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Positioning & Branding Positioning & Branding

Presented by Presented by

Ajith Kumar KRAjith Kumar KR

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Summary and LearningsSummary and Learnings Positioning got its attention when in 1972 Jack Trout Positioning got its attention when in 1972 Jack Trout

and Al Ries wrote a series of articles entitled “The and Al Ries wrote a series of articles entitled “The Positioning Era” for the trade paper Positioning Era” for the trade paper Advertising Age.Advertising Age.

Today positioning has become the buzzword of Today positioning has become the buzzword of advertising and marketing, all over the world.advertising and marketing, all over the world.

Positioning starts with a product .A piece of Positioning starts with a product .A piece of merchandise ,a service ,a company ,an institution or merchandise ,a service ,a company ,an institution or a person. Perhaps yourselfa person. Perhaps yourself..

But it is not what you do to a product. But it is not what you do to a product. Positioning is Positioning is what you do to the mind of the prospectwhat you do to the mind of the prospect..

that is ,you position the product in the mind of the that is ,you position the product in the mind of the prospect.prospect.

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LEARNINGS – Even as an individual you LEARNINGS – Even as an individual you need to manage perceptions of others, about need to manage perceptions of others, about yourself –how they feel and believe about yourself –how they feel and believe about you…so it does not matter in which stream you…so it does not matter in which stream you will be into (Marketing,HR,Finance etc.) you will be into (Marketing,HR,Finance etc.) you just have to do positioning…you just have to do positioning…

Shahrukh Khan –Romantic,talented,monogamus Shahrukh Khan –Romantic,talented,monogamus

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VocabularyVocabulary

Brand Brand PerceptionPerception PositioningPositioning MappingMapping Brand value Brand value Mind shareMind share

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A name, sign or symbol used to identify A name, sign or symbol used to identify items or services of the seller(s) and to items or services of the seller(s) and to differentiate them from goods or services of differentiate them from goods or services of competitors.competitors.

BrandBrand..

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GOOGLE. SEARCH.

BMW.DRIVING.

INDIA.DIVERCITY.

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Positioning Positioning

When you listen ward “Mercedes-Benz”When you listen ward “Mercedes-Benz”

The first ward that comes to your mind is The first ward that comes to your mind is “prestige” “prestige”

Here “Mercedes-Benz” is a brand which has been Here “Mercedes-Benz” is a brand which has been positioned in our minds in such a way that positioned in our minds in such a way that whenever we listen to it, we start thinking of whenever we listen to it, we start thinking of prestige (prestige (Naam,RutvaNaam,Rutva and status) it is called and status) it is called Positioning.Positioning.

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Definition.Definition.

“ “Positioning is not what you do to a product. Positioning is not what you do to a product. Positioning is what you do to the mind of the Positioning is what you do to the mind of the prospect.”prospect.”

“ “Positioning is ,how you differentiate yourself Positioning is ,how you differentiate yourself in the mind of your prospect”.in the mind of your prospect”.

e.g.e.g. Mysore SandalMysore Sandal -Purity and natural fragrance. -Purity and natural fragrance. MargoMargo- Herbal(neem). - Herbal(neem). LifebuoyLifebuoy-Hygiene.-Hygiene.

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How these companies positioned How these companies positioned themselvesthemselves

Mercedes-Benz ………………… prestige.Mercedes-Benz ………………… prestige. BMW …………………………… driving.BMW …………………………… driving. Volvo…………………………….. Safety.Volvo…………………………….. Safety. Starbucks………………………… high-end coffee..Starbucks………………………… high-end coffee.. Rolex………………………………high-end watches.Rolex………………………………high-end watches. Google ……….……………………Search.Google ……….……………………Search. Red bull ………………………… energy drink.Red bull ………………………… energy drink. FedEx…………………………… overnight (delivery)FedEx…………………………… overnight (delivery)

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FedExFedEx

See how FedEx , the American courier has positioned itself as a fastest and most accurate (overnight) courier giant ,which is impossible to be stopped!

How PositioningHow Positioning

Product positioning by Brand mappingProduct positioning by Brand mapping

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Top 10 Auto Brands: Top 10 Auto Brands: Product Positioning MapProduct Positioning Map

High Volume Low Volume

Defined Segment / Niche

Undefined Segment / Mass

Brand Positioning – Is Big always Brand Positioning – Is Big always Beautiful?Beautiful?

The ten top 100 brands fall into two distinct groups:The ten top 100 brands fall into two distinct groups:

1.1. Relatively small volume global brands with < 1.3 million vehicle sales pa Relatively small volume global brands with < 1.3 million vehicle sales pa (BMW, Ferrari, Porsche, Audi, Mercedes-Benz)(BMW, Ferrari, Porsche, Audi, Mercedes-Benz) These are among the most well-defined and understood automotive These are among the most well-defined and understood automotive

brands.  They are specialty manufacturers, all in the luxury segment, brands.  They are specialty manufacturers, all in the luxury segment, with relatively clearly defined target customers.  The strength of their with relatively clearly defined target customers.  The strength of their brand definition makes up for what they lack in volume.brand definition makes up for what they lack in volume.

2.2. Big volume global brands with > 3.5 million vehicle sales pa (Toyota, VW, Big volume global brands with > 3.5 million vehicle sales pa (Toyota, VW, Hyundai/Kia, Ford and Honda)Hyundai/Kia, Ford and Honda) These mass market brands are not as tightly defined.  They market an These mass market brands are not as tightly defined.  They market an

exhaustive range of vehicles in multiple categories to virtually every exhaustive range of vehicles in multiple categories to virtually every customer segment imaginable.  These brands have a broad appeal customer segment imaginable.  These brands have a broad appeal through a broad range of vehicles and customers. What these brands through a broad range of vehicles and customers. What these brands lack in definition they make up for with volume.lack in definition they make up for with volume.

Both approaches can result in strong, valuable brands, but the vehicle Both approaches can result in strong, valuable brands, but the vehicle manufacturing industry is continuously under pressure to increase volume, manufacturing industry is continuously under pressure to increase volume, which sometimes (as in the case of Toyota) results in decisions that which sometimes (as in the case of Toyota) results in decisions that undermine the credibility of the brand.undermine the credibility of the brand.

The desire to increase volume tests the brand’s elasticity.  The desire to increase volume tests the brand’s elasticity.  For example, Volkswagen, having purchased Porsche, wants to For example, Volkswagen, having purchased Porsche, wants to

increase Porsche sales considerably by expanding the product line to increase Porsche sales considerably by expanding the product line to include smaller crossovers and more affordable sports cars.  Is there a include smaller crossovers and more affordable sports cars.  Is there a point at which Porsche is no longer Porsche?  point at which Porsche is no longer Porsche? 

The high volume brands have a different set of issues.  Constant The high volume brands have a different set of issues.  Constant promotional incentives designed to drive up volume have taught promotional incentives designed to drive up volume have taught consumers to look for a deal – in effect to treat the purchase as a price consumers to look for a deal – in effect to treat the purchase as a price elastic, commodity type deal. A lack of brand differentiation and elastic, commodity type deal. A lack of brand differentiation and increasing recognition that today’s vehicles are usually high in quality increasing recognition that today’s vehicles are usually high in quality will inevitably lead to lower margins and lower profits as every volume will inevitably lead to lower margins and lower profits as every volume manufacturer competes on price.manufacturer competes on price.

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Why positioning?Why positioning? There are two kinds of products – commodities and brands. A There are two kinds of products – commodities and brands. A

commodity is a product that is same as those made by every commodity is a product that is same as those made by every other company. As a result the only way to sell a commodity is other company. As a result the only way to sell a commodity is by selling it cheaper than your competitor.by selling it cheaper than your competitor.

A brand on the other hand, is (at least perceived in that way!) a A brand on the other hand, is (at least perceived in that way!) a

product that is unique and different. A customer can buy Tata product that is unique and different. A customer can buy Tata Indica for a lot less money than a Mercedes Benz, but most Indica for a lot less money than a Mercedes Benz, but most Mercedes customer won’t buying tata or any other vehicle Mercedes customer won’t buying tata or any other vehicle simply because “it’s not a Mercedes-Benz.” simply because “it’s not a Mercedes-Benz.”

so, you need unique brands to make moneyso, you need unique brands to make money..

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Why positioning?Why positioning?

The mind rejects much of the information offered to it The mind rejects much of the information offered to it due to over-communication (Per capita consumption due to over-communication (Per capita consumption of advertising in America today is about $200 a year) of advertising in America today is about $200 a year) from each side. In general , the mind accepts only that from each side. In general , the mind accepts only that which matches with it’s prior knowledge or which matches with it’s prior knowledge or experience. experience.

In today’s communication jungle out there, the only In today’s communication jungle out there, the only hope to score big is to be selective, to concentrate on hope to score big is to be selective, to concentrate on narrow targets, to practice segmentation. In a word narrow targets, to practice segmentation. In a word “positioning”“positioning”

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Why positioning?Why positioning?

Starbucks narrowed its focus to high-end coffee and Starbucks narrowed its focus to high-end coffee and became the world's largest coffee chain.became the world's largest coffee chain.

Dell Computer narrowed its focus to personal Dell Computer narrowed its focus to personal computers "sold direct" and became the world's computers "sold direct" and became the world's largest PC manufacturer.largest PC manufacturer.

BMW narrowed its focus to "driving" and became the BMW narrowed its focus to "driving" and became the largest-selling European luxury carlargest-selling European luxury carin the U.S.in the U.S.

Focus is the key to successful brand building in Focus is the key to successful brand building in today's ultra-competitive marketplacetoday's ultra-competitive marketplace

You narrow the focusYou narrow the focus

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The Oversimplified MessageThe Oversimplified Message

Today the best approach to take, in our over Today the best approach to take, in our over communicated society is to simplified communicated society is to simplified message. message.

you simplified the message, then simplified it you simplified the message, then simplified it some more if you want to make a long last some more if you want to make a long last impression.impression.

-Al Ries and Trout-Al Ries and Trout

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Volvo owns a single word in the minds.Volvo owns a single word in the minds.

Volvo.Safety.

Volvo has successfully simplified and Communicated this message.

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You differentiate or dieYou differentiate or die Advertising has entered a new era where Advertising has entered a new era where

creativity is no longer the key to creativity is no longer the key to success ,today a company must create a success ,today a company must create a position in the prospect’s mind. A position position in the prospect’s mind. A position which is unique and based on company’s which is unique and based on company’s strengths and on realities.You don’t lie you strengths and on realities.You don’t lie you only exaggerate.only exaggerate.

Camlin (marker)-Permanent.Camlin (marker)-Permanent.

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Heidelberg - the working man’s beer.Heidelberg - the working man’s beer. Bud - the athletic beer Bud - the athletic beer Bud Lite - the party beerBud Lite - the party beer Millers Lite - the fun and great testMillers Lite - the fun and great test Coors - the environment beerCoors - the environment beer Coors light - the fastest beerCoors light - the fastest beer

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Marlboro - the rugged maleMarlboro - the rugged male Virginia slims - the independent female Virginia slims - the independent female Camel - cool and sophisticatedCamel - cool and sophisticated Benson & hedges - “intellectual”Benson & hedges - “intellectual”

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So is positioning always beneficial? So is positioning always beneficial?

Xerox first made photo copy machine & sold them Xerox first made photo copy machine & sold them world wide, as the time passed Xerox become world wide, as the time passed Xerox become synonymous to photocopy.synonymous to photocopy.

When it launched it’s When it launched it’s

“ “Xerox data system", fax machine,Xerox data system", fax machine,

and PC all were disastrous andand PC all were disastrous and

Xerox lost billions of dollar Xerox lost billions of dollar

since it could not change or since it could not change or

reconstructed minds of prospects.reconstructed minds of prospects.

Xerox.Photocopy.

Same happened with IBM & Dalda

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Repositioning :Reconstruction of Repositioning :Reconstruction of perceptions.perceptions.

Companies like IBM, Bajaj and Xerox did it.Companies like IBM, Bajaj and Xerox did it.

CompanyCompany Traditional imageTraditional image Repositioned imageRepositioned image

IBMIBM Computer hardwareComputer hardware Services & hardwareServices & hardware

XeroxXerox copiercopier Hardware & software Hardware & software

BajajBajaj Scooters Scooters motorcyclesmotorcycles

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1 Coca-Cola

2 Microsoft

3 IBM

4 GE

5 Nokia

6 Toyota

7 Intel

8 McDonald’s

9 Disney

10 Mercedes-Benz

“Positioning makes brands and brands give value to companies”

BRANDBRAND VALUE VALUE $bil$bil

BRANDBRAND VALUE VALUE $bil$bil

65.365.3 3232

55.855.8 30.930.9

5757 29.329.3

51.551.5 29.229.2

33.633.6 23.523.5

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Top brands of the worldTop brands of the world

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HUMAN TOUCHHUMAN TOUCH

In the automobile market where technology In the automobile market where technology and innovations are key to success see how a and innovations are key to success see how a company trying to differentiate itself from it’s company trying to differentiate itself from it’s competitors.competitors.

In the end, have a…..

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References References BOOKS- “BOOKS- “Positioning: the battle for your Positioning: the battle for your

mind” mind”

by Al Ries & Jack Troutby Al Ries & Jack Trout

“ “ Marketing Management”Marketing Management”

by Philip Kotler and Kevin Kellerby Philip Kotler and Kevin Keller

And of course Google.com!And of course Google.com!

You may get this presentation on my blog i.e. You may get this presentation on my blog i.e. brajeshsudarshan.blogspot.combrajeshsudarshan.blogspot.com

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Recommended readingsRecommended readings

Author Author Books Books

Al ries Al ries ““22 immutable laws of branding” 22 immutable laws of branding”

Jack trout Jack trout ““The new positioning”The new positioning”

Michael porter Michael porter ““Good to great” Good to great”

C.k.prahalad C.k.prahalad ““The fortune at the bottom of the The fortune at the bottom of the pyramid”pyramid”

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THANK You.

Question please….