PDF Summary:Positioning, by Al Ries and Jack Trout

In Positioning, advertising consultants Al Ries and Jack Trout explore the concept of positioning—a strategy of framing your product, service, company, or self against your competitors and within your market. They examine not only how you can use positioning for your organization, but also how you can use it to achieve your personal career goals.

In this guide, we’ll look at what Ries and Trout mean by “positioning,” compare it to how others have defined the concept, and explore strategies and techniques you can use in a positioning campaign. We’ll also touch on a few positioning strategies that Ries and Trout caution against. Throughout, we’ll discuss ways that other marketing professionals have interpreted the strategy that expand on and amplify Ries and Trout’s insights.

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• Search Preference: Check search engine statistics to see how people are likely to search for products in your category. For example, if you’re naming a new line of kitchen cutlery, find out whether people are more likely to search for “cutlery” or “kitchen knives.” Basically, this is an extension of Ries and Trout’s principle that names should be representative: Search statistics allow you to see how people refer to things, and find out which names are truly the most representative of your product.

• Availability: Check the availability of web domains and social media profiles matching your possible names. If they’re already taken, that will hinder your positioning. This is basically a digital extension of Ries and Trout’s stipulation that a name be unique.

• Spelling: Don’t name your product something that spell-check algorithms will flag as a misspelling of something else. In a sense, this is an extension of Ries and Trout’s memorability criterion. If spell check flags the name or auto-corrects it when the user types it, users may second-guess their own memory of the name, weakening their recall of it.

Consider Your Abbreviations

Ries and Trout point out that in speech, people tend to shorten names to reduce spoken syllables. This makes some names more suitable than others for abbreviating as acronyms.

They assert that names are more memorable than acronyms. Thus, you may want to avoid selecting a name that people are likely to turn into an acronym. They say phonetic acronyms (acronyms that make up words you can pronounce, like NASA) are more memorable, and thus may offer an alternate solution.

However, the authors warn that acronyms can backfire if the acronym sounds contrary to your positioning claim. For example, suppose you’re rolling out a program that helps people stay in shape by teaching them psychological techniques to maintain a positive attitude about exercise. You call the program “Fitness Attitude Training,” which gets shortened to FAT.

(Shortform note: Psychological studies on the memorability of acronyms have had mixed results, but generally corroborate Ries and Trout’s assertion that they are less memorable than names. One study also highlighted the significance of social context, finding that how a person answers the question, “Would you say this name in conversation at a party?” was the strongest predictor of their receptiveness to the product. Thus, if you’re designing a survey to compare the effectiveness of different names, questions about using a product name in a social context may give you more accurate results than questions like, “How likely would you be to buy this product if it was named…?”)

Additional Naming Pitfalls

Vague or Arbitrary Names: A name that’s too vague makes it harder to establish a strong position, because it’s less obvious what kind of product the name stands for.

For example, what would you expect “W Magazine” to cover? Maybe finances, or gambling: ways to double your money? Maybe women’s issues? It appears they actually focus on art and fashion, but you need more than their name to figure that out.

(Shortform note: Other analysts add that you should not choose a name that’s too generic because your product can’t be everything to everybody.)

Obsolete Names: Cultures change over time, and so do businesses. Names that used to be good may no longer reflect the nature of the product or the role of the company in a way that resonates with prospective customers. We already discussed the importance of the company name accurately reflecting its role. However, even if the product and the company stay the same, the name can become obsolete due to changes in culture or language.

(Shortform note: Globalization can also render names obsolete if they appeal to the original local customers but not to a broader global audience. The Harvard Business Review provides some pointers on brand naming for success in the global market, such as choosing a name that is easy to pronounce in a variety of languages.)

Technical Names: Ries and Trout observe that engineers often come up with technical names for products they are developing that are meaningless to outsiders. Thus, they argue that these names should be changed when the product is brought to market.

(Shortform note: While this is probably good advice, there are exceptions. For example, WD-40 stands for “Water Displacing Agent, experimental formula #40,” a name that obviously carried over from the company’s R&D efforts. However, the product was highly successful, and is widely regarded as the market leader in water displacing agents.)

Confusing Names: Ries and Trout point out that if your name is too easily confused with a competitor’s name, it becomes difficult to position yourself relative to that competitor.

(Shortform note: This is true if you’re trying to position yourself as the market leader in your own niche, as Ries and Trout recommend. However, sometimes companies with copycat products deliberately adopt names that could easily be confused with the market leader. For example, Surefire is widely acknowledged as the brand leader in tactical flashlights, while superficially similar but much cheaper lights are available from Ultrafire and Trustfire.)

Positioning Strategy

So, you understand your current position, you have a realistic vision for the position you want, and your name is appropriate for the position you want. Now how do you cement your position as the market leader? Ries and Trout discuss different strategies depending on whether you already are the market leader and just need to stay there, or whether you want to become the market leader.

Strategy for an Established Market Leader

If you are already in a position of market leadership, maybe all you need to do is reinforce your existing position. However, according to Ries and Trout, simply advertising that your product is the best won’t convince anyone.

Instead, Ries and Trout recommend promoting yourself as the originator of the genuine article. Since leaders are typically the first to occupy their respective positions, this claim seems credible, and it implies that competing products are mere imitations, giving people a reason to buy the real thing from you.

(Shortform note: This strategy assumes that the market is not disrupted by technological breakthroughs. However, in some scenarios, being known as the originator of a genuine article that’s now regarded as obsolete can work against you if everyone wants the new and improved version. In The Innovator’s Dilemma, Clayton Christensen explains that disruptive innovations can allow small start-ups to displace established market leaders. He explains that the new technology may be first introduced in a niche market that is too small for the overall market leader to bother competing in, but if it gains traction there, it may expand into adjacent sectors until it dominates the whole market and displaces the market leader.)

Strategy for an Aspiring Market Leader

Suppose you’re not a market leader yet, but you have identified a niche that is worth developing, which nobody else is developing yet. In this case, based on Ries and Trout’s recommendations, we may infer that all you need to become the market leader is a product that fulfills the demand, a suitable name, and an ad campaign that raises awareness about it.

However, their discussion of this scenario also highlights the importance of appealing to expectations and repositioning the competition.

Appeal to Expectations

Recall that it's easier to get a message across if you appeal to people’s expectations. Thus, Ries and Trout point out that if you introduce a totally new product, it’s important to compare it to something they’re familiar with. As an example, they discuss how early automobiles were marketed as “horseless carriages.”

Market Alternatives and Product Alternatives

Moore takes this concept a step further, asserting that people need alternatives to compare your product to before they will position you as the market leader. If you’re introducing a disruptive technology, he recommends presenting it relative to two alternatives: the market alternative and the product alternative.

The market alternative is what your product will most directly compete with in the market. Building on Ries and Trout’s example, the automobile would ultimately replace horse-drawn carriages as people’s primary means of transportation. Thus, calling an automobile a “horseless carriage” helped to position it as a market alternative to horse-drawn carriages.

The product alternative is a product that is based on similar technology but is used for something else. For example, if gasoline-powered railroad engines had caught on before automobiles did, early automakers might have tried marketing their cars as “personal locomotives” instead of “horseless carriages.”

Reposition the Competition

Ries and Trout also assert that you can establish an advantage in a market sector by repositioning your competitors. To do so, discredit the existing market alternative to your product.

For example, perhaps you’re a pharmaceutical company looking to introduce a new flu vaccine that’s formulated specifically for women. To become the leader of this niche, you’ll have to convince people that your product is better for women than your competitors’ gender-neutral flu vaccines.

However, according to Ries and Trout, simply claiming that your product is better in some way is generally not effective. Instead, they advise that if you expose a deficiency of the current lead product, that creates an opening in your niche for a product that overcomes that deficiency, and compels the market to inaugurate a new leader in the new niche.

They go on to point out that people are more likely to pay attention to bad news than to good news, which means any bad news about your competitor that you disseminate is likely to get more traction than good news about your product. In our womens’ flu vaccine example, you could run an ad campaign to raise awareness about side effects of the gender-neutral vaccine on women’s health. Then you would present your product as a solution to mitigate the risk of these side effects.

Exploring the Origins of Negativity Bias

A recent study reviewed much of the psychological research to date on negativity bias, or the tendency to weigh negative impressions more heavily than positive ones. It explored many dimensions of negativity bias, ranging from food-based studies with animals to studies of language, culture, and morality across many different populations. It concluded that negativity bias is a real phenomenon that is common in both humans and animals, and may arise partly from natural selection: Individuals that fail to react to negative stimuli tend to be eliminated from the population, while there is no comparable effect for positive stimuli. However, the study also concludes that negativity bias is too complex to be explained by natural selection alone, and calls for further research.

Strategy for an Established Leader Entering a New Market

What if you’re in a position of market leadership with one product, but you want to launch a new product in a different market sector? Ries and Trout argue that it’s better to introduce a new brand that you can position in the new market even if you’re already a leader in another market. The reason for this is the pitfall of line extensions, which we will discuss next.

The Pitfalls of Line Extensions

Ries and Trout use the term “line extension” to refer to new products that you add to an existing product line, under the same name. Within the product line, you distinguish individual products either with descriptions (for example two types of pasta sold under the same brand name) or with other qualifiers (for example, you’ve been selling “Lotion X” for years, and now you roll out a premium version and call it “Lotion X Supreme”)

Ries and Trout observe that line extensions are usually based on the assumption that if you tack a new product onto a successful product line, your success will carry over to the new product. They concede that in the short term, line extensions do provide instant brand recognition and credibility. They also acknowledge that it saves money relative to starting a new marketing campaign for a new product.

However, they generally advise against line extensions, for two reasons: brand dilution and internal competition.

(Shortform note: Other analysts echo these concerns, adding that overuse of line extensions is also driven by the recent trend toward a business structure that rewards short-term gains over long-term success. This is the case because, as Ries and Trout point out, line extensions provide immediate benefits, even though they are often bad for business in the long run.)

Brand Dilution

According to Ries and Trout, the first problem with line extensions is that a name has to represent the collective essence of everything it stands for. Thus, the more your brand gets associated with diverse products and market positions, the harder it is for a customer to identify exactly what your brand stands for, and so the weaker your position becomes.

For example, imagine what would happen if Ferrari started selling economical commuter cars in addition to their high-end sports cars: Instead of standing for a high-end sports car, the Ferrari name would then just stand for cars in general, and so it would lose most of its meaning.

Why Market Leaders Avoid Line Extensions

When Ries and Trout expanded on this idea in The 22 Immutable Laws of Marketing, which they published over a decade later, they codified this as their 13th Law: Don’t extend your brand to other categories. There, they observe that market leaders seldom have line extensions, and argue that there are two reasons for this: First, market leaders know that they can’t be everything to everybody, and would rather do well in one market sector than poorly in many sectors. Second, a market leader’s brand name becomes synonymous with their product, which helps maintain their market leadership, because when people know a product by its brand name, they tend to buy that brand (think Q-tips). But it also makes line extensions hard to sell, because the brand name isn’t synonymous with the new product.

Internal Competition

Ries and Trout explain that line extensions tend to compete for sales mostly within your existing product line. If you do expand your product line, you want to expand into adjacent market sectors, taking market share away from your competitors, not from your existing products.

Ries and Trout point out that introducing a new product under a different name gives you the opportunity to position it as the leader in a new market sector, but introducing the same product as an extension of your existing product line forfeits this opportunity.

(Shortform note: In Good Strategy Bad Strategy, Richard Rumelt argues that an overuse of product line extensions that compete internally can be a symptom of a company’s loss of focus. He presents a case study of General Motors as a warning. In an effort to appeal to all kinds of customers, the company expanded each of its models, so that their high-end cars started making lower-end models and vice versa. Consequently, their luxury cars (like Pontiac) ended up competing with their economy cars (like Chevrolet) instead of complementing them. By 2009, the company declared bankruptcy. This shows that internal competition can arise between separate product lines as well as within a single product line.)

The Line Extension Litmus Test

Because of the pitfalls of line extension, Ries and Trout advise expanding only when the following conditions are met:

• The new product is sufficiently similar to what you’re already selling under that name that it won’t weaken your position or dilute your brand’s meaning. For example, if you already make spaghetti noodles, it’s ok to introduce macaroni noodles under your same brand name.
• The advantages of instant brand recognition outweigh the risk of missing an opportunity to expand into a new market sector.
• The advertising cost savings are significant relative to your marketing budget.

(Shortform note: Given the danger of internal competition, it might be prudent to consider the opposite perspective and add another condition to the test: Is the new product functionally different enough that it will add value to your product line instead of just competing within it? For example, if you already make spaghetti noodles, and you add macaroni noodles as a line extension, you’ll likely pick up some additional customers, because a customer planning to make macaroni for dinner probably won’t be interested in your spaghetti noodles, but they might buy your macaroni noodles. However, if you add a line of linguini noodles, it might only compete with your very-similar spaghetti for customers.)

Professional Positioning for Career Success

While positioning is most often discussed in the context of marketing a product or company, Ries and Trout say you can use the same principles to advance your career. They even recommend applying the same overarching strategy: Understand your current position, identify your desired position, select a suitable name, and then chart a course from your current position to your desired position.

1. Understand Your Current Position

According to Ries and Trout, first you need to understand your current professional positioning. How do others perceive you in terms of your strengths and weaknesses relative to other candidates or employees?

(Shortform note: According to Douglas Stone and Sheila Heen, the key to understanding how people perceive you is learning how to receive feedback effectively. They advise that to stay open to feedback, you should become aware of certain triggers that might prevent you from listening—for example, a relationship trigger might cause you to ignore advice from someone you dislike, or an identity trigger might make you ignore feedback that criticizes who you are as a person. Ironically, the kind of feedback that an identity trigger might block could be especially useful in determining your current position, because it implies a disconnect between how you see your identity (or position) and how someone else sees you.)

2. Identify Your Desired Position

Second, Ries and Trout advise that you realistically identify your desired professional position. They caution that you can’t be the best at everything to everybody, and argue that the biggest challenge in positioning yourself for career success is often figuring out specifically what professional positioning you want.

(Shortform note: While Ries and Trout don’t mention it, we might infer a connection between identifying your desired position and finding an open niche. To identify your desired career positioning, you might need to also identify the niche where you can succeed professionally.)

3. Consider Your Name

Third, Ries and Trout assert that your name is a crucial element of how people perceive you, just as a brand name influences how people perceive products and companies. As with company acronyms, they advise you to avoid going by initials, as they’re less memorable.

Furthermore, they argue that some names intuitively sound more credible than others for a given role. Thus, as with brands, if your name doesn’t support your desired positioning, Ries and Trout recommend changing it, or using an assumed name (for example, many authors write under a pen name).

Your Name and Your Career

While the extent to which your name affects your career is a matter of some speculation, studies do show correlations between names and various aspects of career success. For example, people with names that are more common or easier to pronounce are statistically more likely to be hired, and names associated with a certain ethnicity will favorably affect your job outlook in places where that ethnicity is favored by employers.

If you think a different name would help advance your career, how should you go about changing it? Ries and Trout don’t provide details on this, but depending on the situation, you may have several options:

• You could just use an assumed name on your resume. This would be similar to an author using a pen name, or having your coworkers call you by a nickname. It’s simple, costs nothing, and requires no paperwork, but it can backfire if your prospective employer gets suspicious when they find out you’re not using your real name. Many companies require you to show some kind of identification at some point in the application process. Some may require a background check. If you’re hired, you’ll need to provide your legal name along with your social security number to payroll. So the company will find out your real name, one way or another.

• You could change your legal name. This mitigates the pitfalls of using a nickname, but it’s a long process. Generally, if your name change doesn’t relate to a change in marital status, you’ll have to file a petition, attend a court hearing, and publish your proposed name change in a newspaper, in addition to paying filing fees.

• You could start an LLC and name it whatever you want. In most states, creating an LLC is much easier than changing your legal name, and the company is a legal entity that can enter into contracts and receive payment. However, this would probably only be an option if you were paid as a contractor rather than an employee.

4. Chart Your Course

Ries and Trout then offer some specific suggestions for charting a course from your current professional positioning to your desired position.

First, they emphasize the importance of fit. Your boss and company should fit with your values and goals—in other words, your desired positioning. Conversely, your desired positioning should fit with your company’s vision and goals. Ries and Trout advise that when applying or interviewing with a new company, you emphasize this fit. To do so, they advise that you focus on how your strengths match the company’s strengths rather than how your strengths can help the company’s weaknesses.

(Shortform note: Determining whether you fit with the corporate culture is often a significant part of a job interview. If you’re a good fit, your strengths will tend to match what the company values. Thus, Ries and Trout’s advice is consistent with showing that you’ll fit in with the company culture.)

Second, Ries and Trout emphasize the importance of networking and staying in touch with people outside your own organization. They contend that you get most of your big opportunities through these contacts.

(Shortform note: In Give and Take, Adam Grant argues that being a generous person makes it easier to network with people, ultimately leading to career success. He draws a connection between generosity and trust: To cultivate a generous personality, start by giving others the benefit of the doubt. Most of them will reciprocate, building mutual trust in your network. Similarly, he associates generosity with powerless communication: You make yourself more approachable by asking questions, seeking advice, and signaling vulnerability.)

Finally, Ries and Trout emphasize the importance of persistence, since positioning is inherently a long-term proposition.

(Shortform note: The admonition to persevere is common among career advisers. For example, in A Mind for Numbers, Barbara Oakley asserts that persistence is more important than innate intelligence for your success, both academically and in your career.)