Thursday, July 28, 2005

Mind Games: Positioning

Violent conversation today with a couple of MBAs.

Topic du jour?


What is it? Why do companies do it?

Do individuals position themselves to others?

Positioning is a marketing term, first and foremost.

It is the technique by which marketers try to create an image or identity for a product, brand, or organization.

That is because products are not perceived by their target markets in a vacuum.

It happens in the mind.

Companies position themselves and whatever it is they are selling because they want your hard earned cash.

For them, it's all about the Benjamins, baby.

And the only way to get them is to convince you that they are the best in whatever market/industry they're operating in.

When you think of soda, you think of Coke.

The photocopier in your office breaks down? Someone call Xerox!

Time to refill your toothpaste -- at the pharmacy, you gravitate towards Crest.

That's positioning in a nutshell.

If a product's position is how potential buyers see the product, perhaps my generation's consummate "positioner" is Microsoft.

Microsoft has the software industry in a noose.

Positioning is expressed relative to the position of competitors.

The average person barely knows a software company other than the Redmond giant.

That say's something.

Business management guru Peter Drucker tells us that a firm has only 2 resources -- innovation and marketing.

What makes Bill Gates such a genius (and a threat to all potential entrants) is that he's exploited both of these to the last drop.

Microsoft only recruits geniuses.

If someone were to buy Microsoft tomorrow, they'd be paying billions and billions for their intellectual capital (what M&A bankers call goodwill).

Then they'd have to pay over $275 billion just for the company's book value and hard assets.

Meanwhile, Microsoft's marketing is unparalleled.

With innovation and marketing perfected, Microsoft epitomizes the moniker "corporate juggernaut."

Without positioning, companies can plan on everything except sustaining a competitive advantage in the marketplace.

In such a product-flooded and attention-span-impoverished environment as ours, positioning may be a company's last hope for survival.

Positioning is everywhere; companies control market share vis-a-vis mind share.

Keep it in mind the next time you find yourself in Aisle 4 at CVS.

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