Thursday, October 20, 2005

Retention of top managers

“There is no doubt that when we lose a key manager the whole organization suffers. ...”

In last few months we lost a couple of key top managers and we really hurt ourselves. This forced me to learn & write about how to retain the best managerial talent.

Many organizations have a great deal of experience in dealing with turnover in the top ranks of employee. In some cases, losing personnel might be described as simply a cost of doing business or as something that happens with few, if any, consequences. For small organizations employee turnover produce devastating results, damaging both organizational performance as well as its operating capabilities.

Industry experts suggest that organizations should manage top management personnel turnover and retention as a market-driven process because of the financial and organizational costs associated with losing people. A recent industry study estimates that the minimal replacement cost of an employee is 1 to 2.5 times their annual salary. At the same time, turnover can have a damaging effect on project completions, morale, teamwork, workloads, group stress levels, and a host of intangibles.

In recent years, a wealth of research has emerged that has identified the primary causes of why employees leave their employers. These factors fall into five broad categories:

  • Poor quality of work life

  • Compensation below market level

  • Lack of training and development opportunities

  • Bad management

  • Inability to advance one’s career

Many organizations have put together systematic approaches to address these concerns in an attempt to reduce employee turnover. Little is known, however, about the reasons why top managers leave their organizations.

According to a survey by Mckinsey, the industry turnover rates for management personnel can range between 12 and 38 percent annually. Most people will agree that top IT manager can have a profound influence on both functional and organizational performance.

To further illustrate the point, a vice-president with a Fortune 500 organization stated that, “When you lose your top leadership, the cost is always larger than it initially appears because you are getting hit on both the system side and the people side of your operation. ...”
The leadership is the key to creating competitive advantages.” Thus, it is critically important
for any organization concerned with retaining its top-flight management talent to focus on the key reasons for managerial turnover and retention.


Survey was done by a McKinsey to identify factors related to employee turnover and retention. Study participants were asked to answer each of the following open-ended questions as part of the survey:

  1. Have you considered leaving your current employer in the past 18 months?

  2. What factors are most likely to cause you to leave your current employer?

  3. What happens when turnover is high among managers?

  4. What factors cause you to stay at your current organization?

  5. What level of impact do managers have on the overall performance of their staff?

The responses to each of these questions were summarized using frequency counts and are
presented in the next section. The remainder of this article discusses these findings and their
implications with respect to the issues of managerial turnover and retention and organizational

Survey Results

A starting point for this discussion is to determine the extent to which managers in this study would consider leaving their current employer. A willingness to leave an organization is the seed that may eventually grow into the actual act of organizational departure. Approximately two thirds (68 %) of managers in this study stated that they had seriously considered leaving their current employer in the previous 18 months. This sizable proportion should cause concern to any organization that is increasingly reliant on managers for both operational and, consequently, organizational success.

Another important question asked managers to identify the factors that would most likely cause them to consider leaving their current employers. Responses to this open-ended question are:

  1. Lack of resources/staff (46%)

  2. A better job opportunity/salary (42%)

  3. A bad boss (39%)

  4. Too much stress/unrealistic performance expectations (37%)

  5. Lack of advancement opportunities (35%)

  6. A negative organizational culture/feeling unappreciated (30%)

  7. Lack of teamwork and cooperation (27%)

  8. Professional stagnation/lack of development (26%)

  9. An inability to take time off/get away from work (22%)

  10. Politics and infighting (19%)

A key finding of this research is that the factors most likely to cause a manager to leave his or
her enterprise involve organizational rather than operational issues. Almost one half (46 %) of the managers considered leaving their current employer due to a shortage of resources and staff needed to get the job done. A better job opportunity or salary (42 %) or a bad boss (39%) can also make leaving seem quite attractive. These two factors result in a manager experiencing both a “pull” and a “push” to leave the organization. Approximately one third of managers find themselves “under an avalanche” of ongoing stress and unrealistic performance demands (37%), have a pronounced lack of advancement opportunities (35 %), and feel unappreciated in a negative organizational culture (30 %). All these factors significantly diminish a manager’s willingness to stick with their current employer and should cause employers to consider an assessment of their work environment.

Organizations should also take note of other factors that cause top managers to leave their current employer. Among these are lack of teamwork and cooperation (27 %), professional stagnation and a lack of development opportunities (26 %), an inability to feel that they can take time off or get away from work (22 %), and too much politics and infighting (19 %). These factors have little to do with the actual work of the manager but everything to do with the organizational culture and politics in which the work is being performed. This is a very important finding for those organizations and leaders who have a serious problem with turnover in the management ranks.

The next research question addresses the consequences of top management turnover; i.e., what happens when turnover is high among top managers?

  1. Greater difficulty in achieving performance goals (34%)

  2. Communication breakdowns (30%)

  3. Loss of focus and direction (28%)

  4. An increase in unresolved problems (27%)

  5. Morale/motivational problems among staff (22%)

  6. Increased workload for others/stress (21%)

  7. Loss of teamwork and cooperation (19%)

  8. Additional turnover among staff (16%)

  9. Chaos/disorganization (11%)

The research also concentrated on factors most likely to cause managers to stay with their current employer:

  1. Challenging work (51%)

  2. Loyalty (43%)

  3. Having organizational influence/clout (38%)

  4. Job security (34%)

  5. Being part of a team/co-workers (33%)

  6. Advancement opportunities (31%)

  7. Money/benefits (30%)

  8. Development and growth opportunities (25%)

  9. Recognition and a sense of achievement (21%)

  10. A good boss (17%)

Conclusion from the Survey

  • A significant number of managers do consider leaving their organizations.

  • The primary factors that cause management turnover are not simply monetary but include a host of support and organizational issues.

  • The problems associated with managerial turnover damage organizational performance and negatively affect remaining workers.

  • The majority of the factors that drive managerial retention are controllable for most organizations.

  • The participants in this study strongly believe that managers have a significant impact on the performance of personnel.

Thus, it is imperative that organizations should minimize unwanted turnover in the top management ranks if they were to create and sustain a competitive advantage.

What needs to be done?

Based on the findings of this study, a number of key practices are detailed below that can be used to improve management performance while at the same time minimizing unwanted turnover.

  1. Provide managers with clear direction and priorities

    A primary cause of turnover is stress and unrealistic performance demands. When managers have clearly defined duties, priorities, and goals, they can perform their job effectively and contribute to organizational efficiency. Enabling leaders to keep up with the everchanging demands of the workplace is critical to improving workplace performance. Stress must be properly managed and managers must be kept properly focused on the duties and prioritiesthat are critical for organizational success. A failure to do so results in unnecessary stress and causes managers to be busy without being effective. Challenging and stimulating work, which was a key to minimizing turnover, must not become “overwhelming work.”

  2. Provide top managers with the support they need to get things done

    Support can come in many forms, all of which can have an impact on a manager’s ability to get things done. Managers must be given the physical and staff resources needed to achieve their goals. In addition, they require support from their leaders, which includes ongoing and balanced performance feedback, being kept in the communications loop on issues that impact their operation, and help in removing organizational roadblocks and barriers to performance. It is important to note that a bad boss and operating in a negative organizational culture/feeling unappreciated were primary factors that encouraged management turnover.

  3. Make management development a priority

    While advancement opportunities are not always a possibility, an organization can promote effective management development activities. Research shows that management development is key to job satisfaction and can include a myriad of practical activities. These activities can and should include formal training, effective performance appraisal and review, cross training, special assignments, formal career development planning, mentoring, and on-the-job coaching. The key issue is that an organization should help its managers expand and develop their current skills so that they have a sense of “continuous improvement” on a personal level. An organization should have development plans that have been tailor-made for its IT managers in order to help them improve their performance and expand their repertoire of skills.

  4. Keep salaries and benefits competitive
    This is self-explanatory.


The survival of an organization may depend on its ability to deal with the issues of turnover and retention among its top managers. In today’s business environment where it is increasingly important to create and sustain a competitive advantage, the loss of experienced and capable managers, can be profound. An organization should adopt an aggressive strategy to address those factors causing turnover In short, a firm can improve its organizational health by taking good care of its managers.

Monday, October 17, 2005

Making the best use of Market Research

In my previous blog I had written about the usefulness & need for market research. Despite the value offered by market research, several firms fail to make the best use of the research. So this blog is all about how to make the best use of market research.

Marketing department in all firms understand the value and usefulness of market research. They spend money (anywhere from $10,000 to $250,000) to hire external agencies to get the research done. But in many cases, the research findings are never fully utilized. The reports and findings just happen to sit on "I will get to it latter" pile and is ignored till its forgotten. While this was not the intent, it happens because:
  • Research studies were more strategic or far-reaching. Results can be viewed from various perspectives, and there is no crystal-clear path to follow.
  • Firms don't have a process in place for getting the most out of their research findings.
  • The research fails to give "silver bullet" answers. Then it is regarded as useless data.
  • The researcher analysis fails to make action-oriented recommendations that everyone likes. (Finding unpleasant information puts off people and they cast the research aside)
  • Once the research has been presented, there is the perception that, months later it is no longer relevant.
  • The research results casts doubt on the status quo within the organization and has a potential to upset the power balance within the organization.
  • There is no research champion, or a person who takes responsibility for making sure the research is used to its fullest.
  • Person who ordered the research fails to take an active role in using research results. Then the research becomes an academic exercise.
  • When recommendations are often viewed as unaffordable.

Person who is sponsoring the research - or the research champion must remember that most studies that are tactical or limited in nature and the results point to a clear course of action must communicate the findings to all the stakeholders. Swift action must be taken, and marketing programs are changed or enhanced as a result. All the value that the research has to offer has to be realized. To prevent such a waste, the Research Champion must:

  1. Put together a list of key people who have the power to implement research results. Get agreement from each person who will participate in a "Research Optimization" process once the study is completed.
  2. Once market research is completed, circulate the research report to your key people only when you have everyone's agreement on a date for attending a presentation of results and discussion of the findings. It is one thing to circulate a research report, and quite another to motivate people to read and study it. There is no doubt that you will get more out of both if your key people know that they are expected to react to the research findings at a particular time and place.
  3. Circulate a proposed action sheet. Attach a proposed action sheet when you circulate the report, and tell people they will be referring to their action sheets throughout the presentation and discussion. Check with everybody one day prior to the meeting to make sure that all the action sheets are completed. If not, reschedule the meeting.
  4. Use the presentation and discussion to kick off action plans. Immediately following the discussion or presentation (optimally, on the same day), have people go over their action sheet suggestions again. Write the ideas on an easel. Brainstorm new ideas as you go. Rank the idea as follows: (1) Let's get started on that one; (2) Ideas with merit but need greater thought... revisit in one month; (3) Longer-term good ideas... also revisit in three months.
  5. Champion the process. Completing the above steps is a great start, but if responsibility for action is in several hands, research champion must take sole responsibility for continuing to champion the recommendations. Even the best laid action plans bog down. And often actions have a way of morphing into something not suggested by the research in the first place. At realistic intervals, the champion should meet personally with the action takers. The relevant findings and action plans should be reviewed to determine whether they are still on target and going forward.
  6. Revisit ideas with merit within one month. Good ideas are often lost because there is no set procedure for their review. Always set aside time for your key people to review good ideas and determine whether they continue to merit consideration and action.
  7. Review the research in its entirety three months later. Most research does not lose its value for many months (or even many years) after being initially conducted. This is especially true for studies that have strategic and course-changing implications or for ideas deemed to have longer-term possibilities.

Time has a way of altering perspective. Revisiting the results will suggest changes to actions not yet implemented. It will also suggest new and better actions not previously conceptualized.
Invariably, it is worth the effort for everyone to reconvene and view the research results again. If the only thing accomplished is to reinforce actions that have been taken previously, there will be satisfaction in knowing that the research made a valuable contribution. You will be amazed at the new actions you generate by reviewing the research again in six months or even a year later.

Closing Thoughts

Research studies usually collect dust because they fail to get the attention they deserve in the kind of format that leads to action. But don't just take my word for it. Take one of your old research reports and dust it off. Follow steps 1-7 above, and then judge whether you had gotten everything out of that report that you thought was possible.

Chosing a Value Position for a Brand

NOTE: This is the third part of the series on product positioning. Read the earlier part-1 on developing a brand position, and part-2 on developing a specific brand position before reading this

Value position refers to the value(for money) the brand promises to the customer. Customers think of value in terms of price and what they get for their money. So Value positioning is all about setting the selling price for the branded product.

The value position for any product can be categorized into four broad categories.
  1. Premium Product position
  2. Value for money position
  3. Discount pricing position
  4. "Got you sucker" position

Premium Product Position

Companies that make upscale products or top-of-the line products use premium position. These products are priced much higher than the competition. These products are definitely superior than their competition, they can command a premium price. Also customers associate a superior product with a higher price, they don’t mind paying a high price. For example, Starbucks coffee commands a 250% premium over other coffee. Tiffany’s jewelry, Dillards etc. Enjoy a premium position.

Even in services, firms can create a premium segment. Banks, airlines, stock brokers, accounting agencies create a "Gold" class - a premium service category for high value customers. In IT services or high tech design services, there are firms which are positioned at a premium. Sarnoff labs, IBM, Synopsys design services command a premium price.
The risk of premium positioning is that they can be copied by competitors and offer the same quality product or service at a lower price. Company which is using premium positioning must always be on guard to protect the brand’s premium; either through constant innovation (IBM) or by creating a mystic value (Tiffany’s) or by superior service (Banks & Airlines).

Value for Money Position

This is the most common positioning category. Most firms position their products to offer great value for their customers. Companies can choose either "Same (as premium product) for less price" or "More (of the product) for the same price" pricing strategy.

More for the same price is often used at high end products which have superior product attributes but is priced on par with competition. For example, Lexus positions its cars at the same price point as Mercedes but offers a lot more features. AMD positioned Opteron CPU’s in the value segment when compared to Intel’s Xeon. Similarly, Dell positioned in Xeon based servers as value for money when compared to Sun’s UltraSparc server.

"Same for less price" positioning is possible if a firm can profitably deliver its products which are on par with that of the premium products from the competitors at a price that is lower than that of the premium priced product. The key word is "profitably", i.e., the firm should be able to deliver a high end product at a lower price.

For example, Samsung positions its TVs to be same as SONY, but at a lower price. Indian Software firms, Infosys, TCS, and Wipro were able to win market share from their US competitors by using "Same for less price" positioning.

In a commodity product, where a product from one company cannot be differentiated with the other, firms try to use "Same for less price" positioning. The danger of this strategy is that it may (in many cases will) lead to price wars which will affect all the firms. To be successful, a firm has to create a strong brand differentiation and then select the pricing strategy.

Discount pricing position

Discount pricing position refers to offering a same product at a lower price. For example, Walmart sells the same TV’s at a price lower than that at Circuit City. - an online retailer of camera’s sells the same camera at a price much lower than that of Sears.
In recent times, discount stores have come up in every product category. Discount stores operate with very low overheads, use their bargain power to negotiate a lower price from the suppliers/manufacturers and pass on some of the savings to the customer.

"Got you sucker" position

This is "Less for More money" positioning. Companies which enjoy a near monopoly in their markets use this position to maximize their profits. Customers feel cheated but have little choice, so they accept what they get reluctantly, and at the first chance migrate to the competitor.

This is more prevalent in socialistic countries such as former Soviet Union, China, India and in war torn regions where there is critical shortage of a particular good. For Example, a liter of petrol in Afghanistan in 2004 was approximately $3-4, which is several times higher than the international rates. Telephone service in India in 1980’s was ~10 times costlier than that in the US.

Firms also adapt Less for More money" positioning when demand for a product/service far exceeds the supply. For example, the hotel rates in Houston went up several times when Hurricane Katrina struck New Orleans. The retail gas prices went up 50% at the same time as well.

Closing Thoughts

All brands will have to adapt a value position based on the market segment it wants to cater to. A premium positioning will attract one set of customers, a discount positioning will attract another set of customers. These sets of customers will usually be mutually exclusive. Trying to position the same product in more than one value segment will confuse the customer and the brand will fail and disappear from the market. Value positioning is driven by a lot of factors such as: internal costs, competitive pricing, market segments, firm’s profitability etc., and must be carefully chosen.

Friday, October 14, 2005

Market Research in services marketing

All companies have a genuine interest to beat customer’s expectations, yet in several of my encounters as a customer with various service providers I found that, companies routinely fail to meet customer expectations or fare even worse when they turnoff the customer.

As a marketing professional, I am interested to write about how a firm can improve its service offering and beat customer expectations. In my observation, I have noticed that companies often fail on customer satisfaction - for a simple reason that they do not know what the customer wants! In other words, services providers do not listen or observe what the customer wants and instead they insist on offering what they think the customer is asking.

To explain this in easier terms, I want to quote a recent example: I often visit a restaurant near my house. So far I had good experience every time I visited. But on one occasion it was vastly different. My friend had ordered "Vegetable Noodle Soup". But the waiter returned (after a long long wait) with "Vegetable Noodles". Since that was not what we ordered, we called for the manager. The manager on hearing our complaint, absolved the waiter of nay mistake and in turn insisted on us to have the "Vegetable Noodles", claiming that it was what we ordered. The end result, a bad customer experience and loss of reputation!

Though the above was such a lame example, the same is repeated in technology services as well. A IT services firm delivers a software with different set of features than what the customer wanted, or the software works in a different manner, etc.

The reasons on such service failures are several. In this article I will not write about the reasons for service failures. Instead this article is all about how to detect, measure service failures, how to track service performance and gain insights to improve the quality of service and hence the level of customer satisfaction: Market Research

Market Research

The most common tool available for all marketers is market research. Market research being such a complex exercise, it has to be used carefully to avoid creating additional customer agony and at the same time make research valuable to the company.

The term "Market Research" tends to invoke a feeling of an expensive exercise which is best done by an outside firm or consultant. Small firms with limited resources often choose not to indulge in it. This could be true if the world was flat and if the sun were to go around the earth. But that’s just a myth. Any firm can (and must) do market research. It can be as simple as the owner of a small firm talking to a customer, or the salesman talking to the customer. The cost of market research is insignificant when compared to the cost of not doing it. i.e., lost sales & profits.

So depending on the impact to the firm, select an appropriate research methods & budgets.

Research Objectives

Like all other research, Market research should be driven by objectives. The most common research objectives ( for services) are:

  • To identify dissatisfied customers, so that service recovery can be attempted
  • To discover the customer’s expectations for the service
  • To monitor or track service performance
  • To assess gaps between customer expectations and perceptions
  • To compare the company’s service offering with that of the competitor
  • To setup norms for performance appraisal within the company
  • To track changes in customer expectations in the industry
  • To forecast future expectations of the customers
  • To determine customer expectations for a new service

The above list is not exhaustive, but is just a pointer. Individual firms can further redefine or refine their objectives for their market research.

The objectives for Market Research in services differs from that of products in several ways. One must be aware of these differences to make the results of the market research valuable. The main differences are:

  1. Service performance is subject to human variability. People providing the service may provide varying levels of service. Thus measuring a service quality only once is insufficient. To understand, consider the above example in a restaurant: The waiter might have had a busy day and were really tired thus confusing Vegetable noodles for Vegetable Noodle soup.

  2. The process under which services are provided may vary - even though the waiter was doing his best. In our example, the hotel manager would have told the waiter not to return the food or make the waiter bear the cost of his error.

  3. Customer’s expectations is also subjected to variations. Customer will have different levels of expectations and different levels of perceptions of what constitutes a good service.
  4. Service quality measurement has to be carried out several times to give a meaningful results. (for goods a one time survey on a set of products will work)

An effective market research in service industry must therefore:

  • Include Qualitative and quantitative research. Research must be done to define what constitutes "Quality Service". This must be based on customer’s perception of quality. In addition, research must be done to determine the number of samples to be taken that will make the survey statistically valid. The sample size must be large enough to test specific hypothesis.
  • Include perceptions and expectations of Customers
    Customer expectations is the reference point to what is called as "quality". Customers set their expectations based on their perceptions of quality. Perceptions are often influenced by the competitors, customer’s past experience, by the company’s communication (advertisements, presentations etc.) to the customer, and by customer’s innate nature.
    Balance the cost of research and the value of the InformationCost of research must be driven by the economic goals of the research. With a huge budget, a company can discover huge amount of information, but that information may have little economic value.For example, a small IT services firm cannot spend a huge amount of money to find out how to alter the buying pattern of the customer behavior - which has no value to the firm’s immediate sales.
  • Measure the importance or priorities of customer
    Customers will have various service needs, but not all are of equal importance. For example, in IT services there are several sub services: documentation, presentation, architecture development, testing, coding etc. The importance of each of the service offering will be different for the customer.
  • Include measures of customer loyalty
    Loyal or regular customers or long time customer will have different level of expectations and will have different customer behavior when compared to customers who are purely looking for a price break or migratory customers.To understand this better, consider our restaurant example: Since I have been visiting that particular restaurant often, I am willing to give it another try. If the service level is unsatisfactory, I will stop visiting the restaurant. On the other hand, a casual customer who is visiting the restaurant for the first time may never patronize the restaurant in future.

Establishing the norms for conducting market research is tough. Deciding on all the parameters to be measured takes considerable effort and time. Once the norms and objectives for market research are established, the next step of data collection can be started.

Data Collection

A good services market research will include multiple data collection points, with each point collecting data for various objectives of the research. Some of the common or widely used data collection points are:

  1. Customer complaint Solicitation
    Have a well established process to hear customer grievances. Collect all the customer complaints/suggestions and record all interactions with the customer during complaint solicitation. Complaint Solicitation is essential for service recovery. Handling customer complaints efficiently and in timely manner such that customer grievance is addressed in such a way that the customer is satisfied is an absolute must. By recording customer complaints and using that data for analysis is critical in services market research. In high tech services, firms often overlook the fact that customers complain. Even when customer complains to the account manager or the sales manager, the complaint is never fully documented for future analysis. This finally leads to customer loss. Only when there is excessive customer turnover or loss of a important customer, the firm does data analysis.
  2. Regular customer feedback Study
    In case of IT services or high tech services, the service delivery will have several milestones. A customer satisfaction survey at every milestone has to be done to capture various aspects of customer satisfaction and customer perceptions. Service quality survey consisting of 10-12 questions for which answers are on a relative scale must be done. Customers are often more than willing to take part in such a survey.
  3. Post Transaction Survey
    This must be undertaken at the end of the transaction i.e. When the firm has provided all the services to the customer. For example, at the end of the project or when the customer checks out of a hotel. Post transaction survey should also be carried out after some time of providing the service. This will capture the memory of the customer - and rate how the customer remembers the interaction with the service provider.
  4. Critical Incident Research
    Sometimes a service offering will fail and customer will be very annoyed and threatens to walk out. When such incidents happen, a complete and exhaustive study has to be done to analyze the incident and determine the root causes and means to eliminate them in future.Often, many companies do critical incident research - but fail to implement the leanings. I should also point out that if regular customer surveys are carried out, analyzed and improvements are implemented, the number of critical incidents will drop dramatically. The corollary is also true: If a firm does Critical Incident research often, then it is not effectively listening to its customers.
  5. Service Expectation meetings
    In complex high tech services, it is essential to meet with the customer before providing the service and establish common norms of what constitutes good quality service. Such meetings help set customer expectations before providing the service. This helps the service provider to measure the service level expected by the customer and provide more than the promised level of service.
  6. Lost Customer Research
    Even the best firms lose customers. It is therefore important to know why these customers dropped out or why customers stopped buying from you. This involves going and meeting the lost customer and getting their opinion or view points as to why they moved to your competitor. This research helps to identify the failure points or common problems. The research also provides an insight to the cost of losing a customer and the cost of retaining the customer.

  7. Future expectations research
    Customer’s expectations are always undergoing changes. It is therefore essential to know what their future expectations are. For example, a leading manufacturer of automobiles expects their IT service provider to have technologies to implement RFID system in future. Intel’s Developer Conference is a great example of collecting customers future expectations.

  8. Customer Forum's
    Companies encourage and sponsor user groups. The user groups becomes a platform for customers to interact with each other and share their experiences. Customer forums also serves as a platform for customer interaction at various levels. Marketers can interact with people at various levels of the customer firm and understand their needs, expectations and perceptions. For example, Synopsys User Group (SNUG) is very popular among ASIC designers. This fourm provides Synopsys with customer insights and acts as platform for customer market research.

Analyzing the Market Research Findings

Analyzing the data is a big challenge. The market research data has to be analyzed quickly and the findings has to be communicated to various people within the organization to make the research useful. The reports generated from the research must be easy to read and understand by executives, managers and stakeholders who will make decisions from the research.

I will write about various standards and procedures used in data analysis in my future blogs.

Friday, October 07, 2005

Use Marketing to Hire and Retain Talent

Traditionally, the marketing department bears the responsibility for directing and increasing sales. This is done mainly through cultivating an organization’s brand image - the image that attracts the target customers to its products and services.

Nowadays, however, the importance of attracting and retaining talented employees has turned attention to the equally valuable internal image that the organization projects as an employer. In my own organization, employee turnover has had a substantial impact. In addition, hiring to a startup has always been a challenge. In this context, I would like to share a few points on how to use marketing to attract and retain talent.

Importance of Internal Branding

Organizations are increasingly recognizing the importance of internal branding — presenting a compelling story about the organization — which has become a crucial tool for attracting and keeping the best people. The growing focus on internal branding stems from the realization that retaining the organization's best talent has a direct and significant impact on the bottom line of its business.

The stakes are high: demographic trends indicate that talent is becoming increasingly scarce. This is prompting organizations to look at all aspects of the employment relationship — from benefits to culture — to differentiate themselves from their competitors.

Another reason why organizations need to market themselves effectively to employees is that aside from the talent deficit, today’s employees are seeking greater purpose and meaning in their working lives. Competitive pay and fringe benefits — such as cars and laptop computers — are still highly attractive benefits, but a shift is occurring in professionally-skilled workplaces towards making work more meaningful. This is reshaping the entire social contract between employers and employees. The employer presenting a value proposition that captures the spirit and culture of this movement will win.

Further proof to the growing popularity and need for internal branding was revealed by Mckinsey survey "Branding to attract Talent - 2004" study. Some 50 percent of companies surveyed said they allocated resources for internal branding. Furthermore, the survey found that employees rated factors such as "Fun place to work", "For people Like me", "Training opportunities", and "innovative company" to be more important than "High Salary" when it comes to converting potential recruit into an applicant/employee.

As a consequence of the keener emphasis on internal branding, there have been growing calls for the human resources (HR) department to become an extension of the marketing department, combining people skills and marketing savvy to help the organization compete for the talent it needs. Additionally, recruitment and retention practices are moving onto the radar screen of the executive team — and even the Board.

Savvy marketers are well aware of the grapevine effect of talented people talking to each other, whether it’s at a business school, an existing company, or among the ubiquitous e-mail community. People talk and employers need to influence these discussions. Creating a memorable brand image and a compelling value proposition is central to that strategy.
Realistically, the battle for talent could become such a critical business issue that significant advertising budgets could soon be set aside for internal branding campaigns — employee focused advertising campaigns that extol the virtues of organization (employers).

Over time, an organization's ability to deliver on its promises to employees will form a solid foundation for its internal brand image. The organization must therefore unfailingly deliver on its promises. An employment brand that fails to provide employees with the value it has promised them will fail in its efforts to build a positive and productive internal brand. It is also important for the organization to align its content, communication and service delivery. An employee's experience in each of these areas should reflect the brand promise, which could be compromised if there is misalignment in even one of these areas.

Although internal branding can be a significant performance improvement strategy, it is only as effective as its ability to deliver differently — not just to make new promises.

Of course, the internal brand does not exist solely to attract new recruits. When existing employees are satisfied with their employment package, their loyalty to the company and the internal brand increases, which in turn helps to attract quality talent from outside and minimize turnover through increasing employee satisfaction.

Internal branding should not be selectively applied to particular departments, staff levels or practices within the organization. So in assessing the strength of an internal brand in the eyes of potential recruits, the organization's culture, values, policies and people practices should all be evaluated. The assessment should not be restricted to policies and practices relating to recruitment, pay, training and development, compensation, benefits, performance management and communication.

The organization should ask if it has satisfactory procedures for employee orientation, for example. Does it have a program to provide new employees with complete and useful information about the firm, its structure, its mission, functions and policies, compensation, benefits, services, work requirements, standards, rules, safe work habits and desirable employee-management relations?

Does the organization provide satisfactory financial security — plans to support the long-range financial goals and objectives of the employee to ensure financial independence in retirement?
Increasingly important in the 21st century, does the organization have policies that promote a balanced work/life experience for its people? This should include accommodations and benefits programs designed to help equalize benefits, serve as recruiting and retention incentives, and build goodwill among employees. Examples include an adoption assistance program, dependent care assistance plan, employee home ownership plan, family care program, flexible leave, home leave, home marketing assistance, home sales protection, job sharing/splitting, maternity and child care, and parental leave.

Encourage Feedback

Are there channels for employees to provide feedback and express concerns to the organization's leadership? Employees should be encouraged to communicate their views and provide feedback to their leaders. Organizations that fail to listen to their people may not win their loyalty. Furthermore, by not listening to employees, organizations are effectively blinded from the pitfalls that may lie ahead.

Closing Thoughts

Internal marketing and building a strong Brand image has a direct impact on employees. It will: Lower the cost of hiring, Lower employee turnover, and Increase employee productivity. All this has direct impact on operational costs and overheads.

Thursday, October 06, 2005

Brand Management

Brands were originally created in order to differentiate what one offers from what the competition offers. Frims "branded" it to avoid confusion and help people to remember, identify the manufacturer and aid the choice of purchase. This progressively involved equipping the product offered with attributes which converted it into the favourite choice of the purchaser. Thus companies began to offere products with an additional differentiation which made them more competitive. This process is just the starting point of what is now known as Branding.

The problem is that, like any strategy, sooner or later it is also discovered and used by competitors, which leads us to the current situation: lots of brands, we could even say too many.

I just can't recall all the brands of soaps which Hindustan Levers (subsidiary of Uni Lever) sells in India.

In consumer goods there are several - even millions of brands, which are sometimes almost pointless, brands which, instead of helping the consumer to choose, complicate the purchase enormously, brands which do not provide anything and which in the end are perceived as mere commodities.

In industrial goods, branding is still at a nascent stage. Branding in B2B or industrial goods or services is mostly limited to company branding and branding of a few select products. In software services for example, the company brand is the most prominent. For example IT consulting firm Accenture is brand by itself. In case of IBM, the company brand "IBM" is the most prominent of the brands in IBM stable - DB2, MQ Series, Z-series etc.

Corporate Brands - be it in software services, semiconductors, manufacturing equipment etc, represent the company, it's reputation and it's value to its customers. To build a successful company brand, it requires sophistication and discipline - or in other words Brand Management.

Brand Strategy

It is relatively easy to give a company or a product a name, to get a spectacular logo designed for it and communicate repeatedly (and insistently) this brand in numerous exposures to the consumer.

It is something quite different to capture the essence of the product/service offered, to conscientiously create an attractive, different personality, full of meaning for the potential customer, and to connect it on an emotional level to the brand, providing it with a certain magic. This is indeed a much more complex process that is called brand strategy.

This involves giving the brand a very clear power of attraction, a set of relevant, unquestionable meanings which achieve a space not just in the head but also in the heart of the consumers.

Moreover, it should not be forgotten that the context of branding is considerably different for the corporate brands (than that of consumer goods), and that the model is to make the customer feel comfortable, confident with the values of the brand before and after using the products or services. The bonus from differentiation is merely symbolic in terms of personal and corporate reaffirmation.

A strong brand should fulfil three basic objectives: information, differentiation and seduction.

Information because it should tell customers something about the product offered that is intelligible and decipherable: "I have to understand the proposal of basic value or what the product offered consists of."

Differentiation because what it tells us should be perceived as different by the purchaser or, in other words: "I understand what you are telling me and I think that it is something that the others haven' told me."

Seduction because this is the raison d' of any brand. The first two are in the service of the third: in the end a brand has to tell us something that we consider to be interesting and that ends up seducing us. And seduction is something very subtle.

There are currently numerous brands that have reached the first stage. They have succeeded in getting customers to recognize their logos and we see their advertisements. They have succeeded in getting customers to know more or less what they offer but they have not seduced the customers. They are there, in customer's mind, and customer's see them and recognize them, but when it comes to buying customer's do not feel that irresistible, emotional attraction that drives them to clearly opt for the brand.

One should not confuse Communication with brand creation or management. The objective of Communication may be to achieve renown for what the firm offers, but marketers have to define the brand: to know what to communicate and what to say in their communication plan. In short, what meanings, values and personalities are important and distinguishing.

The objective of Brand Management is to maintain the consistency and strength of the brand so that it can be adequately exploited. This should be the work of a good brand manager.

Differentiation of a Brand

With effective brand information, it is possible that there is already an enormous group that recognizes the brand. However, brand value is built on the management of customer experiences as a means of differentiation.

With a clear definition of meanings and an excellent transmission of the same, full of creativity. New strategies that have managed to find a niche among the clutter of brands out there in the market. Brand management tools for differentiation are:

1. An emotional as well as a real offer

If a firm is going to work on the brand, then they must offer a good product. Nothing can aspire to be a brand without first having managed to be a good product or service as a minimum prerequisite to compete. The first thing that can differentiate a seductive brand from its undifferentiated competitors is therefore how the customers are charged with emotion for the product is. These emotions refer to pleasant sensations, desire, attraction, a longing to buy it almost as an impulse without the need to rationalize it too much.

If the brand is clearly differentiated, it will certainly have this emotional part that distinguishes it from the rest and obtains the sale, because it has been said that a brand is made up of a good basic product plus a good dose of magic.

Think of Intel Pentuim processors or IBM's On-Demand services or Teradyne testers.

2. A feeling of community

The true success of a brand does not consist in engraving a logo on a product but rather in giving rise to a certain similar experience for a group. The customer portfolio is the most valued asset of any company. The community of sympathizers with our brand is what we really manage to obtain this asset.

Synopsys is one of the few brands that have literally succeeded in establishing themselves in the minds of their customers. Synopsys's managers organize meetings, events, conferences and even sponsor user group meetints. This is not just a powerful Relational Marketing strategy, but also constitutes one of the main sources of information for the company.

Xilinx is another brand that has known how to manage its community of followers.

(For those who are not aware of synopsys or Xilinx, think of Harley Davidson and HOG Harley Owner's Group)

3. The values within the customer

Customers are increasingly well trained and informed in today' world. And are less and less willing to buy a symbol-brand which simply lists values to which customer should aspire. In this new setting customers will not just increasingly opt for responsible companies, but also for products which have a positive effect on the business environment and share the same values and concerns.

Customers buy from Teradyne or Broadcom or synopsys because these firms understand customer's values and have a plan(roadmap) to address the problems the customer faces in the future. Sellers must have the same concerns as that of the customer.

4. Market communication goes further

The main objective when it comes to customer communication is to stand out and to seduce. Brands that communicate in a different manner manage to impress. Market communication should go beyond the medium that the rest of the industry is using to position the brand in the minds and hearts of people.

Circulating stories of how the company went to extraordinary lengths to solve it's customer problem will certainly win the mindshare.

5. The obsession with small details

Another characteristic of successful brands is their obsession with detail. An insignificant detail can have a tremendous impact on the perception of the product. These are details that sometimes communicate much more than big campaigns: a faster than expected service, or offering a better solution than the one customer has developed etc.

Closing Thoughts

Before communicating and transmitting, however, companies need to define three very important elements make up the product they offer:

  1. What it is
  2. What it does
  3. What it means

If a company cannot complete and define each of these dimensions, then it does not have a strong brand. All products talk about what they are, and nowadays brands are rarely differentiated by what they do. Brand management is all about creation of meanings in the minds of the customer.

Wednesday, October 05, 2005

Define your Brand and determine its value

Strong Brands help companies communicate why their products & services are uniquely able to satisfy customer needs"

How do you define a brand?

Defining what is constitutes a brand is not easy. A "Brand" can be defined at three different levels - each level satisfies a category of brands.

Level-1: Brand is a logo and associated visual elements.

This definition holds good from a legal point of view. The logo design, logotype, and other visual elements can be registered and are associated with the product. Eg: Intel Logo, Golden Arches of McDonald’s.

Level-2: Brand is a bundle of a logo, associated audio/visual elements, registered trademarks, and other intellectual property rights.

This is a wider view of a brand. Often a branded product includes several intangibles such as patents, business process knowledge, market knowledge etc. Intangibles such as business knowledge, market knowledge, customer relationships adds a value to the product. For example Pentium-4 processor would not be successful without the intangible assets which was used to design & build it.

Level-3: Brand represents the company or the entire organization

This holistic view of a brand includes the logo, audio/visual elements, patents, trademarks, intellectual properties, intangible knowledge and the organization: its people, culture and management. All this has to be put together to create a brand. When taken as a whole, the brand represents a specific value proposition and create strong customer relationships.
This view of a brand ties up the company, its reputation and its brands. This is correct, because if there is a damage to a brand - it will affect the company reputation also. For example, Ford Explorer fiasco affected Ford Motor company too.

Financial Impact and Value creation

It is a well accepted idea that brands play an important role in generating and sustaining financial performance of branded products. But the impact of brands on corporate performance is more subtle as the value creation by a brand is often difficult to measure.

There are several ways of measuring a brand value in dollar terms, such as Book to market value multiples, Net present value of the premiums which customers are willing to pay for a branded product over an unbranded product, price a competitor is willing to pay for a brand etc. In this article, I will refrain from discussing how the brands are valued. Instead lets take a look at how brands create value.

Value Creation
Brands create financial value in several ways which is illustrated below.

Improved Brand Equity Affects Audience Behavior Increases Financial Value
Customers Increased buying rates

Buying more quantity

Paying a premium Price
Increased Revenue
Suppliers Better terms of Business

Bigger discounts
Savings on direct costs
Employees Better/lower cost of hiring

Lower employee turnover

Improved productivity
Savings on operational costs & Overheads
Financial Reduces cost of equity

Reduces cost of debt
Better returns to Investors

Closing Thoughts

Brands create value to the shareholders. The exact dollar value of a brand cannot be easily fixed, yet companies must invest in building brands.

Selecting a specific brand position

Every brand must express a concrete benefit that entices customers to buy. The broad positioning serves as the first step, the next step is to select a specific benefit position for a brand. Many companies choose a single major benefit positioning, such as: Best Quality, Lowest price, Most reliable etc.

In complex B2B markets, companies may have to develop multiple benefit positioning to cater to multilevel buyers. [ Buyers or decision makers in a B2B market will be many, ranging from engineering, finance, management, operations etc.]

For example, in my firm Open-Silicon Inc. positions it’s ASIC in three benefit areas: Reliable first time silicon (for prototypes) , predictable schedules (for design services), & Low cost silicon (for volume production). In this case, the company has multiple benefit position to attract multilevel buyers.

The following are some of the pointers to select a specific position for a brand:

  1. Attribute Positioning: The brand has a unique attribute i.e., Fastest, oldest, etc. Attribute positioning is usually a weak positioning as it does not explain the benefit to the customer.
  2. Benefit positioning : The brand promises a benefit to the customer. This is very strong positioning only if the brand can deliver on its promise. If the brand promises but does not deliver, then customers will not buy the product - worse still, the company can become liable for fraud or face legal challenges
  3. Application positioning: Brand promises to be the best suited for that application. For example Caterpillar positions itself as the best suited for earth moving equipment, or iPod positions itself as the best MP3 player.
  4. Competitor Positioning: Here the brand is positioned to be superior or different than that of the competition. For example, AMD’s Opteron is positioned to be better than Intel’s Xeon processors.
  5. Category Positioning: The company describes the brand as the category leader. This has a strong appeal in a uncertain market where buyers are not sure and to be safe many will choose to follow the majority (herd mentality). For example "Nobody got fired for buying from IBM" .
  6. Quality/price or Price/Performance positioning: Here the brand promises a higher level of benefit for a given price. This positioning strategy is usually followed when the brand is inferior to its competitor on performance but the company can sell it at a lower price than the competitor. For example, Hyundai cars in US are positioned against Japanese cars - as value for money cars.

Selecting a specific position for a brand has to be done very carefully. The company and all its employees must agree with that brand positioning. Specific brand positioning must be in-line with the broader positioning strategy. (see my earlier blog "Developing a Brand Position")
There are some well known pitfalls which one can avoid in selecting the specific positioning for a brand. The most common pitfalls are:

  1. Under positioning: Failing to present a strong central benefit or reason to buy the product. For example, Magnavox brand of TVs from Philips in US does not promote a strong reason to buy it instead of Sony’s Vega TVs.
  2. Over positioning: This happens when a brand is positioned at a very narrow customer base that most of the potential customers will overlook the brand. For Example, the web based grocery retailer - targeted the busy professional and ignored the mass market.
  3. Confused Positioning: By claiming two are more benefits that contradict each other. This is the most common of the mistakes in positioning. Routinely one can see a statement "Highest quality & lowest price". ( A google search on the phrase Highest quality & lowest price" resulted in over a 100 million hits. )
  4. Irrelevant Positioning: By claiming a benefit which few prospects care about the brand will have an irrelevant brand position. For example, "The world’s slimmest cellphone" - Motorola’s Razr V3. People don't buy phones because its thin, people buy cell phones for its utility.
  5. Doubtful Positioning: Claiming a benefit that customers will doubt that the brand can actually deliver. For example, a mutual fund offers 100% returns on investment. Another example will be the claims for various products in QVC channel: Oxyrich - which claims to clean better than all the leading brands, Ashvini hair oil - which promises to stop hair loss, Weight loss pills etc.

Selecting a clear, meaningful and trustworthy brand positioning is a critical step in the overall brand positioning. By having a well defined brand position will not sell the product. One needs to convince the customer the value of the product. This is done by selecting a suitable value position for the brand (which will be described next)

Tuesday, October 04, 2005

Developing a Brand Position

"The best way to hold your customer is to constantly figure out how to give them more for less" -- Jack Welch

Today, most peole do not think much about branding. For many, branding is mearly a selection of a good brand name, advertise it carefully and la viola a brand is developed. But in reality branding involves many painstaking steps, which can be broadly classified into two major tasks:

  1. Develop the Value proposition
  2. Build the brand

Developing the Value proposition

Developing the value proposition consists of 4 main steps:

  1. Selecting a broad positioning for the brand product
  2. Selecting a specific positioning for the brand
  3. Selecting a value positioning for the brand
  4. Developing a total value proposition for the product

Broad positioning a brand

No company can be good at everything. Firms have limited resources and funds, so they must concentrate their limited resources towards one or two areas where there are better than their competition. Broadly stated, positioning strategy can be:

  • Low Cost Leader
  • High Quality Leader or product differentiator
  • Niche market provider

A firm can therefore concentrate on one of the positioning strategy. A low cost leader cannot afford to match the quality of the high quality leader or a Niche market provider. To understand this better, consider this example: Hotel Chain Best Western is pursuing a low cost leader positioning, but it cannot provide the same quality of service as Ritz-Clarton.

To quote another example in technology sector, Reasearch In motion's Blackerry cell phones are the top of the line handsets - but they cannot be a low cost leader, that position is occupied by Nokia.

Prof. Michael Porter in his book "Competitive strategy" stress that a firm must focus on being a low cost leader or product differentiator or niche market provider. He warns firms that try to be good in all three ways, but not superior in any way will lose out to firms that would be superior in one way. The middle way is a trap.

Trying to be best in all three ways will not work because: Firms do not have sufficient resources and mainly because each positioning strategy requires a different organizational culture and management system.

Note: Few firms have excelled in more than one positioning strategy. For example, Toyota has established itself as a low cost leader with its Corolla brand and with its Lexus brand, Toyota has extablished as a high quality leader.

Intel is another example, In low cost segment - Intel dominates with its Celerion brand of CPUs, but at high end performance market, Intel dominates with its Pentium-4 Extereme edition brand of CPUs.

Firms that have succeeded in more than one positioning strategy usually have their core competency in manufacturing, have deep pockets, and have developed a multiple brands to cater to different market segments.

However for most firms developing multiple brands for each segment and to be a leader in that segment is a tough task. The three positioning strategies require different cultures and management attitudes that often conflict. For companies which excel in manufacturing operations, it is difficult to excel in customer intimacy - i.e., they cannot alter their product to meet individual customer needs. Neither can firms which excel in customer initimacy match the low prices offered by a cost leader.

To be successful with limited resources, a firm should follow four rules of sucess:

  1. Become the best at one of the three value segments
  2. Achieve comparable parity in performance level in the other two positioning segments
  3. Keep improving one’s superior position in the chosen positioning strategy so that they remain the undisputed leader in that category.
  4. Maintain parity or atleast keep up with competitor in other two positioning segments

Broad positioning exercise provides a starting point for the overall brand positioning. To effectively communicate the brand value one needs to select a specific brand positioning which will be explained in the next posting.

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.