‘Positioning’ Came Out Nearly 40 Years Ago. Does It Hold Up?
In their marketing classic Positioning, Al Ries and Jack Trout lay out three distinct “eras” in marketing. First came the product era of the 1950s, when marketing messaging focused on products’ features and usefulness; then came the image era, ushered in by David Ogilvy (and rehashed in Mad Men), when advertising focused more on creativity and holistic reputation.
By 1980, Ries and Trout argued that a third era had arrived: the positioning era.
Effective marketing no longer needed to be slick or inventive — it just needed to be strategic, concise and clear. After all, marketers were by that point addressing consumers in an “overcommunicated society,” who operated in a constant state of sensory overload.
At first, the book was controversial. “Every advertising expert strongly disagreed,” Ries told Built In — and that’s what initially made Positioning famous. Today, though, it’s influential in a more conventional way, popping up on nearly every list of marketing must-reads.
That’s all the more impressive because the marketing landscape today would be unrecognizable to a time traveler from the 1980s. The rise of the internet, smartphones and social media have opened up massive new marketing channels, and new ways of targeting and personalizing ads. Marketing today is a maze of cookies, influencers and email automations.
So — has the positioning era ended?
Not according to Ries, now 93 and helming a strategy firm with his daughter. “Too many companies are still doing all the wrong things,” he said.
Just like the time loop in Groundhog Day, the positioning era won’t end until we learn our lesson.
What is Brand Positioning?
Brand Positioning 101: What’s Held Constant Since 1980?
The more things change, the more they stay the same. At least when it comes to positioning.
Leading Your Product Category Pays
This is why modern VCs often push companies to grow at all costs. Sure, it can mask deal-breaking unit economics — but from a marketing perspective, leading your product category makes you “near invulnerable,” Ries and Trout wrote in Positioning.
At least in the short term.
Often, leading a category has a lot to do with being the first to enter it. You get a head start on the competition, Ries and Trout noted. Since 1980, the rise of Amazon has only persuaded Ries more completely that establishing a leadership position is worth a lot, even when it means losing money.
Amazon got its start as an online book retailer. It sold popular books at steep discounts, and it lost money doing so. To the alarm of some investors, the company didn’t turn a profit until nine years after it was founded.
But it earned something better than a profit, in Ries’ eyes: a leadership position in online bookselling, and in e-commerce more broadly. From there, Amazon was able to expand into a digital general store selling almost everything, as well as an Emmy-winning media empire, and a top cloud computing provider.
If Amazon had started off trying to sell 12 million products, Ries doubts it would have been so successful.
Being a Generalist Rarely Works
Amazon is actually the exception that proves the rule to Ries. Though companies have long loved what Ries and Trout called “line extensions” in Positioning, they tend to corrode the company’s position over time. The more different products a company sells, the fuzzier the meaning of its name to prospective customers.
This was true when Positioning came out — “Levi’s for Feet,” a 1970s shoe line from the renowned denim maker, flopped — and today, too, companies that focus on their specialty tend to triumph. Of the top four United States airlines, Ries noted, the only one that hasn’t gone bankrupt in the 21st century is Southwest, which had focused on one, and only one, product: coach-only flights.
This is one of the elements of positioning Ries sees companies continually getting wrong. They see Amazon as a role model, but to Ries, it’s a freak outlier.
Your Competition Is More Important Than Market Research
This is counterintuitive. You have to give consumers what they want, right?
Well, Ries said, kind of. It’s important to understand how your customers think, so you can send them marketing messages they’ll be receptive to. But it’s equally important to find an open market position you can own — which means keeping an eye on your competition.
Your competition has access to the same market research you do, Ries warns — so over-reliance on research can lead to a weak position.
“When you are customer-oriented, you always end up with a similar product than the market leader,” he said.
Customer Perceptions Matter More Than the Product
If people don’t perceive your product positively, they’re unlikely to have a positive experience with it, Ries noted. Our expectations skew our sensory experiences.
In blind taste tests, for example, people prefer the flavor of Pepsi to Coke. This was the centerpiece of “The Pepsi Challenge,” a 1980s Pepsi TV campaign.
“Let your taste decide,” the closing slogan advised.
Few people really did though. Pepsi didn’t steal Coca-Cola’s leader slot in the cola market, likely because life isn’t a blind taste test. In the real world, primed by Coke’s branding and logo, Coke tastes better because people expect it to.
Customer Perceptions Matter More Than ‘Reality’ — Whatever That Is
In Positioning, Ries and Trout wrote that “the mind accepts only that which matches prior knowledge or experience.”
This is why it’s hard to convince people they’re wrong, and why it’s hard to sell anything totally unfamiliar. It’s much more viable, they argue, to build on what people already know.
“So a company doesn’t start with the product or the product’s advertising,” Ries said — at least, not if it wants to be heard. “A company starts with the mind of the prospect and asks itself, how can I relate my product to what already exists in my prospects’ minds.”
This is why many startups market themselves as the Uber of a non-taxi industry, and why companies are more likely to stand for than against things, and rarely combat misinformation — unless they’re its subject.
“There is no reality,” Ries said. “There are only perceptions in minds.”
Brand Positioning 201: What’s Changed Over the Past 50 Years?
Well, basically everything. But here’s what’s changed with respect to positioning, according to Ries.
People Are More Inundated With Information — and Less Open-Minded — Than Ever
When Ries and Trout wrote Positioning, there were four forms of mass media: the book, the periodical, the radio and TV. Today, there’s a fifth: the internet.
“Every new medium ... just added to the information reaching the average person,” Ries said.
So people today live in a state of even more disorienting sensory overload than they did in 1980. In Ries’ estimation, that means there’s less room for a product with a nuanced, tertiary position.
Each product category has room for a leader, a silver medalist, and riff-raff.
“There are too many categories, too many brands, too much of everything,” he said. “The only way to win the marketing war is to either be first” — like Red Bull — “or be different” — as Monster was, when it came out with a 16-ounce energy drink that contrasted with Red Bull’s tiny cans.
The Monster logo is also a Shrek-green “M,” it’s worth noting. That’s the literal opposite, on the color wheel, of Red Bull’s red bull. Simple positions, and simple contrasts, win the day today.
It’s Easier to Build a Global Brand
The internet has made international communication much easier. Though advertisers’ ability to use consumers’ data varies by location — the European Union, for instance, has the sweeping General Data Protection Regulation, while the U.S. has only the regional California Consumer Privacy Act — it’s unprecedentedly easy to reach a global audience.
(Though it’s still upsettingly easy to embarrass yourself in front of that global audience — say, by translating “Got Milk?” into “Are You Lactating?”)
“Today, the internet allows companies to build global brands in the same way they used to build national brands in the past,” Ries said.
It’s Easier to Send Different Messages to Different Market Segments — but It’s Still Not Advisable
Targeted advertising means a company can attempt to position itself differently to different market segments — potentially crafting separate marketing messages for men and women, or teenagers, adults and retired people.
Ries doesn’t recommend this, though. People talk among themselves about brands and products; in fact, word of mouth (or as Ries calls, it “the pass-along market”) plays a key role in the vast majority of people’s purchases.
“With multiple messages, a brand just confuses the people the brand is trying to reach,” Ries said.
That doesn’t necessarily mean you can’t change phrasing or imagery for different demographics — but the underlying message should be similar across market segments.
PR May Be the New Advertising
“When Jack Trout and I wrote Positioning, the primary tool for reaching prospects was advertising,” Ries said. “But today, there is too much advertising and it’s also too expensive as compared to public relations.”
It’s not that it’s too expensive to buy an ad — plenty of small businesses advertise through Facebook and Google — but media has “fractionalized,” the Ad Contrarian wrote in a recent blog post. “It is not nearly as easy as it once was to reach mass audiences.”
It’s not nearly as cheap, either. Mass events like the Super Bowl persist, but the price of Super Bowl ads has skyrocketed much faster than the rate of inflation.
The positioning era isn’t over — but maybe the advertising era is.