Positioning, by Ries and Trout

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This is a classic book in marketing, and therefore one of the books that Joel asked us to read. The main message of the book is that consumers have a limited mindspace. They can only pay attention to a certain number of things before they just lose track and don’t care any more. So it is vital as a company to make sure that your company marks out a clear position that is easy for the consumer to remember.

The most distinctive position to hold is to be perceived as the first or the best in a category. It’s a sign of distinction in the authors’ eyes to have one’s brand name confused with the category (e.g. Coca-cola for soft drinks or Xerox for copiers) because it indicates that your brand owns that category.

If you’re not on top, the authors describe a couple options. The best option is to create a new category; they use the example of Tylenol. Bayer dominated the aspirin market, so Tylenol started an advertising campaign as the non-aspirin pain reliever. It wasn’t a category that had existed before, but Tylenol’s marketing campaign created it, and by default, Tylenol was the leader of the category.

The other option is to use your secondary status as a plus. The canonical example they use of this is Avis, with its campaign of “We Try Harder”. Harder than whom? Well, obviously Hertz, although they never say that. Avis could paint Hertz as resting on its laurels as the market leader, so they spun their secondary status as a positive.

The other interesting point we got out of the book was the perils of line extension. It is all too tempting as a company to say “We have a successful brand, we want to move into a new area, let’s create a version of our brand for the new area”. The authors argue strenuously against this attitude. Returning to the example of Bayer, the authors pointed out that Bayer had a total grip on the aspirin market. Bayer equalled aspirin in the mind of the consumer. Then Tylenol did its end run creating a new category of non-aspirin pain relievers. Bayer reacted by creating a non-aspirin version of Bayer. Note the cognitive dissonance this sets up for the consumer; if Bayer equals aspirin, then a non-aspirin Bayer is a non-aspirin aspirin. It doesn’t make sense. It confuses the consumer, and ends up making them less likely to buy either version because it is no longer clear what Bayer means. Hence the authors highly recommend always starting a new brand for a new product category. Procter and Gamble are the masters of this; they have a phenomenal number of brand names, each of which is targeted to a specific product category.

I thought it was an interesting book with several good points. It’s highly opinionated, of course, and a bit dated (it’s over 20 years old), but the principles still make a lot of sense. After finishing the book, we had a spirited discussion in the company of how the lessons from the book apply to Fog Creek Software. And I’ve been thinking about how it applies to my own life; I think this positional attitude plays into my obsession with being the best at something. However, as Beemer rightly pointed out and as the example of Tylenol demonstrates, one can always create a category for one to be the best at by creating a new niche. More thoughts on this later.

P.S. I’ve added a new category of books, joelbooks, to indicate books that I’m reading for the Software Management Training Program. There’s a whole slew of books that are on the reading list that we’ll be working through.

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