Book review by Al Ries and Jack Trout


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Summary on Positioning By Al Ries & Jack Trout

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Book review by Al Ries and Jack Trout

  1. 1. MARKETING MANAGEMENT IIPositioning: AL RiesAnd Jack TroutLiterature Review: The concept of positioning applies to products in a broad sense.Services, tourist destinations, countries, and even careers can benefit from a well-developedpositioning strategy that focuses on a niche that is unoccupied in the mind of the consumeror decision-maker.Submitted by Group 6:Ashish SahooAshish AcharyaDeepika AgarwalMayank MarooMayur Kumar PatelV.Kundan SRI SRI UNIVERSITY
  2. 2. Executive SummaryF ailure to communicate is the single most commonly used reason that people give to their problems. In positioning Al Ries and Jack Trout discuss the problems that occur daily in communication, not just in business but in society as a whole. We are the worlds mostover communicated society and there is only so much a person or prospect can process. Eachyear we send or are sent more and more information and we steadily receive less of it.Positioning which is a form of better communication that works for products, services,companies, and even for people. Positioning is what you do to the mind of the intended prospect,not what you do to the product itself. One of the best ways to position anything is to be first toestablish that vacant position in the mind of the prospect. If you and a companion made love forthe first time together then you will always occupy a position in their mind. A question that theauthor’s asked in the book was: Who was the first person to fly across the Atlantic? Many peopleknow its Charles Lindbergh. Who was the second person to do it? No one really knows, even ifthe second pilot was a better pilot! Charles Lindbergh had made a permanent position in themind of people. With today’s high volume of communication you have to select just the materialthat you know will not just get to the prospect but in the prospect’s mind. You don’t look forsolutions to products in your own mind or in the product itself, but in the mind of the prospect.How do they see your product? If they see it as second best, you can’t advertise it as first. If thecustomer is always right, then isn’t the sender may be wrong? You have to focus on theperceptions of people. And still it is important to remember that less is more today in yourmessage. An average newspaper weighs about four pounds and contains over 500,000 words. Fora person to read the entire paper front to back at a normal reading speed it would take almost 28hours. How much information is getting through to people and how much of it is being retained?Timing is also a key element of communication and positioning. You never get a second chancewith a product, company, or even as a person to make a first impression. Communication shouldnot take place until you are ready to position yourself for the long run. Also you have to find thebest form of media to extend your desired position to prospects. In past years we can all agreethat the wave of advertising output and methods have grown rapidly, but has our knowledge ofthe products matched the growth? Let’s say if per capita consumption of advertising equalsfifteen times as much as it did a decade ago. We wouldn’t know fifteen times as much about theproducts that are being advertised. This is called sensory overload, our brains can only take somuch before they shut down. Another key part of positioning strategy involves the right placeand time. When two people meet each other and end up falling in love, it requires an openwindow (vacant spot) and both individuals being receptive to the idea. The same type of situationhas to occur when you position a product. It is also important to realize that the human mind bestaccepts information that matches its current state of mind and views. An interesting example theauthors mentioned was if a Republican and Democrat read a controversial passage, they woulduse the same facts in the article to support their different states of mind. Positioning is a bookPositioning: Al Ries & Jack Trout Page 1
  3. 3. that will help any company or person who is trying to beat competition and gain recognition intodays over crowded marketplace and society.Things Managers Need to Know from Positioning  Positioning is a better form of communication in business and society in general. Positioning is reaching and filling a vacant spot in the mind of the prospect. You can position nearly anything: company, product, even yourself. The start to this process is not looking at what’s in your mind or the product itself, but in the mind of the intended prospect and their perceptions.  One of the most effective ways to position a product is to be first. Many people know Charles Lindbergh was the first man to fly across the Atlantic. Who was second? No one knows or really cares, even if the second pilot was better because Charles Lindbergh established a position in the minds of people.  Today, timing and “more=less” is the approach to take when positioning. You shouldn’t communicate with prospects until you are ready to release your long term positioning strategy. Also in our highly over communicated society it is important to remember more is less in a message.  People see what they want to see. In taste test people have put inexpensive California brands of wine in 50 year old bottles of French Burgundy. Of course, respondents were more favorable of the cheap wine taste since it was in the old French bottle.  Why is it hard to take leadership away from the top positioned company? One, they are in the mind of the prospect as number one, stores are going to stock more of leading brands, and winning companies attract outstanding employees. As a leader, don’t keep saying you’re number 1 if people know it, it shows insecurity. What you should do is reiterate the original concept. Coke calls itself the “real thing” because it is and it was first before a bunch of imitations that try to copy something great.  To reposition a competitor you can’t be afraid of conflict. When Tylenol successfully repositioned aspirin, it started its ad by listing all the side effects on the back of the aspirin bottle before even mentioning its own brand. It related itself to a product that was already in the minds of people.  One of the most important parts of positioning a product is what you name it. A name should not be too generic but tell the major product benefit Example Head&Shoulders dandruff shampoo.Positioning: Al Ries & Jack Trout Page 2
  4. 4.  To position your product you have to look at the most obvious thing in the mind of the prospect. Milk Duds positioned itself against candy bars by understanding their product was enjoyed by their obvious target market (kids) for an obvious reason: the candy lasted for a longer period of time compared to candy bars. So they used the millions companies like Hersheys spent on advertising in their favor by running the line “When a candy bar is only a memory, you’ll still be eating your Milk Duds.”  To position yourself you have to link one concept with yourself, you can’t be everything to all people. Your success in a company comes from trying many times and succeeding sometimes rather than only going for sure things. Success usually doesn’t come from within you have to ride a horse, what can others do for you? Find companies and industries you can ride and learn from them.  The best way to cope with today’s rapid changes is to not change if you have been traditionally successful (own an established position in the prospect’s minds). It’s too hard to keep up with the pace. Establish a positive long term movement and the sun will shine tomorrow on those who have made the right decision today.Summary of the book “Positioning” by Al Ries and Jack TroutPositioning: A battle for Your Mind, by Jack Trout and Al Ries is one of the most famousmarketing books of all time. Their concept of positioning created a new world in advertising thatwhen used effectively can beat the competition. After reading this book as a group we believethe book was such a success.The positioning strategy can be applied not only to products, but tocompanies, careers, politicians, and even countries.Information Overload:Al Ries and Trout explain that while positioning begins with product, the concept really is aboutpositioning that product in mind of the customer. This approach is needed because consumers arebombarded with a continuous stream of advertising, with advertiser spending several hundreddollars annually per customers in the U.S. The customer’s mind react to this high volume ofadvertising by accepting only what is consistent with prior knowledge or experience.It’s quite difficult to change a consumer’s impression once it’s formed. Consumers cope with theinformation overload by simplifying and are likely to shut out anything inconstant with theirknowledge and experience. In an over communicated environment the advertiser should presenta simplified message and make that message consistent with what the consumer already believesby focusing on the perceptions of the consumer rather than on the reality of the product.Positioning: Al Ries & Jack Trout Page 3
  5. 5. What Positioning is all about?Positioning is all about what reality is. In the past, all organizations and companies would try tobe the most creative and inspiring in their advertising. To be successful you have to touch basewith reality. Jack Trout and Al Ries explain that this can only be done by touching base withwhat is already in your prospect’s head. This is the only reality that matters. Why is thisnecessary? Today we have become the world’s first over communicated society. Every day weare exposed to more and more information that we cannot retain or let alone process. Oneeffective thing to do is focus on narrow targets and realize that the mind only chooses to acceptwhat it already has a knowing or relation of. You can’t find solutions in your company or yourproducts, but in the mind of the prospect. How does the customer see my product and why?The Assault on the Mind:How much information is getting through to the average American? Over communication hasinterfered with our ability to receive and send messages. Trout and Ries mention that the averageAmerican family watches more than seven hours of television a day or 750,000 pictures a day.We are being pictured to death. This is just one medium we are exposed to and we can onlyremember a fraction of the information that is constantly being thrown at us. If the per capitaconsumption of advertising was to increase 15 times as much as it is now in the future, we wouldnot know 15 times more about the products or services trying to reach us. When the firstsupermarket in America opened in Cincinnati, it had 60,000 products. No human is capable offully organizing and knowing all those products, especially when the average human vocabularyis only a couple thousand words.Getting into the mind:The easiest way of getting into someone’s mind is to be first, it is very easy to remember who isfirst and much more difficult to remember who is second .Even if the second entrant offer abetter product ,the first mover has a large advantage that can make up for other shortcoming.However, all is not lost for products that are not the first. By begin the first to claim a uniqueposition in the mind the consumer, a firm effectively can cut through the noise level of otherproduct for example, Miller Lite was not the first light beer, but it was the first to be positionedas a light beer, complete the name to support that position, Similarly, Lowenbrau was the mostpopular German Beer sold in America, but Beck’s Beer successfully carved a unique positionusing the advertising.“You’ve tasted the German beer that’s the most popular in America. Now taste the German beerthat most popular in Germany.”Positioning: Al Ries & Jack Trout Page 4
  6. 6. Consumers rank brands in their minds. If a brand is not number one, then to be successful itsomehow must relate itself to the number one brand. A campaign that pretends that the marketleader does not exist is likely to fail. Avis tried unsuccessfully for years to win customer,pretending that the number one hertz did not exist. Finally, it began using the line,“Avis is only number 2 in rent-a-car, so why go with us? We try harder.”After launching the campaign, Avis quickly became profitable, whether Avis actually triedharder was not particularly relevant to their success. Rather, consumers finally were able to relateAvis to Hertz, which was number one in their minds.Another example is that of the soft drink 7-Up.which was No 3 behind Coke and Pepsi. Byrelating itself to Coke and Pepsi as the “Uncola”,7-Up was able to itself in the mind of theconsumer as a desirable alternative to the standard colas.When there is a clear market leader in the mind of the consumer, it can be nearly impossible todisplace the leader, especially in the short-term. On the other hand, a firm usually can find a wayto position itself in relation to the market leader so that it can increase its market share .It usuallyis a mistake, however, to challenge the leader head-on and try to displace it.Those little ladders in your head:The human mind only accepts information that matches its current state of mind. Humans alsocannot deal with more than seven units of information at a time. So we try to simplify things byranking them. We rank different brands and products in our heads from the superior to the worst.As a company, it is mostly impossible to try and jump a rung on the ladder in the prospects mindunless another company seriously screws up, rarely happens. You have to bring out a whole newproduct ladder. But it’s hard to relate your new product if the prospect has no room for newinformation, so it’s best to relate to the old. Tell what the product is not instead of what it is. Youalso have to look at the competitor’s position. Avis was the second place rent-a-car companynext to Hertz. Avis ran the ad “Avis is only No.2, so why go with us? We try harder.” Thisposition proved highly successful as they were honest, related themselves to Hertz (knowncompany), and because people tend to have a thing for liking the underdog.You can’t get there from here:You can have a great sales force, product, and advertising campaign and still fail miserably ifyou can’t create a position. When RCA (Radio Corporation of America) tried to take on IBM(established leader) in the computer industry they folded and lost 250 million dollars. RCA, notknown for ever making computers tried to go in an industry that they had no shot of creating aposition. They would have been better off to take advantage of whatever positions they had inthe minds of their consumers.Positioning: Al Ries & Jack Trout Page 5
  7. 7. Positioning of a leader:Historically, the top three brands in a product category occupy market share in a ratio 4:2:1.Thatis the number one brand has twice the market share of number two,which has twice the marketshare of number two, which has twice the number share of number three. Ries and Trout arguethat the success of a brand is not due to the high level of marketing acumen of the companyitself, but rather, it is due that the company was first in the product category.They use the case ofXerox to make this point.Xerox was the first plain-paper copier and was able to sustain itsleadership positioning. However, time after time the company failed in other product category inwhich it was not first.Similarly, IBM failed when it tried to compete with Xerox in copier market, and Coco Colafailed to use Mr.Pibb to take on Dr.Pepper.These examples support the point that the success of abrand usuallyis due to itsbeginning first in the market rather than the marketing abilities of thecompany.The power of the company’s comes from the power of its brand, not the other wayaround. With this point in the mind,there are certain things that a market leader should so do tomaintain the leadership position. First,Ries and trout emphasize what it should not do, and that isboast about being number one. If a firm does so,then customers will think that the firm isinsecure in its position if it must reinforce it by saying so.If a firm was the firm the first to introduce a product, that the advertising campaign shouldreinforce this fact Coca-Cola “the real thing”does just that and implies that other coals are justimitations. Another strategy that a leader can follow to maintain its position is the multi-brandstrategy.This strategy is to introduce multiple brands rather than changing existing ones that holdleadership positioning it often is easier and cheaper to introduce a new brand rather than changethe positioning of an existing brand.Ries and trout call this strategy a single position strategybecause each brand occupies a single,unchanging positioning in the mind of the consumers.Finally,change is evitable and a leader must be willing to embrace change rather than resistit.When new technology open the possibility of a new market that may threaten the existingone,a successful firm should consider entering the new market so that it will have the first moveradvantage in it, for example in the past century the New york central railroad lost its leadershipas air travel became possible then company might have been able to maintain its leadershipposition had it used its resources to form an airline division.Sometimes it’s necessary to adopt a broader name order to adapt the change.For example, Haloidchanged its name to Haloid Xerox and later to simply Xerox.This is a typical pattern of changingName1 to an expanded Name 1-Name 2,and later to just Name 2.Products that fail are usually from the company following a leader. They think they canintroduce a product similar and say it’s better. It’s not about being better, but about speed. Youhave to introduce products first to get a position in the minds. If every other company is headingeast, sometimes it works to head west.Volkswagen was successful releasing the Beetle becauseat this time everyone else was introducing bigger size cars. They ran the simple ad “ThinkPositioning: Al Ries & Jack Trout Page 6
  8. 8. small.” While there were other small cars on the market they were the first to create a small carposition which became a success.POSITIONING OF A FOLLOWER:Second-place companies often are late because they have chosen to spend valuable timeimproving their product before launching it. According to Ries and Trout, it is better to be firstand establish leadership. If a product is not going to be first, it then must find an unoccupiedposition in which it can be first. At a time when larger cars were popular, Volkswagenintroduced the Beetle with the slogan "Think small." Volkswagen was not the first small car, butthey were the first to claim that position in the mind of the consumer.Other positions that firms successfully have claimed included:  Age  High price (Mobile 1 synthetic engine lubricant)  Gender (Virginia Slims)  Time of day (Nyquil night-time cold remedy)  Place of distribution (Leggs in supermarkets)  Quantity (Schaefer - "the one beer to have when youre having more than one."It most likely is a mistake to build a brand by trying to appeal to everyone. There are too manybrands that already have claimed a position and have become entrenched leaders in theirpositions. A product that seeks to be everything to everyone will end up being nothing toeveryone.Reposition the competition:To reposition a competitor you have to remove an idea or product out of the consumer’s mind.The world was first flat in everyone’s mind but a simple observation changed everything. Youcan’t be afraid to rumble and undercut an existing concept or product. A famous example waswhen Tylenol repositioned aspirin and the millions who were taking the product. Tylenol’s adsaid “For the millions who should not take aspirin” then they listed several of the precautionsassociated with aspirin. There was sixty words said before Tylenol even mentioned its product.The repositioning strategy allowed to Tylenol to grab a position as a safer alternative in theprospects mind, and allowed them to efficiently become number one. Sometimes, there are nounique positions to carve out. In such cases, Ries and Trout suggest repositioning a competitorby convincing consumers to view the competitor in a different way. Tylenol successfullyrepositioned aspirin by running advertisements explaining the negative side effects of aspirin.Consumers tend to perceive the origin of a product by its name rather than reading the label tofind out where it really is made. Such was the case with vodka when most vodka brands sold inthe U.S. were made in the U.S, but had Russian names. Stolichnaya Russian vodka successfullyrepositioned its Russian-sounding competitors by exposing the fact that they all actually werePositioning: Al Ries & Jack Trout Page 7
  9. 9. made in the U.S., and that Stolichnaya was made in Leningrad, Russia. When Pringles new-fangled potato chips were introduced, they quickly gained market share. However, Wise potatochips successfully repositioned Pringles in the mind of consumers by listing some of Pringlesnon-natural ingredients that sounded like harsh chemicals, even though they were not. Wisepotato chips of course, contained only "Potatoes vegetable oil Salt." As a resulting of this advertising, Pringles quickly lost market share, with consumerscomplaining that Pringles tasted like cardboard, most likely as a consequence of their thinkingabout all those unnatural ingredients. Ries and Trout argue that is usually is a lost cause to try tobring a brand back into favor once it has gained a bad image, and that in such situations it isbetter to introduce an entirely new brand. Repositioning a competitor is different fromcomparative advertising. Comparative advertising seeks to convince the consumer that one brandis simply better than another. Consumers are not likely to be receptive to such a tactic.The Power of the Name:A brands name is perhaps the most important factor affecting perceptions of it. In the past,before there was a wide range of brands available, a company’s could name a product just aboutanything. These days, however, it is necessary to have a memorable name that conjures upimages that help to position the product. Ries and Trout favor descriptive names rather thancoined ones like Kodak or Xerox. Names like DieHard for a battery, Head & Shoulders for ashampoo, Close-Up for a toothpaste, People for a gossip magazine. While it is more difficult toprotect a generic name under trademark law, Ries and Trout believe that in the long run it isworth the effort and risk.In their opinion, coined names may be appropriate for new products in which a company is firstto market with a sought-after product, in which case the name is not so important. Margarine is aname that does not very well position the product it is describing. The problem is that it soundsartificial and hides the true origin of the product. Ries and Trout propose that "soy butter" wouldhave been a much better name for positioning the product as an alternative to the more commontype of butter that is made from milk. While some people might see soy in a negative light, apromotional campaign could be developed to emphasize a sort of "pride of origin" for soy butter.Another every day is example is that of corn syrup, which is viewed by consumers as an inferioralternative to sugar. To improve the perceptions of corn syrup, one supplier began calling it"corn sugar", positioning it as an alternative to cane sugar or beet sugar. Ries and Trout proposethat selecting the right name is important for positioning just about anything, not just products.For example, the Clean Air Act has a name that is difficult to oppose, as do "fair trade" laws.Even a persons name impacts his or her success in life. One study showed that on average,schoolteacher’s grade essays written by children with names like David and Michael a full lettergrade higher than those written by children with names like Hubert and Elmer. Eastern Airlineswas an example of a company limited by its name. Air travel passengers always viewed it as aregional airline that served the eastern U.S., even though it served a much wider area, includingPositioning: Al Ries & Jack Trout Page 8
  10. 10. the west coast. Airlines such as American and United did not have such a perception problem.(Eastern Airlines ceased operations in 1991. Another problem that some companies face isconfusion with another company that has a similar name. Consumers frequently confused the tiremanufacturer B.F. Goodrich with Goodyear. The Goodyear blimp had made Goodyear tires well-known, and Goodyear frequently received credit by consumers for tire products that B.F.Goodrich has pioneered. Other companies have changed their names to something more general,and as a result create confusion with other similar-sounding companies. Take for instance TheContinental Group, Inc. and The Continental Corporation. Few people confidently can say whichmakes cans and which sells insurance.The No Name TrapPeople tend use abbreviations when they have fewer syllables than the original term. GE is oftenused instead of General Electric. IBM instead of International Business Machines. In order tomake their company names more general and easier to say, many corporations have changedtheir legal names to a series of two or three letters. Ries and Trout argue that such changesusually are unwise. Companies having a broad recognition may be able to use the abbreviatednames and consumers will make the translation in their minds. When they hear "GM", they think"General Motors". However, lesser known companies tend to lose their identity when they usesuch abbreviations. Most people dont know the types of business in which companies namedUSM or AMP are engaged. The same applies to peoples names as well. While some famouspeople are known by their initials (such as FDR and JFK), it is only after they become famousthat they begin using their initials. Ries and Trout advise managers who aspire for namerecognition to use actual name rather than first and middle initials. The reason that initials do notlead to recognition is that the human mind works by sounds, not by spellings. Most companiesbegan selling a single product, and the name of the company usually reflected that product. Asthe successful firms grew in to conglomerates, their original names became limiting. Ries andTrout advise companies seeking more general names to select a shorter name made of words, notindividual letters. For example, for Trans World Airlines, they favored truncating it simply toTrans World instead removing all words and using the letters TWA.Why Los Angeles is often called L.A. and New York is not called N.Y.? Trout and Ries wrote ona topic called phonetic advantage, which is our simple knack to have shorthand names orabbreviations for longer syllables. In business, if you want to be well known you can’t useinitials until you are popular and successful. Think about the names of some of the most popularpresidents FDR and JFK. They were popular enough to use initials and it helped with phoneticshorthand. It is important to make sure that if you go to the initials that you won’t be confusedfor another brand, company, person, etc. Sometimes you can carefully select initials to formacronyms. EX: MADD (Mothers Against Drunk Driving) has been a long time proof that thismethod can be effective.Positioning: Al Ries & Jack Trout Page 9
  11. 11. The Free Ride Trap:A company introducing a new product often is tempted to use the brand name of an existingproduct, avoiding the need to build the brand from scratch. For example, Alka-Seltzer named anew product Alka-Seltzer Plus. Ries and Trout do not favor this strategy since the original namealready in positioned in the consumers mind. In fact, consumers viewed Alka-Seltzer Plussimply as a better Alka-Seltzer, and the sales of Alka-Seltzer Plus came at the expense of Alka-Seltzer, not from the market share of the competition. Some firms have built a wide range ofproducts on a single brand name. Others, such as Procter and Gamble have selected new namesfor each new product, carefully positioning the product in a different part of the consumersmind. Ries and Trout maintain that a single brand name cannot hold multiple positions; either thenew product will not be successful or the original product bearing the name will lose itsleadership position. Nonetheless, some companies do not want their new products to beanonymous with an unrecognized name. However, Ries and Trout propose that anonymity is notso bad; in fact, it is a resource. When the product eventually catches the attention of the media, itwill have the advantage of being seen without any previous bias, and if a firm prepares for thisevent well, once under the spotlight the carefully designed positioning can be communicatedexactly as intended. This moment of fame is a one-shot event and once it has passed, the productwill not have a second chance to be fresh and new.Ries and Trout stress the importance of having a new name for new products to avoid confusionor even competing against yourself. Example when Alka-Seltzer wanted to introduce their newcold remedy idea “Alka-Seltzer PLUS” they figured they would take the free ride on the $20million dollar a year name Alka-Seltzer. The new product ate into the Alka-Seltzer marketinstead of stealing shares from competitors like Dristan andContac. You have to avoid corporateego and wanting to slap your company name on everything. Proctor and Gamble is a greatexample of a company that understands a new product needs a new name as they make moremoney each year than most of America’s advertising agencies combined. A well-known namegot well known because it stood for something else in the minds of prospects. When Heinz triedto slap their name on ketchup they experienced the “teeter totter” effect. While they becamesuccessful with their ketchup they lost leadership and a lot of market share in their pickleposition which is what Heinz originally stood for. One name is meant to stand for one thing.The Line Extension TrapLine extension is often misunderstood. Companies think it is logical to extend based on theirsuccess of one product alone. Example : Dial soap tried to extend into Dial deodorant and didn’tpick up market share. Companies like this look at their strategy from their point of view ourname will carry us. Instead they need to work backwards and look from the prospects point ofview. This will let you know that line extension will likely blur the prospect’s vision of yourbrand. If you have a position like Kleenex it becomes almost generic because it’s so strong.Positioning: Al Ries & Jack Trout Page 10
  12. 12. “Hand me a Kleenex” often heard over hand me a tissue paper. If Kleenex was to start makingtoilet paper it would imply to the prospect that they are becoming just another brand name.Line extensions are tempting for companies as a way to leverage an existing popular brand.However, if the brand name has become near generic so that consumers consider the name andthe product to be one and the same, Ries and Trout generally do not believe that a line extensionis a good idea.Consider the case of Life Savers candy. To consumers, the brand name is synonymous with thehard round candy that has a hole in the middle. Nonetheless, the company introduced a LifeSavers chewing gum. This use of the Life Savers name was not consistent with the consumersview of it, and the Life Savers chewing gum brand failed. The company later introduced the firstbrand of soft bubble gum and gave it a new name: Bubble Yum. This product was verysuccessful because it not only had a name different from the hard candy it also had the advantageof being the first soft bubble gum.Ries and Trout cite many examples of failures due to line extensions. The consistent pattern inthese cases is that either the new product does not succeed, or the original successful productloses market share as a result of its position being weakened by a diluted brand name.When line extension can workDespite the disadvantages of line extensions, there are some cases in which it is not economicallyfeasible to create a new brand and in which a line extension might work. Some of the casesprovided by Ries and Trout include:Low volume product-- if the sales volume is not expected to be high.Crowded market- if there is no unique position that the product can occupy.Small ad budget- without strong advertising support, it might make sense to use the house name.Commodity product-- an undifferentiated commodity product has less need of its own name thandoes a breakthrough product.Distribution by sales reps-- products distributed through reps may not need a separate brandname. Those sold on store shelves benefit more from their own name.Line extension can be useful in the short term. When Alka-Seltzer introduces Alka-Seltzer plus,retailers are going to buy and load up on it. This doesn’t necessarily mean that consumers will asTrout and Ries say “This will probably give you enough time to hang yourself.” Kraft which wasoriginally strongly known for cheese, line extended into categories like mayonnaise and saladdressing and didn’t come close to a top position in those markets. When a name becomeseverything it starts to mean nothing in the mind of the prospect, falling further down the ladder.Where they are no brands or weak brands, you can line extend, but soon as the competitors arriveyou’re in trouble.Positioning: Al Ries & Jack Trout Page 11
  13. 13. Positioning a company: XeroxWhy would you want to position a company? Who buys a company? When a new employeeaccepts a job, that person buys the company which sold itself with recruiting programs, etc. Thecompany’s that occupy the best positions in the minds of prospective employees usually getthose employees. The same goes for getting investors to buy shares of stock in your companyand the position of your company. When trying to create a position in the mind of the prospect,whoever it may be, you have to take into consideration the position that people have towardsyou. When Ford was trailing GM in the car industry, Ford’s campaign was “Ford has a betteridea”, but the prospect is thinking “if you have better ideas, why aren’t you ahead of GM?” Tobe successful, your advertising has to answer the questions that roam the mind of the prospect.Positioning a country: BelgiumThe book also proves you can apply positioning strategies to a country. Sabena Belgian WorldAirlines was an airline that took Americans only to one destination: Belgium. While a high endairline, you can’t convince people to fly with you if you aren’t going where they want. Theyneeded to position Belgium, just like when you hear France you think wine and the Eiffel Tower.San Francisco and you think cable cars and golden gate bridge. They created a strategy thatrelated them to Amsterdam, a popular tourist stop which was ranked 3 stars by Michelin Guides.Michelin ranked Belgium as having five-3star cities. The campaign that was established was “InBelgium there are five Amsterdam’s.” Amsterdam and the Michelin Guide which were twoconcepts already in the mind of the prospect traveler, helped put Belgium on the map in tourism.Positioning an Island: JamaicaWhen Jamaica was announced open for capital investment, David Rockefeller rounded up 25American corporate officers to see if the island was worth investing in. They knew they wouldhave to create a position against competitors like the Bahamas, Puerto Rico, Virgin Islands, andBermuda. Jamaica needed a mental picture placed in the minds of prospect travelers. Theystarted by looking at what images already exist in the minds of people. A connection was madewith the similar landscaping and scenery of Hawaii. The campaign that was launched was“Hawaii of the Caribbean.” This along with pointing out that Jamaica was a far bigger islandthan all its competitors gave the “more to see, more to do” touch.Positioning a product: Milk DudsTraditionally, Milk Duds were mainly for teenagers at movie theaters. They wanted to gainmarket share by spreading appeal to others, especially the younger kids. The company did whatall good positioning strategies need and found the obvious outlook that was in the mind of theprospect. They knew that kids were disappointed in the downgraded size of candy bars and howquickly you could eat one. Kids felt that their time of enjoyment wasn’t worth the money theyPositioning: Al Ries & Jack Trout Page 12
  14. 14. spent. The Milk Dud candy was a box of 15 individual slow chew pieces of chocolate candy. So,they launched a simple campaign that related well to the kids. “When a candy bar is only amemory, you’ll still be eating your Milk Duds.” This created a position that not only reversed abad sales trend, but allowed them to sell more units than ever in its history.Positioning a Service: Mailgram:When advertising for a service, it is important that you say everything well, and the way youintended. An advertisement for Milk Duds should heavily rely on the strength of the visuals. Fora service, you want to make the customers aware of what exactly you are doing and how you aregoing to do it.Positioning a Long Island Bank:The Long Island Trust bank did research to see where their bank stood amongst the surroundingbanks. When their numbers came back they saw they were ranked last in the amount of branchesthey had, their range of services, and their quality of services. Getting those numbers back, TheLong Island Trust Bank knew with their new advertisements they had to address those issueswhile continuing to do the things they did well.Positioning a New Jersey Bank:The name of this bank is called United Jersey, and the problem with it, is that it is in the shadowsof a lot of the bigger banks that are in New York. With United Jersey being a smaller bank theyneed to look and study their competition to let their potential customers know all of theirdisadvantages of being a part of a large bank. Some of those disadvantages include bad responsetime by big banks in terms of help and having no real relationships.Positioning a Ski Resort: Stowe:In this example of positioning, this certain ski resort in Stowe, Vermont is using its notability inorder to help out with advertising. In a magazine, Stowe ski resort was named one of the top 10ski resorts in the world. Stowe ski resort used this to its advantage with all of its advertisements.They even talked about how they were the only ski resort on this list on the east coast of NorthAmerica. This was another strong point for them.Positioning the Catholic Church:Ries and Trout here discuss the difficulties of positioning in the Catholic Church. There were alot of communications problems that were going on between the church and these issues need tobe addressed. It is a lot harder to work on your positioning with a religion because churches donot usually use the same kind of advertisements that companies use.Positioning: Al Ries & Jack Trout Page 13
  15. 15. Positioning yourself and your careerPeople suffer from the same thing that companies and products do: Trying to be all things to allpeople. This creates problems in the minds of people. You have to select something to hold on tothat will make you cut through the prospects mental wall. To be successful you to have to isolatethe concept that you want to use to create a long term position. Your reputation will probably bebetter within your company if you try many times and succeed sometimes than if you only try forthings that are for certain. Trying harder in business is rarely your key to being a successfulindividual. You have to find a horse to ride, what can others do for you? First, ride yourcompany. Ask, where is your company going? If nowhere, find a new company. Place yourfocus on growing industries. Second, ride your boss. Is your boss going anywhere and what canthis person teach you in business? Thirdly, ride your business friends. Most big breaks in careershappen because a friend recommended that person. The more friends you have outside your job,the better the chances are you will end up in a big rewarding position. Fourth, ride an idea, but beready to receive ridicule. Never be afraid of conflict. Fifth, ride the faith horse, faith in othersand their ideas. Ray Kroc bought the idea for McDonalds from the McDonald brothers who hadno faith in the idea. Ray Kroc became one of the richest people in America. The sixth and finalhorse to ride is yourself. “Like life itself, business is a social activity. As much cooperation ascompetition so remembers, the winnings jockeys are not necessarily the lightest, the smartest, orthe strongest. The best jockey doesn’t win the race. The jockey that winds the race is usually theone with the best horse.”Positioning your businessWhat position do you own in the market place, not from the marketing manager’s view. Whatposition do you want to own? Most failures come from trying to create a position that someoneelse owns. Whom must you outgun? Look at the situation not only from the prospect’s view ofyour product, but your competitors products as well.Playing the Positioning Game:One of the final messages Ries and Trout left us in the book was “words don’t contain meanings.The meanings are not in the words. They are in the people using the words.” “A word has nomeaning until someone uses it and fills it with meaning.”Conclusion:The concept of positioning applies to products in the broadest sense. Services, touristdestinations, countries, and even careers can benefit from a well-developed positioning strategythat focuses on a niche that is unoccupied in the mind of the consumer or decision-maker.Positioning: Al Ries & Jack Trout Page 14