 During the 90’s, a variety of hand-held electronic devices were introduced in response to the perception that consumers had more information to manage than ever before and less time to manage it.
Amongst the first to be launched was the ‘Apple Newton’, a notepad and organizer with the distinctive feature of handwriting recognition, which meant notes could be stored digitally. Sales were very disappointing, which was attributed to the poor performance of the character recognition rather than lack of market opportunity.
Numerous companies launched similar and improved products that came and went including products from companies like Motorola, but sales continued to be disappointing. Then Palm Pilot was launched, a hand held digital personal organizer that was significantly less expensive than its predecessors. Palm Pilot sold millions of units, making it the most rapidly adopted computer product in history. So why was it successful? I would contend that a key determinant was how these brands were positioned.
Successful positioning involves affiliating a brand (see previous article in issue 2) with a category that consumers can readily grasp, and differentiating the brand from other products that belong to the same category. For sustained success, a brand must also be linked closely to consumer’s goals. Therefore successful positioning requires the performance of four tasks:
Careful definition of what the brand is.
Clear and meaningful differentiation from similar products.
Deepening of the brand and connection to consumer’s goals over time.
Disciplined defense of the position as competitor’s react and consumer tastes change.
Traditional approaches to positioning focus on brand definition and differentiation. Together these components emphasize the relationship between the product and it’s competition. The brand is defined for consumers by highlighting the features that it shares with other products, that is, it’s point of parity. Brand differentiation is then introduced by identifying a point or points of difference that allows the brand to dominate competition on a benefit or benefits that are important to consumers.
Returning to my example, Palm Pilot was successful because it was defined to the consumer as a digital personal organizer. This was credible to consumers because the product delivered the key benefit associated with that category, convenient organization of personal information. It was differentiated from the earlier entrants by its ease of use, particularly with respect to synchronizing information with the users desktop or laptop.
Once a brands position is defined, it needs to be differentiated from other members of the category. In our industry, it could be Operating Tables, Operating Lights, Defibrillators or Gloves. Typically this differentiation focuses on how the brand dominates its competitors with respect to a benefit that is important to consumers. The strongest competitive position in which to be is one where a brands point of difference on the primary benefit motivates consumers to buy the category. Whatever the basis for differentiation, an effort should be made to give consumers a reason to believe that the brand possesses the benefit. In some cases, support for differentiation is in terms of image – which uses the brand and the occasions on which it is used. In our case, that would be a prestigious hospital, department or eminent surgeon of world renown.
Even when the principles of positioning are understood, there are a variety of barriers to their successful implementation. When entering a category where there are established brands, the challenge is to find a viable basis for differentiation. A frequent occurrence is that the superiority claim selected is not the one that is important to customers. Care must be taken to ensure that your point or points of differentiation are important and relevant to your customers. Several years ago this is an error that my team and I experienced first hand. Fortunately we recognized the error in our strategy and corrected it quickly.
A variant of this problem emerges when a benefit, which a company dominates, is important to some consumers but not the ones who are responsible for brand choice. An example could be where the benefit is not important to the Business Manager, Departmental Manager or Surgeon at your hospital but it is important to the patient. Some of the more enlightened decision makers may take it into account, but generally they don’t.
One way to address the concern that any single benefit may be important to some segment of consumers is to claim multiple benefits. By doing this, the calculation is that the brand will offer something for everyone. This approach however may also emerge as a compromise when strategists cannot agree on an approach. Once a position is developed, most activity is directed towards sustaining it. Sustaining a benefit over time can often serve as a barrier to competitive entry. Sometimes in our industry we can see evidence of this through competitive tender specifications.
Despite the fact that a sustained position can serve as a barrier to competitive entry, companies can often abandon a position in response to some minor change in consumer preferences or in an effort to generate incremental volume and revenue for it. However, this strategy can often end in failure. As an example, the emergence of a consumer disposition against sugar in children’s cereals led to several brands with “sugar” in their name adopting a new name. In effect, these brands walked away from their “brand equity” and, not surprisingly, sales plummeted.
In summary, however good your product, if it is badly positioned sales are likely to be disappointing. If companies give careful attention to the basic principles outlined here regarding positioning of their products they are likely to be successful. Duncan Wilson |
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