Yesterday I spoke about the advantage of creating a Perception / Position in the mind of the customer and how a clear positioning can help you get premium.
Since my focus is on Product Management in technology products and services, within Marketing, I always like to focus on the differentiation and positioning one can create for the product.
There are an immense number of examples I will share with you on this in the future posts, showcasing how technology products/services own a category.
This post however looks at the downside of creating a strong positioning.
Once you take the position in the mind of a customer, it becomes very difficult to change that perception.
If we look at history Digital Equipment was the company which was positioned as the “mini” computer company. When the mainframe computers were associated with the IBM’s of the world Digital created a perception of being different with a “mini” computer. DEC PDPs were the computers which any company longed to own. They owned the Mini Computer category.
DEC however no longer exists today. The reason for that is – DEC was the MINI Computer company. When computers became personal, people didn’t associate DEC with that market and they got completely annihilated.
When you own a product category and the technology related to that category is nearing “end – of – life” then it becomes very difficult to migrate into a different category. This happens because of 2 reasons in my opinion:
- Internal – the management of the company still tries to push their existing products/services because the are incentivized on pushing that.
- External – because the position you hold is strong in the minds of the customer – they can’t see you in a different position and don’t believe you have those capabilities
Most managements don’t read the writing on the wall, some read it but are not able to take a tough call.
For a marketer, its a double edged sword especially in the technical world where the technology is changing so rapidly. Should they work and put the effort into creating and owning categories or should they be a generalist and try and attract everyone.
I will still place my bet any day on creating a positioning / perception/ differentiation so that your product/service can stand out and customers see you defining that space. Then making a sale become easier, making profits become easier.
There are other aspects to creating the differentiation which we will take in future posts.
Till next time.