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Positioning for CEO’s

When DHL decided to aggressively compete with Fedex and UPS, I wondered “what’s wrong with those guys”?

We had Brown and Purple, did we need Yellow, too?

Then when they went on to spend all that money advertising and promoting the brand, I really wondered who was running the company. Their retreat from the U.S. market was a surprise to many, but not me.

Fedex is number One and UPS is number Two in package delivery. Or, vice versa depending up the perception of individual customers. Who needed anyone else? Obviously – nobody! Have you missed DHL?

Likewise, we have a CVS or a Walgreen’s around the corner. Who needs Rite-Aid? And, we have Walmart and Target close by. Who’s going to K Mart/Sears? Likewise, McDonald’s or Dunkin Donuts is an easy choice for coffee these days? Who can afford a $5 Latte from Starbuck’s? And so on in most markets.

These are all clear examples of successful positions that have been established by market leaders.

Let’s look at another example of repositioning by some of these positioning experts.

In their continuing effort to keep their respective shares of customer’s minds Fedex and UPS have acquired storefront operations in the form of Kinko’s for Fedex, and the old Post Office Box stores that we now know as the UPS Store. The logic being if you were going to copy/print and ship something why not do it all at one location using either Fedex or UPS.

It was also an ideal solution for small businesses and people who did not ever have enough to send to warrant having a UPS or Fedex account.

Kinko’s was more challenging for Fedex, than the Post Office Stores for UPS. The change over to the UPS Store was so transparent that few really noticed since UPS had already established a presence as part of the initial Post Office Box store value proposition. Kinko’s, on the other hand was a larger and different culture than Fedex. Kinko’s had become the Starbuck’s for print, copy and word processing.

Kinko’s was established in 1970 by Paul Orfalea and the derivation of the brand name was Paul’s “kinky” (thus Kinko’s) hair at the time. Obviously the brand has aged along with Paul who no longer has as much kinky hair these days. More importantly, like Starbuck’s, Kinko’s image has faded and will be renamed – Fedex Office, which is more in keeping with the Fedex value proposition. Or, another line extension for Fedex e.g. Fedex Air, Fedex Ground, and now Fedex Office.

Fedex Office is repositioning the Kinko’s stores they acquired as “the back office for small businesses and the branch office for mobile professionals”.

As these examples illustrate the mental product grid in our mind can only retain so much information on each brand value proposition. For most it is only one brand value proposition and for others two, and beyond that all the other brands in that product category are typically “fuzzy” like the DHL, Rite Aid and K Mart/Sears examples above.

Yes, we have heard of them, but they do not resonate or we do not “blink” and form an immediate positive image of them when we have a need for that type of product. Package = Fedex/UPS. Pharmacy = CVS/Walgreen’s. Value = Walmart/Target. Etc.

The goal of marketing is to own a position in the mind so that the customer will automatically seek your brand when they have a need. So brand equity as I have explained in other articles is the value associated with the position that the brand occupies in the minds of customers, or in other words the share of mind owned by the brand.   

Another good example is Best Buy that based upon their success is the epitome of positioning – a great brand name that easily resonates with their value proposition, as opposed to an older competitor Circuit City that disappeared because it did not resonate. I was always confused by the Circuit City brand and could not easily make a quick mental connection or “blink” with a product/value proposition. Obviously, so were many others which led to its demise. 

My last example for you to ponder and maybe be amused by is office supplies brand positioning. We have Staples, Office Depot and Office Max. Like with the other brand examples Staples is the leader, Office Depot is number two, and then we have Office Max(?). I never got the Max message and apparently neither has many others, as they occupy a “fuzzy” third place. Some customers in Office Max stores have been known to write checks out to Office Depot.

How about that as a testimonial to which brand owns a share of mind?

As all these examples illustrate, marketing is the battle for the customers mind and if you don’t own a share of mind you are just a “fuzzy” fleeting mental distraction. So the question is – how are your brands positioned in the minds of customers in your marketplace?

Is your company/brand at risk of disappearing?

If you are not sure let’s start a dialogue on how to position your company so that you aren’t surprised by many of your customers defecting to a clearer value proposition that resonates better from one of your competitors.

An entrepreneur himself, Bob has spent most of his career involved with starting, growing and selling businesses. Having held managerial positions with IBM, Pfizer and Exxon, he draws upon extensive organizational experience with large and small companies in advising CEOs of growing firms. He is available online to answer questions from Chief Executive readers, as well as offer workshops, tips, books to read and a monthly online column about common issues facing CEOs of growing firms. Bob has been featured in USA TODAY for his work with Inc 500 firms and is associated with NYU’s Stern Graduate School of business in their Center for Entrepreneurial Studies where he is a Venture Mentor, Marketing Strategist and Business Plan Reviewer.

He is the author of GUIDEBOOK TO PLANNING – A Common Sense Approach to Building Business Plans for Growing Firms, which has recently been reprinted. He is a past contributor to Chief Executive and one of his articles was featured in The Best of Chief Executive.  Email Bob at: rmdonnelly@chiefexecutive.net

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