The book "Positioning" was published in 1981 by masters Al Ries and Jack Trout, and it has been 41 years since then.
Since it was introduced to China in the 1990s, its fame has grown, possibly making it the most well-known book in the branding category, if not the only one, having a huge impact in both the consulting and business worlds.
Of course, no branding book has ever sparked such controversy; believers treat it as a guiding principle, while skeptics are full of doubts.
What exactly is "Positioning"? How should positioning be done correctly? What controversies surround positioning?
Today, I will break down the book "Positioning" into four parts for you:
Part One: What is Positioning?
Part Two: Why Positioning is Necessary?
Part Three: How to Position?
Part Four: Two Major Controversies About Positioning
Part One: Let's first discuss what positioning actually is.
When the term "positioning" is mentioned, many people have their own interpretations, and I believe you certainly have your understanding of positioning as well.
Our interpretations may vary, which is normal; even the book "Positioning" offers several different definitions of positioning.
I will first explain my understanding of positioning and then explore the definitions provided in the book with you.
My understanding of positioning is very simple: it is just four words—"Determine the Position."
Determine what position?
Determine the brand's position in the consumer's mind.
There are two key terms here: one is "brand," and the other is "consumer's mind."
First, the subject of positioning is the brand.
Positioning is for brand positioning, not for product positioning, nor for corporate positioning, and certainly not for various other types of positioning.
Therefore, positioning is applicable to enterprises that want to build a brand. If you don't want to build a brand and just want to do a small business, then positioning is actually unnecessary; having common sense about running a small business is enough.
For example, if you open a steamed bun shop at your doorstep, you actually don't need positioning; you just need to make delicious buns.
But if you already have dozens of steamed bun shops and want to expand to thousands, aiming to build a brand for the national market, then positioning becomes necessary.
Why?
Because opening one steamed bun shop and opening thousands of them are completely different concepts.
When opening a nationwide chain of steamed bun shops, you will face competition not only from other national chain steamed bun shops but also from strong local steamed bun shops and other breakfast shops.
The competitive environment you face will be much more complex, and the complexity of operations will increase many times. At this point, establishing a clear positioning for your steamed bun brand and providing customers with clearer reasons to buy will greatly help improve brand competitiveness and operational efficiency!
Secondly, the destination of positioning is the consumer's mind.
Positioning is about creating a clear perception of your brand in the consumer's mind. This perception provides customers with a clear reason to purchase. When a brand establishes this perception in the consumer's mind, it can gain priority in the consumer's choices.
For example, the positioning established by Head & Shoulders in the consumer's mind is "dandruff removal," while the positioning established by Pantene is "smoothness." Customers choose Head & Shoulders and Pantene based on these purchasing reasons.
Having shared my understanding, let's look at the definitions of positioning in the original book:
First, positioning is a new method of communication.
In the introduction, the author writes, "This book has written a new method of communication, called 'positioning.'"
This sentence tells us that when positioning was first invented, it was a set of methods for advertising and promotion.
Secondly, positioning is about making you stand out in the minds of potential customers.
Also in the introduction, the author provides a definition of positioning: "Positioning is how to make you stand out in the minds of potential customers."
Combining this sentence with the earlier statement that "positioning is a new method of communication" leads to a clearer definition:
"Positioning is a new method of communication that makes you stand out in the minds of potential customers."
Is this definition still not easy to understand? Can it be simplified even further?
No problem, the author provides an extremely simplified definition in just six words:
"One word occupies the mind."
How to understand this? A few examples will clarify.
For instance, Volvo uses the word "safety," BMW uses "driving," FedEx uses "overnight delivery," and Colgate uses "cavity protection." Wanglaoji is "afraid of getting heat, drink Wanglaoji," and Hanting is "love cleanliness, stay at Hanting."
Finding this word or phrase for your brand is the process of positioning, but finding the positioning is just the beginning; finding the positioning does not mean occupying the positioning.
Once the positioning is found, a lot of supporting work is needed to occupy it. Only by embedding this word into the consumer's mind—so that when consumers see a certain word, they think of your brand, and when they see your brand, they think of a certain word—can the brand's positioning be established.
The best effect after establishing positioning is that the brand becomes synonymous with a certain type of product.
For example, when air conditioning is mentioned, you first think of Gree. When high-end sauce-flavored liquor is mentioned, you first think of Moutai. When herbal tea is mentioned, you first think of Wanglaoji.
Using "one word or phrase occupies the consumer's mind," you can establish brand positioning.
This seems too simple, too easy!
Saying it's simple is correct; it is indeed very simple!
But simple does not mean easy! Positioning is a simple yet not easy task!
It's simple because you only need to find the most suitable word for your brand.
It's not easy because it's hard to find a word that is both effective and not already occupied. Even if you find it, you still need to do a lot of operational work to get it right before you can truly establish the positioning.
What if I don't lock my brand into one word?
I have many products under my brand, and each product has many selling points. Can I use several words?
The answer is: No!
Why?
This leads us to understand why brands need positioning.
Let's move to Part Two: Why do brands need positioning?
Please take a minute to think about why brands need positioning.
......
Alright, I will reveal the answer: because:
Positioning is a good way to break free from fierce competition and homogeneity.
The birth of positioning theory is due to increasingly fierce competition and severe product homogeneity. People face a vast array of similar products and feel lost, unsure of how to choose.
Positioning is a methodology specifically designed to establish brands in a fiercely competitive environment. If the market competition environment is very relaxed, positioning is actually unnecessary.
But the reality is that we are already in a competitive society.
Almost every industry faces not only domestic competitors but also many foreign peers eyeing them!
Almost every industry is engulfed in flames of war, with smoke everywhere!
The author discusses the development process of the American market from relaxed competition, where it was easy to make money, to fierce competition, where it is hard to make money. To make it easier to understand, let's illustrate it with the Chinese market.
In the early 1980s and early 1990s, when China had just reformed and opened up, there was a material shortage. Almost any product that could be produced had no worries about sales.
Some products, like color TVs, refrigerators, watches, and bicycles, were not even available for purchase just because you had money; you even needed a unit's approval.
But this lack of competition and extremely relaxed market environment quickly came to an end. From the mid-1990s to 2000, and into the 2010s, market competition has become increasingly fierce, and many industries are now experiencing severe internal competition!
As competition intensifies, marketing and promotional methods have also been upgraded. Initially, not advertising did not affect sales.
Later, as the saying goes, "When the advertisement rings, gold comes pouring in," many brands became famous on CCTV. As more brands began to advertise, the effectiveness of advertisements actually decreased.
With the market competition becoming more brutal, three explosions occurred, making the emergence of positioning inevitable:
The first is the product explosion.
We have long transitioned from a society of material shortage to one of overcapacity. The variety of goods in the market and the number of manufacturers for each type far exceed what most people can imagine.
Open the all-powerful Taobao, click through the category navigation bar, and you will find the richness of product categories, the detailed classification of each category, and the vast number of SKUs in each subcategory, which is truly astonishing!
It is no exaggeration to say that now there are products that you cannot think of, but none that cannot be produced.
Moreover, a large number of new products emerge in the market every day. The total number of SKUs on Taobao has exceeded hundreds of millions, and it continues to expand daily. Thus, Taobao is called the all-powerful Taobao.
The second is the media explosion.
Not only products are exploding, but also media. In the 1980s and 1990s, media was very concentrated, mainly consisting of "television, radio, newspapers, and magazines."
The internal classification of these four major media was also limited. Now, not only has the variety of media increased, but the four major media have long since become traditional media.
Now, various outdoor media, elevator media, internet media, and self-media are emerging one after another. Even the backpacks of ride-hailing drivers are designed as large electronic advertising screens.
Now, any carrier that can convey information has already become media or is on the path to becoming media.
The third is the advertising explosion.
Due to the product explosion, there are more and more products that need to be promoted.
Due to the media explosion, there are enough media resources available for disseminating advertising information.
This has led to an advertising explosion. Now, a working person's daily life looks like this:
In the morning, after the alarm clock wakes them up, the smart speaker starts playing the news, interspersed with advertisements.
Picking up toothpaste to brush their teeth, the toothpaste packaging has advertisements, the toothbrush has the brand name printed on it, and the breakfast milk and oatmeal packaging are advertisements. The cup used for drinking milk has advertisements printed on it.
When going out, the elevator has print and video advertisements. After getting off the elevator and walking out of the community, they see advertisements for interest classes on the community bulletin board.
While waiting for the bus, there are large advertisements at the bus stop, and the bus itself is covered in advertisements. Once on the bus, the handrails and the backs of the seats have advertisements.
Sitting on the bus, looking at news on their phone, the app opens with a splash advertisement. After scrolling through a few news articles, they see information flow advertisements, and when they open a piece that looks like news, they find it is a sponsored article from a brand.
Then they switch to a real news article and see brand advertisements at the bottom. Once they get to the office and open their computer, pop-up advertisements appear on the desktop...
Think about it, isn't it like this?
We live in a society where advertisements are everywhere and infiltrate every aspect of life.
The product explosion, media explosion, and advertising explosion have what consequences?
The product explosion leads to too many choices.
The media explosion and advertising explosion lead to information overload.
Too many choices and information overload ultimately result in choice difficulty.
When we shop, most of the time, it is not that there are no options, but that we are faced with too many choices and do not know which one to choose.
We are no longer in an era where needs are unmet.
Instead, we are in an era of helping people make choices.
I wonder if you have ever felt this way: as soon as you enter a large supermarket, you feel dazed.
I have felt this way for a long time. Upon entering, it feels like many products are rushing at you, each one acting like a silent salesperson, desperately promoting itself.
When buying something, it often involves comparing multiple brands, making it hard to determine which is better.
If at this moment, you find a brand you have heard of, and its selling point is simple, easy to understand, and can resonate with you, you will choose it and feel relieved, finally completing the difficult task of shopping.
This is the choice difficulty caused by too many choices and information overload. This means:
"Having no choice is not a good thing. Having too many choices is also not a good thing."
Why is having too many choices not a good thing? Why do people experience choice difficulty?
Because the capacity of the human mind is limited.
According to the research of Harvard psychologist George A. Miller, the average person cannot process more than seven units at the same time.
This is why the things that must be remembered usually consist of only seven units. Seven-digit phone numbers, the Seven Wonders of the World, seven-card poker games, and Snow White and the Seven Dwarfs, etc.
Think about it, how many smartphone brands can you name? How many thermos brands? How many computer brands? How many toothpaste brands?...
We can remember many different types of products, but very few brands from any category can be remembered beyond seven.
Among the brands you can remember, how many characteristics can you name for each?
Actually very few. Not only are there few brands we can remember, but our understanding of each brand is also limited.
The information about products in the market is infinite, while the capacity of the human mind is limited; this is an eternal contradiction.
How to resolve this contradiction?
The answer is: simplify information as much as possible.
Simplify the brand's information into one word or one sentence, and implant this word or sentence into the consumer's mind.
Positioning is the method of simplifying brand information. The proposition of positioning is to simplify brand information to one word or one sentence, as simple, direct, and sharp as a nail, breaking through the barrier of massive information and embedding the brand into the consumer's mind.
In the game of brand communication, the more you want, the less you get; the less you give, the more you receive. The rules of the positioning game are:
"Simplicity conquers complexity; less is more."
How to use positioning to achieve the effect of less is more?
You need to master the basic methods of positioning.
Let's move to Part Three: How to Position a Brand?
How should positioning be done?
We need to return to the simplest definition of positioning, which is "one word occupies the mind."
What you need to do is find the most advantageous word or phrase for the brand and occupy it.
How to find and occupy it? Just follow these three steps:
First, find the right empty space;
Second, solidify the positioning;
Third, persist and deepen;
Let's first understand how to find the right empty space.
How to find the empty space? The book provides the following suggestions:
1. Become the first;
The leadership position of a brand is the most effective differentiation method. People believe that only the best products can become the first. Because you are the first, your product should be good, even though that is not necessarily the case.
If a certain category rarely advertises, consumers may not even know who the industry leader is.
In that case, the leader of that category should quickly advertise to convey their leadership status, which can further reinforce their leadership position and widen the gap with other peers.
For example, in the red date industry, there are many companies, and the brand awareness in the industry was previously very low, with no brands advertising.
Later, the largest company in the industry, Haohuanxi, promoted its leadership status through advertising, quickly gaining recognition and establishing itself as the leading brand in the market, widening the gap with its peers.
You might say that becoming the first is great, but there can only be one first in an industry. If I am not the first and still have a long way to go, I can't use this method.
In fact, there are many dimensions to being first; it doesn't have to be about scale. If you are not first in one dimension, you might be first in another. If you are not the first here, then find another place to become the first.
For example, if sales are not first, perhaps volume is first. If overall is not first, online might be first. If not first across the entire network, a specific platform might be first. If not first for the whole year, you might be first on 618 or Double Eleven. If not first nationally, you might be first regionally.
Including brand growth rate, factory capacity, technology, history, etc., there are many dimensions to find a basis for becoming the first.
Here are two examples:
An advertisement for a pet medicine brand states, "Continuous growth of over 50% for seven consecutive years." What message does this convey?
It conveys, "I am the fastest-growing pet medicine brand; I am number one in growth," making distributors eager to sell this rapidly rising brand.
An integrated stove brand promotes itself as "the number one integrated stove brand on Tmall." Although it may not rank in the top three in the entire industry, being number one on Tmall feels impressive!
2. Become the second.
If there is no possibility of becoming the first, then become the second; being second is also good and can occupy a considerable market share.
The book introduces a classic case of the second: the American rental car brand Avis, which states in its advertisements:
"Avis is only second in the rental car industry; why choose us? Because we try harder."
Avis had been losing money for 13 consecutive years, but since it acknowledged its second-place ranking, it began to turn a profit.
Why? Because people previously had no idea it could even rank second.
In its first year, Avis made $1.2 million, $2.6 million in the second year, and $5 million in the third year. Eventually, the company was sold at a high price to the Fortune 500 ITT Group.
This method of positioning as the second is applicable when the second position in the industry has not yet been occupied, and many domestic brands have used this approach.
For example, the first brand in China's dairy industry was Yili, and no one knew who the second brand was! Mengniu seized the opportunity to promote itself as "Mengniu strives to be the second dairy brand in Inner Mongolia," quickly occupying the second position.
A similar case occurred in the sauce liquor industry, where Moutai is recognized as the first brand.
But who is the second brand? There are many opinions, and no conclusion.
Langjiu took the opportunity to promote itself as "one of the two major sauce liquor brands in China," and the "second strategy" brought Langjiu rapid growth.
The above two examples use a method called associative positioning, which is a common approach for second brands.
Another way to become a second brand is through oppositional positioning, which means taking a stance opposite to the positioning occupied by the first brand.
For example, the strongest luxury car brand is Mercedes-Benz, which emphasizes comfort, while BMW, standing in opposition, emphasizes driving, positioning itself as "the ultimate driving machine." There is a saying among the public: "Ride in a Mercedes, drive a BMW."
Coca-Cola is the inventor of cola and the most authentic cola. Pepsi-Cola stands in opposition to Coca-Cola, emphasizing itself as "the cola for young people," positioning Coca-Cola as "the cola for older people."
3. Price positioning;
Price is also a powerful positioning tool. The market is stratified, and different groups have different purchasing power for similar products. Different price ranges can meet the needs of different groups.
If you find a price range in a category that is empty, it may be a positioning opportunity. Low price is a positioning opportunity, fair price is a positioning opportunity, and high price is also a positioning opportunity.
For example, when the Chinese smartphone market was just emerging, almost all smartphone brands were selling at high prices, with international brands like Apple and Samsung priced above four or five thousand yuan. Chinese brands like HTC, VIVO, and OPPO had prices starting at over 3000 yuan.
At this time, affordable and low-cost smartphones represented a huge positioning opportunity.
As we all know, Xiaomi quickly rose by offering high-spec smartphones at a fair price of 1999 yuan through a complete internet strategy. With its price advantage, Xiaomi smartphones rapidly gained popularity.
Later, Xiaomi's Redmi smartphones took the lead in capturing the low-cost smartphone market at a few hundred yuan.
Not only low prices can be competitive; if the high-end market is empty, it is also a positioning opportunity.
If low prices follow the cost-performance route, then high prices follow the value route. You can sell products at very high prices, but you must provide value that matches that price. This value includes not only product-level aspects but also brand-level aspects.
I once had a client who produced kitchen knives and was among the top manufacturers in the country.
Many knives from brands like Zwilling and Fissler were made by them, and these big-name knives could sell for thousands of yuan per set. However, their own brand's knives, of the same quality, could only sell for two to three hundred yuan per set.
They felt it was very unfair; why should their knives, which are of the same quality as Zwilling's, be priced so much lower just because Zwilling has a brand label? Their knives are made by them!
The reason is actually very simple: Zwilling provides higher value, which includes not only product value but also brand value.
This brand value comes from Zwilling's history of over a hundred years, countless advertising expenses, and opening stores in the most upscale malls, all of which have shaped its image over a long time.
It can meet the demands of the high-end market and sell products of the same quality at ten times the price. Moreover, customers are very willing to pay!
In addition to long-established international brands like Zwilling, many new brands can also find high-price positioning opportunities. Can you think of any examples around you?
For instance, in the ice cream industry, Zhongxuegao; in the spicy strips industry, Weilong; in the new energy vehicle industry, NIO...
4. Demographic positioning.
Brands can position themselves to serve a specific demographic.
For example, positioning can be based on gender, serving only women or men.
In the past American cigarette market, many women smoked, and all cigarette brands were positioned to appeal to both genders.
Marlboro was the first to focus on the male market, establishing a cowboy image, which is very masculine.
Another cigarette brand, Virginia Slims, was the first to position itself as a cigarette specifically for women, achieving success.
Positioning can also be based on age, meaning serving only a certain age group, such as children, middle-aged people, or the elderly.
For example, in the shoe market, there had never been a brand specifically for elderly shoes. Zuli Jian found this empty space and positioned itself as "professional elderly shoes," achieving billions in just a few years.
Positioning can also cater to specific needs of certain groups, meeting the personalized demands of specific demographics.
For example, a beer brand positions itself as a brand for heavy beer drinkers, a speaker brand positions itself as an entry-level speaker brand, and a yoga training brand positions itself as "focused on beginner yogis."
The four types of positioning mentioned above are the key methods discussed in the book "Positioning." In practice, there are far more methods than just these four.
Trout later wrote another book, "Differentiate or Die," which details several other positioning methods, including "owning characteristics, classic, favored, market expertise, manufacturing methods, new generation, pioneer, and best-seller," each with many application scenarios.
If you are interested, you can look it up; I won't elaborate further here.
Once you find the right empty space, the next step is to solidify the positioning.
If I have found an empty space and distilled this opportunity into a word or a sentence,
but if I do nothing afterward, then everything is equal to zero!
The positioning keyword you distilled will not automatically take effect; you must do a lot of supporting work consistent with the positioning to turn it from a slogan into a strategy. This supporting work is referred to as "operational matching" in the terminology of positioning.
Thus, a complete strategic positioning can be expressed with a formula:
Strategic Positioning = Brand Positioning * Operational Matching
Brand positioning is a word or a sentence, while operational matching is a complete set of operational actions designed around that word or sentence. It is precisely due to the existence of this set of actions that positioning transforms from a communication slogan into a corporate strategy.
For example: Southwest Airlines, as the most profitable airline in the United States, has the positioning of "low-cost and convenient." If it merely printed this phrase on posters, the miracle of Southwest Airlines making profits for decades would not occur!
The key to this miracle is the many operational actions designed around the words "cheap and convenient," which released the power of positioning and created a strong attraction for customers.
How does Southwest Airlines solidify the positioning of "low-cost and convenient"? They take the following major operational actions:
- Low ticket prices;
- Frequent and reliable flights;
- Limited passenger services;
- Higher aircraft utilization rates;
- Efficient ground service personnel;
- Short, fixed routes between medium-sized cities and secondary airports;
Each key action has several supporting sub-actions. Each sub-action supports the higher-level key action, and all actions coordinate and align with each other.
For example:
Since it is a low-cost airline, the ticket prices must be low. If ticket prices are low, then operational costs must also be low.
To keep costs low, passenger service items must be reduced, such as not providing meals, no assigned seating, and no luggage transfer.
There are no transfer services with other airlines, and tickets are sold directly to customers via automatic vending machines, greatly reducing cooperation with travel agencies and lowering intermediary costs.
The operational activities that Southwest Airlines has undertaken around the "low-cost and convenient" positioning are shown in the diagram below:
This is the process of solidifying positioning through operational matching after finding the right empty space!
This process is complicated, arduous, and full of challenges!
However, once the entire operational matching system is established, it can unleash tremendous power!
Southwest Airlines became the most profitable airline in the United States thanks to this unique positioning and operational system!
More importantly, this positioning of Southwest Airlines is difficult for other airlines to imitate because it is a tightly interconnected system that enhances each component!
If you try to imitate them, merely copying one or two links is completely useless.
You must imitate their entire system, but the likelihood of successfully imitating the entire system is almost zero.
Assuming this system consists of ten links, it is impossible for peers to replicate every operational action to 100%. If competitors are highly skilled and can replicate each link to 90%, multiplying ten 0.9s results in 0.35.
Therefore, once Southwest Airlines' strategic positioning is established, it becomes a deep moat. This moat blocks all other airlines, securing Southwest Airlines' wealth for decades.
Not only Southwest Airlines, but many successful brands in China that have implemented strategic positioning have also built solid operational matching systems, forming a unique combination of business activities. This operational matching system is a wide and deep moat that keeps competitors far away.
Their names include Jiangxiaobai, Wanglaoji, Great Wall Motors, Guazi used cars, and Boss kitchen hoods...
Competitors find it difficult to imitate them, lamenting their fate!
Once the first and second steps are done, only the simplest yet most challenging third step remains: "Persist and Deepen."
Why must we persist and deepen? There are three reasons:
1. The release of positioning power takes time;
Some positioning, once proposed, can produce immediate effects with slight changes in operational activities. For example, tweaking an advertisement or adjusting packaging can quickly boost sales.
For instance, Wanglaoji's slogan changed from "Healthy family, always together" to "Afraid of getting heat, drink Wanglaoji," and sales in hot pot and barbecue restaurants skyrocketed!
However, some positioning requires a longer time to demonstrate its power; the longer the time, the stronger the power!
For example, the implementation and effectiveness of Southwest Airlines' "low-cost and convenient" positioning require significant investment and a long time to achieve. In the early stages, for a considerable period, it not only did not make a profit but also incurred losses.
If there is a lack of strategic determination during this time and one does not persist, it could lead to abandoning the effort and wasting all previous work!
2. Positioning is not a one-time effort; it requires continuous improvement and reinforcement;
It is difficult to conquer a territory, but it is also not easy to maintain it!
In the market, there are both visible strong enemies and potential incursions from cross-industry giants. They may launch attacks on the positioning territory you occupy, eager to tear you apart!
Just like when Head & Shoulders occupied the positioning of anti-dandruff shampoo.
Seeing the large cake of anti-dandruff shampoo, brands like Curel, Kangwang, and Clear launched attacks on this territory.
If Head & Shoulders did not adhere to its positioning, continuously improve its products, and increase advertising and market investment, it might have long been torn apart by competitors.
Boss kitchen hoods, after finding the positioning of "strong suction," have continuously improved and upgraded to the "fifth generation."
Mingmen Lock Industry, after finding the positioning of "silent," has continuously improved and upgraded to the "fifth generation."
Jianyi, after finding the positioning of "marble tiles," has continuously improved and upgraded to the ninth generation.
Continuous improvement is not only reflected in products. All operational matching can be continuously improved and strengthened.
Perfection is endless; every task can be done better than the last!
Every small improvement reinforces and strengthens the positioning!
3. Growth slowdowns are inevitable; positioning should not be easily changed.
After the correct implementation of positioning, there will be a "positioning dividend period," where there will be a period of rapid, even explosive growth, which is a natural phenomenon following the filling of market gaps.
However, if we extend the timeline, we will find that the explosive growth of the brand is only a short-term phenomenon. After rapid growth, a slowdown is inevitable, leading to a long period of stable growth, or even slow growth or stagnation.
Do not expect continuous high growth; this is unrealistic and does not conform to natural laws!
Just like a small sapling grows into a small tree quickly, but a small tree growing into a towering tree takes a long time, growing only a little each year! The growth of a small tree into a big tree relies on time, not speed! Trees that grow too fast cannot withstand the wind and rain!
When growth slows down, do not easily change the positioning; the problem may not lie in the positioning itself, but rather in the methods used to promote growth, or it may simply be due to the increased scale, entering a period of slow growth! At this time, if you easily change the positioning, it may lead to losses!
Next, we move to the final section:
Part Four: Two Major Controversies Surrounding Positioning
There is a saying that fame brings controversy; when a field of study becomes popular, there will also be many controversies.
There are several controversies surrounding positioning, mainly focusing on two points: one is about brand extension, and the other is about being solely competition-oriented.
First, positioning does not prohibit brand extension; what it opposes is blind brand extension.
Positioning does not support brand extension, but it does not completely prohibit it. The original words in the book on positioning state, "Brand extension is not a mistake, but a trap."
Positioning advocates that every brand should have its main channel and focus on its main business. Most brands should become expert brands, turning their main business into a flourishing tree.
So what if a significant new opportunity arises?
The answer is: it is best to use a new brand to capture the new opportunity.
If you see an opportunity and extend your existing brand to it, although it may benefit sales in the short term, over time, the more brand extensions there are, the more diluted the brand's positioning in the consumer's mind will become, weakening the brand's status.
Positioning believes that the effects of brand extension manifest in three stages:
The first stage is great success and breakthrough;
This occurs when a new market opportunity is discovered, and the existing brand is extended to it, resulting in significant growth due to the brand's recognition advantage.
The second stage is being blinded by victory;
This involves further extending the brand to more products, leading to increasingly blurred brand recognition.
The third stage is a complete retreat;
The combined profits of all types of products under the brand do not surpass the profits of strong expert brands that focus on a single type of product.
This phenomenon is particularly evident in China's home appliance industry, taking the three giants—Gree, Haier, and Midea—as examples.
Gree specializes in air conditioning, while Haier and Midea do everything. Although Haier and Midea have higher revenues than Gree, their profit margins are far lower than Gree's.
Haier's chairman, Zhang Ruimin, once lamented to the media, "Haier's profits are as thin as blades!"
Midea and Haier have produced so many different types of products that their brand extensions have become excessive. In contrast, Gree, which focuses solely on air conditioning, is more profitable. Midea and Haier have fallen into the trap of brand extension.
Gree's brand focuses on air conditioning, but that does not mean Gree Group can only make air conditioners and cannot enter other home appliance categories or industries; it just shouldn't use the Gree brand.
Using other new brands or acquired brands can also open up second and third growth curves without damaging Gree's strong position in the air conditioning market.
Now let's discuss the second controversy: Is positioning solely competition-oriented?
The answer is: Not at all! Positioning is actually "customer + competition" dual-oriented.
Positioning is primarily customer-oriented.
The consumer's mind is what positioning emphasizes the most. The book "Positioning" states:
"The solution to the problem lies in the mind of potential customers. You should focus on the perceptions of potential customers, not the realities of the product."
It also states:
"To find a unique position, you must abandon traditional logical thinking. Traditional logic believes you should find the positioning concept within yourself or your product. This is incorrect. What you must do is search in the minds of potential customers.
You cannot find the 'non-cola' positioning concept in a 7-Up can; instead, you will find it in the minds of people who drink cola."
Another very key statement is:
"In any positioning project, if you can leverage a deeply rooted concept from the start, you have taken a significant step in establishing your position."
This statement is extremely important and is a core principle of positioning. Many domestic brands have fully utilized this point:
For example, Six Walnuts.
What is the slogan for Six Walnuts?
"Drink Six Walnuts often to boost brain power." What connection is there between brain function and walnuts? None! Do walnuts have strong brain-boosting effects? No!
However, in China, especially in the north, it is widely believed that eating walnuts can enhance brain function. The belief that walnuts boost brain function is not a factual reality but a fact in the consumer's mind.
At this time, perception > fact, and Six Walnuts' positioning fully applies the principle of "leveraging a deeply rooted concept."
There are many such examples; can you think of others?
Secondly, positioning is competition-oriented.
The book on positioning states:
"Too many companies, when launching marketing and advertising plans, ignore the positions of their competitors. They advertise as if in a vacuum, and once they realize their efforts are in vain, they feel disappointed."
Positioning emphasizes that when establishing positioning, one must consider the position of competitors in the minds of customers. You cannot charge headlong into a position that others have already occupied.
You need to understand the competitive landscape, know the positioning that major competitors are focusing on, and then form a differentiated positioning to engage in dislocated competition rather than homogeneous competition.
For example, "dandruff removal" is a great positioning in the shampoo market, and the market for anti-dandruff shampoos is large, but the broad concept of "dandruff removal" has already been occupied by Head & Shoulders.
At this time, as a new brand entering the market, you cannot ignore this reality and directly attack the "dandruff removal" concept.
If you do, it would be like hitting a stone with an egg; Head & Shoulders is too strong in this concept, and Procter & Gamble has enough money—no one can directly attack Head & Shoulders.
At this time, if you want to enter the anti-dandruff shampoo market, you must create a differentiated positioning from Head & Shoulders.
For example, you could position yourself as "medicated dandruff removal," "men's dandruff removal," or "long-lasting dandruff removal," among other positioning concepts.
When formulating these positioning concepts, you must consider Head & Shoulders' strong position in the anti-dandruff market; ignoring the existence of this competitor will undoubtedly lead to a disastrous defeat.
Alright, having discussed this, we have covered most of the content of this book.
Finally, let me summarize today's content. I have interpreted the book "Positioning" for you in four parts.
Part One: What is Positioning?
Positioning is about determining the position, specifically the brand's position in the consumer's mind.
The subject of positioning is the brand, and the destination is the consumer's mind.
The best positioning is to achieve "one word occupies the mind," becoming a synonym for the category.
Part Two: Why is Positioning Necessary?
Because the product explosion, media explosion, and advertising explosion lead to information overload, while the capacity of the human mind is limited.
Infinite information and limited minds create a contradiction, leading to choice difficulty.
By simplifying the brand's appeal into one word or one sentence, we can conquer complexity and potentially enter the consumer's mind.
Part Three introduced the steps and common methods of positioning.
Finding and occupying a positioning requires three steps:
First, find the right empty space; second, solidify the positioning; third, persist and deepen.
Methods for finding empty space include "becoming the first, becoming the second, price positioning, and demographic positioning." After finding the positioning, a tightly interconnected operational matching system must be established to solidify it, and continuous improvement through persistence will reinforce and strengthen the positioning.
In the final part, I introduced two controversies surrounding positioning.
First, positioning does not prohibit brand extension but opposes blind brand extension.
Secondly, positioning is not solely competition-oriented but is a dual orientation of "customer + competition."
Brand positioning is strategic, so it is expensive!
The fees charged by professional positioning consulting companies are, of course, also high!
Fees in the millions are common, and the top-tier companies like Trout and Ries charge over ten million!
They are known for having the highest fees in China's marketing consulting industry!
But the basic methods of positioning consist of four categories, twelve types, and over a hundred strategies.
Mastering these means grasping the fundamentals of positioning.
Yes, just the fundamentals! Because, in practice, positioning is much more complex than what is written on paper!
What are the four categories and twelve types of brand positioning methods?
1. Physical Characteristics Positioning
Including "owning characteristics, manufacturing methods, new generation" (3 types).
2. Market Characteristics Positioning
Including "pioneers, leadership status, best-sellers, classics, market expertise, favored" (6 types).
3. Leveraging Cognitive Positioning
Including "associative big brands and oppositional positioning" (2 types).
4. Spiritual Ideology Positioning
Finding concepts that resonate emotionally with the audience from an emotional perspective.
These are the practical strategies for the four categories and twelve types of brand positioning!