seems to be all the rage these days with declining sales and profit
margins. However, the influx of new and available products, some actually
very interesting and useful, has not abated.
To jump start sales, many people are asking me about branding. But their
question should be positioning. Often what goes wrong with marketing
campaigns is the underlying strategy. Too many VPs of marketing and their
product managers choose a branding campaign when they cannot even
articulate a position.
The pursuit of brand is expensive, time consuming and is designed to
elicit an emotional reaction from the audience. It generally works best
for commodity-type products where there is little distinction among the
competition. Positioning is based on a demonstration of real value, can be
done in a much shorter time frame (months rather than years), and
consequently is significantly less expensive. Most importantly, for many
industries and companies, positioning is the best strategy for improving
sales and market share, not branding.
The real problem, however, is that many people do not know the difference
between the two. Instead of pursuing brand, or ubiquity (everyone knows
you), it is often more appropriate to establish positioning, or value
(everyone wants you). When market share is the objective, the fastest and
least expensive marketing strategy is positioning. The building of a brand
not only takes more time and money than originally budgeted, but can be
difficult to measure, as brand does not always show up in the form of
Many of the dot-coms fell into this trap. Basically, they failed to
communicate a value proposition. People knew who they were but did not
know why they needed them. They thought the road to market share was paved
by brand creation. They succeeded in generating Web hits but not sales.
Positioning creates demand for a product. Brand works best when leveraging
this already established need or demand for continued sales.
Positioning helps create brand but brand does not always or necessarily
contribute to position. Some companies have achieved brand in a short time
but are still suffering from an unclear positioning. This is a situation
that currently affects Yahoo! It could be argued that Yahoo! has brand but
no position. Is Yahoo! a search engine? A portal? An online auction site ?
A content aggregator? Online store? All of the above? What is the value
proposition to its customers? What is the company's position vis a vis its
In every one of these categories, Yahoo! has formidable competition. What
is least understood about building brand is the amount of time required.
Amazon did it in a relatively short time but anyone can articulate its
reason for existence--online storefront. Hence, the call to action is
visit the site for eventual purchase of a particular product. People go
there expecting to spend money and this in turn creates market share.
So before creating brand, establish a position. Define positioning as that
desirable place in the customer's mind where he not only recognizes the
product but can also recite the attributes of the product or service being
offered. Effective positioning makes the customer a part of the sales team
while reinforcing your positioning efforts.
Positioning is dynamic and fluid. Yesterday's unique position is today's
commodity provider. Useful positioning statements should describe who the
company is AND who it wants to be.
Gelphman is chair of the Marketing Work Group for
MoCA - "The Standard for Home Entertainment Networking"
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