The book "Positioning" was published in 1981 by masters Al Ries and Jack Trout, and it has been 41 years since then.
Since it was introduced to China in the 1990s, its fame has grown, possibly making it the most well-known book in the branding category, perhaps without exception, having a huge impact in both the consulting and business worlds.
Of course, no branding book has ever sparked such controversy; believers treat it as a guiding principle, while skeptics are full of doubts.
What exactly is "Positioning"? How should positioning be done correctly? What controversies surround positioning?
Today, I will break down the book "Positioning" into four parts for you:
Part One: What is Positioning?
Part Two: Why is Positioning Necessary?
Part Three: How to Position?
Part Four: Two Major Controversies About Positioning
Part One: Let’s first discuss what positioning actually is.
When the term "positioning" comes up, many people have their own interpretations, and I believe you certainly have your understanding of positioning as well.
Our interpretations may vary, which is normal; even the book "Positioning" offers several different definitions of positioning.
I will first explain my understanding of positioning, and then we can explore the definitions provided in the book together.
My understanding of positioning is very simple: it is "determining a position."
What position is being determined?
Determining the brand's position in the consumer's mind.
There are two key terms here: one is "brand," and the other is "consumer's mind."
First, the subject of positioning is the brand.
Positioning is for brand positioning, not for product positioning, not for corporate positioning, and certainly not for various other types of positioning.
Therefore, positioning is applicable to enterprises that want to build a brand. If one does not intend to build a brand and just wants to run a small business, then positioning is not necessary; having basic knowledge of running a small business is sufficient.
For example, if you open a bun shop at your doorstep, you actually do not need positioning; you just need to make the buns delicious.
However, if you already have dozens of bun shops and want to expand to thousands, aiming to build a brand for the national market, then positioning becomes necessary.
Why?
Because opening one bun shop and opening thousands of them is a completely different concept.
When opening a nationwide chain of bun shops, you will not only face competition from other national chain bun shops but also from strong local bun shops and other breakfast shops.
The competitive environment you face will be much more complex, and the complexity of operations will increase significantly. At this point, establishing a clear positioning for your bun shop brand and providing customers with clearer reasons to purchase will greatly help improve brand competitiveness and operational efficiency!
Secondly, the destination of positioning is the consumer's mind.
Positioning is about enabling consumers to form a clear understanding of your brand. This understanding provides customers with a clear reason to purchase. When a brand establishes this understanding in the consumer's mind, it can gain priority in consumer choice.
For example, the positioning established by Head & Shoulders in the consumer's mind is "anti-dandruff," while the positioning established by Pantene is "smooth." Customers choose Head & Shoulders and Pantene based on these purchasing reasons.
Having explained my understanding, let’s look at the definitions of positioning in the original book:
First, positioning is a new method of communication.
In the introduction, the authors wrote, "This book has written a new method of communication called 'positioning.'"
This sentence tells us that when positioning was first invented, it was a set of methods for advertising and promotion.
Secondly, positioning is about making you stand out in the minds of potential customers.
Also in the introduction, the authors provided a definition of positioning: "Positioning is how to make you stand out in the minds of potential customers."
Combining this sentence with the earlier statement that "positioning is a new method of communication," we can derive a clearer definition:
"Positioning is a new method of communication that makes you stand out in the minds of potential customers."
Is this definition still not easy to understand? Can it be simplified further?
No problem, the authors provided an extremely simplified definition in just six words:
"One word occupies the mind."
How to understand this? A few examples will clarify.
For instance, Volvo uses the word "safety," BMW uses the word "driving," FedEx uses the word "overnight delivery," and Colgate uses "cavity protection." Wanglaoji uses "afraid of heat, drink Wanglaoji," and Hanting uses "love cleanliness, stay at Hanting."
Finding this word or phrase for your brand is the process of positioning, but finding the positioning is just the beginning; finding positioning does not mean occupying it.
Once positioning is found, many supporting tasks are needed to occupy it. Only by implanting this word in the consumer's mind—so that when consumers see a certain word, they think of your brand, and when they see your brand, they think of a certain word—can the brand's positioning be established.
The best effect after positioning is established is that the brand becomes synonymous with a certain type of product.
Just like when air conditioning is mentioned, you first think of Gree. When high-end sauce-flavored liquor is mentioned, you first think of Moutai. When herbal tea is mentioned, you first think of Wanglaoji.
Using "one word or phrase occupies the consumer's mind," brand positioning can be established.
This is very simple and easy, right?
Saying it's simple is correct; it is indeed very simple!
But simple does not mean easy! Positioning is simple but not easy!
It is simple because you only need to find the most suitable word for your brand.
It is not easy because it is very difficult to find a word that is both effective and not already occupied. Even if you find it, you still need to do a lot of operational matching work to truly establish the positioning.
What if I don't lock my brand to one word?
I have many products under my brand, and each product has many selling points. Can I use several words?
The answer is: no!
Why?
This leads us to understand why brands need positioning.
Let’s move to Part Two: Why do brands need positioning?
Please take a minute to think about why brands need positioning.
...
Alright, I’ll reveal the answer: because:
Positioning is a good way to break free from fierce competition and homogeneity.
The birth of positioning theory is due to increasingly fierce competition and severe product homogeneity. People face a plethora of similar products and feel lost, unsure of how to choose.
Positioning is a methodology specifically designed to establish brands in a fiercely competitive environment. If the market competition environment is very relaxed, positioning is actually not necessary.
But the reality is that we are already in a highly competitive society.
Almost every industry faces not only domestic competitors but also many foreign counterparts eyeing the market!
Almost every industry is engulfed in flames of competition, with smoke everywhere!
The authors describe the development process of the American market from relaxed competition, where it was easy to make money, to fierce competition, where it became difficult to make money. To make it easier to understand, let’s use the Chinese market as an example.
In the early 1980s and early 1990s, when China had just reformed and opened up, there was a material shortage. Almost any product that could be produced had no trouble selling.
Some products like color TVs, refrigerators, watches, and bicycles were not even available for purchase just because one had money; one even needed a unit's approval.
However, this lack of competition and extremely relaxed market environment quickly came to an end. From the mid-1990s to 2000, and into the 2010s, market competition has become increasingly fierce, and many industries have already become highly competitive!
As competition intensifies, marketing and promotional methods have also been upgraded. Initially, not advertising did not hinder sales.
Later, as advertising became prominent, many brands emerged. Eventually, as more brands began advertising, the effectiveness of ads started to decline.
With the competition becoming more brutal, three explosions occurred, leading to the inevitable emergence of positioning:
The first is product explosion.
We have long transitioned from a society of material shortage to one of overproduction. The variety of goods in the market and the number of manufacturers for each type far exceed what an average person can imagine.
Just open the all-powerful Taobao, click through the category navigation bar, and you will see the richness of product categories, the detailed classification within each category, and the vast number of SKUs in each sub-category, which is truly astonishing!
It is not an exaggeration to say that now there are only products you cannot think of; there are no products that cannot be produced.
Moreover, new products are emerging in the market every day. The total number of SKUs on Taobao has already exceeded hundreds of millions and continues to expand daily. Thus, Taobao is dubbed the all-powerful Taobao.
The second is media explosion.
Not only products have exploded, but media has too. In the 1980s and 1990s, media was quite concentrated, primarily consisting of "television, radio, newspapers, and magazines."
The internal classification of these four major media types was also limited. Now, not only have the types of these four major media increased and become more segmented, but they have also long since become traditional media.
Today, various outdoor media, elevator media, internet media, and self-media are emerging endlessly, with even the backpacks of ride-hailing drivers designed as large electronic advertising screens.
Now, any carrier that can convey information has either become media or is on the path to becoming media.
The third is advertising explosion.
Due to the product explosion, there are more and more products that need to be promoted.
Due to the media explosion, there are enough media resources available to disseminate advertising information.
This has led to an advertising explosion. Now, a working person's daily life looks like this:
In the morning, the alarm clock wakes them up, and the smart speaker starts playing the news, mixed with advertisements.
Picking up toothpaste to brush their teeth, the toothpaste packaging has advertisements, the toothbrush has the brand name printed on it, and the breakfast milk and oatmeal packaging are advertisements. The cup used for drinking milk has advertisements printed on it.
When leaving home, there are print and video ads in the elevator. After getting off the elevator and walking out of the community, they see advertisements for interest classes on the community bulletin board.
While waiting for the bus, there are large station advertisements at the bus stop, and the bus itself is covered in advertisements. Once on the bus, the handrails and the backs of the seats have advertisements.
Sitting on the bus, looking at news on the phone, the app opens with a splash ad. After scrolling through a few news articles, they see an information flow ad, and upon opening what looks like a news article, they realize after a while that it is a brand's soft advertisement.
Switching to a real news article, they see a brand's advertisement poster. Upon arriving at the office and opening the computer, a pop-up ad appears on the desktop...
Think about it, is it like this?
We are already living in a society where advertisements are everywhere and pervasive.
The product explosion, media explosion, and advertising explosion have what consequences?
The product explosion leads to too many choices.
The media explosion and advertising explosion lead to information overload.
Too many choices and information overload ultimately result in choice difficulties.
When we shop now, in most cases, it is not that there are no options, but rather that we are faced with too many choices and do not know which one to pick.
We are no longer in an era where needs are unmet.
Instead, we are in an era of helping people make choices.
Have you ever felt that when you enter a large supermarket, you feel dazed?
I had this feeling a long time ago; upon entering, it feels like so many products are rushing at you, each one like a silent salesperson desperately promoting itself.
When buying something, it often involves comparing multiple brands, making it hard to determine which is better.
If at that moment, you find a brand you have heard of, and its selling point is simple, easy to understand, and resonates with you, you will choose it and feel relieved, finally completing the difficult task of shopping.
This is the choice difficulty caused by too many options and information overload. This means:
"Having no choice is not a good thing. Having too many choices is also not a good thing."
Why is having too many choices not a good thing? Why do people experience choice difficulties?
Because the human mind has limited capacity.
According to research by Harvard psychologist George A. Miller, the average person cannot process more than seven units of information simultaneously.
This is why the things that must be memorized usually only consist of seven units. Seven-digit phone numbers, the Seven Wonders of the World, seven-card poker games, and Snow White and the Seven Dwarfs, etc.
Think about it: how many smartphone brands can you name? How many thermos brands? How many computer brands? How many toothpaste brands?...
We can remember many different types of products, but very few brands from any category can be remembered beyond seven.
Among the brands you can remember, how many characteristics can you name for each?
In fact, very few. Not only can we remember very few brands, but our understanding of each brand is also limited.
The information about products in the market is infinite, while the capacity of the human mind is limited; this is an eternal contradiction.
How to resolve this contradiction?
The answer is: simplify information as much as possible.
Simplify the brand's information into one word or one sentence, and implant this word or sentence into the consumer's mind.
Positioning is the method of simplifying brand information. The proposition of positioning is to simplify brand information to one word or one sentence, as simple, direct, and sharp as a nail, thereby breaking through the barrier of massive information and embedding the brand into the consumer's mind.
In the game of brand communication, the more you want, the less you get; the less you give, the more you get. The rules of the positioning game are:
"Simplicity conquers complexity; less is more."
How to use positioning to achieve the effect of "less is more"?
You need to master the basic methods of positioning.
Let’s move to Part Three: How to Position a Brand?
How should positioning be done?
We need to return to the simplest definition of positioning, which is "one word occupies the mind."
What you need to do is find the most advantageous word or phrase for the brand and occupy it.
How to find and occupy it? Just follow these three steps:
First, find the right empty space;
Second, solidify the positioning;
Third, persist and deepen;
Let’s first understand how to find the right empty space.
How to find an empty space? The book provides the following suggestions:
1. Become the first;
A brand's leadership position is the most effective method of differentiation. People believe that only the best products can become the first. Because you are the first, your product should be good, even though that is not necessarily the case.
If a certain category rarely advertises, consumers may not even know who the industry leader is.
In that case, the leading brand in that category should quickly advertise to communicate its leadership status, which can further reinforce its leadership position and widen the gap with other competitors.
For example, in the red date industry, there are many companies, and previously the branding level in the industry was very low, with no brands advertising.
Later, the largest player in the industry, Haoxiangni, promoted its leadership position through advertising, quickly gaining recognition and establishing itself as the leading brand in the market, widening the gap with its peers.
You might say that becoming the first is good, but there can only be one first in an industry. If I am not the first and still far from it, I cannot use this method.
In fact, there are many dimensions to being first; it does not have to be the first in scale. If you are not first in one dimension, you might be first in another. If you are not first here, find another place to become the first.
For example, if sales are not first, perhaps volume is first. If overall sales are not first, online sales might be first. If not first across the entire network, perhaps a specific platform is first. If not first for the whole year, maybe you are first on 618 or Double Eleven. If not first nationally, perhaps you are first regionally.
Dimensions such as brand growth rate, factory capacity, technology, and history can all provide a basis for becoming first.
Here are two examples:
An advertisement for a pet medicine brand states "over 50% growth for seven consecutive years." What message does this convey?
It conveys that "I am the fastest-growing pet medicine brand; I am number one in growth," which makes distributors eager to sell such a rapidly rising brand.
A certain integrated stove brand promotes itself as "the number one integrated stove brand on Tmall." Although it may not even rank in the top three in the entire industry, being number one on Tmall feels impressive!
2. Become the second.
If it is impossible to become the first, then become the second; being second is also good and can occupy a considerable market share.
The book introduces a classic case of being second: the American car rental brand Avis, which states in its advertisements:
"Avis is only second in the car rental industry; why choose us? Because we try harder."
Avis had been losing money for 13 consecutive years, but since it acknowledged its second-place ranking, it began to turn a profit.
Why? Because people previously had no idea it could even rank second.
In its first year, Avis made $1.2 million, $2.6 million in the second year, and $5 million in the third year. The company was then sold at a high price to the Fortune 500 ITT Corporation.
This method of positioning as the second is applicable when the second position in the industry has not yet been occupied, and many domestic brands have used this approach.
For example, the first brand in China's dairy industry was Yili, but no one knew who the second brand was! Mengniu seized the opportunity to promote itself as "Mengniu strives to be the second dairy brand in Inner Mongolia," quickly occupying the second position.
A similar case occurred in the sauce liquor industry, where Moutai is recognized as the number one brand.
But who is the second brand? Opinions vary, and there is no consensus.
Langjiu took the opportunity to promote itself as "one of China's two major sauce liquor brands," and this "second strategy" brought Langjiu rapid growth.
The methods used in the above two cases are called associative positioning, a common method used by second-tier brands.
Another way to become a second-tier brand is through oppositional positioning, which means taking a stance opposite to that of the first brand.
For example, the strongest luxury car brand is Mercedes-Benz, which emphasizes comfort. BMW, on the other hand, emphasizes driving, positioning itself as the "ultimate driving machine." There is a saying among the public: "Ride in a Benz, drive a BMW."
Coca-Cola is the inventor of cola and the most authentic cola. Pepsi positions itself in opposition to Coca-Cola, emphasizing that it is "the cola for young people," positioning Coca-Cola as "the cola for older people."
3. Price positioning;
Price is also a powerful positioning tool. The market is stratified, and different groups have different purchasing power for similar products. Different price ranges can meet the needs of different groups.
If you find that a certain price range in a category is empty, it may represent a positioning opportunity. Low price is a positioning opportunity, fair price is a positioning opportunity, and high price is also a positioning opportunity.
For example, when the Chinese smartphone market was just emerging, almost all smartphone brands were selling at high prices, with international brands like Apple and Samsung priced above four or five thousand yuan. Chinese brands like HTC, VIVO, and OPPO had prices starting at over 3000.
At that time, affordable smartphones and low-cost smartphones represented huge positioning opportunities.
As we all know, Xiaomi quickly rose by offering high-spec smartphones at a fair price of 1999 yuan through a complete internet strategy. With its price advantage, Xiaomi smartphones rapidly gained market share.
Later, Xiaomi's Redmi brand was the first to capture the low-cost smartphone market priced in the hundreds.
Not only low prices can be competitive; if the high-end market is empty, it is also a positioning opportunity.
If low prices follow a cost-performance route, then high prices follow a value route. You can sell products at very high prices, but you must provide value that justifies that price. This value includes not only product-level aspects but also brand-level aspects.
I once had a client who produced kitchen knives and was among the top manufacturers in the country.
Many knives from brands like Zwilling and Fissler were produced by them. These big-name knives could sell for thousands of yuan per set, while their own brand's knives, of the same quality, could only sell for two to three hundred.
They felt it was very unfair; why should their knives, which are of the same quality as Zwilling's, be priced so much lower just because Zwilling has a brand label? Their knives were made by them!
The reason is quite simple: Zwilling provides higher value, which includes not only product value but also brand value.
This brand value comes from Zwilling's hundred-year history, countless advertising expenses, and opening stores in the most upscale malls, all of which have long shaped its image.
It can meet the demands of the high-end market and sell products of the same quality at ten times the price. Moreover, customers are very accepting of this!
Besides long-established international brands like Zwilling, many new brands can also find high-price positioning opportunities. Can you think of examples around you?
For instance, in the ice cream industry, there is Zhongxuegao; in the spicy strips industry, there is Weilong; in the new energy vehicle sector, there is NIO...
4. Demographic positioning
Brands can position themselves to serve a specific demographic.
For example, positioning can be based on gender, serving only women or men.
In the past, in the American cigarette market, many women smoked, and all cigarette brands were positioned to cater to both genders.
Marlboro was the first to focus on the male market, establishing a cowboy image, which is very masculine.
Another cigarette brand called Virginia Slims was the first to position itself as a cigarette specifically for women, achieving success.
Positioning can also be based on age, meaning serving only a specific age group, such as children, middle-aged people, or the elderly.
For example, in the shoe market, there had never been a brand specifically for elderly shoes. Zuli Jian found this empty space and positioned itself as "professional elderly shoes," achieving billions in revenue in just a few years.
Positioning can also cater to specific needs of certain groups, meeting personalized demands.
For example, a beer brand positions itself as a brand for heavy beer drinkers, a speaker brand positions itself as an entry-level speaker brand, and a yoga training brand positions itself as "focused on beginner yogis."
The four types of positioning mentioned above are the key methods discussed in the book "Positioning." In practice, there are far more methods than just these four.
Trout later wrote another book called "Differentiate or Die," which details several other positioning methods, including "owning characteristics, classic, favored, market expertise, manufacturing methods, new generation, pioneer, and best-seller," each with many application scenarios.
If you are interested, you can look it up; I won't elaborate further here.
Once you find the right empty space, the next step is to solidify the positioning.
If I have found an empty space and distilled this opportunity into a word or a sentence,
but if I do nothing afterward, then everything equals zero!
The positioning keyword you distilled will not automatically take effect; you must do a lot of supporting work consistent with the positioning to turn the positioning from a slogan into a strategy. These supporting tasks are referred to as "operational matching" in positioning terminology.
Thus, a complete strategic positioning can be expressed with a formula:
Strategic Positioning = Brand Positioning * Operational Matching
Brand positioning is a word or a sentence, while operational matching is a complete set of operational actions designed around that word or sentence. It is due to the existence of this set of actions that positioning transforms from a communication slogan into a corporate strategy.
For example, Southwest Airlines, as the most profitable airline in the U.S., has the positioning of "low price and convenience." If it merely printed this phrase on posters, the miracle of Southwest Airlines making profits for decades would not occur!
The key to this miracle is the many operational actions designed around the words "cheap and convenient," which released the power of positioning and created a strong attraction for customers.
How does Southwest Airlines solidify the positioning of "low price and convenience"? They adopted the following major operational actions:
- Low ticket prices;
- Frequent and reliable flight schedules;
- Limited passenger services;
- Higher aircraft utilization rates;
- Efficient ground service personnel;
- Short, fixed routes between medium-sized cities and secondary airports;
Each key action has several supporting sub-actions. Each sub-action supports the upper-level key action, and all actions are coordinated and aligned with each other.
For example:
Since it is a low-cost airline, the ticket prices must be low. If ticket prices are low, then operational costs must be low.
To keep costs low, passenger service items must be reduced, such as not providing meals, no assigned seating, and no luggage transfer.
There are no transfer services with other airlines, and tickets are sold directly to customers through automated kiosks, greatly reducing cooperation with travel agencies and lowering intermediary costs.
The operational activities that Southwest Airlines has developed around the "low price and convenience" positioning are shown in the diagram below:
This is the process of solidifying positioning through operational matching after finding the right empty space!
This process is complicated, arduous, and full of challenges!
However, once the entire set of operational matching is established, it can unleash tremendous power!
Southwest Airlines became the most profitable airline in the U.S. thanks to this unique positioning and operational system!
More importantly, this positioning of Southwest Airlines is difficult for other airlines to imitate because it is a tightly interconnected system that enhances each other!
If you try to imitate them, merely copying one or two links is completely useless.
You must imitate their entire system, but the likelihood of successfully imitating the entire system is almost zero.
Assuming this system consists of ten links, competitors cannot possibly replicate every operational action to 100%. If competitors are highly skilled and can replicate each link to 90%, multiplying ten 0.9s results in 0.35.
Thus, once Southwest Airlines' strategic positioning is established, it becomes a deep moat. This moat blocks all other airlines, ensuring Southwest Airlines' prosperity for decades.
Not only Southwest Airlines but many successful brands in China that have implemented strategic positioning have also established solid operational matching systems, forming a unique combination of business activities. This matching system is a wide and deep moat that keeps competitors far away.
Their names include Jiangxiaobai, Wanglaoji, Great Wall Motors, Guazi used cars, Boss oil fume purifiers...
Competitors find it difficult to imitate them, lamenting their fate!
Once the first and second steps are done, only the simplest yet most challenging third step remains: "persist and deepen."
Why must we persist and deepen? There are three reasons:
1. The release of positioning power takes time;
Some positioning, once proposed, can produce immediate effects with slight changes in operational activities. For instance, changing an advertisement or adjusting packaging can quickly boost sales.
For example, Wanglaoji's slogan changed from "Healthy family, always together" to "Afraid of heat, drink Wanglaoji," and sales in hot pot and barbecue restaurants surged!
However, some positioning requires a longer time to demonstrate its power; the longer the time, the stronger the power!
For example, the implementation and effectiveness of Southwest Airlines' "low price and convenience" positioning require significant investment and a long time to realize. In the early stages, for quite a while, it not only did not make a profit but also incurred losses.
At this time, if there is a lack of strategic determination and persistence, it may lead to abandonment halfway, wasting all previous efforts!
2. Positioning is not a one-time deal; it requires continuous improvement and reinforcement;
Building a business is difficult, but maintaining it is also not easy!
In the market, there are both visible strong competitors and potential sudden invasions from cross-industry giants. They may launch attacks on the positioning territory you occupy, eager to dismantle you!
Just like after Head & Shoulders occupied the anti-dandruff shampoo positioning.
Seeing the large market share of anti-dandruff shampoo, many brands like Clear, Pantene, and others launched attacks on this territory.
If Head & Shoulders does not stick to its positioning, continuously improve its products, and increase advertising and market investment, it may have long been torn apart by competitors.
Boss oil fume purifiers, after finding the positioning of "strong suction," have continuously improved and upgraded to the "fifth generation."
Mingmen Locks, after finding the positioning of "silent," have continuously improved and upgraded to the "fifth generation."
Jianyi, after finding the positioning of "marble tiles," has continuously improved and upgraded to the ninth generation.
Continuous improvement is not only reflected in products. All operational matching can be continuously improved and strengthened.
Perfection is endless; every task can be done better than the last time!
Every little improvement reinforces and strengthens the positioning!
3. Growth slowdowns are inevitable; positioning should not be easily changed.
After the correct implementation of positioning, there will be a "positioning dividend period," where there will be a period of rapid, even explosive growth. This is a natural phenomenon following the filling of market gaps.
However, if we extend the timeline, we will find that the explosive growth of the brand is only a short-term phenomenon. After rapid growth, a slowdown is inevitable, leading to a long period of stable growth, or even slow growth or stagnation.
Do not expect continuous high growth; this is unrealistic and does not conform to natural laws!
Just like a sapling grows into a small tree quickly, but a small tree growing into a towering tree takes a long time, growing only a little each year! A small tree becomes a large tree through time, not speed! Trees that grow too fast cannot withstand the wind and rain!
When growth slows down, do not easily change the positioning; the problem may not lie in the positioning but rather in the methods used to promote growth, or it may simply be due to the increased scale, entering a slow growth phase! At this time, if you easily change the positioning, it may lead to losses!
Next, we move to the final section:
Part Four: Two Major Controversies Surrounding Positioning
There is a saying that fame brings controversy; when a field becomes popular, it will also have many disputes.
There are several controversies surrounding positioning, mainly focusing on two points: one is about brand extension, and the other is about being solely competition-oriented;
First, regarding the first point, positioning does not prohibit brand extension; what it opposes is blind brand extension.
Positioning does not advocate brand extension but does not completely prohibit it either. The original wording in the book is, "Brand extension is not wrong, but it is a trap."
Positioning advocates that every brand should have its main channel and focus on its core business. Most brands should become expert brands, turning their core business into a flourishing tree.
So what if a significant new opportunity arises?
The answer is: it is best to use a new brand to capture new opportunities.
If you see an opportunity and extend the existing brand, although it may benefit sales in the short term, over time, the more brand extensions there are, the more diluted the brand's positioning in the consumer's mind will become, weakening the brand's status.
Positioning believes that the effects of brand extension manifest in three stages:
The first stage is great success and breakthrough;
This is when a new market opportunity is discovered, and the existing brand extends into it, gaining significant growth due to the brand's recognition advantage.
The second stage is being intoxicated by victory.
Further extending the brand to more products leads to increasingly blurred brand recognition;
The third stage is a complete retreat.
The combined profits of all types of products under the brand do not surpass the profits of strong expert brands that focus on a single type of product.
This phenomenon is particularly evident in the domestic home appliance industry, taking the three giants—Gree, Haier, and Midea—as examples.
Gree specializes in air conditioning, while Haier and Midea do everything. Although Haier and Midea have higher revenues than Gree, their profit margins are far lower than Gree's.
Haier's chairman, Zhang Ruimin, once lamented to the media, "Haier's profits are as thin as a blade!"
Midea and Haier have produced so many different types of products that their brand extensions have become excessive. In contrast, Gree, which focuses solely on air conditioning, is more profitable. Midea and Haier have fallen into the trap of brand extension.
Gree's brand focuses on air conditioning, but that does not mean Gree Group can only make air conditioners and cannot enter other home appliance categories or industries; it just should not use the Gree brand.
Using other new brands or acquired brands can also open up second and third growth curves without damaging Gree's strong position in the air conditioning market.
Now, let’s discuss the second controversy: Is positioning solely competition-oriented?
The answer is: not at all! Positioning is actually "customer + competition" dual-oriented.
Positioning is primarily customer-oriented.
The consumer's mind is what positioning emphasizes most. The book "Positioning" states:
"The solution to the problem exists in the minds of potential customers. You should focus on the perceptions of potential customers, not the realities of the product."
It also states:
"To find a unique position, you must abandon traditional logical thinking. Traditional logic suggests that you should find the positioning concept within yourself or your product. This is incorrect. What you must do is look for it in the minds of potential customers.
You cannot find the 'non-cola' positioning concept in a 7-Up can; however, you will find it in the minds of people drinking cola."
Another very crucial point is:
"In any positioning project, if you can leverage a deeply rooted concept from the beginning, you have taken a significant step in establishing your position."
This statement is extremely important; it is a core principle of positioning. Many domestic brands have fully utilized this point:
For example, Six Walnuts.
What is the slogan for Six Walnuts?
"Drink Six Walnuts often to boost brain power." What relationship does brain function have with walnuts? None! Do walnuts have strong brain-boosting effects? No!
However, in China, especially in the north, it is widely believed that eating walnuts can enhance brain function, even though this is not a factual reality; it is a fact in the consumer's mind.
At this moment, perception > fact, and Six Walnuts' positioning fully applies the principle of "leveraging a deeply rooted concept."
There are many such examples; can you think of any?
Secondly, positioning is competition-oriented.
The book on positioning states:
"Too many companies launch marketing and advertising plans without considering the positions of their competitors. They advertise as if in a vacuum, and when they find their efforts fruitless, they feel disappointed."
Positioning emphasizes that when positioning, one must consider the position of competitors in the consumer's mind. You cannot charge into a position that others have already occupied.
You need to understand the competitive landscape, know the positioning that major competitors are focusing on, and then form a differentiated positioning to engage in dislocated competition rather than homogeneous competition.
For example, "anti-dandruff" is a good positioning in the shampoo market, and the market for anti-dandruff shampoos is large, but the broad concept of "anti-dandruff" has already been occupied by Head & Shoulders.
At this point, as a new entrant, you cannot ignore this reality and directly push the concept of "anti-dandruff."
If you do so, it would be like hitting a stone with an egg; Head & Shoulders is too strong in this concept, and Procter & Gamble has enough money; no one can directly attack Head & Shoulders.
At this time, if you want to enter the anti-dandruff shampoo market, you must differentiate yourself from Head & Shoulders.
For instance, you could position yourself as "medicated anti-dandruff," "men's anti-dandruff," or "long-lasting anti-dandruff," among other positioning concepts.
When formulating these positioning concepts, you must consider Head & Shoulders' strong position in the anti-dandruff market. Ignoring the existence of this competitor will undoubtedly lead to a disastrous defeat.
Alright, having discussed this, we have covered most of the content of this book.
Finally, let me summarize today's content. I have interpreted the book "Positioning" for you in four parts.
Part One: What is Positioning?
Positioning is about determining a position, specifically determining the brand's position in the consumer's mind.
The subject of positioning is the brand, and the destination is the consumer's mind.
The best positioning is to achieve "one word occupies the mind," becoming a synonym for the category.
Part Two: Why is Positioning Necessary?
Because product explosion, media explosion, and advertising explosion lead to information overload, while people's mental capacity is limited.
The infinite information and limited mental capacity create a contradiction, leading to choice difficulties for people.
Through positioning, simplifying the brand's appeal into one word or one sentence allows for simplicity to conquer complexity, making it possible to enter the consumer's mind.
Part Three: The Steps and Common Methods of Positioning
Finding and occupying positioning requires three steps:
First, find the right empty space; second, solidify the positioning; third, persist and deepen.
Methods for finding empty spaces include "becoming the first, becoming the second, price positioning, and demographic positioning." After finding the positioning, a tightly interconnected operational matching system must be established to solidify the positioning, and continuous improvement through persistence will reinforce and strengthen the positioning.
In the final part, I introduced two controversies surrounding positioning.
First, positioning does not prohibit brand extension but opposes blind brand extension;
Secondly, positioning is not solely competition-oriented but is a dual orientation of "customer + competition."
Brand positioning is strategic, so it is expensive!
The fees charged by professional positioning consulting companies are indeed high!
Fees in the millions are common, with the top-tier Ries and Trout company charging over ten million!
It can be said to be the highest fee in the Chinese marketing consulting industry!
But the basic methods of positioning consist of four categories, twelve types, and over a hundred strategies.
Mastering these means grasping the fundamentals of positioning.
Yes, just the fundamentals! Because, in practice, positioning is much more complex than what is presented on paper!
What are the four categories and twelve types of brand positioning methods?
1. Physical Characteristics Positioning
Including "owning characteristics, manufacturing methods, new generation" (3 types)
2. Market Characteristics Positioning
Including "pioneers, leadership position, best-sellers, classics, market expertise, favored" (6 types)
3. Leveraging Cognitive Positioning
Including "associative big brands and oppositional positioning" (2 types)
4. Spiritual Ideology Positioning
Finding concepts that resonate emotionally with the audience from an emotional perspective.
The practical strategies of the four categories, twelve types, and over a hundred brand positioning methods!