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Publisher's Outlook
September 2002


Nadji Tehrani On Differentiation And Positioning:
Every Company Wants To Be A Peacock In The Land Of Penguins
But Few Companies Know How To Do It Right!

BY NADJI TEHRANI


The Missing Link In Marketing: Differentiation And Positioning
Your customers must have a reason to buy from you and that reasoning comes from positioning and differentiation.

Definitions
In order to better understand the purpose of positioning and differentiation, which, in my opinion, are the most crucial parts of marketing strategy, I thought it would be a good idea to refer to The American Heritage Dictionary, Second College Edition and find the definition offered for differentiation and positioning. Although they do not have a direct definition for differentiation and positioning in marketing, if you look at the definitions for differentiate and position, one will arrive at the same conclusion, as follows:

American Heritage defines differentiate as follows:

  • To constitute the distinction between.
  • To perceive or show difference in or between; and discriminate.

Position is described as follows:

  • The right or appropriate place.
  • The way in which something or someone is placed.
  • The act or process of positioning.
  • To place in proper position. Last but not least,
  • An advantageous place or location.

Having stated the above definitions, one can clearly conclude that to effectively market, any product or service must be differentiated from its competition, thereby giving the potential buyer a reason to purchase the product or service in question.

As for positioning, the definition clearly points out that it is crucial for any product to be positioned in an appropriate place or, preferably, advantageous location.

Over the years, I have learned that if you dont position yourself advantageously, your competition will position you and your product in the most disadvantageous way. Having said that, one must clearly explain that positioning is not a part-time job by any stretch of the imagination. Positioning and differentiation, like marketing itself, are not part-time jobs. In fact, to do it right, they are more than full-time jobs. That means you must market every day, you must position every day and you must differentiate every day, 365 days a year, 24 hours a day, 7 days a week. In short, marketing, positioning and differentiation are 24/7 jobs, period, end of story.

An example can be cited by describing the success and failure of company X and the ultimate success of company Y.

In the mid to late 80s, company X took advantage of the inbound telemarketing boom by using a toll-free number and advertising it heavily as the preferred source to buy its products around-the-clock. In the early development stages of the company, the firm marketed heavily and practically all day long, every day, until they positioned themselves as THE source for the product in question and thus enjoyed the number 1 position in market share. A few years later, the company was sold. All advertising, positioning and differentiation was stopped by the new owners. Company Y came along and did what company X used to do and started to heavily market, advertise, differentiate and position themselves as the new leaders. Guess what? Company Y is the unquestionable leader in the marketplace and next to nothing is heard about company X. This is a true story. The idea is not to bad-mouth any company, but to simply point out that great marketing, positioning and differentiating made company X successful, but when all of these marketing activities stopped, they lost market share and their leadership position to someone else who did a better job of marketing, advertising, positioning and differentiating.

Why Positioning And Differentiating Are Vital To The Success Of Any Marketing Campaign For Any Product Or Service
Here is some food for thought:

With so much global competition, customers need a reason to buy from you and that reason comes from your positioning and differentiation, which explains to your customer or potential customer what sets you apart or what sets your product or service apart. Without that, no one has any reason to buy your product or service as opposed to your competitors.

I was reading a book entitled The New Positioning; The Latest on the Worlds #1 Business Strategy by Jack Trout and Steve Rivkin, published by McGraw Hill. I highly recommend this book and here are a few testimonials found in this book:

A firm in a highly attractive industry may still not earn satisfactory profits if it has chosen a poor competitive positioning.
-- Michael E. Porter
The Competitive Advantage of Nations

The key to any marketing plan is positioning.
-- Ron Zarrella
Vice President, General Motors Brandweek

The global marketing imperative: Positioning your company for the new world of business.
Chicago Tribune

More than anything else the success of soft drinks depends on taste and positioning, rather than on presentation and design.
Food Magazine (Holland)

Rolls-Royce to buy Allison, positioning U.K. firm in the U.S.
The Wall Street Journal, Europe Edition

Influencing The Mind
In his book, Mr. Trout defines positioning as follows:

We have always defined positioning, not as what you do to the product, but what you do to the mind.

Mr. Trout further believes that the ultimate marketing battleground is the mind, and the better you understand how the mind works, the better you will understand how positioning works.

Positioning Must Be Adjusted To The Rapidly Changing Market Conditions
In todays ultra-fast-moving and rapidly changing environment, one can practically assume that market conditions also change month to month, maybe even day to day as opposed to 25 years ago when things changed more slowly. Consequently, one must always remain 100 percent focused on the marketplace as well as on the validity of positioning vis vis the current conditions of the marketplace. It would be a disaster if one were to lose sight of adjusting ones positioning to reflect the changing marketplace requirements. The next important item is that when companies fail to change their positioning, they lose market share and lose considerable revenue. In fact, such companies may not even survive when markets change so rapidly.

What Then Is The Proper Course Of Action?
Obviously, as I have stated in many of these Publishers Outlooks, in all cases one must remain extremely flexible and change as rapidly as the marketplace changes. This process is called repositioning, which is crucial to the survival of any successful and progressive organization. Mr. Trouts book spends considerable time explaining this process.

How To Cope With Information Explosion
In todays extremely complex, information-jammed world, we are exposed to thousands of advertisements, promotions of various kinds and in short, are inundated with information explosion. It has been said that in the last 30 years, more information has been produced than in the previous 5,000 years. The emergence of the Internet has added ultrasonic speed to the growth of information available. Therefore, to make your products and services stand out in the marketplace, you must do a superb job of positioning, differentiation, marketing and advertising.

You Dont Want To Be A Penguin, You Want To Position Yourself As A Peacock
Take a look at the picture to the right. What stands out? Obviously, the peacock. What sets it apart? The magnificent colorful feathers and its artistic design versus the bland black-and-white feathers of the penguin. If you were to buy one of them, which one would you buy, the peacock or the penguin? Those who would buy the penguin would need to see a psychiatrist. The bottom line is, the peacock is different from the rest of the crowd; it stands above the rest with magnificent and attractive colors in the bland land of the penguins. If you truly want success in your positioning or the position of your company or product, you dont want to be a me-too or a penguin. You want to be unique and position yourself as such. In short, you want to position yourself as a peacock in the land of penguins. That is how you gain market share, penetrate the minds of the buyers and become a leader.

The First Law Of Positioning
The first law of positioning states that it is better to be first than to be better. And I will prove it to you in less than one minute. Who was the first man who flew over the Atlantic? Obviously, Charles Lindbergh. Who was the second person to fly over the Atlantic? Answer: nobody knows and nobody cares about number 2. What was the name of the horse who won the Triple Crown in 1973 and broke practically all racetrack speed records? The answer: Secretariat. What was the name of the horse that always came in the number 2 position right behind Secretariat in all three races? The answer, no one remembers and no one cares about number 2. Only horse racing fans, such as myself, would remember the name of the second-place horse, which was Sham. The bottom line: the first law is true and if you really want to be a market leader, you must position yourself as such every minute, every hour, every day, every month, 365 days a year and 24/7.

The Second Law Of Positioning
If you are unable to be first in your field, then find a niche in which you can be number 1. I think you can find a way of justifying the validity of this law also by looking at the first law.

Finally, dont forget repositioning as the markets continue to change!

As always, I welcome your valued comments.

Sincerely,
Nadji Tehrani
TMC Chairman, CEO and
Executive Group Publisher
ntehrani@tmcnet.com

[ Return To September 2002 Table Of Contents ]


In Remembrance Of September 11th

As we are at the first anniversary of the horrible events of last September 11th, I wanted to take time to pause in reflection of how much we lost on that day, of how much it changed the world. I believe a fitting tribute is the accompanying painting, by a longtime family friend, Ali Dowlatshahi. Mr. Dowlatshahi has portrayed the towers of the World Trade Center shortly after the attack, with an angel fighting the demon who would conceive of such evil as the attack on the innocent who were going about their business on that day. Two snuffed candles symbolize the darkness of that day, and two doves (symbolizing peace and the hopes of mankind) rise from the devastation, their wings singed by the fires. And yet they rise, as we all have to, in hopes of a better world. The Statue of Liberty cries for the dead, yet the Stars and Stripes, waving defiantly in the face of the attack, represent Americas strength and pride. The crowd represents the faces of the peoples of all nations, united in mourning the deaths of so many, for as symbolized in Mr. Dowlatshahi painting, it was an attack not just on America but on civilization itself, and people everywhere should stand united, angels in the fight against the demon of terrorism, no matter where it may be lurking, waiting to plunge our world into darkness.


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