According to the assigned reading for the week, identify and explain the four essential components of a positioning statement.? 4. Evaluate the positioning statements of Wal-Mart, Apple, S

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Marketing Sunil Gupta, Series Editor

READING + INTERACTIVE ILLUSTRATIONS

Brand Positioning

JILL AVERY Harvard Business School

SUNIL GUPTA Harvard Business School

8197 | Published: February 20, 2015

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8197 | Core Reading: Brand Positioning 2

Table of Contents

1 Introduction ………………………………………………………………………………………………………………………….. 3 2 Essential Reading …………………………………………………………………………………………………………………. 4

2.1 Brand Positioning ……………………………………………………………………………………………………………4 2.2 Crafting a Positioning Statement ………………………………………………………………………………………5 2.3 Staking Out a Unique Selling Proposition ………………………………………………………………………….7 2.4 The Three Cs Model ………………………………………………………………………………………………………. 10

2.4.1 Consumer Analysis ……………………………………………………………………………………………… 10 2.4.2 Competitive Analysis …………………………………………………………………………………………… 15 2.4.3 Company Analysis ………………………………………………………………………………………………. 21

2.5 Brand Repositioning ……………………………………………………………………………………………………… 24 2.5.1 Balancing Consistency and Change ……………………………………………………………………… 26 2.5.2 Repositioning an Identity Brand……………………………………………………………………………. 27

3 Supplemental Reading …………………………………………………………………………………………………………. 31 3.1 Positioning Differently …………………………………………………………………………………………………… 31

4 Key Terms ………………………………………………………………………………………………………………………….. 33 5 For Further Reading …………………………………………………………………………………………………………….. 34 6 Endnotes ……………………………………………………………………………………………………………………………. 35 7 Index ………………………………………………………………………………………………………………………………….. 36

This reading contains links to online interactive illustrations and video, denoted by the icons above. To access these exercises, you will need a broadband Internet connection. Verify that your browser meets the minimum technical requirements by visiting http://hbsp.harvard.edu/tech-specs. Jill Avery, Senior Lecturer of Business Administration, Harvard Business School, and Sunil Gupta, Edward W. Carter Professor of Business Administration, Harvard Business School, developed this Core Reading.

Copyright © 2015 Harvard Business School Publishing Corporation. All rights reserved.

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1 INTRODUCTION

consumer stands before a set of supermarket shelves, staring at the myriad choices in the bottled water category. Before she can choose one, there’s a multitude of questions to answer. After all, in today’s marketplace, water is

much more than just H2O. Sparkling or still water? Vitamin-enriched or energy- boosting? With zero calories or sweetened and fruit-flavored? A small bottle for lunch boxes or extra-large for long-term storage? In a slender glass bottle evoking fine art or packaged in lightweight, eco-friendly plastic?

Beyond these functional differences, each brand tells its own unique story. Fiji claims that equatorial trade winds purify its water. Perrier describes how its mineral water’s bubbles originate on the Languedoc plain in southern France when rainwater seeps into the ground and combines with volcanic gases. Poland Spring touts its Maine roots, while Crystal Geyser highlights its alpine origins near Mount Shasta. Dasani and Aquafina, respectively owned by The Coca-Cola Company and PepsiCo, attempt to hide their corporate parent affiliations and their less glamorous sources (the public water supply). Instead, Dasani boasts about its environmentally conscious bottle design and its reverse-osmosis filtering process. Aquafina highlights its trademarked HydRO-7™ seven-step purification process.

Source: Photo by Kim Yanoshik

Each brand tries to stake a particular claim of superiority—the cleanest, freshest, purest, healthiest, most natural, most environmentally sensitive, most socially conscious, most fashionable—that resonates with a particular type of consumer. The consumer’s choice will depend on how strongly she perceives that a particular brand offers the best solution to her needs. Is she a mother who cares about her children’s health? Is she a hostess throwing an important dinner party? Is she preparing for surviving a natural disaster? Is she a concerned citizen of the world? Each brand is positioned to appeal to a different customer need.

A

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This reading addresses the principles of brand positioning: the art of staking out a particular piece of mental real estate for a brand in the consumer’s mind by crafting and communicating a differentiated positioning statement. Brand positioning provides a strategic roadmap for creating powerful, resonant, and unique messages to help a company’s products and services stand out amid the cacophony of the marketplace. In this reading, we highlight a process for formulating a brand’s positioning statement that delivers competitive advantage by using the analysis and synthesis of consumer, competitive, and company factors. We will explore the types of positions companies can claim and the creative ways in which they can differentiate brands from one another. Finally, we will examine the challenges associated with repositioning brands, including the tension between maintaining consistency and adjusting to changing consumer preferences.

2 ESSENTIAL READING

2.1 Brand Positioning

In their classic book Positioning: The Battle for Your Mind, branding consultants Al Ries and Jack Trout proclaim, “Positioning is not what you do to a product. Positioning is what you do to the mind of a prospect,” reinforcing the notion that what is important to measure in positioning is not the brand manager’s intent, but the brand positioning’s actual end result—how consumers catalog, classify, and remember a brand.1 A brand’s position represents its location vis-à-vis its competitors in the mental maps that consumers construct to represent the range of possible solutions to their problems. Strong brand positions are powerful because they help consumers categorize brands by their similarities and, at the same time, distinguish and differentiate between brands based on their differences.

Regardless of a company’s strategic intent in positioning its brand, consumers actually determine the brand’s position by their response to it. Marketing consultant Harry Beckwith explains the difference: “A position is a cold-hearted, no-nonsense statement of how you are perceived in the minds of your prospects. A positioning statement, by contrast, expresses how you wish to be perceived.”2 (For a detailed perspective, see the sidebar “Ted Levitt on Positioning.”)

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Ted Levitt on Positioning

Marketing experts often regard Theodore “Ted” Levitt, an economist, Harvard Business School professor, and former editor of the Harvard Business Review, as a founder of modern marketing. His provocative Harvard Business Review articles lambasted marketing managers for their shortsighted views of their businesses.3 Levitt argued that companies should not define themselves by the products they sell, but rather reorient themselves to their customers’ perspective by defining themselves through the value they produce in consumers’ lives—the “value proposition.” He realized that consumers attach value to a product or service in proportion to its perceived ability to solve their problems or meet their needs.

Stating that there was no such thing as a “commodity product,” Levitt understood that even something as basic as water could be differentiated. He suggested that a company’s deep understanding of its customers is the key to creating a value proposition that allows consumers to perceive a product as a differentiated solution that meets their specific needs, rather than as a commodity.

Levitt declared that commodity products are simply failures of marketing. The problem, he claimed, does not lie with the products themselves, but exists within the minds of consumers: “There is no such thing as a commodity, only people who act and think like commodities.” In Levitt’s view, managers do not need to change the products they are selling; instead, they need to fix their positioning in consumers’ minds. In today’s marketplace, we see brands like Dole, Chiquita, and Purdue creatively differentiating products in categories once viewed as commodities (fruit and poultry).

Source: Adapted from “Marketing Success through Differentiation—of Anything” by Theodore Levitt, Harvard Business Review, January–February 1980. Copyright © 1980 by the Harvard Business Publishing Corporation; all rights reserved.

2.2 Crafting a Positioning Statement

Companies begin the brand positioning process by creating a positioning statement, a strategic document that communicates the unique value the brand would offer to a particular target market segment. Positioning statements distill the brand’s value proposition into a compelling answer to the all-important question, “Why should I buy?” Consumers in most product and service categories are bombarded with too many alternatives, with most seemingly undifferentiated from one another, making the selection process very difficult. A provocative positioning statement can make the difference between a brand’s

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8197 | Core Reading: Brand Positioning 6

getting lost in the sea of choices and standing out as the best solution for the consumer.

Note that, unlike brand slogans or taglines, positioning statements are strategic in nature, developed for an internal managerial audience rather than an external consumer audience. They help guide the tactical execution of the brand and are often the starting point for developing the marketing messages that will be delivered to consumers. Positioning statements contain four essential components:

• For whom, for when, for where? An explicit description of the target market segment that helps consumers easily discern which brands directly address their specific needs and which don’t. This component can outline a particular type of person (e.g., mothers concerned about their children’s health), a particular usage situation (e.g., when you need to decorate your dinner table), and/or a particular usage location (e.g., when you are on the go). For more on how managers can choose a target market segment, see Core Reading: Segmentation and Targeting (HBP No. 8219).

• What value? A simple, straightforward description of the unique value claim the brand offers, written from the consumer’s viewpoint. This will become the thing for which the brand is known. There are four types of value that customers can derive from a product or service: economic value, functional value, experiential value, and/or social value. Products that provide tangible monetary savings either at purchase or over their long- term use offer consumers economic value. When comparing many products (e.g., mobile phones or laptops), consumers often consider not only price but also different features, or the functional value of the products. Many consumers, however, buy products for their experiential value—intangible psychological and emotional values associated with the brand. Finally, in many settings, consumers derive social value from products or services. Facebook’s value comes from sharing information, pictures, and videos with friends. For more on how customers derive value from the brands they use, see Core Reading: Creating Customer Value (HBP No. 8176).

• Why and how? Evidence that provides consumers with reasons to believe the brand’s claims. Supporting evidence for the product’s value can come from logical arguments, scientific and technological data, consumer testimonials, celebrity or expert endorsements, product demonstrations and experiments, and independent agency seals of approval.

• Relative to whom? An explicit description of the competitive set in which the brand classifies itself and the alternatives consumers may be considering. This helps consumers establish a frame of reference for the purchase decision. This section of the positioning statement can either help consumers classify the brand as similar to other brands or product categories they are already familiar with, or differentiate and distinguish it as something completely different. For example, Hyundai—known for low- cost, functional vehicles—launched a luxury automobile by positioning it as “a brand new luxury car as spacious as the Mercedes S-Class, yet priced like a C-Class.” This statement drew both a parallel to and a distinction between Hyundai and one of the world’s leading luxury car brands. When 7-Up

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wanted to differentiate itself from market leaders Coca-Cola and Pepsi- Cola, it positioned itself as “the Uncola,” offering customers something different to quench their thirst. Sandal maker Sanuk prominently declares on its point of purchase displays, “These are not shoes” to clearly differentiate its Sidewalk Surfers as being more comfortable than other footwear.

The four components of positioning statements can be summarized in this general format:

For [target market], Brand X is the only brand among all [competitive set] that [unique value claim] because [reasons to believe].

Below is an example of how three bottled water companies might use this format to position their brands to address three distinct target markets with unique value claims:

• For [upscale consumers looking to make a design statement with their choice of water],Voss is the only brand among all [bottled waters] that offers [the purest and most distinctive drinking experience] because [it derives from an artesian source in southern Norway and is packaged in a stylish, iconic glass bottle].

• For [middle-class consumers looking for an affordable and accessible luxury], Perrier is the only brand among all [bottled waters] that offers [an elegant, sparkling, and refreshing water, with just a hint of zaniness] because [it is naturally carbonated by volcanic gases deep beneath the soil in southern France and features clever bottle designs by Andy Warhol].

• For [millennial consumers who are socially conscious], Ethos is the only brand among all [bottled waters] that [cares about solving the world’s clean water crisis], because [it donates five cents for every bottle sold to programs that help support water, sanitation, and hygiene education programs in water-stressed countries].

2.3 Staking Out a Unique Selling Proposition

Brand managers should craft positioning statements to focus on a single, most important claim that distinguishes the product from the competition, rather than to include a laundry list of all of the attributes, benefits, and values offered by the brand. According to advertising executive Bill Bernbach, “You’ve got to live with your product. You’ve got to be steeped in it. . . . Indeed, if you have not crystallized into a single purpose, a single theme, what you want to tell the reader, you cannot be creative.”4 In our advertising-saturated culture, simple messages increase brand recall and receptivity. Writing a positioning statement becomes a challenging endeavor, since managers must choose the claim most likely to resonate with consumers.

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Brands often highlight their most important value claim through the use of a unique selling proposition. First devised by advertising pioneer Rosser Reeves, a unique selling proposition (USP) is a type of value claim that offers a prospective customer a specific, unique, and superior reason to purchase a product. Reeves felt strongly that a successful product had to actually be better than its competitors; while clever ads could move substandard product off the shelf initially, the disappointing customer experience thereafter would eventually doom the product to failure. He pushed his clients to build superior performance into their products, claiming that the USP must hinge on a specific benefit that competitors could not copy and that was resonant and relevant enough to persuade consumers to buy.5

USPs anchor some of the most famous advertising taglines in history, such as FedEx’s “When it absolutely, positively has to be there overnight”; Domino’s Pizza’s “You get fresh, hot pizza delivered to your door in 30 minutes or less or it’s free”; and M&M’s “The chocolate melts in your mouth, not in your hands.” Similarly, Procter & Gamble (P&G) has long been a proponent of using USPs as a core of its brands’ positions. Bounty paper towels are the “quicker picker- upper”; Tide laundry detergent claims, “If it’s gotta be clean, it’s gotta be Tide”; Pampers promises “the driest diaper”; Charmin toilet paper offers “superior softness and absorbency”; and Head & Shoulders shampoo “effectively targets the source of dandruff” and “provides the dual benefits of a healthy scalp and great-looking hair.”

Rosser Reeves proposed the USP to capture the “rational” advertising strategies of the 1940s and 1950s, which viewed customers as logical purchasers who would listen to a reasoned argument. However, since the 1960s, marketers have acknowledged that, when making purchasing decisions, consumers often rely on their “irrational” emotions, memories, intuitions, dreams, and aspirations. That insight ushered in a new era, dubbed the Creative Revolution, led by advertising pioneers David Ogilvy, Leo Burnett, and Bill Bernbach, who believed that successful brand positions were those that struck a human chord. “Nothing is so powerful as an insight into human nature, what compulsions drive a man, what instincts dominate his action,” proclaimed Bernbach.6 Their positioning strategies used creativity, wit, intelligence, and storytelling to capture consumers’ imaginations.

By connecting brands with cultural values, lifestyles, and ideals, some positioning statements promise consumers entry into desirable worlds. Brands like Vans, Cannondale, and Patagonia positioned themselves as authentic parts of the skateboarder, mountain biker, and mountain climber communities; brands like Tommy Hilfiger (clothing) and Sprite (beverages) borrowed their appeal from urban culture; and Harley-Davidson (motorcycles) and Diesel (jeans) accentuated their rebel and outlaw characteristics. (See the sidebar “Positioning Absolut” for another example.)

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Choosing whether to use a rational or emotional positioning appeal requires insight into three interacting factors: how the firm’s target customers choose and use the product; how the firm’s competitors use rational versus emotional appeals; and how the firm’s own brands and other assets can support the positioning statement.

Positioning Absolut

Positioning Absolut as a premium vodka in 1979 was a marketing challenge. The brand first came to the United States at a time when vodka was perceived as a lower-class, tasteless drink. Brown spirits—bourbons, rums, and whiskies—were in, clear spirits were out. The vodka category was dominated by Stolichnaya and Smirnoff, which leveraged their Russian origins and connections to the czars. Absolut, made in Sweden, could not compete on its national origins, nor did it have a distinct taste advantage. Instead, the company decided to package the product in a unique, elegant, old-fashioned medicine bottle. There was no paper label, so that consumers could see the crystal-clear vodka—the difference from brown spirits now a source of pride.

Absolut’s simple design became the heart of the brand’s positioning and the subject of one of the world’s longest-running advertising campaigns. Advertising agency TBWA created 1,500 Absolut ads

featuring images in the shape of the iconic bottle with witty two-word headlines. The first ad was a straight-on shot of the bottle with a halo above it and the words, “Absolut Perfection.” Since then, the brand has taken iconic images such as New York’s Central Park, Aspen’s ski terrain, and Amsterdam’s street scenes and reconfigured them into its bottle shape. It also teamed up with artists such as Andy Warhol and Keith Haring for a series of ads featuring their renditions of the bottle.

Today, Absolut ads are treasured by collectors. Furthermore, the brand has earned a place as one of the best-selling liquor brands of all time, all based on a value claim that focused on selling an image and a link to contemporary art and culture, rather than a rational reason to buy the product.

Source: © The Absolut Company AB. Used under permission from The Absolut Company AB. Absolut® Vodka. Absolut Country of Sweden vodka and logo, Absolut bottle design and Absolut calligraphy are trademarks owned by the Absolut Company AB.

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2.4 The Three Cs Model

The Three Cs model of brand positioning encourages managers to analyze three key dimensions of their market situation—consumers, competition, and company—before deciding on a single most important claim regarding their product or service (see Exhibit 1).

EXHIBIT 1 Three Cs Model of Brand Positioning

2.4.1 Consumer Analysis

Let’s start by looking at the ways that managers can identify value claims that are relevant, resonant, and realistic to consumers.

Creating Relevance

Understanding consumer needs and behavior is essential to choosing the right value claim. Strong value claims should be relevant to consumers, addressing their fundamental needs or the jobs that they need the product or service to accomplish. In fact, product innovation researcher Clayton Christensen encourages managers to uncover the basic “job” consumers are looking to fill when they “hire” a product or service. This, he asserts, is the key to creating relevant value claims that speak to consumers’ needs. (For more on Christensen’s research, see the sidebar “Hiring Milkshakes for Breakfast” and the accompanying Video 1.)

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Relevance is also established by clearly specifying a target market in the positioning statement and aligning the value claim with the specific needs of that target market. For example, marketers for the erectile dysfunction (ED) drug Cialis needed to find ways to convey the drug’s relevance when it entered the market four years after market leader Viagra. Cialis’s target market choices included everyone from current Viagra users and men for whom Viagra had not worked, to women who were in relationships with men with ED and primary care doctors, who were often the first line of defense. 7 Because each target market finds relevance in a different product attribute, a marketer’s choice greatly shapes the type of value claim being offered to prospective customers.

Creating Resonance

Strong value claims should resonate with consumers, providing them with a narrative that feels personally meaningful. Claims can be made at three levels: feature- or attribute-based claims that focus on a special feature, ingredient, or capability of the product or service (“What’s in it?”); benefit-based claims that focus on the specific benefits customers receive from using the product or

Hiring Milkshakes for Breakfast

Why would a customer order a milkshake for breakfast? Clayton Christensen looked at that question for a fast-food restaurant client and identified several jobs that such a milkshake was being “hired” to do. Morning customers often face a monotonous, lonely drive to work and often do not eat before leaving the house. Ordering a milkshake, rather than a coffee or other beverage, helped them cope better with the commute. Why? Because a milkshake, with its viscous consistency, lasted longer than other beverages, and its enjoyment could stretch out over the entire commute. What’s more, sucking a milkshake through a straw adds an element of playfulness and alleviates some of the boredom of the drive. Finally, unlike a breakfast sandwich or other food, a milkshake is a satisfying liquid “meal” that could easily be managed with one hand while driving. Once Christensen’s client realized that its milkshake was being hired to do these important jobs, it improved the product’s positioning.

Hear Christensen discuss the job of a milkshake in this related video.

VIDEO 1 Hiring Milkshakes for Breakfast

Scan this QR code, click the icon, or use this link to access the video: bit.ly/hbsp2utt6jW

Source: Clayton M. Christensen, Scott Cook, and Taddy Hall, “Marketing Malpractice: The Cause and the Cure,” Harvard Business Review 83 (December 2005): 74–83.

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service (“What’s in it for me?”); and value-based claims that focus on helping consumers achieve the values they hold to be important (“Why is it important to me?”). As shown in Exhibit 2, laddering up from feature-based to benefit-based to value-based claims can increase brand resonance.

EXHIBIT 2 Laddering Up from Features to Benefits to Values

Resonant value claims address consumers’ deep-seated needs. They offer the meaning required for living in consumers’ unique cultural space and time. To discern how consumers use brands to create meaning, marketers need to uncover their worldviews, ideologies, value systems, organizing principles, archetypes, and deep motivations. Some techniques

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