Monday, October 03, 2005

External Product Positioning - Need for Clarity

Positioning is a process of conveying product value to buyers through controlling all outbound communications.

But in recent years, it looks as if positioning has "devolved" into creating documents of vague or exaggerated superlatives that convey nothing to the customer, but confuses the customer in an attempt to trick the customer into buying the product.

Creating a perfect product positioning is not that difficult. I must reiterate that the best product positioning should clearly state how the product will solve specific customer problems - thus create value to the customer.

Note: Services are products too. They are service products. All that I say about product positioning also applies to services.

Why do product positioning?

Various surveys have shown that companies who have completed positioning documents will save 30% to 50% of their selling costs. A clever product positioning will cut the time taken to explain the basic things to customers and increase the possibilities of converting a prospect to a customer.

To explain this in layman's terms, If the company calls itself as an Iron & steel company, their salesmen need not spend time educating customers that they sell steel. And at the same time, customers looking for aluminium will not call up on the sales either. Thus saving time of the salesmen.


Dell Corp, which has a well defined positioning done as a price leader in PC market, will have to spend less time to in convincing a prospect that they deliver low cost - high performing PCs.

Positioning starts Internally

Product positioning must start within the company. Views about the product or service offering from the CEO, CFO, Various VP's, directors, and employees have to be captured and if necessary even altered (via internal training or internal communications) to develop a consistent product positioning statement which all employees can agree upon. (see my earlier blog: "Position before you communicate")

Internal positioning results in a series of well-crafted documents that focus on the buyer and how your solutions improve his life.

The trick to positioning is to understand the value of the product to the buyer. In other words:

  1. What problems can you solve for the buyer?
  2. Do you know the benefits your customers achieve with your products and services?

Do not confuse your customer

The age old adage " If you cannot convince your customer, confuse your customer" does not hold good in B2B markets.

Yet, Much of the writing we see in marketing materials seems obscure due to insincerity. It’s as if the writer wants to fool the reader into thinking the product is more important than it is, or that the product solves problems better than the competitor’s when it doesn’t really. If your product is clearly inferior, you cannot fix it with positioning. A product must be adequate for the market need to succeed; no amount of marketing can overcome it.

For example, Microsoft Office. Microsoft products are not inadequate; they are wonderfully adequate, and backed by strong marketing.

Many organizations create cute or clever taglines that don’t convey meaning. But cute does not work in B2B (and maybe not in B2C either). What does GE expect us to think about their "Innovation at Work" tagline? Can we use GE products to be innovative while working? Are their products only good in the workplace? Or perhaps are they working to be innovative in the future? A Google search for this phrase generates over 5,000,000 pages. How meaningful is the phrase to consumers of GE products?

For what it’s worth, I think that SAP does messaging pretty well: "The Best-Run Businesses Run SAP" and "Innovative Solutions to Innovate Business." The latter phrase results in fewer than 5000 Google hits, all related to SAP.

The bottom line here is: Your positioning tag line must convey a clear message to your customer.

Focus on the Customer to Communicate

In high tech industry, we love to wallow in technical jargon and assume that the reader can connect the specs to their problems. And we hope that our sales people can connect all the dots. This rarely benefits the buyer. A good product positioning and all the marketing materials and sales tools, should explain the value and use specifications to support your promises to the buyer.

Most technology companies use a template—and often a formula—for positioning. The best positioning is put in the context of solving a problem for a specific buyer. That means that there are multiple positioning documents, each conveying product value in terms that resonate with the specific buyer.

Start with the generic problem in the industry and the ideal generic solution (which is basically what your product does). Then provide a short primary message, 25 words that you want the buyer to remember, followed by a more detailed product description, again in terms of the buyer’s need. Finally, describe the three to five features that are relevant to this buyer profile.
It takes many different people within an organization to make a purchasing decision for a complex product. Typically, we see a financial buyer, a technical buyer, and one or more user buyers. Each of these buyers has a different primary goal and sees product information through a different lens. The user buyers want to know how the features will make their daily job different and better. The financial buyer obviously wants to know how the product will save money for the company, while the technical buyer is primarily concerned with how the product will fit into the existing technology environment. Of course, all buyers want to be assured that the product will satisfy the needs of the users of the product.

How can you use one message to communicate to multiple buyers? Obviously you cannot. You will need different articulations of your message that resonate with each buyer type.

In Pragmatic Marketing’s Practical Product ManagementAA seminar, we illustrate the differing viewpoints in positioning with a sales force automation product. A positioning document written for a salesperson should emphasize the features that reduce his paperwork while the document for the sales manager emphasizes the value of centralized territory data.

Company, family, product positioning

One company quadrupled sales of services just by positioning them using the same process. In fact, aren’t services products just like software and hardware? Services should be defined as repeatable offerings that are consistently communicated, sold, and delivered—just like software.
Products and services, as well as families of products, all follow the same method. Within the company’s overall message, we articulate how the product, service, or product family solves problems for each type of buyer.

For example, I assume that Microsoft has positioning documents for Microsoft Word (product), Microsoft Office (product family), and Microsoft Corporation (company). It must be true, as each positioning message is so clearly consistent with the others.

Ideally, a product positioning must amplify the company positioning. It may not matter if you do product or company first, but the product positioning must support the company positioning. Every product should integrate with the company message—or the product should be spun off into a different company.

Positioning has two main benefits. The one obvious to all marketers is the consistency of message. Each marketing and sales piece communicates exactly the same message. A less obvious benefit, but perhaps the more important one, is that the positioning process forces Product Management to identify and spell out clear benefits for each type of buyer.

Remember : Without a clear message, most products are doomed to failure.

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