January 12th, 2007, 7:51am – A musician walks into Washington’s Enfant Plaza subway station wearing, like any street artist, a plain t-shirt and a brand name ball cap. He picks a spot near one of the entrances to cash in on rush hour traffic, takes his violin out of its case, leaves it open on the floor for coins and bills, and without further ado, begins playing Bach’s Chaconne, considered the apotheosis of the violin repertoire and reputed for its great complexity. Next comes a piece by Massenet, a Schubert, and another Bach. A handful of passersbys take a moment to listen to the musician, but most rush past without so much as a glance. After forty-five minutes, the busker counts the money in his case: a total of 32 US dollars. Not bad for a street musician. He puts away his violin and leaves the subway station.
January 8th, 2007, 8:35pm – Boston’s Symphony Hall is packed: the virtuoso performing that night explains the unusually high seat prices, asking 100 US$ even for folding seats. The distinguished audience and orchestra musicians wait in reverence-filled silence, until a loud roar of applause welcomes him onto the stage. He greets the audience, exchanges a glance with the conductor and opens the evening with Bach’s Chaconne, followed by a piece by Massenet, a Schubert, and another Bach. Ninety minutes later, and an enchanted crowd of concertgoers leaves the hall thankful for the privilege of having been among those to attend a performance by a prodigy named “Instrumentalist of the Year” and nominated for 5 Grammy Awards.
You’ve guessed it: the two musicians are one same person. His name: Joshua Bell, one of the world’s top violinists. His subway performance was part of a social experience headed by the Washington Post on “context, perception and priorities”. In both contexts, Bell played the same program on a violin valued at 3.5 million made by Stradivarius himself.
One musician. Two contexts. Two different perceptions.
Context and perception
The experiment confirms that people always judge the value of something based on its context, not with true objectivity. When Joshua Bell played in the subway, he positioned himself as a street artist and that is how he was seen. But when he plays in a concert hall, he is positioned as a virtuoso. The appreciation of his talent differs with the context. This contextual mechanism comes into play in all human activity. It is fundamental in the brand creation process, and more specifically when it comes to positioning. In marketing, positioning refers to the place a brand occupies in consumers’ minds compared to the competition.
Finding your place in consumers’ minds
To build a strong brand, companies must contextualize their offering, especially when their product or service doesn’t necessarily stand apart from the competition. San Pellegrino is the water of Italian fine dining, Contrex for people watching their waistline, VOSS for the world’s elite and Perrier for Parisian bars and cafés.
An established brand triggers associations that are similar in the minds of all of their customers. The mental picture is what gives a brand its strength and substantiates price mark-ups. For new brands or products, the biggest challenge is often in trying to find a positioning that differs from the competition but is still relevant and attractive to the target clientele. Starting out, Amazon called themselves “the world’s largest bookstore.” It was a clever positioning to differentiate themselves from conventional bookstores and the few e-shops at the time. Etymologically speaking, Amazon is not in fact a bookstore (a physical place you can buy books), yet they ably toyed with the association of ideas to attract customers.
From positioning to marketing mix
In theory, a brand’s positioning should help drive all decisions pertaining to its choice of products, pricing, distribution and communications (the marketing mix). In practice, however, a great many brands lack clarity in their positioning, which results in a marketing policy that is more or less random. Yet putting in the extra effort is well worth it. Clear positioning helps you make confident decisions for your marketing actions. And when positioning and marketing mix truly align, magic happens. Nespresso is a powerful example.
Coffee or Grand Cru?
Upon the 1986 launch of the Nespresso brand, Nestlé had already been marketing another coffee brand, Nescafé… since 1938. In the 80s, Nescafé was known around the world, so why not use that notoriety to launch their new machine with capsules stamped Nescafé?
From a financial standpoint, using a well-known brand to launch a new product has the advantage of cutting marketing costs drastically. But from a brand perspective, the Nescafé name (despite its fame) would have cramped possibilities for premium pricing to go with the capsule innovation, seeing how Nescafé has long been positioned as a household brand offering easy-to-use products for everyone, everywhere.
And so, Nestlé ably forged a new name to warrant the high pricing of their capsules. Nespresso is positioned as a luxury brand, without truly being one, and applies all the sector codes. Each and every piece of its marketing mix (product, price, distribution and communications) is used to reflect that positioning. Their capsules have elegant Italian names (Volluto, Corto, Chiaro, Vivalto Lungo) and some have been labeled “Grands Crus.” Like luxury brands, Nespresso has nominative shops and invites customers to become members of a “club.” And to top things off, the brand’s visibility is taken care of by a combination of George Clooney and chic paper bags. In contrast, Nescafé’s marketing mix is much more conventional and run-of-the-mill for coffee: instant coffee sold in supermarkets, what else?
Positioning and marketing mix
|Positioning||Luxury product||Basic product|
|Product||Capsules (grands crus) and sophisticated names (Volluto, Corto, Chiaro)||Instant coffee|
|Price||Premium (starting from CHF 100/kg for Volluto capsules)||Average (starting from CHF 36/kg for Nescafé Red Cup)|
|Distribution||Designer boutiques, online, premium packaging, “members” club||Supermarket|
|Communications||Advertising using celebrities (George Clooney), coffee workshops, selective distribution at launch (lawyers and private bankers)||Online promotions (rebates per volume, aisle-end displays etc.)|
Let’s not forget that the relationship between brand positioning and marketing mix is a two-way street. Every decision for the marketing mix affects positioning, and the other way around. Nespresso sold at Aldi would lose its splendour, just like Nescafé on Geneva’s rue du Rhône would have little credibility. This is why consistency between positioning and marketing mix is essential for a project’s success.
How to go about it
Settling on a positioning for your company inevitably takes time. Before you make any decisions, you need to analyse the market, decrypt trends and predict your competitors’ next moves, which takes not only analytics, but also creativity and strategy. The goal is not to find “a catchily worded phrase” but rather to draw up a set of items that form a coherent whole. Positioning is more specifically made up of four key components: the target segment, the frame of reference, the benefits and the proof points.
Always begin by pinpointing the customer type (target segment). You customers should be the starting (and arrival) point for your brand strategy. For instance, Montblanc targets senior executives seeking a status symbol. Next, define your frame of reference. This means deciding which product/service category you want for your brand. A couple of examples: Mini is framed as a “toy for adults” while the Fiat 500 is more of a “fashion accessory.” Lastly, add the benefits and proof points of your brand, meaning the advantages your brand offers customers and points that prove those advantages.
For example, BMW’s assistance, shock absorption and active steering support the brand benefit “sheer driving pleasure.”
Components of a brand positioning
|Target segment(s)||The group(s) of consumers you see as your priority||Montblanc targets senior executives seeking a status symbol while Montegrappa (an Italian pen brand) targets collectors and craft aficionados.|
|Frame of reference||The product/service category you want for your brand||Mini is framed as a “toy for adults” while the Fiat 500 is more of a “fashion accessory”|
|Benefit(s)||The advantages your brand offers customers (values in use, image and/or exchange)||Moleskine makes customers feel like they are following in the footsteps of famous artists and writers|
|Proof points||Les éléments de preuve qui corroborent les avantages de votre marque||BMW’s assistance, shock absorption and active steering support the brand benefit “sheer driving pleasure”|
Proper brand positioning must pass the test in terms of differentiation, credibility, relevance, and attractivity. The following questions can be used to evaluate these aspects:
- Is my positioning different (enough) from my competitors?
- Is my positioning credible or does it seem “far fetched”?
- Is my positioning relevant in terms of my resources, the sector and upcoming trends?
- Is my positioning attractive to my target clientele (does it respond to their needs)?
Once you have run the test, summarize your positioning into two or three sentences (known as a “Positioning Statement”). When done right, your positioning should gleam of simplicity and come across as so obvious you’ll wonder why getting there took so much work.
Something like a musician practising tirelessly to make sure a performance is flawless.
The original version of this articel was published on the blog of PME Magazine.