The essence of brand strategy lies in occupying the minds of customers. The key to positioning is to be the first to occupy a specific spot in people\u2019s minds. Imagine the brain as a collection of mental “boxes,” with some spaces already filled and others still available. Once a space has been claimed by a brand, it becomes much more difficult for competitors to take that spot. This is often referred to as the “First Mover Advantage,” which is not just about dominating physical channels or shelf space but about owning a position in consumers’ minds.<\/p>
Fifty years ago, advertising was heavily influenced by three thought leaders: Rosser Reeves, David Ogilvy, and Leo Burnett. Reeves’ advertising approach, called Unique Selling Proposition (USP), focused on highlighting a product’s unique characteristics. For example, if Pepsi were his client, he would emphasize its superior taste compared to Coca-Cola, as taste tests showed Pepsi performed better. This was the product-centric era. David Ogilvy, on the other hand, viewed advertising as a long-term investment in brand building, while Leo Burnett ushered in the era of creativity, emphasizing that advertising must stand out and be different.<\/p>
While these advertising legends focused on the product itself, the theory of positioning takes a different approach. Positioning doesn\u2019t emphasize the product but instead focuses on the mind of the potential customer. For instance, Pepsi isn\u2019t just a product; it must establish a position in people\u2019s minds. Coca-Cola has already occupied a dominant position, so for Pepsi to succeed, it has to displace Coca-Cola from that mental space. This challenge applies to many brands across various categories. If your brand can solve this problem, you have a chance; if not, you must target your competitors, who have already captured consumers’ minds.<\/p>
To succeed as a market leader, you must create a new category. Coca-Cola is the leader in cola beverages, McDonald\u2019s is synonymous with burger chains, KFC dominates fried chicken, and Red Bull leads the energy drink market. The key to positioning is to be the first to claim a mental space. Once a brand has occupied a space in people\u2019s minds, it becomes extremely difficult for others to enter. Therefore, the first question to ask when entering a category is whether your brand is a pioneer or a follower.<\/p>
In 1969, Jack Trout and I applied the positioning theory to study the computer market. In the mainframe computer space, IBM had already claimed the leading position in consumers’ minds. IBM was synonymous with computers, and even today, it holds that position. At that time, GE and RCA, two major U.S. companies, tried to enter the mainframe computer market by leveraging their financial resources. However, we predicted that both would fail, as their brands were not associated with computers in people\u2019s minds. Two years later, both companies exited the market.<\/p>
GE was associated with electrical equipment, and RCA with media. To succeed in the computer industry, they would have had to displace IBM in consumers’ minds, which is a nearly impossible task. Once a brand is strong in one position, it’s very difficult to move to another, especially if that position is already occupied by another brand.<\/p>
In 1981, we published Positioning: The Battle for Your Mind<\/em>, which sold over 5 million copies and was translated into 22 languages. Yet, over 30 years later, many companies still fail to follow the principles of positioning, which presents an opportunity. Why? Because most companies don’t understand how to succeed in today\u2019s market, focusing too much on their products and not enough on capturing their customers’ minds.<\/p> Take IBM as an example. It made the same mistake as GE and RCA. IBM initially dominated the mainframe computer market but later tried to reposition itself in the personal computer space. This move turned out to be a disaster, resulting in losses of 90 billion RMB over 23 years. Eventually, IBM sold its personal computer business to Lenovo for just 11 billion RMB. However, Lenovo made the same mistake by trying to reposition itself in the smartphone market, which didn\u2019t work either.<\/p> Lenovo kept emphasizing better and cheaper products, believing that focusing on the product was the key to success. However, simply having a better product is not enough to win. The brand name matters. The Lenovo brand didn\u2019t resonate in the smartphone space, so it couldn\u2019t succeed there.<\/p> Now, let’s look at Apple. Apple is not just a product brand; it\u2019s a corporate brand. No one says, “I\u2019m going to buy an Apple,” unless they\u2019re referring to the fruit. Apple uses its company name for branding, but its product lines have their own names\u2014iPod, iPhone, iPad. Each of these brands occupies a specific position in consumers’ minds, which is why Apple is the most profitable company in the world today.<\/p> iPod represents high-capacity MP3 players, iPhone stands for touch-screen smartphones, and iPad signifies tablet computers. Apple\u2019s value as a company is unmatched, while Lenovo\u2019s market value is less than 1\/50th of Apple\u2019s. Lenovo\u2019s branding efforts have been weak, and it shows in the market.<\/p> Apple is a genius in marketing, and China also has its marketing geniuses, such as Alibaba Group. Alibaba has three distinct brands: Alibaba for B2B, Tmall for B2C, and Taobao for C2C, each occupying a different space in the market. If all the mental spaces in a category are taken, a brand must focus, but most business leaders resist narrowing their focus because they want to expand.<\/p> Take the automotive industry as an example. Car buyers want everything\u2014performance, reliability, fuel efficiency, and good looks. Many car companies attempt to include all of these attributes in their advertising. For instance, years ago, BMW tried to market itself as a luxury car that was also fun to drive, easy to handle, and fuel-efficient.<\/p> At the time, BMW ranked eleventh in the U.S. market for European imports\u2014not impressive. However, once BMW changed its strategy and focused solely on “driving performance,” with the tagline “The Ultimate Driving Machine,” its fortunes improved. This slogan has been used for 39 years, and today, BMW is the top-selling luxury car brand globally, followed by Mercedes, Audi, Lexus, and Cadillac. BMW’s success exemplifies the military principle of focus.<\/p> Now let\u2019s look at China\u2019s automotive market. In 2009, our firm, Ries China, started consulting for Great Wall Motors. At that time, Great Wall produced commercial vehicles, SUVs, and small vans under various brand names. We advised them to focus on one product\u2014the Haval, an affordable SUV priced under 150,000 RMB. Despite resistance, Great Wall eventually adopted this strategy.<\/p> After four years of focus, Great Wall’s sales increased 5.1 times, profits grew by 8.6 times, and stock prices rose by 12.3 times. Last year, Great Wall\u2019s net profits exceeded the combined profits of all other Chinese car manufacturers.<\/p> Now, let\u2019s revisit McDonald’s. When McDonald’s first started, it sold a variety of meats and burgers, but most of its profits came from hamburgers. After closing for three months to refocus, McDonald’s reopened with a singular focus on hamburgers and introduced the iconic “Golden Arches.” If McDonald’s hadn’t focused on hamburgers, it wouldn\u2019t have become the successful fast-food chain it is today.<\/p> To succeed, you must focus. Even if you have a large company, you need to start small by narrowing your focus. Through focus, you can capture a position in people\u2019s minds.<\/p> <\/p>","protected":false},"excerpt":{"rendered":" The essence of brand strategy lies in occupying the minds of customers. The key to positioning is to be the first to occupy a specific spot in people\u2019s minds. Imagine the brain as a collection of mental “boxes,” with some spaces already filled and others still available. Once a space has been claimed by a …<\/p>\n