Most of you listening to this podcast, you’re thinking in terms of wanting to have more money, save more money, start a business, have something on the side, or work on something for additional income just to put things on the side; you’re saving for your future or saving for new things.
This episode is one of my favorite topics, and this the positioning of your business or yourself. When I say “the positioning,” you’ll often hear people talk about “branding.” Branding, precisely, is the name, term, symbol, or feature used to distinguish. However, think of in terms of positioning, like in sports.
Where do you position yourself if you’re playing on the tennis court? Where do you position yourself if you’re a basketball player, playing a certain position? A soccer player? A football player? Positioning is not just where you’re standing, but knowing what’s around you; knowing and owning your space. That’s it. Owning your space – that’s what we’re talking about when we’re talking about positioning a product or business, how to own that space so that you maximize your customers and your profitability.
Did you ever feel, in a sense, that an ad that you see on TV or hear on the radio was just like it’s talking to you or talking to friends of yours? Why are friends of yours important? Because if you notice that ad, that means when you’re in need of whatever they’re selling, that will be in the back of your mind so they will still relate. Another part of it, and this is part of the positioning of the product, is if a friend goes to go by something and you’ve got a favorable opinion on it because you have seen an ad – you have a positive influence on them.
Think in terms of luxury cars. You build a luxury car that nobody’s friends know about… By the way, Ford did this in the late 80s, early 90s. They built a car, and they targeted it so well. They targeted so well, and only informed and sent lots of literatures and brochures to those people who would be buying it. The problem is that a lot of what that person is buying at that time is the image that that vehicle projects, and nobody even knew what it was.
Let’s look at some of the success stories, and some of the other stories as well. First of all, take a look at Volvo. How has it niched its way into the market and owned a space? It is known synonymous with safety. That doesn’t mean that you’re never going to have an accident, but it means that it’s built this protective shield around you, you have a certain image. It even projects it by the amount of space that is usually inside a Volvo. Usually, because a couple of times, they have designed a car that has less headroom, which would seem to fly in a direct competition with the concept of safety.
Look at how well Starbucks has done. What has it tried to create as an image? And it has done it very well. The third place that somebody would go: You go to work, you go to home, and you can go to Starbucks to relax. It plays a little bit of light music, has comfortable places for you to sit, has some Wi-Fi for you to interact with or to get on to the internet if you want to, chat with friends, meet people, etc. That has given Starbucks the ability to have this massive network of stores all over the place.
Does that mean that they have the best coffee? I don’t think so. I don’t know whether they believe it or not, but they probably don’t have the best coffee. There’s actually ones that I prefer, and maybe you prefer, but it is reliable also everywhere you go. Every Starbucks you go to, you’ll get the same preparation, the same coffee done the same way. It’s reliable, and that place to relax. Often, in Starbucks when I’m someplace, in a strange city or something, I’ll strike up a conversation with somebody, usually with a start with something like: “Isn’t it nice that Starbucks provides all these offices all over the country just so we can go and get our work done in a nice place?” How does some of this come about at the beginning, and how difficult can it be?
Back quite a ways, I actually was speaking at a major conference for automotive executives around the world, and I gave 10 awards for different things. The idea was really to point out exactly this idea of strategy, positioning and branding. One was I referred to Chrysler having done what I referred to as the “Niche by Mistake Award.” I explained that it really might not have been a mistake, but it worked out beautifully. In the late 80s, they had put a lot of chrome on their cars. Every company around was saying: “Get rid of the chrome. There’s no use for chrome. There’s lots of problems with it, as well as the fact that the styles have changed and people don’t want it anymore.” However, Chrysler had older generation folks; that was the only thing they loved about their cars when they were younger, and that was the only place for them to get it. Chrysler, in that niche, was able to actually sell so many cars that it had trouble producing enough for them.
Another one was Porsche. Porsche had this unique image because of its performance, etc. and its pricing strategy, I gave it the award of the “Male Menopause Award.” Male menopause, and I basically said: “Gee, if you’re a woman out there and your husband goes and buys one, you might want to get a lawyer or think about it. At least have a long, lengthy talk.” I had three guys come up to me afterwards. One told me about himself, one told me about his brother, the other one said: “Can I be at the table where you’re going to be having a lunch today?” I said: “Sure.” He told me about his brother as well. His brother got the Porsche, then got a divorce. Then he told me: “And my wife doesn’t know it yet, but I’m getting a Porsche, too.” It made me wonder whether I had some liability, there. Am I supposed to…? I don’t even know his name. I guess I really don’t have to inform his wife.
That positioning of the Porsche hits exactly the target market of those men in a certain age group/category that are looking for new things, new adventure, reliving their youth, all those kinds of things. That also happens to be synonymous with some problems, but that doesn’t mean everybody fits that. It does keep an image for Porsche that does very well.
There were lots of other things, for example, beers were very big in pursuing markets or getting into markets that others didn’t have. For example, Corona introduced itself, you throw a lime in it, and that makes it different. I think it’s probably to purify the Mexican water inside it, but that’s another story. Of course, it’s brewed and done in the United States, but Budweiser, otherwise, had the market. Then you have the craft beers. The craft beers started being unique in a lot of different ways, and they end up being locationally special. The ones that get very big, such as a Sam Adams or a Yuengling, at the same time, they tried to continually maintain the idea that they’re a craft brewery.
Now let’s look at the burger market, which is really a good one, because you have McDonald’s, which really has wiped everybody up; just controlled so much of the space for so long. Then Burger King was always number two.
Wendy’s came along, and they were there and always a distant third for quite a while. They changed their image and promoted their image more on the idea of fresh ground meat, fresh meat, never frozen, fresh greens for their salads, etc. So they were not quite as fast, but still a fast food restaurant. They had this other niche. As the market grew, and whether they perceived the growth of more interest in non-fast foods and healthier foods or not, I don’t know, but let’s give them credit as if they did. As that market grew, they, as of a few years ago, have overtaken Burger King. Whether they’ll maintain that position, I don’t know, but it is interesting that by choosing a positioning of their product that nobody else in the fast food industry really had at the time within the burger community, they were able to surpass the number two. That’s an unusual story.
After I’ve mentioned all these mega companies, etc., how do you do it and what do you do with your local business? Take a look, for example, at Shari’s Berries. Shari’s Berries advertised on radio, etc., sometimes I see it on TV at certain times of the year. Highly priced strawberries, covered with chocolate, shipped to you, etc. Yes, they’re expensive. Created a wonderful image for themselves, and even though they’re selling it at a high price and the strawberries are great, very sweet, they’re getting a major market share. They have positioned themselves, and I have seen a couple other companies try to come out, but it would be very difficult for another company to come out and compete. Why? Because let’s say you give the product “XYZ Berries” to your friend, girlfriend, or wife, whatever, but she knows nothing about that company compared to the one that she sees all the time and that has the reputation.
How do you position yourself in other industries? See how important this is. For example, my dentist. There are many dentists around here. There are some dentists that target children; that is that they become a friendly place for children to get their teeth taken care of. There are others that advertise as pain-free, and they even have in the name, some word like “Gentle.” My dentist actually is thought of as an artist; not in painting, but in the way he takes care of fillings, teeth, etc., very careful, like an artist.
Where are you going to go to get your dental care? I’m going to go to the guy who I think does the best possible job. That’s very different than seeing an advertisement there that says: “Fillings! $49!” I don’t think I want my fillings done by somebody that advertises on the side of the road or on a subway stand. That sounds funny, because I haven’t actually seen that, but you’ll see that with LASIKs. Can you imagine having your LASIKs done by somebody that advertised on the subway to get it cheap?
The last example I’ll give you is let’s say you have a coffee shop. If you have a coffee shop in a town, there may be a Starbucks there. How are you going to compete? Starbucks is so well-known. First, you’re only going to get, in general, the local traffic. You have to think of that, and you have to understand that. Then, you may have to make sure that the coffee is displayed properly, etc. How can you get and steal the local traffic? Take a look at what you can do. What does Starbucks do? It has certain pastries and sandwiches there. Position yourself as some place that has the best pastries and a good assortment, as opposed to the ones that look like they’re a day old or unfrozen. I don’t know what the condition is of the ones in Starbucks, but I do know that you can have very good presentation, and you see that in certain restaurants, you also see that in some of the places like Panera; Panera has very good-looking pastries.
You target yourself differently in order to get that local traffic. Keep in mind that the people travelling through, if they see some local coffee shop/bakery/café that looks a lot busier, meets the comfort standards, has the Wi-Fi and has something there to make sure that they understand you’ve got the best coffee – you will get some of the travel traffic as well, as well as you’ll have a reputation for it. That’s how you compete: You compete by positioning yourself in such a way that somebody else can’t.
When I first started my consulting company many years ago, as I started out, it turns out my competitors were Chase Manhattan, McGraw-Hill, Merrill Lynch, and Thompson Publishing. They had much deeper pockets than me. I had to figure out where I position myself, and there was only one place, because I couldn’t do it on price; I had to do it on quality.
Pick your niche. If you have an idea and you’d like to think more about it, send me a note. I’d be very interested. Take care. Thank you very much for listening.