Book summary “Positioning”: summary

Introduction

You live in an overcommunicated society. Every day you face a barrage of advertising, media, and promotional noise that overwhelms your senses. Traditional marketing fails because you treat communication as a simple transmission from sender to receiver. The human mind rejects excess information and accepts only what matches prior knowledge.

Al Ries and Jack Trout argue that positioning solves this modern communication crisis. Positioning is not what you do to a product. Positioning is what you do to the mind of the prospect. You shape the perception of the product in the target audience to carve out a distinct mental slot. Success belongs to you not because you create a superior offering, but because you secure a permanent position first.

The book explains the anatomy of the mind and the mechanics of mental product ladders. You will discover why the first brand in the mind wins and how the second player must adopt a different strategy. The following chapters detail how leaders defend their terrain, how followers find empty niches, and why famous names fail when stretched too far. You will learn how to apply these rules to companies, countries, institutions, and your own personal career.

Consider the fundamental questions addressed in this text:

• How do you break through the massive clutter of an overcommunicated society?
• Why does the human mind reject better products in favor of familiar ones?
• What specific tactics let a follower overtake a dominant market leader?
• When does extending a successful brand name destroy its core value?
• How can you position a service, a place, or your own professional career for maximum impact?

1. What positioning is all about

Positioning starts with the product, but it is actually about manipulating what is already in the prospect's mind.

You live in an overcommunicated society. Traditional creative advertising no longer works because the human brain acts as an oversimplified, supersaturated sponge. Instead of forcing new ideas into a resistant brain, effective communication focuses on the receiving end.

Consumers face a constant product explosion and sensory overload every single day. The human brain reacts by tightening its intake valve and rejecting any information that does not match prior knowledge. Advertising functions more like a light fog than a sledgehammer.

America consumes 57 percent of the world's advertising despite having only 6 percent of the world's population.

Effective positioning requires you to understand and target the prospect's perceptions rather than objective reality. You do not change the product itself. You manipulate what is already in the prospect's mind and retie existing connections.

Consider these financial disparities in global marketing reach:

• $376.62 per-capita consumption of advertising in America a year;
• $16.87 per-capita consumption of advertising in the rest of the world.

2. Getting into the mind

Getting into the human mind first secures long-term market dominance, while trying to enter second is immensely difficult.

The human mind creates product ladders for different categories. The first brand to occupy the top rung enjoys an enormous, hard-to-dislodge advantage. In mental contests, the odds heavily favor the first person, product, or politician to establish a position. This grants them double the long-term market share of the runner-up.

Dr. George A. Miller established that the average human mind can deal with a maximum of 7 units at one time. You see this limitation reflected in everyday choices and brand hierarchies.

Charles Lindbergh was the first person to fly solo across the North Atlantic. Few people can name the second person.

Imprinting occurs when a new idea or brand enters an empty mental space. You find it nearly impossible to dislodge a leader who achieved this initial entry.

• The mind rejects new information that contradicts previous impressions.
• The first brand becomes the generic standard for the category.

3. Those little ladders in your head

When you are not the market leader, establishing an against position by relating to the leader is a proven strategy for success.

Mental slots

You cannot succeed by launching a head-on attack against an entrenched market leader's core position. No matter how many resources you invest, a direct challenge on home turf leads to massive financial losses.

RCA suffered a $250 million disaster after launching a direct, head-on computer push to challenge IBM. At that time, IBM held 70 percent of the mainframe computer business versus less than 10 percent for the largest of the dwarfs.

The Avis strategy

Instead of fighting the leader directly, you can carve out a profitable space by acknowledging established market realities. An against position ties your offering to the existing leader in the prospect's mind.

• Acknowledge the top status of the market leader.
• Define your brand as the clear alternative choice.
• Tap directly into established mental pathways.

Avis gained profitability for the first time by running campaigns admitting they were only number two behind Hertz and therefore tried harder. This breakthrough came after 13 consecutive years Avis lost money before admitting they were number two.

4. Positioning of a leader

Market leaders maintain dominance by employing a multibrand strategy and covering new categories instead of altering established brand positions.

Single-position strategy

Attempting to stretch an old, well-known brand to fit a completely new product category creates confusion in the prospect's mind. A successful leader introduces separate brands with unique identities to reflect changing technologies and tastes without diluting the original position.

• Use a multibrand strategy to cover distinct categories.
• Avoid stretching a famous name into a new area.
• Protect the singular focus of the original offering.

Ivory soap has been going strong as a single-position brand for 99 years. Procter & Gamble introduced Tide and Cascade instead of naming them Ivory Detergent or Dishwasher Tide, keeping Ivory uniquely positioned as a soap.

Covering every bet

Market leaders should protect their long-term dominance by swallowing their pride and covering every new product development or emerging technology. Leaders often fall into the trap of dismissing unexpected innovations or relying on the perceived power of their organization rather than the product's position.

• Invest early in alternative technologies.
• Insure your business against unexpected market shifts.
• Rely on the power of the product over corporate pride.

General Motors spent $50 million to acquire a license for the Wankel engine as insurance to protect its massive automotive business.

5. Positioning of a follower

Followers must find an open hole, or creneau, in the prospect's mind rather than introducing a me-too product.

The conventional American philosophy of bigger and better makes positioning difficult. It relies on making products better instead of achieving speed and seizing an unowned position first. You must learn to think in reverse and go against the grain to fill a vacant niche.

Cherchez le creneau

You cannot win by matching the leader feature for feature. A me-too response only validates the pioneer and wastes your resources.

• Cherchez le creneau means looking for a hole.
• Find an unoccupied spot in the prospect's mind.
• Move rapidly to claim that opening before anyone else.

Volkswagen entered a Detroit-dominated market of long, lower cars with a short, fat car and used the simple headline Think small to preempt the size creneau.

Avoiding the factory creneau trap

Companies often make the mistake of filling a hole in the factory rather than a hole in the prospect's mind. Internal positioning to solve manufacturing or portfolio gaps fails because there is no corresponding position for the product in the consumer's mind.

Ford introduced the Edsel to fill an internal gap between the Ford, Mercury, and Lincoln models. The car became a famous market failure because it lacked a unique external position in a mind already cluttered with competing alternatives.

6. Repositioning the competition

An average supermarket displays 12,000 different products or brands. The average college graduate has a speaking vocabulary of 8,000 words. You face an overcrowded market where no empty spaces remain.

When no open creneau exists, you must create one by repositioning the competitors that occupy the prospect's mind.

Shifting perceptions

Introducing a new idea requires moving an old one out. A repositioning program undercuts an existing concept or product. You change the consumer's perception of the competitor rather than changing the product itself.

• Supermarkets contain thousands of competing items;
• mental capacity remains strictly limited;
• old ideas must be dislodged before new ones enter.

The Tylenol approach

Tylenol successfully challenged the aspirin market leader. The brand opened with sixty words of copy highlighting aspirin's negative side effects on the stomach lining before introducing acetaminophen.

7. The power of the name

Choosing a descriptive name that hooks the brand onto the product ladder is the single most important marketing decision.

The first step in positioning is naming the product. A lazy, say-nothing name fails to cut into the mind. While a coined name works for the first pioneer into an empty category, descriptive names work best for followers. They tell the prospect the product's major benefit and block me-too competitors.

• Head & Shoulders utilizes a descriptive name;
• Close-Up secures its position through clear product identity;
• Volkswagen's Beetle used the strategy of telling prospects to think small.

Deceptive names that hide the origin of a product create underlying consumer distrust. Margarine is perceived as imitation butter because its name hides its origin. Calling it soy butter in the peanut butter tradition would have established a stronger position by bringing the product out of the closet and building pride of origin.

Coined names versus descriptive names

You must match your naming strategy to your market position. A coined name makes sense when you invent a new category and stand alone. When you enter an existing category as a follower, a descriptive name connects you directly to the established mental ladder.

Polarizing names

Companies frequently fall into the initialitus trap by replacing their names with meaningless initials, confusing cause and effect. The human mind works aurally by translating visual letters into sounds. Customers use initials only after a company is already extremely well known.

Adopting initials without prior massive awareness destroys corporate identity and reduces communication efficiency. General Aniline & Film changed its name to GAF, ensuring it would never become widely known under an initial moniker that functions like alphabet soup. A Business Week survey revealed 49 percent average awareness of initial companies. Matched name companies achieved 68 percent average awareness, standing 19 percentage points higher.

8. The line-extension trap

Applying a famous house name to a new product backfires by cannibalizing the original market share and diluting the brand focus.

Corporate logic relies on inside-out thinking based on company ego and economics. Effective positioning requires outside-in thinking based on how the prospect's mind is organized around products. You might assume customers will buy a new line extension because they trust the corporate maker. Consumers actually organize their minds around specific product categories and standalone brand hooks.

Inside-out versus outside-in thinking

Makers of Alka-Seltzer spent 20 million dollars annually on their core brand name and wanted to leverage that investment. They created a cold remedy named Alka-Seltzer Plus. The new product ended up eating into the core Alka-Seltzer market rather than competing with Dristan and Contac. This free-ride trap forced the company to constantly shrink Alka-Seltzer and enlarge Plus on its labels over time.

Sears avoided this pitfall by using the distinct name DieHard for its car battery, making it a market leader with a 48 months lifespan guarantee feature. JCPenney used its own corporate name on a battery and failed to capture the top rung.

The teeter-totter principle

A single brand name cannot stand for two distinctly different products in the consumer's mind. As one product goes up in relevance, the other goes down. When you expand a strong name into a completely different category, the teeter-totter principle ensures that the brand loses its grip on its original position. Xerox once folded its computer operations and took an additional write-off of 84.4 million dollars.

Heinz successfully expanded from pickles into ketchup, but in doing so lost its pickle leadership position to Vlasic. Line extension educates the prospect that a brand is merely a corporate label rather than a superior generic substitute.

Protein 21 shampoo initially captured a 13 percent peak share of the shampoo market. After Mennen introduced hairspray, conditioner, and concentrate under the same name, its shampoo market share plummeted to 2 percent.

9. When line extension can work

The shopping list test and the rubber band rule determine whether a brand name has a distinct position or has been weakened into a meaningless label.

The shopping list test

You can evaluate the strength of a brand name by observing how consumers use it. The shopping-list test proves whether a brand name maintains a distinct position in the mind.

9. When line extension can work

The shopping list test and the rubber band rule determine whether a brand name has a distinct position or has been weakened into a meaningless label.

The shopping list test

You can evaluate the strength of a brand name by observing how consumers use it. The shopping-list test proves whether a brand name maintains a distinct position in the mind.

If you write a brand name on a shopping list and it fails to identify a single specific product, the name exists in limbo. It lacks a strong mental position.

Writing Scott on a shopping list has no clear meaning because the name was stretched across tissues, towels, and napkins. This practice caused the brand to lose its foundation in a 1 billion dollar market for consumer paper products dominated initially by Scott.

The name as a rubber band

A brand name acts like a rubber band. It will stretch up to a point, but the more it is stretched across unrelated products, the weaker and less meaningful it becomes.

While broad corporate umbrella names can work for closely related commodities or low-involvement items, stretching a name too far destroys its specific market power.

Dole successfully holds a powerful position in canned pineapple. Stretching the name into fresh bananas risks undermining its core franchise. 3M provides an example of a company with thousands of small-volume products where unique names are impractical, yet most companies do not enjoy this exception.

10. Positioning a company, place, and service

A company, country, island, or service must connect its offering to existing mental reference points rather than relying on technical novelty.

When you manage a brand locked into a single product word in the consumer's mind, you can broaden your mental position by introducing a new technological term connected to your heritage. Instead of fighting your core identity, you can coin a broad technological suffix that leverages existing market strength.

Xerox stands as a 9 billion dollar company with 100,000 employees, yet the mind trapped the brand meaning exclusively in copiers. To encompass printing, scanning, and storing messages using laser beams, the company could introduce the term lasography.

The lasography strategy for Xerox

You cannot attract visitors to an overlooked country by merely advertising airline services. Marketers must position the destination using existing mental reference points. A carrier flying into an unpopular destination fails if it advertises food and service.

Sabena struggled flying passengers exclusively to Brussels until advertising positioned Belgium by comparing its concentration of three-star cities to Amsterdam using Michelin Guide ratings.

• Only 1 out of 50 North Atlantic passengers flew to Belgium;
• Brussels airport once featured an old sign noting 220 days of average annual rain;
• Belgium contains 5 three-star Michelin cities compared to 1 in Holland.

Positioning Belgium and Jamaica

When an island lacks a distinct mental image for tourism, you can borrow the mental postcard of an established destination to save time and money. Jamaica faced competition from islands known for beaches, but lacked a distinct mental hook.

Edward Seaga hired the authors to position Jamaica by presenting it as The Hawaii of the Caribbean. The island highlighted that its Blue Mountain reaches 7,402 feet and its larger size provides more to see and do.

Positioning Mailgram and Milk Duds

When you introduce an advanced service, you should connect it to an existing perception in the prospect's mind rather than focusing purely on technical novelty. Western Union tested two campaigns for Mailgram and found that positioning it as a low-cost Telegram more than doubled awareness from 23 percent to 47 percent, rather than marketing it as a high-speed letter.

You can also build a brand with a fraction of a competitor's advertising budget by repositioning the dominant category and exploiting a glaring weakness.

Switzer Clark positioned Milk Duds around providing 15 individual slow-eating chocolate-covered caramels. This strategy exploited the consumer dissatisfaction that a kid takes only 2.3 seconds to go through a 50-cent Hershey bar.

11. Positioning regional businesses and institutions

Regional banks and large institutions secure loyalty by anchoring their position in local pride and avoiding identity crises.

You can successfully repel larger national competitors by mapping the prospect's mind with semantic differential research. Long Island Trust discovered it ranked poorly on traditional banking attributes compared to New York City giants, but scored highest on local commitment. They built their strategy around keeping money on the island.

Long Island Trust ran ads asking why customers would bank with city institutions that book 75 billion dollars in loans in the Bahamas and Cayman Islands instead of focusing on Long Island.

Through 33 offices of Long Island Trust on Long Island, the bank ensured 95 percent of loans and services went to Long Islanders and their local properties and businesses.

Long Island and United Jersey banks

When a bank is not the largest in its territory, you must study the weaknesses of big-city competitors to find a viable positioning strategy. United Jersey targeted the slow reaction time of massive New York and Philadelphia banks by positioning itself as the fast-moving bank, backed by decentralized decisions and electronic efficiency.

United Jersey implemented seven commitments including cross-training, rapid lock box service, and decentralized decision-making, leading to a 26 percent profit increase.

Operating across 116 branches of United Jersey in New Jersey while competing against 389 banks in Manhattan alone, the institution achieved a 30 million dollar increase in earnings, representing a 26 percent increase over the previous year.

The Catholic Church crisis

A large institution that loses its core positioning statement suffers an identity crisis and a decline in influence and participation. Following Vatican II, the Catholic Church shifted away from being seen as the strict teacher of the law without replacing it with a clear, simple corporate theme, leading to confusion, plummeting vocations, and reduced Mass attendance.

Regular Mass attendance dropped below 50 percent, vocations dropped by 60 percent, and organized religions came in last when evaluated by influential executives.

U.S. News & World Report surveyed 24,000 influential executives, finding that organized religion ranked last among institutions. The Church experienced a 20 percent drop in Catholic Mass attendance and a drop in the number of priests, nuns, and brothers.

12. Positioning your career and business

Personal success and business survival depend on outside-in thinking, finding a horse to ride, and embracing sacrifice.

You can apply positioning to your own career. Hard work alone is rarely enough. Success depends on finding an external vehicle or force to carry you forward.

Ray Kroc achieved massive wealth by recognizing the potential of the McDonald brothers' fast-food idea. He bought the concept they lacked the faith and vision to scale.

Finding a horse to ride

You should hitch your career to growth industries, competent bosses, useful business networks, powerful ideas, or external visionaries. Initiating a positioning program requires outside-in thinking rather than inside-out thinking.

You must evaluate six fundamental questions about your offerings:

• What position do you own in the mind?
• What position do you want to own?
• Who must you outgun to get there?
• Do you have enough funding for the task?
• Can you stick with your strategy long term?
• Does your image match your position?

The everybody trap and the essence of sacrifice

Attempting to appeal to everyone usually results in appealing to no one. Prejudice is a basic human commodity, and one group does not want to share an identity with another.

A famous campaign for Rheingold beer featured various ethnic groups drinking the product. The strategy ended up alienating every ethnic group and appealing to nobody.

The noise level in society is massive. The average human mind is exposed to 200,000 advertising messages in a single year. Bristol-Myers spent $35 million on Nuprin and American Home Products spent $40 million on Advil, but both failed to reposition Tylenol.

The core of successful positioning is sacrifice. You must give up a broader market segment to exclusively own a specific, unique position. Nyquil secured the nighttime cold medicine position by deliberately giving up the daytime market.

10 Key Ideas

1. Positioning starts with the product, but it is actually about manipulating what is already in the prospect's mind.
2. Getting into the human mind first secures long-term market dominance, while trying to enter second is immensely difficult.
3. When you are not the market leader, establishing an against position by relating to the leader is a proven strategy for success.
4. Market leaders maintain dominance by employing a multibrand strategy and covering new categories instead of altering established brand positions.
5. Followers must find an open hole, or creneau, in the prospect's mind rather than introducing a me-too product.
6. When no open creneau exists, you must create one by repositioning the competitors that occupy the prospect's mind.
7. Choosing a descriptive name that hooks the brand onto the product ladder is the single most important marketing decision.
8. Applying a famous house name to a new product backfires by cannibalizing the original market share and diluting the brand focus.
9. Personal success and business survival depend on outside-in thinking, finding a horse to ride, and embracing sacrifice.
10. The core of successful positioning is sacrifice, requiring you to give up a broader market segment to exclusively own a specific, unique position.