Book Summary: Positioning by Al Ries and Jack Trout

Positioning was written all the way back in 1981, but has remained relevant for decades because of the timeless advice inside.

The purpose of the book is simple - to help you reach your target customers in a crowded marketplace. And if the marketplace was crowded in 1981, it's even more crowded now.

So sit back, relax, and get ready for some timeless marketing advice that just makes all the difference for you and your business.

Information Overload

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Positioning might begin with a product, but the ultimate goal is to position that product in the mind of the customer. You've heard this many times before, but your customer is being bombarded with messages all day long by advertisers.

That was the message back in 1981 when there was no Google, Facebook, or Youtube.

Ries and Trout tell us that the consumer's mind only accepts what is consistent with their prior knowledge or experience. In other words, it's very hard to change their impression of something once it's formed.

That's because our brains are wired to sort through information very quickly and make split-second decisions on what to pay attention to and what to discard.

Because of that, the only way to get into your prospect's mind is with a very simple message, consistent with what they already believe to be true.

Easier said than done, of course. We'll spend the rest of the summary exploring ways to do that.

Positioning When You Are The Market Leader

From a marketing perspective, by far the easiest way of carving out some territory in your prospect's mind is to be the first in a category. As golfer Walter Hagen once said, "nobody remembers who finished in second."

Ries and Trout remind us that even if the second entrant in a market offers a better product, the first mover has the upper hand which more than makes up for any product deficiencies.

They also point out that typically, the top three brands in a product category have the market share that follows a ratio of 4:2:1, where the number one brand has twice as much market share as number two, which has twice as much market share as number three.

So, it pays to be first in a market. Sometimes, the first mover in a market becomes so popular that the brand name becomes shorthand for the entire category.

For instance, Xerox was the first photocopier company. After a while, people started referring to a photocopy as a Xerox.

Competing with a number one brand is difficult. Consider the failure of Mr. Pibb, who failed to compete with Dr. Pepper. I'm guessing he's regretting that fateful decision to drop out of medical school.

So the first lesson is to be first. But what do you do after you are first?

Remember not to boast about being number one. Your customers and prospects will think you are insecure in your position. Nobody likes a showoff.

It is ok, however, to reinforce the idea that you were first in the market. The example in the book is Coca-Cola using the tagline "the real thing", implying that any other cola is a second-rate imitation.

Lastly, consider what you might do when you are the leader in existing technology, but a technological advance comes along and makes your technology obsolete. The play here is to embrace the change rather than resist it.

Unfortunately, history tells us that this is difficult medicine to swallow.

The book lists New York Central Railroad as an example of a first-mover that lost its advantage when air travel became possible. They may have saved their company if they used their position of strength to form an airline division.

More recent examples include Polaroid and Blockbuster.

Positioning When You Are A Market Follower

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If you can't be first with a unique product, fret not, there are lots of strategies left on the table. All of them playing off the core strategy of being first in an unoccupied position.

First, you could be the first to claim a unique sub position in the mind of the consumer. A great example is Miller Lite, which was not the first light beer, but the first to be marketed as one. In the eyes of consumers, these are the exact same thing.

Another great example is Nyquil, which was the first cold medicine to position itself as the nighttime remedy.

Second, you can find a unique positioning playing off other brands. Consider Beck's beer, which was competing against the number one selling German beer in America, Lowenbrau. Here's a sample of their advertising:

"You've tasted the German beer that's the most popular in America. Now taste the German beer that's the most popular in Germany."

Or 7Up, which positioned itself as the "Uncola" against Coca-Cola and Pepsi.

Third, there are times when you can even position yourself as the underdog, granting yourself qualities that a customer or prospect would inherently believe. The most famous and direct example of this is Avis, who used the following position with great success:

"Avis is only No. 2 in rent­a­cars, so why go with us? We try harder."

Were they actually trying harder? It doesn't really matter. For the people who wanted better customer service (which is implied in the message), going to the #2 company was the obvious choice.

The main thing that successful challenger brands have figured out is that they can't appeal to everybody. They need to appeal to a subset of the market that isn't being served by the leader. When you try to appeal to everybody, you appeal to nobody.

Repositioning the Competition

But what if there are no unique positions to carve out, you might ask? First, you should probably try a bit harder. But if there are truly no new positions to carve out under the sun, fret not. We have solutions for you too.

One strategy is to convince the marketplace to view your competition in a different way. Exhibit A is Tylenol, the evil geniuses who ran ad campaigns explaining the negative side effects of aspirin.

Another strategy is to focus on the origin of your product. For instance, many US vodka manufacturers gave themselves Russian names. You know, to sound Russian. The land of Vodka.

And then Stolichnaya came along and pointed out that all of those posers were actually produced in the US, and that their vodka was produced in Leningrad. (Quick note: you know a book is old when a city in the book changes its name - Leningrad is now St. Petersburg).

Much more Russian, and thus, much better.

An important point to keep in mind here is that this is not comparative advertising. Your goal is not to compare yourself favorably to your competition.

Your goal is to negatively change the marketplace's view of your competitor's product and thus view yours more highly.

Names Matter

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One of the most important marketing elements is the naming of a product. Of course, you could make the argument that products can succeed in spite of their names if they have a superior product - Google is a great example.

But why not leverage every opportunity you have to build a great brand?

Ries and Trout tell us that descriptive names are better than made-up names.

For instance, Head and Shoulders is a great name for dandruff shampoo, because it conjures up images in your head when you read and say it. People is a great name for a gossip magazine.

A bad brand name in their mind? Margarine. Why? It is trying to replace natural food with something that sounds artificial.

As a complete sidebar for random trivia knowledge value, margarine was created in France in 1869 in response to a challenge by Napoleon to create a butter substitute for the armed forces and lower classes.

A better name, the authors suggest, would have been something like "soy butter."

Another category of bad names includes ones where the name seems to limit the usefulness of the product. The example from the book is that Eastern Airlines ceased operations because it couldn't get over its perception of being an East coast airline.

Lastly, never choose a name that could easily be confused with another company. Consider B.F. Goodrich, who created many tire products that Goodyear frequently got credit for by the marketplace.

Don't Free Ride

So you've done the work to build up one brand in the marketplace, which is hard enough. It only makes sense to keep introducing products through that brand, right?

Not according to Ries and Trout. They tell us to follow the example of Procter & Gamble who have selected different names for each product, carefully positioning them in the minds of their customers and prospects.

As they say, a single brand cannot hold multiple positions.

This comes with the problem of building up awareness for the new brand from scratch. The benefit of this is that there will be no previous bias for the new brand - no baggage if you like.

This means that when the new brand's "15 minutes of fame" comes, you can position it exactly as you intend to.

The Line Extension Trap

In the same vein as the previous section, line extensions are to be viewed with a critical eye as well.

They will generally be a bad idea, according to Ries and Trout, if the brand name has become generic so that consumers consider the name and product to be one and the same.

A good example is today's market is Google, which to everyone just means "search engine."

The cautionary tale they use in the book is of Life Savers candy, which the consumers came to think of as "the hard round candy with the hole in the middle."

Trying to build on that brand, Life Savers introduced chewing gum. It was a flop because it didn't fit the customer's view of what Life Savers was.

When they later launched a new gum brand - Bubble Yum - it was very successful, especially because it had the advantage of being the first soft bubble gum. They obviously learned their lesson.

Not only can your new brand fail if you mistakenly attach it to an existing brand, but you can also dilute the original brand in the process.

So if you are going to do a line extension, make triple sure that you are doing it right. This brings us to the next section...

Line Extensions Can Work - Sometimes.

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Sometimes it's just not economically possible to create a new brand from scratch. If the circumstances are just right, you might get away with it.

Here are some situations in which you have Ries and Trout's blessing to pursue a line extension:

• If you have a low volume product;
• If you are in a crowded market where there is no unique position to occupy (which usually just means you haven't looked hard enough);
• You have a small ad budget that has no hope of building a new brand;
• Your product is a commodity, which doesn't require its own distinct brand; and finally
• Sales reps distribute your product - when relationships make the sale, the brand is less important;

Again, the rule of thumb is that you shouldn't do a line extension unless you can find an exception that applies to your situation.

Conclusion

Thinking about the space your product or service occupies in the mind of the consumer is critical to your success in the marketplace.

As competition intensifies, and barriers to entry continue to fall towards zero in almost every market, keeping focussed on the fundamentals is critical.

Positioning your product correctly is, and always will be, one of the fundamentals. Remember that when the next shiny new thing crosses your desk.

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