REPOSITIONING: Marketing in an Era of Competition, Change and Crisis (BUSINESS BOOKS) - Hardcover

Trout, Jack; Rivkin, Steve

Hardcover

ISBN 10: 0071635599 ISBN 13: 9780071635592

Publisher: McGraw Hill, 2009

Synopsis

The book that completes Positioning . . .

Thirty years ago, Jack Trout and Al Ries publishedtheir classic bestseller, Positioning: The Battle for YourMind―a book that revolutionized the world of marketing.But times have changed. Competition is fiercer.Consumers are savvier. Communications are faster. Andonce-successful companies are in crisis mode.

Repositioning shows you how to adapt, compete―andsucceed―in today’s overcrowded marketplace. Globalmarketing expert Jack Trout has retooled his mosteffective positioning strategies―providing a must-havearsenal of proven marketing techniques specificallyredesigned for our current climate. With Repositioning,you can conquer the “3 Cs” of business: Competition,Change, and Crisis . . .

1. BEAT THE COMPETITION: Challenge your rivals,differentiate your product, increase your value,and stand out in the crowd.
2. CHANGE WITH THE TIMES: Use the latesttechnologies, communications, and multimediaresources to connect with your consumers.
3. MANAGE A CRISIS: Cope with everything fromprofi t losses and rising costs to bad pressand PR nightmares.

Even if your company is doing well, these cutting-edgemarketing observations can keep you on top of your gameand ahead of the pack. You’ll discover how expandingproduct lines may decrease your overall sales, why newbrand names often outsell established brands, and whyslashing prices is usually a bad idea. You’ll learn thedangers of attacking your competitors head-on―andthe value of emphasizing value. You’ll see how consumerscan have too many choices to pick from―and whatyou can do to make them pick your brand.

Drawing from the latest research studies, consumer statistics,and business-news headlines, Trout reveals thehidden psychological motives that drive today’s market.Understanding the mindset of your consumers is halfthe battle. Winning in today’s world is often a matter ofrepositioning. It’s how you rethink the strategies you’vealways relied on. It’s how you regain the success you’veworked so hard for. It’s how you win the new battle ofthe mind.

About this title

About the Author

Jack Trout (Greenwich, CT) is Chairman of Trout & Partners. Authors of numerous best-sellers, Al Ries and Jack Trout are undoubtedly the world's best-known marketing strategists. Their books have been translated into 19 languages worldwide.

From the Back Cover

The marketplace is changing. Are you?

So you've mastered the art of marketing. You've positioned your company, branded your product, and targeted your consumer. Unfortunately, in today's economy, that's not enough. You need REPOSITIONING.

A brilliant new approach to consumer psychology and corporate identity, this groundbreaking-- and game-changing--guide shows you how to . . .

RETHINK your current marketing
REFOCUS your consumer branding
REASSESS your company's strengths
REPOSITION your corporate identity
RECLAIM your competitive edge

Excerpt. © Reprinted by permission. All rights reserved.

REPOSITIONING MARKETING IN AN ERA OF COMPETITION, CHANGE, AND CRISIS

By Jack Trout Steve Rivkin

The McGraw-Hill Companies, Inc.

Copyright © 2010 Jack Trout
All right reserved.
ISBN: 978-0-07-163559-2

Contents

Chapter One

THE FOUNDATION

It's important that we review the essence of positioning, as it is also the foundation of repositioning. We have to reprise some of the prior writings on this subject. If by chance you remember verbatim what's been written, hang in there.

Positioning is how you differentiate yourself in the mind of your prospect. It's also a body of work on how the mind works in the process of communication.

Repositioning is how you adjust perceptions, whether those perceptions are about you or about your competition. (More on this in subsequent chapters.) In both cases, in order for your strategy to work, you must understand how the mind works or how people think.

So, for those of you who have missed our many books, speeches, and articles on the subject, here's a synopsis of how the mind works and the key principles of positioning.

By understanding how the mind works, you'll be prepared to better implement positioning and its twin, repositioning.

Minds Can't Cope

While the mind may still be a mystery, we know one thing about it for certain: it's under attack.

Most Western societies have become totally "overcommunicated." The explosion in media forms and the ensuing increase in the volume of communications have dramatically affected the way people either take in or ignore the information that is offered to them.

Overcommunication has changed the whole game of communicating with and influencing people. What was overload in the 1970s has turned into megaload in the new century.

Here are some statistics to dramatize the problem:

• More information has been produced in the last 30 years than in the previous 5,000.

• The total of all printed knowledge doubles every four or five years.

• One weekday edition of the New York Times contains more information than the average person in seventeenth-century England was likely to come across in a lifetime.

• More than 4,000 books are published around the world every day.

• The average white-collar worker uses 70 kilograms (154 pounds) of copy paper a year—twice the amount consumed 10 years ago.

Electronic Bombardment

And what about the electronic side of our overcommunicated society?

Every day, the World Wide Web grows by a million electronic pages, according to Scientific American, adding to the many hundreds of millions of pages already online.

Everywhere you travel in the world, satellites are beaming endless messages to every corner of the globe. By the time a child in the United Kingdom is 18, he has been exposed to 140,000 TV commercials. In Sweden, the average consumer receives 3,000 commercial messages a day.

In terms of advertising messages, 11 countries in Europe now broadcast well over 6 million TV commercials a year. Television has exploded from a dozen channels to a thousand channels. All this means that your differentiating idea must be as simple and as visible as possible and must be delivered over and over again on all media. The politicians try to stay "on message." Marketers must stay "on differentiation."

Minds Hate Confusion

Human beings rely more heavily on learning than any other species that has ever existed.

Learning is the way in which animals and humans acquire new information. Memory is the way in which they retain that information over time. Memory is not just your ability to remember a phone number. Rather, it's a dynamic system that's used in every other facet of thought processing. We use memory to see. We use it to understand language. We use it to find our way around.

So, if memory is so important, what's the secret of being remembered?

When asked what single event was most helpful to him in developing the theory of relativity, Albert Einstein is reported to have answered: "Figuring out how to think about the problem."

Half the battle is getting to the essence of the problem. Generally speaking, this means having a deep understanding of your competitors and their place in the mind of your prospect.

It's not about what you want. It's about what your competitors will let you do.

The Power of Simplicity

The basic concept of some products predicts their failure—not because they don't work but because they don't make sense. Consider Mennen's vitamin E deodorant. That's right, you sprayed a vitamin under your arms. That doesn't make sense unless you want the healthiest, best-fed armpits in the nation. It quickly failed.

Consider the Apple Newton. It was a fax, beeper, calendar keeper, and pen-based computer. Too complex. It's gone, and the much simpler iPhone is an enormous success.

The best way to really enter minds that hate complexity and confusion is to oversimplify your message. Some of the most powerful programs are those that focus on a single word (Volvo: safety; BMW: driving). The lesson here is not to try to tell your entire story. Just focus on one powerful differentiating idea and drive it into your prospect's mind.

That sudden hunch, that creative leap of the mind that "sees" in a flash how to solve a problem in a simple way, is something quite different from general intelligence. If there's any trick to finding that simple set of words, it's being ruthless about how you edit the story you want to tell.

Anything that others could claim just as well as you can, eliminate. Anything that requires a complex analysis to prove, forget. Anything that doesn't fit with your customers' perceptions, avoid.

Minds Are Insecure

Pure logic is no guarantee of a winning argument. Minds tend to be both emotional and rational. Why do people buy what they buy? Why do people act the way they do in the marketplace?

When you ask people why they made a particular purchase, the responses they give are often not very accurate or very useful.

That may mean that they really do know, but they are reluctant to tell you the real reason. More often, however, they really don't know precisely what their own motives are.

For when it comes to recall, minds tend to remember things that no longer exist. That's why recognition of a well-established brand often stays high over a long period, even if advertising support for that brand is dropped.

In the mid-1980s, an awareness study was conducted on blenders. Consumers were asked to recall all the brand names they could. General Electric came out number two—even though GE hadn't made a blender for 20 years.

Buying What Others Buy

More often than not, people buy what they think they should have. They're sort of like sheep, following the flock.

Do most people really need a four-wheel-drive vehicle? (No.) If they do, why didn't these become popular years ago? (They weren't fashionable.)

The main reason for this kind of behavior is insecurity, a subject about which many scientists have written extensively. If you've been around a long time, people trust you more and feel secure in their purchase of your product. This is why heritage is a good differentiator.

Minds are insecure for many reasons. One reason is perceived risk in doing something as basic as making a purchase. Behavioral scientists say that there are five forms of perceived risk.

1. Monetary risk.

(There's a chance that I could lose money on this.)

2. Functional risk.

(Maybe it won't work, or maybe it won't do what it's supposed to do.)

3. Physical risk.

(It looks a little dangerous. I could get hurt.)

4. Social risk.

(I wonder what my friends will think if I buy this.)

5. Psychological risk.

(I might feel guilty or irresponsible if I buy this.)

All this explains why people tend to love underdogs but buy from the perceived leaders. If everyone else is buying it, I should be buying it.

Minds Don't Change

It's futile trying to change minds in the marketplace.

• Xerox lost hundreds of millions of dollars trying to convince the market that Xerox machines that didn't make copies were worth the money. No one would buy its computers. But people still buy its copiers.

• Coca-Cola blew both prestige and money in an effort to convince the market that it had a better thing than "the real thing." No one bought New Coke. But the Classic version sells as well as ever.

• Tropicana changed its popular "straw in the orange" packaging, and the marketplace instantly declared that it wanted its orange, not something that looked like a private-label package. The orange is back.

When the market makes up its mind about a product, there's no changing that mind.

That said, repositioning is not about changing people's minds. It's about adjusting perceptions in their minds. More on this in later chapters.

Minds Can Lose Focus

Loss of focus is really all about line extension. And no issue in marketing is so controversial.

Companies look at their brands from an economic point of view. To gain cost efficiencies and trade acceptance, they are quite willing to turn a highly focused brand, one that stands for a certain type of product or idea, into an unfocused brand that represents two or more types of products or ideas.

Look at the issue of line extension from the point of view of the mind. The more variations you attach to the brand, the more the mind loses focus. Gradually, a well-differentiated brand like Chevrolet comes to mean nothing at all.

Scott, the leading brand of toilet tissue, line extended its name into Scotties, Scottkins, and Scott Towels. Pretty soon writing "Scott" on a shopping list meant very little, and Charmin took over the lead. Line extension is not a repositioning strategy, and there is more on this in Chapter 6. Some experts will tell you that it's all about building a master brand. Don't listen to them. The result is a confused brand.

Chapter Two

THE RISE OF THE COMPETITION

Every repositioning program has to start with the competition in mind. It's not what you want to do; it's what your competition will let you do. And unless you have a wonderful new invention or you've stumbled into a monopoly, chances are that you have some killer competitors who are trying to take your business.

If you've been out of touch in recent years, just take a look at the number of choices that are out there.

An Explosion of Competition

What has changed in business in recent decades is the amazing proliferation of product choices in just about every category. It's been estimated that there are a million standard stocking units (SKUs) in the United States. An average supermarket has 40,000 SKUs. Now for the stunner: an average family gets 80 to 85 percent of its needs from 150 SKUs. That means there's a good chance that it will ignore 39,850 items in that store.

Buying a car in the 1950s meant choosing among models from GM, Ford, Chrysler, or American Motors. Today, you have your pick of cars, still from GM, Ford, and Chrysler, but also from Acura, Aston Martin, Audi, Bentley, BMW, Honda, Hyundai, Infiniti, Isuzu, Jaguar, Jeep, Kia, Land Rover, Lexus, Maserati, Mazda, Mercedes, Mitsubishi, Nissan, Porsche, Rolls-Royce, Saab, Saturn, Subaru, Suzuki, Volkswagen, and Volvo. There were 140 motor vehicle models available in the early 1970s. There are more than 300 today.

And the choice of tires for these cars is even more vast. It used to be Goodyear, Firestone, General Tire, and Sears. Today, at just one retail outlet called The Tire Rack, you can browse the likes of Avon, B.F. Goodrich, Bridgestone, Continental, Dick Cepek, Dunlop, Firestone, Fuzion, General Tire, Goodyear, Hankook, Hoosier, Kumho, Michelin, Pirelli, Sumitomo, Uniroyal, and Yokohama.

The big difference is that what used to be national markets with local companies competing for business have become a single global market with everyone competing for everyone's business everywhere.

Competition in Health Care

Consider something as basic as health care. In the old days, you had your doctor, your hospital, Blue Cross, and perhaps Aetna/US Healthcare, Medicare, or Medicaid.

Now your hospital has to compete with freestanding clinics set up by its own doctors, not to mention other hospitals in the same town plus satellite operations from hospitals in the next county or the next state.

Even national hospital brands such as the Mayo Clinic and the Cleveland Clinic create localized competition. The Mayo Clinic, based in Minnesota, has facilities in Scottsdale, Arizona, and Jacksonville, Florida. The less well-known but equally highly rated Cleveland Clinic now has locations outside its native Ohio in Florida, in Toronto, and even in Abu Dhabi.

You want health insurance? (And who doesn't?) If you live in New Jersey, you have your choice of six large companies: Aetna, AmeriHealth, Cigna, HealthNet, Horizon BlueCross BlueShield, and Oxford. That seems like a choice any well-informed consumer could make. Oh, we should mention one thing: these six companies offer no fewer than 100 different plans. (By the time you wade through all those choices, you'll have a raging migraine!)

And stand by for the latest from Washington: the Obama administration has big plans to offer its own brand of health insurance.

It's gotten so confusing that magazines like US News & World Report have taken to rating hospitals and HMOs to make our choice easier. Want to know the top-rated plans as of 2009? Check out http://www.usnews.com/listings/health-plans/commercial.

The federal government and almost every state publish health-care "report cards" for the public. You'll find physicians and hospitals listed according to clinical outcome measures, as well as member satisfaction, administrative data, and professional/organizational data.

Maybe you prefer a private source for your medical information. HealthGrades.com is the leading independent health-care ratings organization. To guide you to better care providers, HealthGrades has reports and ratings on 750,000 physicians, 5,000 hospitals, and 16,000 nursing homes.

It's gotten so confusing that people aren't worrying about getting sick. They're worrying more about where to go to get better.

Competition in Consumer Electronics

Let's say you're in the market for a new CD player and recorder, speakers, and earphones. So you wander into your local Best Buy and spend some time in the audio aisle. You'll find no fewer than 21 choices: Bose, Chestnut Hill Sound, Coby, Crosley, Denon, Harman Kardon, Insignia, ION Audio, Klipsch, Logitech, Numark, Panasonic, Philips, Pioneer, Polk Audio, Sharp, Sonos, Sony, Stanton, Technics, and Yamaha. (Do your ears hurt yet?)

Given the fact that most components can be mixed and matched, that means you have the opportunity to create more than 100,000 different audio setups. (Now we know your ears hurt.)

Competition Is Spreading

What we just described is what has happened to the U.S. market, which, of the world's markets, has by far the most choice (because our citizens have the most money and the most marketing people trying to get it from them).

Consider an emerging nation like China. After decades of buying generic food products manufactured by stateowned enterprises, China's consumers can now choose from a growing array of domestic and foreign brand-name products each time they go shopping. According to a recent survey, a national market for brand-name food products has already begun to emerge. Already China has 135 "national" food brands from which to pick.

Some markets are far from emerging. Countries like Liberia, Somalia, North Korea, and Tanzania are so poor and chaotic that choice is but a gleam in people's eyes.

The Law of Division

What drives choice is the law of division, which was described in The 22 Immutable Laws of Marketing.

Like an amoeba dividing in a petri dish, the marketing arena can be viewed as an ever- expanding sea of categories. A category starts off as a single entity—computers, for example. But over time, the category breaks up into other segments: mainframes, minicomputers, workstations, personal computers, laptops, notebooks, and pen computers.

Like the computer, the automobile started off as a single category. Three brands (Chevrolet, Ford, and Plymouth) dominated the market. Then the category divided. Today, we have luxury cars, moderately priced cars, and inexpensive cars; full-size, intermediate, and compacts; sports cars, hatchbacks, coupes, hybrids, diesels, four-wheel-drive vehicles, SUVs, RVs, minivans, crossovers, and suburbans (station wagons on steroids).

In the television industry, ABC, CBS, and NBC once accounted for 90 percent of the viewing audience. Now we have network, independent, cable, satellite, and public television. Today, a wired household may have 900 channels from which to choose (CNN on channel 25, the Golf Channel on 145, Encore Westerns on 353, Animal Planet HD on 757). With all that, if you flip through the channels to try to find something to watch, by the time you find it, the show will be over.

(Continues...)

Excerpted from REPOSITIONING MARKETING IN AN ERA OF COMPETITION, CHANGE, AND CRISISby Jack Trout Steve Rivkin Copyright © 2010 by Jack Trout. Excerpted by permission of The McGraw-Hill Companies, Inc.. All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.

Edition details

• Publisher: McGraw Hill
• Publication date: 2009
• ISBN 10: 0071635599
• ISBN 13: 9780071635592
• Binding: Hardcover
• Language: English
• Edition number: 1
• Number of pages: 224