name and the product’s performance.
You can avoid this trap by creating a new strategy for each new product. This way, the step you won in your customer’s mind will not break under extra weight.
Summary
To sell a product well, you need to get a place in customers’ minds. You must work your way up to the top step of their mental product ladder. For this, you need a strong name. You must also avoid many marketing traps and use your competitors’ weaknesses. If the leading spot in the market is already taken, find a new niche where you can be number one.
What you can do in practice:
Don’t overwhelm your customers.
Don’t advertise too much. We already deal with a lot of information and stimuli every day. Keep your ads simple and find an open spot in your target group’s minds. Make sure you stay on the top steps of their mental product ladder.
Do you have feedback?
We are keen to hear what you think of our Blinks! Just send an email to [email protected]. Use the title of this book as the subject. Share your thoughts with us.
For further reading: Meine Marke by Hermann H. Wala
Meine Marke (2011) explains the core ideas behind successful brands like Amazon, Google, or DM. It gives readers a look inside fascinating companies.
Source: https://www.blinkist.com/https://www.blinkist.com/de/books/positioning-de