Product positioning & brand positioning

Product Positioning and Market Maturity

Four Key Elements of Product Positioning:

1. Your Product

2. Target Customer

3. Alternatives

4. Your Differentiation

As markets evolve, these elements need to adapt. Markets typically move through three stages of maturity: immature, emerging, and mature. The distinctions between early-stage and growth-stage positioning are critical for understanding how to approach marketing, product development, team dynamics, brand building, and execution.

Stage 1: Immature Market

Scenario:

Your target customers are not engaged in remote collaboration. For example, in 2005, remote work was not common, and you were trying to promote Miro.

Challenges:

- You can't compare Miro to other remote collaboration tools (no frame of reference).

- You can't promote Miro for remote collaboration (nobody is collaborating remotely).

Something similar

Strategy:

Convince people to consider remote collaboration by addressing an unmet desired outcome (e.g., enhancing team productivity and collaboration). Position remote collaboration as the best way to achieve this outcome compared to alternative methods.

Essential Elements:

1. Unmet Desired Outcome: Enhance team productivity and collaboration.

2. Activity to Consider: Remote collaboration.

3. Alternative Activities: Traditional in-office collaboration methods.

4. Differentiation: How remote collaboration (and Miro) is better than traditional methods.

In the early days of Asana, the goal was not to outdo Trello but to educate teams on the necessity of structured project and task management. Trello's efforts in promoting this new methodology were beneficial, as they helped raise awareness about the problem and potential solutions.

Naming and creating a category early on is often futile because:

1. Shared Awareness Building: In an emerging and undefined category, your so-called competitors are actually allies. They help build awareness of the problem and educate the market about the new solution. This collective effort benefits all players in the space.

2. Premature Category Naming: There's a temptation to be the first to name the category and to differentiate your product at the top of the funnel. However, at this stage, the audience is usually not aware enough of the problem or the solutions available. They likely don't even understand what your product does.

3. Unified Front: It's more effective to present your products as inevitable solutions to the problem, rather than wasting time on category names that don't resonate with the audience yet. This collaboration helps to avoid confusion and accelerates market acceptance.

4. Focus on Differentiation Later: During the sales process, when prospects recognize the need for a solution, it's crucial to articulate your differentiators. However, this should not be the focus in the early stages. 

5. Clear Communication: As the market matures, a category will naturally form. At that point, it's important to strive to lead it. In the meantime, being descriptive and clear about what your product does is more effective.

This approach highlights the importance of clarity and collective market education in the early stages of a new category.

Stage 2: Emerging Market

Scenario:

People are now engaging in remote collaboration but lack effective tools.

Challenges:

- You no longer need to convince people about the benefits of remote collaboration.

- Your competitors are categories of tools (video conferencing, email, basic document sharing).

Strategy:

Position Miro as the best tool for remote collaboration. Emphasize its superiority over other tools used for the same activity.

Essential Elements:

1. Activity: Remote collaboration.

2. Category of Tool: Visual collaboration platform (Miro).

3. Alternative Categories: Video conferencing, email, basic document sharing.

4. Differentiation: How Miro is better than other tools for remote collaboration.

The probiotics market in India is emerging, with significant growth potential. While it is not yet mature, the increasing demand, coupled with ongoing education and product innovation, indicates that the market will continue to expand in the coming years.

Stage 3: Mature Market

Scenario:

The market understands they want to enhance team productivity through remote collaboration using a visual collaboration platform.

Challenges:

- Your competitors are other visual collaboration platforms.

- The key question is, "Why are you better than other visual collaboration platforms?"

Strategy:

Highlight Miro's unique features and benefits compared to other visual collaboration platforms.

Essential Elements:

1. Category of Tool: Visual collaboration platform.

2. Your Product: Miro.

3. Alternative Products: Other visual collaboration platforms.

4. Differentiation: How Miro is better than other visual collaboration platforms.

Example of CRM in a Mature Market:

For a new CRM targeting SaaS companies, the first question to answer is, "Why are you better than Salesforce?"

Product positioning must evolve as markets mature. Initially, focus on educating potential customers about the benefits of the activity your product supports. As the market grows, position your product as the best tool for that activity. Finally, in a mature market, differentiate your product from similar offerings. By adapting your positioning strategy to the market's maturity stage, you can effectively address customer needs and stand out from competitors.

The perspective on the interconnectedness of product and brand positioning offers a refreshing and insightful take on a subject often treated as dichotomous. The idea that positioning is an organic process where market participants make sense of various offerings is indeed compelling and aligns with the modern understanding of consumer behavior and brand perception.

Brand Positioning in the Prospect’s Mind

The reference to Ries and Trout underscores the fundamental principle that positioning is a battle for the prospect’s mind. This view emphasizes that both brand and product positioning occur simultaneously in the mental space of consumers. The perception of a brand influences the perception of its products and vice versa, creating a symbiotic relationship between the two. As AI becomes increasingly common in business, its novelty as a differentiator is diminishing. Positioning a brand solely on AI can make it indistinguishable from others.

Brand as a Framework for Expectations

The assertion that a brand helps position products by shaping expectations is particularly relevant. Consumers use brand cues to form preconceived notions about new products. For example, Apple’s established brand identity of producing high-quality, minimalist, and aesthetically pleasing devices means that new products are often received with those same expectations. This preconceived brand identity simplifies the positioning of new products, as the groundwork has already been laid by the brand’s reputation.

The Brand-Product Continuum in Tech Startups

The notion that for many tech companies, especially startups, the product is the brand until the introduction of a second product is insightful. This transition period often triggers deeper reflections on the brand's overarching identity and values. The surprise and confusion surrounding brand discussions at this juncture highlight the importance of early and clear brand definition, even when the focus seems to be solely on a single product.

Branding as Coordinated Actions

Reframing branding as a series of coordinated actions to teach the market what to expect from your products is a practical and strategic approach. This view demystifies branding, making it a more manageable and actionable process. By consistently communicating specific attributes and values through various touchpoints, a brand can effectively set and meet consumer expectations.

Simplifying Branding to Expectation and Distinction

Your two simple definitions for branding – Expectation and Distinction – are powerful tools for clarifying a brand’s strategy:

1. Expectation: Define what people should anticipate when they think of your brand. This could encompass quality, service, innovation, reliability, etc.

   - Example: "When people think of our brand, they will expect innovative solutions that simplify their daily tasks."

2. Distinction: Identify how your brand will stand out from the competition. This could involve unique features, superior customer service, a strong ethical stance, etc.

   - Example: "We will stand out by offering unparalleled customer support and sustainable products."

Building Durable Market Perceptions

Developing simple, durable definitions of expectation and distinction helps build a solid foundation for market perceptions. These perceptions aid in the seamless positioning of both current and future products. The challenge lies in creating and maintaining these definitions amidst market changes and evolving consumer preferences, but it is a crucial effort for sustaining a strong, competitive brand.

Three Key Strategies for Effective Product Positioning and Messaging

1. Understand and Segment Your Audience Ruthlessly

🎯 "Start with the audience as a smoke test of who we could be targeting." — Rob Kaminski

Knowing your audience inside out is crucial for tailoring your positioning and messaging effectively. Different segments have varied needs and challenges, so hyper-segmenting helps address these nuances accurately. For instance, messaging that resonates with manufacturing customers might not work for B2B tech. Prioritize your best-fit customers ruthlessly and personalize your approach for each segment.

Key Steps:

- Identify Core Segments: Understand the different customer segments within your target market.

- Tailor Messaging: Develop specific messages that address the unique pain points and needs of each segment.

- Prioritize Best-Fit Customers: Focus on the segments that align most closely with your product’s strengths and potential for success.

2. Map Your Positioning to the Market’s Maturity Stage

📈 "Position in the wrong spot and it leads to all sorts of problems." — Anthony Pierri

Positioning evolves based on the market’s maturity. Different strategies are required for immature, emerging, and mature markets. Tailoring your messaging to the current stage ensures that your value proposition resonates with the audience.

Key Steps:

- Identify Market Stage: Determine whether your market is immature, emerging, or mature.

- Adapt Positioning: Develop positioning strategies that align with the market’s maturity stage.

  - Immature Market: Focus on educating the audience about the activity and its benefits.

  - Emerging Market: Position your product as the best tool for the activity.

  - Mature Market: Differentiate your product from similar offerings in the market.

Example: In the episode, Anthony Pierri discusses positioning using the example of ice baths.

3. You Cannot Build a Homepage for Everyone

🏠 "Summarizing for all segments leads to a non-specific message." — Anthony Pierri

Clarity is paramount when it comes to your homepage, which is one of your most important sales assets. A clear, focused message is more effective than trying to address every possible persona. Instead, lead with a message that is most relevant to the majority of your audience.

Key Steps:

- Define Primary Audience: Identify the main segment that your homepage should target.

- Focus Messaging: Develop a clear and concise message that speaks directly to this primary audience.

- Avoid Over-Summarization: Resist the temptation to create a message that tries to address all segments, as this can dilute your impact.

Effectively positioning your product and crafting your messaging requires a deep understanding of your audience, a keen awareness of the market's maturity stage, and a focused approach to your homepage messaging. By segmenting your audience, mapping your positioning to the market’s maturity, and maintaining clarity on your homepage, you can ensure that your value proposition resonates with the right customers and drives success.

Brand positioning plays a critical role in determining the competitive landscape a brand operates within, even when selling the same products as others

Here's why positioning can place you in a different set of competition:

1. Target Audience Differentiation:

• Example: Two brands might sell the same probiotic supplements, but if one positions itself as a premium, science-backed brand for health-conscious urban professionals, and the other positions itself as an affordable, family-friendly option for general wellness, they cater to different target audiences. The first brand competes with other premium health brands, while the second competes with more mass-market health products.

2. Value Proposition:

• Example: A brand that positions its probiotics as a natural, organic solution appeals to consumers who prioritize organic products and are willing to pay more for them. This brand would compete with other organic or natural wellness brands, even if another brand selling the same probiotic focuses on affordability or convenience, targeting price-sensitive consumers.

3. Perceived Benefits:

• Example: If a brand positions its product around gut health for athletic performance, it enters a competitive space with sports nutrition brands, even though another brand selling the same product might position it as a general digestive health aid, competing with broader health and wellness brands.

4. Brand Personality and Identity:

• Example: A brand with a playful, youthful personality that positions its probiotics as a trendy, fun addition to a healthy lifestyle might compete with lifestyle brands and wellness influencers. Meanwhile, a more serious, clinical brand could be in competition with pharmaceutical companies or professional health brands.

5. Pricing Strategy and Perception:

• Example: If one brand positions its product as a luxury item, it competes with other high-end, premium brands, regardless of whether a lower-priced competitor sells the same product. The luxury brand's competition is based on perceived value and exclusivity, not just product attributes.

6. Distribution Channels:

• Example: A brand that sells primarily through health and wellness e-commerce platforms, targeting online shoppers, will compete with other digitally-savvy wellness brands. In contrast, a brand that focuses on in-store retail at pharmacies or supermarkets will compete within that physical retail environment.

7. Emotional Connection:

• Example: If a brand positions its probiotics as part of a broader lifestyle or wellness movement (e.g., mindfulness, self-care), it competes with other brands that share this emotional appeal, even if other brands sell the same product purely for its functional benefits.

8. Brand Story and Heritage:

• Example: A brand that positions itself based on a rich heritage in traditional wellness practices (e.g., Ayurveda) might compete with other heritage brands, even though another brand selling the same product might position itself as innovative and modern, competing with tech-forward health brands.

Brand positioning shapes how consumers perceive a product and which needs or desires it fulfills. This perception influences the competitive set, as brands are compared not just by their products, but by the overall experience, values, and benefits they offer. By positioning itself uniquely, a brand can distinguish itself from competitors, creating its own niche and competing within a different segment of the market, even if the core product is identical to others.

The brands you think you're competing against and the brands you are actually competing against can indeed differ, often due to direct and indirect competition and the clarity or lack of positioning. Let's break this down:

1. Direct vs. Indirect Competition:

• Direct Competition: This involves brands that offer the same or very similar products or services. If you sell probiotics, your direct competitors are other brands that also sell probiotics.
• Indirect Competition: This includes brands that don't sell the same product but fulfill the same customer need. For instance, if your probiotic is positioned as a general wellness product, you might find yourself competing with vitamin supplements, wellness drinks, or even fitness programs that also promote health and well-being.

Why This Matters: You might assume that your direct competitors are your main rivals, but in reality, your customers might be considering completely different types of products to meet their needs. If your positioning isn't clear, you could overlook these indirect competitors who are actually drawing customers away from your brand.

2. Perceived vs. Actual Competitive Set:

• Perceived Competition: This is the set of brands that a company believes it competes with, often based on similar products, pricing, or market presence. For example, a probiotic brand might perceive its main competitors to be other well-known probiotic brands.
• Actual Competition: This includes all the brands that consumers compare you with when making a purchasing decision. Depending on how consumers perceive your brand, you might be competing with a broader or different set of brands. For instance, if consumers see your probiotics as part of a holistic wellness routine, you might actually be competing with lifestyle brands that offer yoga classes, wellness retreats, or other health products.

Why This Matters: If you're only focusing on perceived competition, you might miss out on strategies to differentiate yourself from the actual competition. This gap can lead to missed opportunities or threats that you didn’t anticipate.

3. Lack of Clear Positioning:

• Ambiguous Positioning: When a brand’s positioning is unclear or too broad, it can inadvertently compete against a wider range of brands than intended. For example, if your brand markets its probiotics as both a daily health supplement and a cure-all remedy, it might compete against a wide range of health products, from multivitamins to herbal teas, diluting your competitive focus.
• Strategic Positioning: A well-defined positioning strategy narrows down the competitive set to those brands that genuinely target the same consumer need in the same way. For instance, if you position your probiotics as a premium, scientifically-backed solution for gut health, your competition is more likely to be other high-end health brands, rather than every brand in the broader wellness category.

Why This Matters: Without clear positioning, consumers might not understand what sets your brand apart, leading them to compare your products with a much broader range of alternatives. This can make it harder for your brand to stand out and maintain a competitive edge.

4. Customer Perception and Decision-Making:

• Influence of Perception: Customers often make purchasing decisions based on perception rather than the specific features of a product. If your brand is perceived as similar to another, even in a different category, customers might see those as alternatives. For instance, a customer might choose between your probiotic and a smoothie marketed as a health booster, depending on which one they perceive as more effective or aligned with their lifestyle.
• Decision-Making Process: The brands you think you're competing with might be those that match your product category, but customers might consider other factors like convenience, brand values, or lifestyle fit, leading them to choose a different type of product altogether.

Why This Matters: Understanding customer perception helps you refine your positioning and marketing strategies to target the actual competition. It also highlights the importance of communicating the unique value your brand offers, ensuring you stand out in the decision-making process.

The difference between perceived and actual competition often stems from a combination of direct vs. indirect competition and the clarity of your brand's positioning. A strong, clear positioning helps you identify and focus on the actual competitors—those brands that your target audience genuinely considers when making a purchase decision. Without this clarity, you might misidentify your competition, leading to strategies that don't effectively differentiate your brand or resonate with your audience.

Conclusion

The contrarian view elegantly bridges the gap between product and brand positioning, advocating for a holistic approach where brand actions consistently shape market expectations and product perceptions. This integrated strategy not only simplifies the branding process but also strengthens the market position of both the brand and its products. By focusing on clear, durable definitions of what consumers should expect and how your brand stands out, you can build a resilient and compelling brand identity that supports long-term success.