“The tai-pan is always alone, that being the joy and the hurt of it.”
– from “Noble House” by James Clavell
One of the most powerful concepts in marketing is the idea of “positioning”…
…put simply, “owning” an idea in the mind of the consumer.
For example, in the world of cars, BMW for most people means “The ultimate driving machine”.
Volvo used to mean “Safety” before they lost their way.
Positioning is similar to the idea of the Unique Selling Proposition (“USP”)…
…but it’s more strategic.
Think of it this way.
Positioning is selecting the general market position you want to dominate…
…the USP is the specific offer you make to potential customers.
They MUST be consistent with each other of course.
The concept of positioning was introduced to the world by Al Ries and Jack Trout in their marketing classic “Positioning – The Battle For Your Mind” back in 1976…
…and still big companies struggle with the idea.
Couple of recent examples of this.
Firstly, Westpac bank in Australia.
Frankly, I have no clear idea of Westpac’s position outside of them being a “bank”.
This is not unusual in the banking arena. In Jack Trout’s book “Differentiate Or Die” there’s a table showing the degree of differentiation in 75 categories. Amongst banks the percentage of differentiation was…
…ZERO!
However, very clearly, Westpac is a bank.
Which makes their current campaign to sell insurance…
…shall we say, an interesting move.
Look, there are some good things about the ad. With the spate of recent natural disasters in Australia there are more than a few people who have discovered that their insurance didn’t quite cover what they thought was covered.
So insurance companies might not be the most popular group in Australia. In fact people might dislike them almost as much as they do…banks!
Westpac might find that people won’t necessarily trust them any more than the insurers.
Also, the ad lacks any great offer or compelling call to action. Nothing unusual there in a run-of-the-mill corporate ad.
The bigger flaw is in the positioning. Westpac doesn’t mean “insurance”.
Sure, they can sell insurance to their existing clients. But a company can’t be both a “bank” and an “insurer”. In the mind of the consumer these are different.
The concept has been tried in the halcyon boom days…remember the trendy “Bancassurance” idea that was responsible for numerous ill-fated mergers and acquisitions between banks and insurance companies?
So it will be interesting to see how this campaign performs.
Ironically, the more successful Westpac are at selling insurance…
…the fuzzier and weaker their position as a bank becomes.
My guess is the insurance campaign will run for a few months and then it will get forgotten as Westpac move on the next marketing fad.
Fortunately for Westpac, they don’t actually have to be very smart or good at marketing to make money. Most businesses don’t have that luxury.
On to the second example…
…Google!
I’d be pretty confident that most people would associate “Google” with “Search”. They own that position and it’s the foundation of their business (where their revenue comes from advertising, of course).
Of late, however, Google has shown signs of losing their way.
Good article from Ryan Healy…
“Has Google Finally Lost its Way?”
…and from Perry Marshall…
“Google+ Team Leader Defects To Microsoft”.
The guys at the top of Google seem to have a serious case of “Facebook-envy”. They don’t seem happy that they’re no longer the coolest guys in the room!
Look, I know that in geek-land there’s the view that Google’s moves are all part of a cunning strategy to extend their dominance of search even further.
That could be the case….but it seems equally plausible to me that Google has lost sight of their strategic positioning (if in fact they were ever consciously aware of it).
Unfortunately, Google can’t own Facebook’s “social connection” position as well as “search”.
Leads us back to the key point about positioning…
…it’s all about cutting through the clutter and owning one clear (and meaningful) spot in the mind of the consumer.
And to that quote at the start of the post.
Get positioning right and you can dominate a market niche. That’s the “joy”.
But you can only own ONE position with a brand.
(Google got this right when they bought YouTube. They didn’t do what would have been incredibly stupid and rebrand it as “Google Online Video”. Google means “search”, the separate brand YouTube means “online video sharing”).
That’s the “pain”…you have to choose.