In the October 2011 issue of the World Manager magazine (http://www.letuoutdoor.com), Beijing Tuozhan Company published an exclusive interview with and theoretical interpretation of Trout, the founder of the positioning theory. This set of articles drew a lot of reactions from readers. Recently, we have sorted out some representative questions and asked the partners of Trought China to conduct research and respond.
1. Does positioning have hypothetical nature?
To what extent should positioning be done? This is a challenge in practical operation. For example, Vancl focuses on post-80s and post-90s young people, meeting all their clothing needs. Is this a large positioning or a small one? Whether these brands' target users and category positioning can reach satisfactory levels remains unknown due to too many uncertain competitive factors. Therefore, in my humble opinion, positioning within a niche market carries hypothetical conditions, which are more accurately described as relatively rational assumptions. Only by doing so can the next step be implemented: brand-focused communication.
Expert Response: The scope of positioning depends on customer cognition and purchasing habits, but more importantly, it depends on the competitive situation. Doing less than your competitors is a common way to establish cognitive advantages, such as Nokia making phones while iPhone only makes smartphones.
2. How to resolve the contradictions in brand evolution and upgrades?
When entering the market, you can focus, for example, just making men's shoes for the post-80s generation. However, if you become the first in this field after three years, what will you do next? This involves choosing between defensive or offensive strategies.
Choosing defense allows competitors to invade your territory directly or indirectly; choosing offense means that whether according to demographics or product line extension, the brand must evolve and upgrade. The better you perform in the original niche market, the harder it is to upgrade because your brand has been deeply rooted there.
In practice, brand evolution and upgrading occur naturally and forcibly. Your core users from the post-80s generation may need formal leather shoes, sports leisure shoes, or clothing. As they grow older, other needs may arise. Thus, merchants naturally add categories or expand user demographics, making the initially focused brand blurry. Dangdang started with books and images, but now it sells various goods and is no longer just a book-selling brand. Another case in reverse is No.1 Store, whose market positioning is "Online Walmart," an extremely unfocused market entry point, but it doesn't need to consider future brand upgrades and still gains significant recognition.
Expert Response: After a brand successfully establishes dominance, it can launch second, third, etc., brands that complement and support the first brand, further increasing market share. For example, Gillette razors and Procter & Gamble’s shampoo brands.
3. How to prevent brand dilution during brand evolution and upgrades?
As a brand continues to succeed, it can enter more markets, attract more audiences, and introduce more products. This is considered by Trout as brand dilution, which easily leads to the loss of the brand's core. However, when a brand enters the stage of upgrading and evolution, its branding elements will inevitably face changes. How to prevent brand dilution during these changes? Does Dangdang's brand seem to face so-called brand dilution?
Expert Response: Dangdang has already begun to incur huge losses, serving as a counterexample.
Management Changes China, Environmental Protection Should Not Be Just Slogans, Excellent Strategies Are Made This Way, Thoughts on Positioning Collisions, Liu Chengyuan's "Autonomous Operation Improvement" Management Theory Interpretation, Discuss Effective Advantages Instead of Core Competitiveness,
4. Must a brand succeed only through focused positioning?
Trout believed that successful brands cannot provide full-service from head to toe because the capacity of customers' minds determines that brands can only focus on specific areas. This implies that a shoe brand cannot also make clothing. However, actual brand operations seem different. For instance, Metersbonwe offers multiple categories, almost satisfying various customer needs from head to toe; Armani expanded from clothing to shoes and bags. How do we understand the success of these brands?
Expert Response: Metersbonwe is not a proper case; its profit is declining sharply. After Armani extended its brand, its revenue increased, but two issues arose: one was a sharp drop in profit margins, and the other was that the truly profitable products were still the original ones.
This article is reprinted from: http://www.letuoutdoor.com/show-id-257.html