Positioning Product Brands

When entrepreneurs or organizations start out with a product seeking a market versus the other way around, they need to think carefully about which market or markets their product (and brand) would be most wise to serve. 

 

This involves target market identification, product category selection and unique value proposition determination.

 

I will use a real-life example with which one of my client companies is now wrestling. This company has created a very tasty parmesan cheese substitute that has no dairy component. It is in a ground up form that can be added to food from a shaker. The product includes many healthy ingredients and no artificial or harmful ingredients. It is a very good product. But the question is, "What are the most advantageous markets for the product?"

 

To determine this, we must consider the customer segments, potential product uses, market sizes, market growth rates, market profit margins, and the competition by market. Once these are used to identify the most advantageous market segments, then the appropriate product category or categories must be selected and the unique value proposition must be crafted to fit the chosen category or categories. 

 

Going back to the parmesan cheese substitute, it could be added to pasta, used to flavor popcorn, shaken on top of grilled steaks or seafood, added to soups, stews or salads, added to quiche, added to fondue or eaten with a spoon as a snack. Which are the most likely uses for each potential market segment? Which uses provide the largest markets? For which uses are the largest quantities consumed? Which uses have less competition? Which uses would make the most intuitive sense to people? Which uses would be the most compelling?

 

What do the targeted markets and the intended uses imply about the product category? Is the product a healthy parmesan cheese substitute, a non-dairy parmesan substitute, a cheese-flavored seasoning, a condiment, a healthy food additive, a flavor enhancer or something else?

 

Each of these product category descriptions might appeal to different target markets. For instance, a non-dairy parmesan substitute would primarily appeal to vegans and people who are lactose intolerant. How big are these two markets?

 

One must also consider who cooks, what types of meals they prepare, how often they prepare different types of meals, how much the snack, what types of snacks they consume and what flavors their palates prefer. 

 

In the case of this product, one must also consider whether it is to be positioned as a variation on a traditional ingredient in classical cuisine or as an ingredient associated with nouvelle cuisine.

 

Once the target markets, product categories and product uses are determined, one must also consider the competition in arriving at a highly compelling unique value proposition (UVP). What will make this product and brand stand out within its intended product category?

 

Also, one might think through whether the product or brand might best be associated with comfort, nostalgia, family, friends, experimentation, excitement or something else.

 

I hope this helps you to see that product uses, product category definitions, target markets and market segments and unique value propositions need to work together to create more focused, integrated and effective brand and marketing strategies. These are all components of a brand's positioning.

Expanding Brand Meaning Through Brand Extension

Sometimes a brand has too narrow a meaning to allow for significant growth. Often this is because it is primarily associated with one product category. In this situation, it is advantageous to expand the brand meaning beyond the core product category by extending it into new categories, uses and need segments. However, to be successful, this usually has to be done in stages. For instance, say you are a brand of oranges. You might be able to immediately extend the brand into orange juice without difficulty. However, you may not yet be able to extend the brand into other fruits or fruit juices or other product formats. So, the first step might be to extend the brand into the orange juice category. The next step might be to begin to brand lemons, limes and other citrus fruits. Once the brand is known in those categories, it might be able to be extended into lemon and lime juices. The next step might be orange, lemon and lime juice snacks. At some point, it might be possible to extend the brand into any food category that primarily has an orange, lemon or lime flavor. And maybe some time well into the future, the brand could be extended into non-food products that have an orange, lemon or lime scent. Any extension needs to be informed by brand extension research. Into what categories do consumers give the brand permission to exist?

The key for any of this is to have a long-term plan of where you want to take the brand but to pursue that plan one step at a time. And each step that you take should be informed by research. Ultimately, you will want to define your brand beyond just one product category. If defined by something broader, especially a customer benefit or a shared value, then the brand has a better chance of thriving well into the future. 

I wish you success in expanding your brand's meaning by extending it into new product and service categories. 

Brands Must Transcend Product Categories

When I was named director of brand management and marketing at Hallmark, most of the company’s leadership team viewed the company as a greeting card manufacturing company.

With the advent of the Internet, it was easy to foresee the demise of “ink on paper” greeting cards.  I felt it was my duty to get the company’s leadership team to think about our business more broadly. Ideally, brands stand for customer values and benefits, not specific products.

It was clear through research that Hallmark helped people maintain their relationships and express their feelings. Based on this, we determined that Hallmark should stand for “caring shared.”

At the time, Hallmark was mostly manufacturing “ink on paper” products – greeting cards, giftwrap, paper plates and napkins and related products. It also produced calendars and day planners. It outsourced collectable Christmas ornaments and other small gifts. Most of these were produced in Asia.

I saw an opportunity for giftable candy and flowers and other “just a little something” gifts.  In fact, we worked with another Kansas City company, Russell Stover, to produce a co-branded upscale giftable chocolate collection.  And a group of us proposed a national florist network acquisition that far exceeded all of the company’s financial hurdles for new businesses and provided a platform for online order processing and significant add-on sales.  The best part of that acquisition is that the revenue and profit streams were very predictable for five years into the future due to outstanding yellow pages contracts (guaranteed first full page ad under “florist” across the nation). The best part is that Hallmark did not need to handle the flowers. It just recruited the right high quality florists, gave them a portfolio of floral arrangements to sell and processed people’s purchases by credit card. The company’s leadership team turned this opportunity down due to risk aversion.

I led the company into the digital age by innovating and launching “The Birthday Times,” “Letter from Santa,” “Peanuts Personalized Cartoon Strips” and other personalized social expression products printed in card shops using Tandy computers. I also developed a joint venture with Microsoft to create “Greetings Workshop,” greeting card software for the home. After that, I was on the advisory committee for the first website that would produce Hallmark’s online greeting cards. And I developed the concept and business plan for a joint venture with Kodak that focused on personalizing wine labels, ties, calendars, scrapbooks, t-shirts and a wide variety of other products with personalized photos and messaging. This joint venture (Image Gallery) was headquartered in Colorado and lasted for a few years.

In an earlier career role, as a new business strategist in Hallmark’s Product Discovery & Development division, I developed and tested the concepts for experiences and services as gifts, “just a little something” gifts and products for grandparents to share with their grandchildren. We also determined that it was possible for Hallmark to stretch the brand as far as offering branded romantic cruises for couples.

So, what happened to all of these endeavors to move Hallmark from a company reliant on manufacturing greeting cards, to a company known for helping people share their feelings and enhance their relationships? The comfort zones of the senior most leaders in the company. They knew how to manufacture greeting cards and sell them through card shops (and later, the mass channels). But they felt far less comfortable with other types of business models.

I left soon after discovering that Hallmark would never move that far from its roots, unnecessarily stunting its future growth prospects.  In fact, many senior managers left shortly after the corporate officers passed on acquiring the florist network, an acquisition that to this day I believe could have been transformational for Hallmark.

So, what are the key takeaways from this example?

• Do not define your brand as a product category. It will limit its growth potential and eventually lead to its demise.
• A brand should stand for something and share values with its customers or at least promise customer benefits, especially emotional benefits.
• The more different types of products that can be offered to deliver on a brand’s promise, the stronger that promise becomes.
• Defining a brand’s promise based on values or benefits (versus product categories) potentially extends a brand’s life indefinitely.
• Senior leadership must buy into the brand’s promise and not be afraid to invest in new product and service categories to deliver on that promise.
• Brands can enter new product or service categories through mergers, acquisitions, joint ventures, licensing or internal development.  Don’t limit the way you extend your brand into new categories to internal development only.

But My Category is Different...

Since 1999, I have helped well over 160 brands. They represent at least a third as many product/service categories. When being considered for a project, I am often asked, “Have you done work in XYZ category?” “Ours is a different category. We are only interested in consultants with experience in our category.” I have had this question asked about B2B, heavy industrial, FMCG (fast moving consumer goods), retail, pharma, federal agencies, professional firms, trade associations, not-for-profit organizations, medical devices, financial services, senior services, church-related organizations, hospitality, luxury products, municipalities, colleges and universities, celebrities, nations and I am sure there are some others.

My answer always is, “You are the experts in your category. I am the branding expert and I am also a quick study. It benefits you that I have experience across a myriad of categories.  I will be able to bring ‘out of the box’ insights and ideas to the project.”

Are there differences between categories? Sure. Are they differences that would stymie a brand consultant? No, not unless he or she didn’t have much mental horsepower.

What categories have I found to be different?

• B2B because of the decision making process and the marketing tactics used
• Pharma because of the regulatory issues and insular nature of the industry
• People (especially celebrities and famous people) because there is a self-analysis and personal coaching component to the project
• Places (municipalities, regions and nations) because of the diversity of the stakeholders and the complexity of the decision making process
• (Sometimes, but not nearly as much as one might think), not-for-profit organizations because of the lack of budget and sometimes the lack of a marketing counterpart in the organization
• FMCG because one has to understand retail, POS data, category management and other issues specific to FMCG

Having noted some differences, brand consultants are called upon because of their customer insight and brand strategy/positioning expertise, not their expertise within a particular product or service category. Our branding processes, templates and criteria work across all product/service categories. They haven’t failed us yet. But then again, we have not yet done work in the ‘QRS’ category. 

Creating "Category of One" Brands

Many marketers talk about "category of one" brands, but most really don't know how to create them. 

To create a “category of one” brand, one must choose a preemptive frame of reference so that the brand is the only one in its consideration set. Rather than differentiating the brand by choosing a differentiating benefit within a current product/service category or frame of reference, one differentiates the brand by identifying or creating an entirely new product/service category or frame of reference that is highly compelling. The new category is set up so that the brand in question is the only one within that category (Figure 6–5).

Excerpted from Brand Aid, second edition, (c) 2015 by Brad VanAuken

Click here to order your copy of the book today.

Brands Help Organizations Transcend Product Categories

Have you heard of Smith-Corona? If you are my age or older, you have. If you are 25 or under, you may not have. They made typewriters, a product format that became obsolete with the advent of personal computers.

Kodak was associated with photography and film, but mostly with film and film processing. Canon, Nikon, Olympus and others were better known in the camera space. It was easier for film-based cameras to translate to digital cameras than for film to translate to digital images in people’s minds. Film became obsolete with the advent of digital photography, something that Kodak created. And the decline of film brought about Kodak’s decline. Admittedly, it is easier for a large ship to avoid an iceberg than for Kodak to switch from chemistry-based operations and personnel to digital (software) based operations and personnel. But, what if Kodak had proactively and aggressively sought to broaden its brand’s meaning well beyond film many years ago, not only with marketing communication but also with products, services and other proof points?

I spent 15 years in marketing at Hallmark. While heading up brand management and marketing for Hallmark, my personal goal was to get its management team to view the brand beyond greeting cards to include all forms of maintaining and building personal relationships. We redefined the brand’s essence as “caring shared.” This expanded brand meaning would allow for “just a little something” gifts such as candy and flowers. It would allow for electronic greetings, romantic cruises, experiences as gifts (romantic dinners, balloon rides, spa treatments, etc.) and other new products and services. And, most importantly, it would allow for the brand’s survival and growth as greeting card usage declined. I am not sure how aggressively Hallmark pursued this path, especially after I left the company.  If it had, its revenues would have grown well beyond the $4 billion level that they were at when I left the company. If not, they are likely to have declined.

Defining its essence as “fun family entertainment” has allowed Disney to offer a wide variety of products and services (movies, theme parks, themed cruises, themed communities, etc.) that make sense to the consumer.

I have worked with Bush’s to expand the meaning of their brand beyond “baked beans.” Methodically extending into other types of closely associated products and uses will allow for years of additional growth for them.

Defining your brand as meeting a specific set of customer needs or delivering specific customer benefits or even as living by a certain set of values allows the brand to transcend historical product categories and therefore extend its life indefinitely. Brands don’t have to fade away. They only fade away if they are too closely tied to one or more product categories that may one day prove to be obsolete.

Brands Help Organizations Transcend Product Categories

Have you heard of Smith-Corona? If you are my age or older, you have. If you are 25 or under, you may not have. They made typewriters, a product format that became obsolete with the advent of personal computers.

Kodak was associated with photography and film, but mostly with film and film processing. Canon, Nikon, Olympus and others were better known in the camera space. It was easier for film-based cameras to translate to digital cameras than for film to translate to digital images in people’s minds. Film became obsolete with the advent of digital photography, something that Kodak created. And the decline of film brought about Kodak’s decline. Admittedly, it is easier for a large ship to avoid an iceberg than for Kodak to switch from chemistry-based operations and personnel to digital (software) based operations and personnel. But, what if Kodak had proactively and aggressively sought to broaden its brand’s meaning well beyond film many years ago, not only with marketing communication but also with products, services and other proof points?

I spent 15 years in marketing at Hallmark. While heading up brand management and marketing for Hallmark, my personal goal was to get its management team to view the brand beyond greeting cards to include all forms of maintaining and building personal relationships. We redefined the brand’s essence as “caring shared.” This expanded brand meaning would allow for “just a little something” gifts such as candy and flowers. It would allow for electronic greetings, romantic cruises, experiences as gifts (romantic dinners, balloon rides, spa treatments, etc.) and other new products and services. And, most importantly, it would allow for the brand’s survival and growth as greeting card usage declined. I am not sure how aggressively Hallmark pursued this path, especially after I left the company.  If it had, its revenues would have grown well beyond the $4 billion level that they were at when I left the company. If not, they are likely to have declined.

Defining its essence as “fun family entertainment” has allowed Disney to offer a wide variety of products and services (movies, theme parks, themed cruises, themed communities, etc.) that make sense to the consumer.

I have worked with Bush’s to expand the meaning of their brand beyond “baked beans.” Methodically extending into other types of beans will allow for years of additional growth for them.

Defining your brand as meeting a specific set of customer needs or delivering specific customer benefits allows the brand to transcend historical product categories and therefore extend its life indefinitely. Brands don’t have to fade away. They only fade away if they are too closely tied to one or more product categories that may one day prove to be obsolete.