Putting You and Your Company in Position to Own Your Market
Americans have always liked their coffee hot. But then Starbucks
made hot coffee desirable, in demand, and extraordinarily
profitable. And then Starbucks made coffee "cool" with its
super-popular iced Frappucino drink -- just as trendy,
fashionable, and universally appealing.
Starbucks is no doubt one of the greatest marketing stories of
recent history. How this company turned an unassuming beverage
into an icon of sophistication and taste is no mystery, however.
It's all about a marketing tenet called positioning.
The coffee company started out in Seattle's Pike Place market in
1971 as a single gourmet coffee shop, and by 1995, the chain's
earnings were $26.1 million. Marketing experts agree that
Starbucks' skyrocket to fortune centers on its aesthetic sense.
In other words, the public's perception of Starbucks has to do
with how it appreciates this company's style. Sure, Starbucks
filled a need and created unique product brands, but what
attracts coffee drinkers again and again is the experience of
the Starbucks environment and its products. Smooth,
sophisticated, artistic: These are seductive qualities even for
a business based on a little brown bean.
The Starbucks story illustrates at least two powerful marketing
principles. Both help us to better understand effective
positioning, or the process of finding a "place" for ourselves
in people's minds:
- People buy for their own reasons, not anyone
else's.
- The stronger position is found in the experience, outcome,
or benefit you provide as opposed to the methods you use for
producing those outcomes.
Starbucks shows us that it's not about packaging -- it's about
positioning. The environment of Starbucks creates an experience
that invites us to come study for exams, hang out and
philosophize with friends, or get the day started with a warm
cup of java and the morning news. Starbucks is an invitation to
linger, not just get your coffee and go.
When you are assessing your own position and considering how you
might improve your image and thus your market share, remember
that there are essentially four winning positions: better,
different, faster, or cheaper. You can certainly position
yourself as one of these, perhaps even two; capturing a position
as three of them is tough and probably not desirable, and
cornering all four is just about impossible.
Not everyone is up to the task of creating another Starbucks.
It's tempting, with price wars so rampant, to believe that a
perception of being cheapest is easiest to establish. Yet in
truth this is the most difficult because of fixed costs. It's
like doing the limbo: you can go only so low, and then you're
overextended or flat on your back. Definitely not the easiest
position to be in.
How about being better instead? Contrary to popular belief, this
is perhaps the easiest position to take, since making an
improvement or simply creating the impression of greater quality
or ability has no constraints. One tip: when you capture the
different category, you may get the better category as a
by-product.
Starbucks capitalized on this technique, as did Dennis Rodman,
the oddball of basketball. He came up with a way to take two
positions in fans' eyes: both different and better. Okay, maybe
he wasn't actually better than his teammate Michael Jordan, who
was unbeatable, but certainly he was perceived for a time as
better (cooler, trendier) among those who were captivated by his
style. His fashion and fascinating antics made him so unique that
he became unforgettable. And because he was also an excellent
ball handler, he became famous and highly regarded in his
sport.
BMW has also taken the better-different approach. Until fairly
recently, Mercedes-Benz had the better luxury car market sewn
up, so BMW -- a competitor with a parity product -- simply
repositioned itself. Its tag, "the ultimate driving machine,"
appeals to a younger crowd and gives them luxury with power and
handling. This is "hip luxury," which is different from the
Mercedes position, which could be summed up as "elegant luxury."
And voil