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Brand X or Position Y
by Rob Gelphman

Classic mistake in the high tech world: Pursue branding when it is their positioning that is in question. Branding is ubiquity, where everyone knows you. Position is value where everyone wants you. What is WindRiver's position? According to their boilerplate, they are "a worldwide leader in embedded software and services." Nothing wrong with that. It is a position and it may lead to brand. But their efforts to brand, so that everyone knows them, whether they need to or not, is an inefficient and misallocation of resources.

Within the technology community, there is serious disagreement and even discord as to which comes first and which is more effective -- the brand or the position. Hence, there is a disconnect as to how to accomplish branding. Companies should look at consumer products for clues. Perhaps this is because branding is easier within the realm of retailing and consumer products. The nature of consumer products is basic and simple, and the target of the branding exercise is a single, individual consumer. Effective branding derives its power from the multiplier effect, i.e., an individual purchase for $2.98 standing on its own doesn't amount to much but multiply that purchase by millions of consumers and you are talking serious money.

In addition, and within the technology sector, classic branding is often at odds with the nature of the product -- the intellectual content is high and not easily understood, and the buying audience consists of a select group of people, small in number but high in buying power. When looked at from a volume perspective, high-tech sales can be miniscule when compared to consumer products. But from a price per unit perspective, high-tech sales often have a larger dollar value.

When it comes to consumer products, effective branding can be incredibly powerful (an energetic and determined six-year old child can be an undeterred evangelist for a breakfast cereal). But when it comes to high technology, where value is measured in arcane performance measurements and complex return on investment metrics, positioning may be the more appropriate tactic.

Of course, the first problem facing branding and positioning is one of basic definition. What exactly is branding? What is positioning? The second problem is one of application. How do the two interrelate? How important are they to the success or failure of a particular company?

Simply defined, branding is the process by which a company or product name or image becomes synonymous with a positive impression, e.g. trustworthiness, predictable quality, performance, etc. Brand equity (the value associated with a brand) is built over a long period of time through communication vehicles, such as, television, radio or print advertising. When it works properly, branding results in an "auto-pilot" kind of purchase.

The brand is the covenant between the company and the customer. Branding is taking your position to another level, and making it stand for something.

Positioning is very much a real-time, people-intensive effort and helps define who and what a company is and what it does. Positioning draws its strength from person-to-person communication rather than media-intensive mass communication. Positioning explains where a company fits into the marketplace, what it has to offer that is unique, and why people should care.

Positioning is getting the customer to buy the product. Branding is getting the customer to experience and live the product. Do engineers live embedded software? And does the end consumer, the cell phone purchaser ask for a phone with "WindRiver Inside?" Or Java for that matter? Consumers don't really have an idea of a Procter & Gamble, a General Mills, or a Ralston Purina brand experience outside of a specific product. Why would they with a WindRiver or Sun's Java?

Sometimes, however, a company-wide brand is absolutely vital to success, because the company offers a single service or product that is indistinguishable from the company itself. A brand cannot be something that is just conceptual. There must be something in it for them. Why is the product or service or company relevant? What is the value proposition? This is where the positioning efforts come in.

Sometimes, if positioning does not keep pace with the momentum of a company or of a market, a brand can suffer severe damage. Worldcom comes to mind. So does Transmeta. What are they doing that Intel, AMD and Via Technologies are not?

Positioning and branding have to be on the same page. If the brand and the positioning are out of sync, there are negative consequences. Positioning is fluid, dynamic and ever evolving. It feeds the brand and makes it come alive.

Companies should be asking themselves, what is the benefit to the customer's customer? Does he or she care that their cell phone has WindRiver embedded software inside? Should they? Do we want them to?

Too often, companies position and brand based on their product's attributes rather than downstream benefits. Then they wonder why they spend all this money and some little, no name startup eats their lunch. No wonder tech is in a slump: engineers are doing marketing. When engineers do marketing we get the VCR and the camel. The former never worked properly and the latter has no use.

Rob Gelphman
Principal
Gelphman Associates
408.451.8420
robert@gelphman.com
www.gelphman.com

Author Information
Rob Gelphman is principal of Gelphman Associates, a marketing communications firm located in Silcon Valley.

 

 

 

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