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.

New Product Development - Corporations versus Startups

It is interesting to compare and contrast how we approached new product development within Hallmark's Product Discovery & Development division versus how startups that I coach through RIT's Venture Creations business incubator do it.

Hallmark is a large corporate entity that is marketing-driven, but also risk adverse. While the startups that I coach are created by entrepreneurs who are willing to risk much to see their startups succeed. Most of these entrepreneurs have technical backgrounds, but little to no understanding of marketing including marketing research.

Given Hallmark's high profitability hurdles, risk aversion, and large marketing research department, we often succumbed to analysis paralysis. 

At Hallmark, we would explore trends through our resident environmental scanning manager, who would report a new societal trend in depth each month. We would also hold new product ideation sessions for each market or trend that we identified as "high potential." We conducted more than one hundred focus groups a year to explore different potential markets. When one of our new business strategists came up with an idea, we would have that person develop a concept statement and later an "ad-form" concept statement (including a visual), which we tested against a normative database (ConScreen was one of them) to determine market need and gap and to project potential sales volume. Each concept needed to explain the product concept including its primary benefit or benefits simply and without any modifying superlatives. 

After the concept testing, we would often refine the concept, and if it seemed that it had enough potential, we might conduct a few more focus groups to refine it even further and then test its marketplace need and gap again against a normative database.

The Hallmark new product development process is based on the concept of a screening funnel with most new product concepts dropping out at some phase of the evaluation process. We often developed product prototypes. We sometimes performed attitude and usage (A&U) studies to size a new market and determine its sales potential for a specific category of products. We used conjoint analysis to refine product functions and features. Sometimes we would conduct market segmentation analysis. And sometimes we would test product package designs.

The final step in the funnel process for the successful product concepts that had made it that far was a full-blown market test in which the product was developed and tested in a test market. A component of those tests was testing different marketing approaches for the product to determine which might work best for the full product launch.

Now I want to contrast Hallmark's approach to new product development to that of our mostly younger entrepreneurs. We have to work hard to get those entrepreneurs to develop unique value propositions for their products. And we push them to conduct "customer discovery." Sometimes, that consists of only ten interviews with potential customers, although it should consist of far more interviews than that to increase the likelihood of success. 

One of the flaws, but also one of the advantages, of entrepreneurs is that they often (but not always) jump into their startups without much knowledge of what they are getting into regarding industry, product category and business functions outside of their general knowledge or academic training. This makes me think about the Dunning-Kruger Effect, which recognizes that the people who are the most ignorant about something are often also the most confident about it. This can lead to many stumbling blocks and mishaps, but it can also lead to novel solutions for problems that industry experts and others with more knowledge assumed had no solutions. This, in turn, can lead to true breakthroughs as there are no preconceived notions that align with those of industry insiders.

Entrepreneurs often start with what is called minimum viable products (MVPs) and incrementally add functions and features to the products as dictated by early adopter feedback and as their resources allow. 

I hope this illustrates the two ends of a continuum regarding how new products can be developed. One end is based on exhaustive, methodical research. The other end is based on learning as you go, nimbleness and rapid pivoting. 

The Essence of Marketing in One Paragraph

 

Recently, a Venture Capital intern asked me to explain marketing to him at the end of our two-hour interview. While I have spent more than 40 years working on hundreds of successful marketing campaigns for almost as many brands, and while I could spend days talking about the nuances of marketing research, brand strategy, brand architecture, PR, pricing strategy, distribution strategy, digital marketing, marketing automation, package design, retail merchandising, etc. - I believe in simplicity. So, I explained the essence of marketing to him in less than one minute, which can be articulated in one paragraph. This is what I said...

The first step in marketing is being able to completely put yourself in the customer's shoes. What are her hopes, fears, beliefs, attitudes, values and behaviors? What are her pain points? What does she need and what does she desire? What problems is she trying to solve? Then you must craft a product/service solution that uniquely meets those needs and then articulate that unique value proposition as simply and powerfully as possible. Your brand's unique value proposition must be presented to her in as many ways as possible as often as possible to build her awareness of and emotional connection to your brand. And finally, you need to possess common sense to say and do the right things at the right times to move her from brand awareness to brand purchase and then ultimately brand loyalty and even brand advocacy. 

It's as simple as that. All of the rest of marketing is just tactics, which can be taught.

Customer Discovery

Customer discovery must run deep. You need to talk with a lot of people and you need to probe deeply with each of them. That means understanding their hopes, fears, aspirations, anxieties, beliefs, attitudes, values and more. While a highly trained marketing research moderator may use a variety of qualitative research techniques (including projection, ideation, guided imagery, sorting exercises, etc.) to discover these motivations and behavioral drivers, you can do much of this yourself by asking open-ended response questions and spending more time listening than talking. 

The types of questions that can elicit deeper responses include the following:

• What keeps you up at night?
• What is your most pressing need right now?
• If this product or brand were a movie/book/car/party/musical genre/food/etc., what type of movie/book/car/party/musical genre/food/etc. would it be and why?
• How does it make you feel?
• What is missing?
• Do you think the product says anything about you, about who you are?
• Would you recommend this to a friend or colleague? Why or why not?
• What about this appeals to you?
• What is the most important need this would fulfill?

I will give you an example of superficial customer insight versus deep customer insight.

Superficial Insight

Q: Why did you purchase a Tesla?

A1: Because gasoline prices are soaring, electric vehicles (EVs) make increasing sense financially.

A2: Because I care about the environment.

Deeper Insight from Deeper Probing

Q: Why did you purchase a Tesla?

A1: I have always admired Elon Musk and wanted to buy one of his cars.

A2: Teslas are the coolest, newest cars on the road.

A3: Tesla acceleration makes it fun to drive.

A4: Tesla stereo systems are "to die for." I enjoy tooling around listening to some of my favorite music.

A5: I like their clean lines inside and out. They are aesthetically pleasing. 

A6: I love showing my car off to others.  

A7: I want to support society's transition from fossil fuel powered vehicles to EVs.

A8: I want to help slow down climate change. 

A9: When I drive a Tesla, people view me as successful, progressive, an early adopter and environmentally conscious.

A10: Teslas are really fun to drive. They perform very well on the road.

A11: I can always beat other cars across an intersection after a full stop at a stoplight or stop sign.

A12: Teslas have fun "toys" - whoopee cushion noises under seats, light show, caraoke, Netflix movies, etc.

A13: I am just really happy when I am driving my Tesla. It is a joy to drive.

Looking at this list that was compiled from deeper probing, we now have to determine which of these are the primary drivers of the purchase decision. And then we have to distill that to a unique value proposition and brand messaging.

A possible unique value proposition for Teslas given this list of purchase motivations might be:

• Teslas are the coolest cars on the road. They are really fun to drive and they are good for the environment.

Asking your family, friends and colleagues if they like your new product or service idea is not customer discovery. Try for a minimum of 60 interviews. If this seems like an overwhelming task, set aside two hours each week to conduct a few customer interviews. Breaking the task up into smaller chunks will make it seem easier and ongoing customer discovery is better that one-time customer discovery anyway.

The only way to arrive at a truly compelling unique value proposition for your startup is to base it on thoughtful and rigorous customer discovery. 

Branding & the Customer Experience

Mostly, when people talk about brands and branding they are thinking about the brand's name, identity system, positioning, and marketing messaging. They are not thinking about its underlying order fulfillment, customer service, technical support, crisis management and other systems and policies that create the overall customer experience. And yet, a brand's reputation can be enhanced or tarnished by these systems and policies. 

Think of a surly customer service representative that you have interacted with. Or, alternatively, think about a particularly empathetic and helpful customer service representative.

Think about someone who hung up on you when you were seeking help versus one who stayed on the phone with you for hours until your problem was completely solved. 

Think about an order that took dozens of screens and multiple inputs to complete versus one that was completed with one click. 

Think about a hotel employee who personally saw to it that your request was fulfilled versus one who passed it on to someone else, or worse yet, one who never followed through on your request. 

Think about input screens that were very confusing or that timed out versus those that were simple and intuitive. 

Think about brands that create a huge series of walls so that you can never reach a live person versus those in which a real person answers the phone. 

Think about systems that anticipate your needs versus those that can't seem to to help you find what you are looking for. 

Think about the FAQs that never seem to address the question you have versus those that are thorough and help you solve your problem.

Think about an order that arrived overnight versus one that took weeks and weeks to arrive.

Think about brands that surprise you by including unexpected product enhancements after your purchase versus those that surprise you by including unexpected hidden costs and surcharges.

Think about assembly instructions that were incomplete and impossible to follow versus assemblies that were so intuitively obvious that you didn't even need instructions.

Think about retail establishments in which you were immediately greeted in a friendly but unobtrusive way versus those that didn't even acknowledge you. 

And think about warm and welcoming brand environments versus sterile or off-putting environments.

These systems, processes, policies and constructs all contribute to the brand experience. It doesn't matter how cool the brand's identity or marketing messages are. If your interaction with the brand frustrates you or makes you angry versus putting a smile on your face, your perception of and loyalty to the brand will suffer. 

FREE Marketing for Startups Webinar

 

FREE Marketing for Startups Webinar on Wednesday, May 18 from 11:30 am to 1 pm ET. Sponsored by RIT's Venture Creations Incubator and Nextcorps. 

Sign up here: https://nextcorps.org/event/marketing-for-startups/ 

101 Trends Shaping Our World

Sometimes it’s useful for marketers to understand trends that may affect their businesses. Here are some of the current trends that I am monitoring:

1. 5G technology
2. The Internet of Things
3. Mobile Internet
4. Cloud technology and distributed infrastructure 
5. Democratization of technology
6. The world becomes hyperconnected
7. Move toward all media consumed through the Internet
8. Seamless language translation, making the world even smaller
9. Exploration of more direct human-computer interfaces (HCI)
10. Electrification
11. Electric vehicles (EVs)
12. Autonomous vehicles
13. Hydrogen powered vehicles
14. Drones
15. Battery technology, including sodium-sulfur molten salt batteries
16. Microgrids
17. Grid-connected renewable energy systems
18. All forms of clean tech
19. Atmospheric (electromagnetic) energy
20. Software defined vehicles (SDVs)
21. AI & machine learning
22. Deep structured learning
23. Autonomic systems
24. Generative AI
25. Big data analytics
26. Edge computing & tinyML
27. Quantum computing
28. Nanoparticles
29. Next generation materials including honeycomb lattice
30. Photonics
31. Quantum teleportation
32. Virtual and augmented reality
33. 3-D multisensor transmitters
34. Advanced robotics
35. 3-D printing 
36. Process automation and hyper-automation
37. Explosion of smart devices
38. Genomics/genetic engineering
39. Psychobiotics and microbiome therapeutics
40. Health care data analytics
41. Personal medical devices
42. Telehealth and mobile medicine
43. Hyper-personalized medicines
44. Social determinants of health (SDOH) receive greater attention
45. Mental health becomes a larger priority
46. Unbundling of health care
47. Living building material
48. Web 3.0
49. Homomorphic encryption
50. Blockchain (distributed ledger) technology and decentralized identifiers
51. Cryptocurrency
52. Non-fungible tokens (NFTs)
53. A cashless society
54. Privacy and cybersecurity
55. Open-source intelligence (OSINT)
56. Biometric technology (face, voice, eye, hand and signature security)
57. Deglobalization
58. Redesign of supply chains
59. Increased self-service
60. Recurring revenue streams
61. Distributed enterprises and remote employees
62. Increased flexible work 
63. Continued growth in the gig economy
64. Huge need for retraining for new economy jobs
65. Minimum living wages as an alternative to job loss
66. Increased time sharing of all things
67. Fractional CXOs
68. Extreme personal profiling
69. Hyper-targeting and hyper-geofencing 
70. OTT (Over-the-top) media service platforms
71. On-demand personalized customer experiences
72. Move from retail stores to Internet distribution centers and home delivery
73. Move toward unique and boutique in retail
74. Increasing use of personal digital assistants
75. Cameras, cameras everywhere
76. Struggle for personal privacy
77. Increasing popularity of veganism and vegetarianism
78. Increased focus on personal health
79. Decrease in romantic relationships
80. Increasing acceptance of sexual freedom 
81. Decrease in organized religion, increase in personal spirituality
82. Continued decreasing trust in traditional institutions, especially government
83. Shift from a patriarchal society to a matriarchal society
84. More focus on the home
85. Increasing self-care and compassion toward others
86. Increasing importance of pets as family
87. Increased frequency and severity of natural disasters due to climate change
88. More eco-friendly lifestyles
89. The private sector steps up its support of social and environmental issues
90. Distributed localized agriculture through hydroponics and aeroponics
91. Increased “fake news” and disinformation
92. Increased sophistication of deep fakes
93. Increased botnet activity
94. More censorship, less free speech
95. Increased public awareness of and pressure to address economic inequality
96. Less capitalism, more socialism
97. Continued urbanization
98. Continued population shifts to less expensive states
99. Less abundance thinking, more scarcity thinking
100. The blurring of war and crime with the emergence of terrorism
101. Rethinking of the criminal justice system

If you aren’t familiar with some of these, I would recommend that you search on and read about those that most interest you.