Flashback to August 1995 – Fulcrum Technologies: The Positioning Dilemma

Marketing can and must be done at world class levels for the Ottawa valley technology community to thrive.

Good marketing is not hocus-pocus or magic.

A structured planning process works, just as it does in hardware engineering or software design.

The Marketing Column

This column will build marketing process awareness to help readers run successful companies. If you are interested in growing your revenues and profits, read on. Even if you are in a non-marketing role such as engineering, sales, support, training, or general management, the column is for you.

Over the first few months, we will provide a series of columns on the parts of an effective marketing plan. Today we discuss “positioning.” First, a definition: “positioning” is finding the place your product lives in the minds of your clients. A good position is unique, and thus very competitive: adjectives like first, best, biggest can be used and they are credible in the marketplace. Let’s give an example.

A Surfin’ Saga

At Fulcrum Technologies, Product Manager Mike Doyle faced a tough positioning challenge – to launch an Internet text retrieval product, “Surfboard,” when competitors had already entered the market. His initial actions covered all the necessary bases:

1. A fact-finding mission in the San Francisco bay area. He visited companies who had adopted Internet technology early on. They were asked about the needs of the market, and their views on Internet document search and retrieval products.

2. Talks with visionary sales people, those familiar with client needs and trends in technology.

3. Concepts for positioning were “test driven” with real clients during Beta testing.

About 15 companies Beta tested “Surfboard.” Positioning was initially “The Internet publisher’s search tool” for the wide Internet market. But Beta test client discussions revealed further segmentation in the Internet publishing market. The “external Web publishing market” was found to be crowded with competitors and very price-sensitive.

A second segment was discovered: “internal Web publishing,” defined as those large organizations which had private Web sites inside the corporation, as well as the usual internal base of corporate Information Systems (IS). The challenge for these clients was to establish an ability to serve users with electronic documents and search facilities on both the Web servers and traditional IS technology. Fulcrum already had an established position in high-end Corporate IS text search & retrieval products. As Doyle says, “By targeting the more narrow ‘internal publishing’ market, we were really marrying our strength as a company with an emerging market.” The updated positioning statement was “The best search toolset for corporate Web publishing.”

The result was a positioning strategy based on unique company strengths, and aimed at a well-focused niche opportunity. The key strength in Fulcrum’s plan was the effort put into fact-finding and then testing of key positioning concept early in the game.

The Positioning Dilemma

Clients will ask themselves: Is there a clear, simple concept of what this product does? Is the product intriguing and motivating? Does it have unique strengths? How does it stack up against other demands on my budget dollars?

Our dilemma: real positioning happens in the minds of customers. We can kickstart the image of a product, we can aim it in a desired direction, but we don’t own the image. The positioning concept should be based on what real customers think, and tested from time to time to ensure credibility. Here are three steps to a good positioning plan:

1. Write up some client profiles for your target market(s). Include your assumptions on basic needs of the clients, related products used, existing supplier and distributor relationships, how they learn about new products, and pricing sensitivities. Then consider the question “Why would they buy from us, in a competitive marketplace?”

2. How does your product compare to competition? Write up a list of your product Strengths and Weakness, as compared to competition. This should generate e few ideas on where there is a position not dominated by a competitor.

3. Talk to clients about what they like about your product. How would they describe it, in a nutshell? Then talk to key employees and business partners. Then synthesize the best ideas into a “positioning statement.” It will often be based on something a client said during market testing, so make sure you take note of any nifty descriptive comments as you are talking to clients. Discuss it, mull it over, and validate the concept with clients. Use the positioning message in your marketing material and reinforce it at every opportunity,

You may also need a few statements at a more detailed level – for example, how delightful it is for a particular application or segment. Or perhaps, how easy it is for distributors to handle. The most important thing is that the positioning concept be credible to real customers. If it isn’t, or if it is oversold, the clients will come up with an image of their own.

Finale

The Internet market is hot, hot, hot! There are now more than 60,000 Web servers on the planet, with that number doubling every 53 days. “In this market, positioning has to be reevaluated on a monthly basis” according to Doyle. Good luck Mike!

This article by Peter Fillmore, was originally published in August 1995.