What Is Product Positioning?

How Does Product Positioning Help My Startup?

Product positioning refers to the place that a product occupies in the minds of the customers and how it is distinguished from the products of the competitors.

In order to position products, companies may emphasize the distinguishing features of their brand (what it is, what it does and how, etc.) or they may try to create a suitable image (inexpensive or premium, utilitarian or luxurious, entry-level or high-end, etc.) through the marketing mix. Once a product has achieved a strong position, it can become difficult to reposition it.

Positioning is one of the most powerful marketing concepts.

Originally, positioning focused on the product and with Ries and Trout grew to include building a product's reputation and ranking among competitor's products. Schaefer and Kuehlwein extend the concept beyond material and rational aspects to include 'meaning' carried by a brand's mission or myth.[1]

Primarily, positioning is about "the place a product occupies in the mind of its target audience".[2][3] Positioning is now a regular marketing activity or strategy. A national positioning strategy can often be used, or modified slightly, as a tool to accommodate entering into foreign markets.[2][4]

The origins of the positioning concept are unclear. Scholars suggest that it may have emerged from the burgeoning advertising industry in the period following World War I, only to be codified and popularised in the 1950s and 60s.

The positioning concept became very influential and continues to evolve in ways that ensure it remains current and relevant to practising marketers.

Defining Product Positioning

David Ogilvy noted that while there was no real consensus as to the meaning of positioning among marketing experts, his definition is "what a product does, and who it is for". For instance, Dove has been successfully positioned as bars of soap for women with dry hands, vs. a product for men with dirty hands.[5]

Ries and Trout advanced several definitions of positioning. In an article, Industrial Marketing, published in 1969, Jack Trout stated that positioning is a mental device used by consumers to simplify information inputs and store new information in a logical place.

He said this is important because the typical consumer is overwhelmed with unwanted advertising, and has a natural tendency to discard all information that does not immediately find a comfortable (and empty) slot in their mind.[6] In Positioning: The Battle for Your Mind, the duo expanded the definition as "an organized system for finding a window in the mind.

It is based on the concept that communication can only take place at the right time and under the right circumstances".[7]

Positioning is closely related to the concept of perceived value. In marketing, value is defined as the difference between a prospective customer's evaluation of the benefits and costs of one product when compared with others. Value can be expressed in numerous forms including product benefits, features, style, value for money.[8]

Positioning Origins

The precise origins of the positioning concept are unclear. Cano (2003), Schwartzkopf (2008) and others have argued that the concepts of market segmentation and positioning were central to the tacit knowledge that informed product advertising from the 1920s, but did not become codified in marketing textbooks and journal articles until the 1950s and 60s.[9][10]

Al Ries and Jack Trout are often credited with developing the concept of product positioning in the late-1960s with the publication of a series of articles, followed by a book. Ries and Trout, both former advertising executives, published articles about positioning in Industrial Marketing in 1969 and Advertising Age in 1972.[11]

By the early 1970s, positioning became a popular word with marketers, especially those in advertising and promotion. In 1981, Ries and Trout published their now classic book, Positioning: The Battle for Your Mind.

However, the claim that Ries and Trout devised the concept has been challenged by marketing scholars. According to Stephen A. Fox, Al Ries and Jack Trout "resurrected the concept and made it their trademark."[12]

Some scholars credit advertising guru, David Ogilvy, with developing the positioning concept in the mid-1950s, at least a decade before Ries and Trout published their now classic series of articles.[13] In their early writing, Ries and Trout suggest that the positioning concept was widely used in the advertising industry prior to the 1950s.

Ogilvy's own writings indicate that he was well aware of the concept and drilled his creative team with this idea from at least the 1950s.

Among other things, Ogilvy wrote that "the most important decision is how to position your product" and,[14] "Everyone in the organization should understand the brand positioning and use it as context for making decisions"[15] and "Every advertisement is part of the long-term investment in the personality of the brand."[16]

Ogilvy is on record as having used the positioning concept in several campaigns in the mid 1950s and early 1960s, well before Ries and Trout published their articles on positioning. In relation to a Dove campaign launched in 1957, Ogilvy explained, "I could have positioned Dove as a detergent bar for men with dirty hands, but chose instead to position it as a toilet bar for women with dry skin.

This is still working 25 years later."[17] In relation to a SAAB campaign launched in 1961, Ogilvy later recalled that "In Norway, the SAAB car had no measurable profile. We positioned it as a car for winter. Three years later it was voted the best car for Norwegian winters."[17]

Yet other scholars have suggested that the positioning concept may have much earlier heritage, attributing the concept to the work of advertising agencies in both the US and the UK in the first decades of the twentieth century.

Cano, for example, has argued that marketing practitioners followed competitor-based approaches to both market segmentation and product positioning in the first decades of the twentieth century; long before these concepts were introduced into the marketing literature in the 1950s and 60s.[18]

From around 1920, American agency, J. Walter Thompson (JWT), began to focus on developing brand personality, brand image and brand identity—concepts that are very closely related to positioning. Across the Atlantic, the English agency, W. S. Crawford's Ltd, began to use the concept of 'product personality' and the 'advertising idea' arguing that in order to stimulate sales and create a 'buying habit' advertising had to 'build a definitive association of ideas round the goods'.[19]

For example, in 1915 JWT acquired the advertising account for Lux soap. The agency suggested that the traditional positioning as a product for woolen garments should be broadened so that consumers would see it as a soap for use on all fine fabrics in the household.

To implement, Lux was repositioned with a more up-market posture, and began a long association with expensive clothing and high fashion. Cano has argued that the positioning strategy JWT used for Lux exhibited an insightful understanding of the way that consumers mentally construct brand images.

JWT recognised that advertising effectively manipulated socially shared symbols. In the case of Lux, the brand disconnected from images of household drudgery, and connected with images of leisure and fashion.[20]

As advertising executives in their early careers, both Ries and Trout were exposed to the positioning concept via their work. Ries and Trout codified the tacit knowledge that was available in the advertising industry; popularising the positioning concept with the publication their articles and books.

Ries and Trout were influential in diffusing the concept of positioning from the advertising community through to the broader marketing community. Their articles were to become highly influential.[21]

By the early 1970s, positioning became a popular word with marketers, especially those that were working in the area of advertising and promotion. In 1981 Ries and Trout published their classic book, Positioning: The Battle for Your Mind (McGraw-Hill 1981).

The concept enjoys ongoing currency among both advertisers and marketers as suggested by Maggard[3] who notes that positioning provides planners with a valuable conceptual vehicle, which is effectively used to make various strategy techniques more meaningful and more productive.[3]

Several large brands – Lipton, Kraft, and Tide – developed "precisely worded" positioning statements that guided how products would be packaged, promoted and advertised in the 1950s and 1960s.

The article, "How Brands Were Born: A Brief History of Modern Marketing," states, "This marked the start of almost 50 years of marketing where 'winning' was determined by understanding the consumer better than competitors and getting the total 'brand mix' right.[22]

This early positioning tactic was focused on the product itself – its "form, package size, and price", according to Al Ries and Jack Trout[3]

The positioning concept continues to evolve. Traditionally called product positioning, the concept was limited due to its focus on the product alone.[23] In addition to the previous focus on the product, positioning now includes building a brand's reputation and competitive standing.[3]

John P. Maggard notes that positioning provides planners with a valuable conceptual vehicle for implementation of more meaningful and productive marketing strategies.[3] Many branding practitioners make positioning a part of brand strategy and even label it as "brand positioning".[24][25]

However, in the book Get to Aha! Discover Your Positioning DNA and Dominate Your Competition, Andy Cunningham proposes that branding is actually "derived from positioning; it is the emotional expression of positioning.

Branding is the yang to positioning's yin, and when both pieces come together, you have a sense of the company's identity as a whole".[26]

References

  1. Kuehlwein, JP; Schaefer, Wolfgang (2015). Rethinking Prestige Branding - Secrets of the Ueber-Brands. London: Kogan Page. pp. 15–16, 115–116. ISBN 978-0749470036.
  2. Jump up to:a b Andrei, P; Ecaterina, B, R; Ionut, T. C (2010). "Does Positioning Have a Place in the Minds of our Students?". Annals of the University of Oradea, Economic Science Series.
  3. Jump up to:a b c d e f g h i Maggard, John P. (1976-01-01). "Positioning Revisited". Journal of Marketing. 40 (1): 63–66. doi:10.2307/1250678. JSTOR 1250678.
  4. Sandra Bell (March 29, 2008). International Brand Management of Chinese Companies: Case Studies on the Chinese Household Appliances and Consumer Electronics Industry Entering US and Western European Markets. Springer Science & Business Media. p. 26. ISBN 978-3-7908-2030-0.
  5. David Ogilvy (September 11, 2013). Ogilvy on Advertising. Knopf Doubleday Publishing Group. p. PT17. ISBN 978-0-8041-7005-5.
  6. Jack Trout (1969). "Positioning" is a game people play in today's me-too market place". Industrial Marketing: 51–55.
  7. Al Ries; Jack Trout (2001). Positioning: The Battle for Your Mind. McGraw Hill Professional. ISBN 978-0-07-137358-6.
  8. marketing. 2011. p. 147.
  9. Schwarzkopf, S., "Turning Trade Marks into Brands: how Advertising Agencies Created Brands in the Global Market Place, 1900-1930" CGR Working Paper, Queen Mary University, School of Business and Management Centre for Globalization Research London, 18 August 2008
  10. Cano, C., "The Recent Evolution of Market Segmentation Concepts and Thoughts Primarily by Marketing Academics," in E. Shaw (ed) The Romance of Marketing History,Proceedings of the 11th Conference on Historical Analysis and Research in Marketing (CHARM), Boca Ranton, FL, AHRIM, 2003
  11. T. Ellson (March 16, 2004). Culture and Positioning as Determinants of Strategy: Personality and the Business Organization. Palgrave Macmillan UK. p. 260. ISBN 978-0-230-50981-8.
  12. Stephen R. Fox (1984). The Mirror Makers: A History of American Advertising and Its Creators. University of Illinois Press. p. 324. ISBN 978-0-252-06659-7.
  13. Urde, M. and Koch, C., "Market and brand-oriented schools of positioning", Journal of Product & Brand Management, vol. 23, no. 7, 2014, pp 478-490
  14. Ogilvy, D., Confessions of an Advertising Man, 1963
  15. David Ogilvy, Ogilvy on Advertising, Vintage Books, (1983), 1985
  16. Ogilvy, D, "The Image and the brand: a new approach to creative operations," Speech given at AAAA Luncheon in Chicago, 4 October 4, 1955 and cited in Schwarzkopf, S., "Turning Trade Marks into Brands: how Advertising Agencies Created Brands in the Global Market Place, 1900-1930" CGR Working Paper, Queen Mary University, London, 18 August 2008
  17. Jump up to:a b David Ogilvy, Ogilvy on Advertising, (1983) Vintage Books, 1985, p. 12
  18. Cano, C., "The Recent Evolution of Market Segmentation Concepts and Thoughts Primarily by Marketing Academics," in E. Shaw (ed.), The Romance of Marketing History: Proceedings of the 11th Conference on Historical Analysis and Research in Marketing (CHARM), Boca Ranton, FL: AHRIM, 2003, p.18
  19. Schwarzkopf, S., Turning Trade Marks into Brands: how Advertising Agencies Created Brands in the Global Market Place, 1900-1930, CGR Working Paper, Queen Mary University, London, 18 August 2008, p. 22
  20. Cano, C., "The Recent Evolution of Market Segmentation Concepts and Thoughts Primarily by Marketing Academics," in E. Shaw (ed.), The Romance of Marketing History: Proceedings of the 11th Conference on Historical Analysis and Research in Marketing (CHARM), Boca Ranton, FL: AHRIM, 2003, pp 16-18
  21. Enis, B. and Cox,K., Marketing classics: a selection of influential articles, Boston, Allyn and Bacon, 1969
  22. Marc de Swaan Aron (October 3, 2011). "How Brands Were Born: A Brief History of Modern Marketing". The Atlantic. Retrieved November 8, 2016.
  23. Al Ries; Jack Trout (January 3, 2001). Positioning: The Battle for Your Mind. McGraw Hill Professional. p. 2. ISBN 978-0-07-170587-5.
  24. "A Simple Definition of Brand Positioning". The Branding Journal. Retrieved November 14, 2017.
  25. "Brand Positioning Strategy". Equibrand Consulting. Retrieved November 14, 2017.
  26. Cunningham, Andy (October 17, 2017). Get to Aha! Discover Your Positioning DNA and Dominate Your Competition. McGraw-Hill. ISBN 978-1-260-03120-1.
  27. Moutinho, L., "Segmentation, Targeting, Positioning and Strategic Marketing," Chapter 5 in Strategic Management in Tourism, Moutinho, L. (ed), CAB International, 2000, pp. 121–166
  28. Marketing Insider, "Evaluating Market Segments", Online: https://marketing-insider.eu/marketing-explained/part-i-defining-marketing-and-the-marketing-process/market-targeting/
  29. Business Dictionary, http://www.businessdictionary.com/definition/positioning.html
  30. Mulvey, Michael (January 2009). "Experiential positioning: Strategic differentiation of customer-brand relationships". Innovative Marketing. 5 – via ResearchGate.
  31. Jump up to:a b Geoffrey Moore (1991). Crossing the Chasm. HarperCollins Publishers. ISBN 978-0887305191.
  32. Volvo Creative Brief, in Rossiter, J. and Percy, L., Advertising Communications and Promotion Management, N.Y., McGraw-Hill, 1997, p. 159
  33. Charles Lamb (2012). Essentials of Marketing (7e ed.). Mason, OH: South-Western Cengage Learning. pp. 279–82. ISBN 978-0-538-47834-2.
  34. Jump up to:a b c d Ostasevičiūtė, R; Šliburytė, L (February 2008). "Theoretical Aspects of Product Positioning in the Market". Engineering Economics.
  35. Rogers, S.C., Marketing Strategies, Tactics, and Techniques: A Handbook for Practitioners, Greenwood Publishing Group, 2001, pp 90-92; Belch, G., Belch, M.A, Kerr, G. and Powell, I., Advertising and Promotion Management: An Integrated Marketing Communication Perspective, McGraw-Hill, Sydney, Australia, 2009, pp 205-206
  36. Kaschny, Martin (2018). Innovation and Transformation. Springer Verlag. ISBN 978-3-319-78524-0.
  37. Hoffman, D.L. and Franke, G.R., "Correspondence analysis: graphical representation of categorical data in marketing research," Journal of Marketing Research, 23, 1986, pp 213–227
  38. Phipps, A., Carroll, J.D. and Wind, Y.J., "Overlapping Clustering: A New Method for Product Positioning," Journal of Marketing Research, Vol. 18, No. 3 1981, pp. 310-317
  39. Wena, C.H. and Chen, W.Y., "Using multiple correspondence cluster analysis to map the competitive position of airlines", Journal of Air Transport Management, Vol. 17, No. 5, 2011, pp 302–304
  40. Paul E. Green and Abba M. Krieger Conjoint analysis with product-positioning applications Chapter 10 in Handbook in Operations Research and Management Science, Vol. 5 [Marketing], Eliashberg,j. and Lilien, G.L. (eds), Elsevier, 1993 https://dx.doi.org/10.1016/S0927-0507(05)80023-4, pp 467–515
  41. Moutinho, L., "Segmentation, Targeting, Positioning and Strategic Marketing," Chapter 5 in Strategic Management in Tourism, Moutinho, L. (ed), CAB International, 2000, pp 121-166
  42. Mazanec, J.A., "Positioning analysis with self-organizing maps: An exploratory study on luxury hotels", The Cornell Hotel and Restaurant Administration Quarterly, Vol. 36, No. 6, 1995, pp 80-95
  43. Sair, S. A (2014). "Consumer Psyche and Positioning Strategies". Pakistan Journal of Commerce & Social Sciences.
  44. Blythe, J., Key Concepts in Marketing, Sage, 2009, p. 171
  45. Strydom, J., Introduction to Marketing, Juta and Company, 2005. pp 77-78
  46. Jump up to:a b Ray, Michael L. (1973-01-01). "A Decision Sequence Analysis of Developments in Marketing Communication". Journal of Marketing. 37 (1): 29–38. doi:10.2307/1250772. JSTOR 1250772.

This information is provided under the Wikipedia Creative Common License. More updates coming soon.

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Jason Quey

I am the CEO and Founder of Growth Ramp. I enjoy helping high-growth startups on their journey from idea to scale.

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