Posts Tagged ‘positioning’

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Differentiation: It’s that simple. It’s that difficult.

Friday, April 18th, 2014

Strong products and services are highly differentiated from all other products and services.

Never has a sentence about marketing received more head nods and less true understanding than the sentence above. It’s a statement that has always been an accepted part of marketing lore, and one that became fact when Young & Rubicam actually spent the money, build their “Brand Asset Valuator” and proved it.

Relevant differentiation was found to be a leading indictor. (Any idiot can be different. The tricky part is to be different in a way that is relevant to your audience.) Traditional measures such as knowledge and esteem were found to be lagging indicators. These lagging indicators (the ones we seem to spend so much time and money tracking) degrade slowly and can  be artificially maintained through marketing expenditure or price discounting. Thus, by the time they start to fall off, you might already be in a ton of trouble.

I’ve always found it fascinating that the consumer packaged goods industry is so full of B-word job titles: Brand Directors, Brand Managers, Brand Assistants, etc. At the end of each year a lot of very smart brand people get their report cards. Revenues, cases, market share, profitability, distribution- the list is long and comprehensive. But the most important measures are usually nowhere to be found: Is your product or service differentiated in a way that is meaningful to your audience? And did that difference increase or decrease?

In most companies, astonishingly, differentiation isn’t even tracked. Keep in mind, the people behind all this are brilliant people; some are the superstars of the marketing and management world. Certainly they are smart enough to know that important things get measured- and that those things that are measured tend to show up in their evaluations and determine their bonuses. So if difference isn’t measured and case volume is, guess which one gets priority whenever they come into conflict (such as the end of the accounting year)? “You’ll weaken your brand position” almost always loses out to “If I don’t provide a deep discount and launch that line extension I won’t make my volume forecast.”

Brands are built by intelligent and creative marketing. Marketing is all about positioning. Positioning is all about differentiation. Track that differentiation and you’re able to track the creation and evolution of your brand. But don’t stop there. You should also track specific outcomes. For example, track the premium that people are willing to pay for your product over a generic product, and use the resulting data as a proxy for brand strength and use it- along with all the other business measures. An accurate and trended measure of differentiation can be a great tool (see Y&R about their Brand Asset Valuator), but simple measurement and accountability count most in the end.

When I was at Kellogg’s (pre-Brand Asset Valuator, and so long ago it hurts), we simply measured the value of our brands by comparing them to house brand equivalents. The difference in perceived value was measured once a year and then tracked. We were less interested in the absolute difference than we were in the trend. An upward trend meant good brand stewardship, while a downward trend meant poor brand stewardship and the need for intervention.

It really is that simple.

Tune in next week for more on creating real difference from Austin McGhie.

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A Brand is a Response, Not a Stimulus.

Tuesday, March 25th, 2014

Yes, I’ve made this point before, but as we marketers are great believers in repetition, I intend to keep at it.

A brand is a collective marketplace response, hopefully to the stimulus of a well orchestrated, focused and attention-getting marketing program. When you develop a compelling position and an associated strategy, you have gone a long way toward establishing the response that you’d like to elicit from your audience. But you still have to craft the stimulus.

And the stimulus doesn’t work in a vacuum, either. Rather, the stimulus operates in the medium of the customer’s mind, and that medium is in turn impacted by everything from the customer’s long and deeply held beliefs to what he or she had for breakfast an hour ago… So you’d better know them both intimately before you start constructing that stimulus. More on this later, but for now, to know your customers’ beliefs intimately means to know them personally. There’s nothing wrong with that big, quantitative U&A study or with customer segmentation research, but there’s no substitute for personally mixing it up with a few real live customers and prospects.

Once again: You don’t build a brand- your audience does. You don’t give a brand to the marketplace- you get a brand from the marketplace. Until the marketplace says you have a brand, you simply have a product. And there’s nothing wrong with having a great product or service. Just don’t mistake it for a great brand.

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Stay tuned next week as Austin delves deeper into the art of Positioning

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Great Brands Are Built from the Inside

Thursday, March 13th, 2014

If you can’t get it right on the inside, you’ll never get it right on the outside.

The strongest brands are built from the inside out. The brand simply reflects the culture of the organization in a focused way.

Once, when I presented a positioning strategy to a senior manager of a client company, he clearly felt let down. “Where’s the magic?” he asked. “This simply describes the way we are on our best day.” That’s when I told him that I thought his words were the best description of brand positioning and strategy I’d heard in a long time. Suddenly, we both had a better understanding of brand strategy.

So let me state the point more formally:

Your brand position distills, focuses and bottles the essence of who and what you can be on your very best day.

Some brands begin with a clear view of their positioning from within their organization and build their brand strategy on that foundation – but what do you do when it comes time to introduce a new brand strategy into an existing organization? It’s not so easy, especially if you want to do it right. How do you avoid the skeptical (and typical) organizational response that the strategy you’ve spent so much time developing is merely the latest in a long line of marketing initiatives?

Obviously, the best starting point is to have the right strategy. One that seems real. Not only must the strategy be more than right analytically, it also must feel right to people who know. It must be emotionally compelling. And it must seem to have arisen from the culture itself- even as it focuses and drives that culture.

The right brand strategy screams competitive advantage. There may be many places where a company’s internal culture meets the needs of the external customer, but there are few that actually yield competitive advantage. Unfortunately, the customer can’t tell you which ones they are. It’s your job to find the best of those few.

Let’s assume you’ve found the right strategy, that optimal brand position. What’s next?

1.)

First, you need to recruit your senior management team. This team must become serious brand advocates or failure is all but assured. Most of all, your CEO must become the brand champion. If he or she cannot channel the brand in a natural way, someone has a lot of work to do.

Don’t worry: most serious marketing organizations do this part of the process pretty well.

2.)

The second step is to “operationalize” your strategy. That is, you need to bring the strategy to life in activities that your employees actually do every day. Ask yourself the following questions:

-How does the strategy drive product development and design?

-What about engineering?

-How does the strategy impact the office environment?

-How is the strategy “sold” by the sales force?

-How can HR use the strategy to help hire the right people?

Unlike the first step, not as many organizations handle this second course of action well.

3.)

Third, you need to “launch” your strategy to your organization, typically through some combination of a company-wide meeting, departmental presentations, and internal marketing vehicles such as the company’s Intranet, brand books, screen savers, etc. But thinking beyond the launch event, consider an ongoing media plan that targets internally, just as your external media targets your customers.

It’s a psychologically healthy cult, minus the isolation and chanting, but plus the consistency and repetition. Watch out for inconsistencies and stick to your mission.

Finally…

Take your time. Sell the strategy internally. Build organizational understanding and support. Make the strategy and the brand position a cultural focus inside the organization before using them in the outside world.

Put simply: make it real inside if you want any shot at making it real outside.

Check back next week for Austin’s latest installment on how to build great brands.

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What the Hell is a Brand Anyway?

Monday, March 3rd, 2014

“A brand is something that won’t come off in the wash.” - Cowboy’s adage

Now that we’ve driven the B word into a box, let’s look inside that box.

Charles Revson, who founded and built Revlon, is often quoted as saying: “In the factory we make cosmetics, but in the drugstore we sell hope.” In other words, companies and products build intellectual relationships while brands build emotional relationships. Consumers buy products but become emotionally invested in brands. Put yet another way, once consumers are emotionally vested, you have a brand.

Let’s remind ourselves once again: A brand is a marketplace response, not a marketer’s stimulus. You can’t brand something. You can only position it:

-If you manage to create a position that is compelling, different and competitively advantageous, you’re off to a good start

-If your organization has the ability to consistently execute that position, you have a shot at becoming a successful brand

-If that position can stand the test of time, you have a shot at becoming a strong brand

-If that execution stays on strategy, is simple yet powerful, and is somehow kept fresh and surprising over time, you have a shot at becoming a great brand

-If you can do all of this better than your competition, your brand will win

Those are a lot of “ifs,” but no one said this marketing thing is easy- and at the very start of that chain of “ifs”  is the notion of the right positioning. So how do you know if you’ve found the right position?

You know you’ve found the right position when your position is built around a single idea that:

-Is highly differentiated

-Creates competitive advantage

-Guides and inspires your organization and your audience

-Is sustainable over time

-Is provocative, even disruptive to the marketplace status quo

-Can be consistently executed over time, but in ways that evolve and stay fresh

That’s a daunting list and few companies pull it off, which is why we all tend to use the same limited set of case studies (e.g. Apple, Nike, ESPN, Google, Starbucks). Marketing is positioning. Great marketing is positioning that fits all these criteria (and probably a few others I haven’t articulated). Great marketing is the exception rather than the rule.

And you will need to work your but off to become that exception.

Stay tuned next week when Austin explains how Great Brands are Built from the Inside, out.

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Definitions: Communication

Tuesday, February 18th, 2014

We throw around a lot of jargon in the business world, but do we truly know what we mean when we talk about ‘Vision’, ‘Business Model’, ‘Position?’

We’re going to talk a lot about Positioning on The 3rd Button in the coming months, but we’ll spend the first few weeks with a clear definition of terms.

Today, let’s talk Communication…

communication

COMMUNICATION:

-Presenting your position to your audience in a way that assures its attention is more difficult than many marketers seem to realize. It’s easy to communicate an idea to someone who is paying attention. It’s remarkably tough to accurately communicate an idea in a way that captures the attention of someone who doesn’t care. And by and large, you have to assume that your customers do not care.

-As we’ll discuss, position drives communication. Communication is a stimulus designed to operate in a cultural medium in order to elicit a desired response. The desired response is the position. A simple closed loop- except for one critical factor. People process that stimulus in wildly different ways. What you say is seldom what they actually hear.

IMPACTFUL COMMUNICATION

-Corona’s ongoing campaign to find new and interesting ways to take us to the beach has done a remarkable job of selling the brand. The “Most Interesting Man in the World” campaign  has done the same for Dos Equis.

-As the Old Spice Guy, ex-NFL player and actor Isaiah Mustafa has actually made Old Spice cool for the first time in its life.

-But for ongoing communication excellence, it’s hard to get past Nike and its ad agency, Wieden+Kennedy. Time after time, they have managed to hit the creative ball out of the park, all the while maintaining that consistent thread you need to hold a brand together.

-And let’s not forget Apple’s “1984.” One great ad, placed just once, and still being talked about to this day.

Stay tuned for our next term as defined by Austin McGhie, Sterling Strategy

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Definitions: Business Strategy and Marketing Strategy

Monday, February 3rd, 2014

We throw around a lot of jargon in the business world, but do we truly know what we mean when we talk about ‘Vision’, ‘Business Model’, ‘Position’?
We’re going to talk a lot about Positioning on The 3rd Button in the coming months, but we’ll spend the first few weeks with a clear definition of terms.
Today, let’s get our strategies straight…

We throw around a lot of jargon in the business world, but do we truly know what we mean when we talk about ‘Vision’, ‘Business Model’, ‘Position?’

We’re going to talk a lot about Positioning on The 3rd Button in the coming months, but we’ll spend the first few weeks with a clear definition of terms.

Today, let’s get our strategies straight…

strategy

BUSINESS STRATEGY:

-Driven by the vision and business model, the business strategy is the blueprint that outlines how you will go to market.

-Exactly how will you deploy the business model in a way that creates sustainable competitive advantage? How will you create and deploy products and services? How will you support that deployment?

MARKETING STRATEGY:

-Driven by the vision, business model and strategy, the best way to compete in the marketplace is through the intelligent use of marketing. If, by analogy, your business model and strategy are your Order of Battle (i.e. your army, its resources and how you will deploy your troops) your marketing strategy is closer to the territory over which you will fight, whom you will fight and how you will take that fight to them in order to win.

-Keep in mind that building a brand is not mandatory. Building a brand is a strategy, not an objective.

CLEVER MARKETING STRATEGY

-ESPN wrote the book on this one. Combine a niche you can own with an attitude that shows you own it. Stay true to your strategy and keep it fresh-year after year. While this is easy to say, it’s remarkably hard to do.

-Starbucks built itself as a ‘third place’ rather than a coffee retailer. It also understood the importance of a happy barista. The rest is history.

-Target knew it couldn’t assail Wal-Mart on price, so it introduced a line of name designers dedicated to creating ‘cheap-chic.’

-When Fox News decided to focus on an audience that perceived itself as underserved when it came to media, it became an opinion leader for the right. You may not love the network’s politics, but you have to admire its marketing savvy.

-Pepsi just couldn’t beat Coke- until someone realized Pepsi was sweeter and could beat Coke in a blind taste test. The ‘Pepsi Taste Test’ made history, partly because it was smart marketing strategy and partly because the other guy blinked.

Stay tuned for our next term as defined by Austin McGhie, Sterling Strategy

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Definitions: Business Model

Wednesday, January 29th, 2014

We throw around a lot of jargon in the business world, but do we truly know what we mean when we talk about ‘Vision’, ‘Business Model’, ‘Position’?

We’re going to talk a lot about Positioning on The 3rd Button in the coming months, but we’ll spend the first few weeks with a clear definition of terms.

Today, we delve into what ‘Business Model’ really means…

lemonade-4

BUSINESS MODEL:

-A strong and differentiated business model is the most effective of all marketing tools. If your business is differentiated, your brand will ultimately be differentiated. Obviously, marketers can build highly differentiated brands out of non-differentiated businesses, but the degree of difficulty is so much higher.

-It’s hard to see how you can have a strong and differentiated business model without an equally strong and differentiated sense of vision behind it. On the other hand, a strong vision doesn’t need a highly differentiated business model to succeed.

-Whereas Wal-Mart’s business model is deeply entrenched, highly differentiated and creates differentiated advantage, most packaged goods brands lack this luxury and have to create difference at the product and marketing communication level.

HERE ARE SOME STRONG, NEARLY UNASSAILABLE BUSINESS MODELS

-You can certainly out-communicate Wal-Mart and Southwest, but good luck to you if you think you can compete directly with them when it comes to their business models. While I tend to believe marketing can win any war, these are not competitors I’d like to test my conviction on.

-You can compete with McDonald’s, but unless you can actively “de-position” it in some sustained way, the company’s operational excellence will wear you down over time. Operational excellence doesn’t sound unassailable, but finding an Achilles heel  when it comes to companies like these is a way harder than most people realize.

-Amazon has- relatively quietly- placed itself into a position from which it can attack new markets. That elevated position also means that competitors will have great difficultly scaling the walls of Amazon.com.

Stay tuned for our next term as defined by Austin McGhie, Sterling Strategy

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Definitions: Vision

Thursday, January 23rd, 2014

We throw around a lot of jargon in the business world, but do we truly know what we mean when we talk about ‘Vision’, ‘Business Model’, ‘Position’?

We’re going to talk a lot about Positioning on The 3rd Button in the coming months, but we’ll spend the first few weeks with a clear definition of terms.

Don’t be shy to use this as a refresher, and of course we’ll provide examples to guide you through.

Today we start of with ‘Vision’….

vision

VISION:

-The idea that drives the organization. Vision is the reason a company’s employees come to work every day. This vision must work actively to imbue the organization- and by extension, its strategy- with a clear sense of purpose. Better still, with a sense of mission. This vision must also have utility. It must inform all decision-making, including marketing strategy and, therefore, positioning.

-Must be deeply internalized. Most people don’t spend nearly enough time ensuring their vision paints a clear picture for their people.

-Weak vision = weak brand. Smart and creative marketing may delay the inevitable, but a business without a strong vision is ultimately a brand fighting to stay afloat.

-What business are you in? It all starts with that disarmingly simple question. Apple’s answer to this question transformed the company, while Yahoo! still has to answer this question if it is to have any hope of success.

SOME EXAMPLES OF VISION

-Visa has been working hard to replace paper with plastic; ultimately, it wants to replace both with smart devices.  Everyone wins in the world Visa hopes to create- consumers, banks and, of course, Visa itself.

-While consumer electronics companies are scrambling to harness technology, Apple has moved from technology to entertainment, from fascinating computers to irreplaceable and constant companions. Its vision (devices matter) is increasingly in direct conflict with the Amazon vision (intelligence in the cloud), and while both can still prosper, only one worldview can be right.

-Google  wants to organize the world’s information. How’s that for a vision?

Stay tuned for our next term as defined by Austin McGhie, Sterling Strategy

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Sterling Buzz…

Thursday, November 8th, 2012

Brand4Letter

We’re excited to share this great interview of Austin McGhie, our head of Strategy, on Intrepid Radio!

“You cannot brand anything unless you’re a Rancher. You position something and you become a brand…”

Tune in for the full broadcast: HERE

To learn more about Austin’s new book, click here.