With the passing of my ex-partner and good friend Jack Trout, I feel compelled to write a few words about our nearly 30 years of working together.
In love, opposites attract. In business, opposites work well together. Jack and I were opposites.
Jack was Mr. Outside; I was Mr. Inside. Jack was an extrovert, talkative and very social; I am an introvert. Jack was athletic; I am not. You name it, we were opposites.
When Jack joined my ad agency in 1967, advertising was widely considered to be “communications.”
You studied your product, its features and its competitors and then you prepared advertising that explained why your product was better.
In spite of billions of advertising dollars spent every year, perceptions about leading brands as well as their market shares seldom changed. All that advertising was not doing very much communicating.
That insight led to the positioning concept. Instead of focusing on the product and its competitors, we focused on the mind of the prospect. And in the process, we developed the principles of positioning.
(1) The concept of categories.
With a billion neurons and some 2.3-trillion connections, the human mind is a massive mental storage container. From a marketing point of view, however, the most-important aspect of the mind is the concept of categories.
Consumers use categories to store brands that interest them. When consumers want to buy something, they think category first, brand second.
Nobody walks into a store and says: I want to buy a Sony. Please show me all the Sonies you have for sale.
(2) For every category, there is a ladder in the mind.
On the rungs of the ladder are brand names, with the preferred brand at the top of the ladder and the rest of the brands in descending order.
Most consumers have room in their minds for only a few brands in each category. Many categories have just two brands. Duracell and Energizer in appliance batteries. Crest and Colgate in toothpaste.
Seldom do consumers consider their top two brands as equals. Invariably, consumers prefer one brand over the other, although the second brand is often “acceptable.”
(3) The name is the hook that hangs the brand on the ladder.
The most important marketing decision you can make is what to name the product. That’s what we said in our 1981 Positioning book.
The leading vodka brand in Russia is Kremlyovskaya. So the owners of the brand introduced Kremlyovskaya in the American market with the slogan, The No.1 vodka brand in Russia.
Naturally, the brand went nowhere. How can an English-speaking person file that name in the vodka category in the mind?
The leading pasta brand in Italy is Barilla. So the owners of the brand introduced Barilla in the American market with the slogan, Italy’s #1 pasta. Three years later, Barilla was the No.1 pasta brand in America.
(I made several speeches in Moscow suggesting that Kremlyovskaya in America be called Red Square Vodka.)
(4) Find an open hole in the mind.
Every category in the mind is either filled with a brand name, or it’s not. If the category is not filled, then it’s an open hole or position which your brand can easily occupy.
Tesla moved into the mind to occupy an open category called “electric cars.” Today, Tesla is worth more on the stock market ($61 billion) than either General Motors ($52 billion) or Ford ($44 billion.)
But didn’t General Motors, Ford and every other major automobile company in the world also introduce electric vehicles? Sure, but they didn’t give them different brand names so consumers had no way of filing these names in their minds.
You can’t put “Chevrolet” on your electric-car ladder.
(5) Touch base with what’s already in the mind.
Advertising a minor feature of your brand that is already recognized in prospects’ minds is a better strategy than advertising a major feature of your brand nobody knows about.
Yet most companies do exactly the opposite. No sense advertising what people already know, let’s use our advertising to communicate what they don’t know.
Thanks to its invention of the lap-and-shoulder seat belt, Volvo was known for safety. As a result, Volvo was the leading imported luxury-vehicle brand in the American market from 1978 to 1992. But that wasn’t good enough for Volvo.
As the global advertising manager said, Safety on its own is not enough. So Volvo introduced a range of vehicles including convertibles and the C30 hatchback with a turbo-charged engine. (Automotive News called it a “pocket rocket for the kids.”)
And Volvo advertising talked about beauty and performance with various themes including Life is better lived together.
Last year, the leading imported luxury-vehicle brands were Mercedes, Lexus, BMW, Audi, Acura, Infiniti. And then Volvo.
(6) You can’t move a brand in the mind.
Many billions have been wasted by companies that violate this positioning principle. IBM trying to move its brand into personal computers. Kodak trying to move its brand into digital photography. BlackBerry trying to move its brand into touchscreen smartphones.
The list is endless. We called this exercise in futility, The line-extension trap.
(7) Initials don’t exist in the mind.
There are letters of the alphabet and there are words in the mind, but not initials. When a mind hears or reads about a brand using initials, the instant reaction is What do those initials stand for?
GE stands for General Electric. HP stands for Hewlett-Packard. IBM stands for International Business Machines. Initials are recognized in the mind not as initials, but as the shorthand for names. If the names are not in the mind, then the prospect is unlikely to remember the initials.
And yet, there is a strong trend toward initials. Do you recognize any of these 30 no-name companies? HCA, CHS, TJX, EMC, PNC, AES, NRG, PBF, CDW, VF, CSX, CBRE, BBGT, DTE, CST, EDG, PVH, KKR, PPL, AGCO, LKQ, AK, UGI, CMS, WEC, HRG, CH2M, SGP, LAM and NVR.
Probably not. But all 30 are on Fortune’s latest list of the 500 largest American companies. The smallest, NVR, had revenues last year of $5.2 billion, enough money to hire a marketing-strategy firm.
(8) A slogan or a tagline is not a position.
Almost every company in the world uses either a slogan or a tagline. Yet almost none of these slogans or taglines are what Jack or I would have called a “position.”
A position is something that exists in the mind. Most slogans or taglines are “aspirational.” With enough advertising, they hope to be inserted into prospects’ minds. It seldom happens.
Take Nissan’s slogan Innovation that excites. Does Nissan really think potential car buyers have has an open hole in their minds called “Exciting automobile innovations.”
Safety is a position. Driving is a position. Inexpensive is a position. Small is a position. But Exciting automobile innovations is not.
There’s still a lot of work to be done.
And without Jack Trout, it is going to be a lot more difficult to move the positioning concept into the minds of business executives around the world.
But with my daughter Laura Ries, I will keep trying.