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On Differentiation and Positioning

By Nadji Tehrani,
Chairman and Founder, Technology Marketing Corp.

Every Company Wants To Be A Peacock In The Land Of Penguins, But Few Companies Know How To Do It Right! Part 1

Editor´s Note:
Exactly 10 years ago, I wrote this editorial. To the extent that problems explained herein still exist, I felt compelled to reproduce it again. And here it is:

The Missing Link In Marketing: Differentiation And Positioning

Your customers must have a reason to buy from you; 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. Although it does not have a direct definition for differentiation and positioning in marketing, if you look at the definitions for differentiate and position, you will arrive at the same conclusion.

American Heritage defines differentiate as:

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

Positioning is described as:

• 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 don´t 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.

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 one 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. 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

As always, I welcome your comments. Please email them to me at nadjitehrani@tmcnet.com.

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