You can position anything. A person, a product, a politician. Even a company.
Why would anyone want to position a company? Who buys a company? And why would a company want to sell itself? To whom? (To protect themselves against unfriendly takeovers, most companies would like to be invisible.)
Actually, a lot of buying and selling of companies is going on. Only it’s called different names.
When a new employee accepts a job, he or she “buys” the company. (With its recruiting programs, a company is actually selling itself.)
Who would you rather work for, General Electric or the Schenectady Electrical Works?
Every year companies across the country compete for top graduates at the nation’s leading universities. Who do you think gets the cream of the crop?
That’s right. The companies that occupy the best positions in the minds of the prospective employee. The General Electrics, the Procter & Gambles.
And when investors buy a share of stock, what they are really paying for is a piece of that company’s position, now and in the future.
How much a person is willing to pay for that stock (six or sixty times earnings) depends on the strength of that position in the buyer’s mind.
Positioning a company effectively has lots of advantages if you happen to be an officer or director of that corporation. It’s not easy, though.
First of all, the name. Especially the name. Would you believe that Pullman doesn’t happen to be much of a factor in the railroad car business anymore?
And that bus revenues represent only a small part of Greyhound’s total sales.
Both Pullman and Greyhound have changed drastically. Yet the way they are perceived by the public has scarcely changed at all. Their names have locked them to their past reputations.
Yet they have tried. Especially Greyhound, which has spent millions of dollars telling the financial community that it is “more than a bus company.”
But as long as those buses with the long slim dogs on the side go zipping up and down the interstate highways, the corporate advertising is an expensive mistake. If Greyhound wants to be more than a bus company, it needs a new name. A “more than a bus company” name.
But even with the right name, the corporate positioning job isn’t done. Your company’s name ought to stand for something within your industry.
Consider Ford. Everyone knows that Ford is an automobile company. But what kind of car is a Ford?
Ford can’t build a corporate position on a specific kind of car, because it builds them in all types and all sizes, including trucks. (Whether it should or not is another matter.)
So the positioning question boils down to some quality to be found across the board in all vehicles.
The company has settled on “innovation” as the key attribute in a vehicle from Ford. Result: the “Ford has a better idea” campaign.
Not bad, but many corporate programs settle on a mundane and hackneyed approach. Of which the most mundane and hackneyed, perhaps, is one based on people.
“Our people are our greatest resource.”
“Gulf people: Meeting the challenge.”
“Grumman: We’re proud of the many products we make. We’re prouder of the people who make them.”
Are there no differences in quality between the people in one company and those in another?
Of course there are. But it’s quite another matter to build a position based on better people.
Most people think that the bigger, more successful companies have the better people. And the smaller, less successful companies have the leftovers.
So if your company occupies the top rung of the product ladder in the prospect’s mind, you can be sure that the prospect will also think that your company has the best people.
If you’re not on top and you tell the prospect you have the better people.… Well, that’s one of those inconsistencies that doesn’t usually get resolved in your favor.
If Ford really has the better ideas, why doesn’t it use them in the marketplace to overtake General Motors instead of using them in its advertising to impress the public?
This is not a question of fact. (Ford could have the better ideas and still be in second place.) This is just a question that springs up in the prospect’s mind.
And your advertising, to be successful, must answer this question.
Next to “people,” the most common corporate positioning theme is “diversification.” Companies want to become known as diversified manufacturers of a wide range of high-quality products.
But diversification is not effective as a corporate advertising approach. As a matter of fact, the two concepts of positioning and diversification are poles apart.
It’s a fact of life that strong positions in the prospect’s mind are built on major achievements. Not on broad product lines.
General Electric is known as the world’s largest electrical manufacturer. Not as a diversified maker of industrial, transportation, chemical, and appliance products.
Even through General Electric makes thousands of consumer and industrial products, most of its successful products have been electrical ones. Most of its unsuccessful ones have been nonelectrical products. Computers being a typical example.
General Motors is known as the world’s largest builder of automobiles. Not as a diversified maker of industrial, transportation, and appliance products.
IBM has a reputation as the world’s largest computer manufacturer. Not as a worldwide manufacturer of many types of office machines.
A company may be able to make more money by diversifying. It should think twice, however, about trying to build a position based on that concept.
Even the stock market consistently undervalues conglomerates like ITT and Gulf & Western. (Many companies are worth more broken into parts than they are worth whole.)
Sometimes companies think they are concentrating their communication efforts when they are really not. The positioning concept becomes so broad that it is almost meaningless.
Which company used to call itself “a developer and supplier of information systems for work, education, and entertainment?”
Would you believe Bell & Howell? That’s right, Bell & Howell.
How do you develop an effective position for a company? Let’s look at Xerox, a company that seems to already have a position.
Why would Xerox want a position? Xerox has a position. Xerox is the Coca-Cola of copiers.
Quick, name another copier company? Nothing jumps into the mind, does it? Sure, after a while, you probably can remember that Sharp, Savin, Ricoh, Royal, and Canon make copiers. Even IBM and Kodak make copiers.
But nobody owns the copier position the way Xerox does. This is an enormous advantage in selling copiers. When you think your company needs another copier, your first thought is Xerox and your first telephone call is most likely to Xerox.
So what’s the problem? Xerox sees the office market moving toward systems, expecially computer-based information systems. So Xerox bought Scientific Data Systems and subsequently changed the name to Xerox Data Systems.
“Our objective in acquiring SDS,” said the chairman, “was to offer broader-based information systems. We feel that to really seize the opportunities around the world for supplying information, we had to broaden out from graphics, as IBM is broadening out into graphics. People in the seventies who can say to a customer, ‘We can handle all your information needs, whether fascimile transmission, graphics, or whatever,’ will have an enormous advantage.”
Six years later, Xerox Data Systems folded. But the loss of XDS didn’t stop Xerox from trying to broaden the company’s product line. Xerox was still committed to the concept of going beyond copiers.
In the years to come, Xerox introduced a parade of office automation products. The XTEN network, the Ethernet network, the Star workstation, the 820 personal computer. “Now the industry will know our secret for certain,” declared a Xerox vice president. “We want to be No. 1 in this market.”
If Xerox would look into the minds of its prospects, it would quickly see that moving into office information systems is not in the cards.
The trade publication Information Week recently surveyed a sample of its subscribers. (The magazine has 100,000 subscribers, 80 percent of whom represent companies with 1000 or more employees. It would seem that this is the heart of the office automation market.)
Here are the answers given when subscribers were asked, “Which manufacturers of office information systems are you most interested in?”
Xerox didn’t make the charts.
What can Xerox do? Our message to Xerox is to stop fighting copiers. You can’t change what’s in the prospect’s mind.
Start using copiers. They could be your strongest asset. An asset in a strategic war with IBM and AT&T.
It’s a way for Xerox to take advantage of its heritage. As with many strategies, it’s helpful to step back and get a sense of what has been going on in the marketplace.
Let’s look first at the office of the past. Things were simple then. To put yourself in business, you got a telephone from AT&T, a typewriter from IBM, and a copier from Xerox.
Now look at the office of the present. All the action has been in the typewriter leg. Typewriters have been supplanted by computers. The telephone and copier legs have hardly changed at all.
What about the office of the future? If you believe everything you read, the office of the future will have a single leg consisting of an office automation system supplied by a single vendor. IBM, of course, is everyone’s bet.
As a result, every manufacturer worth its computer is chasing this “single vendor” idea.
But systems don’t always sell. The high-fidelity audio system was never supplied by one vendor as consumers picked the receivers and turntables and tape players they wanted.
The same went for the home entertainment center and the dream that GE had to sell all the major appliances in the kitchen. The woman of the house picked her favorite brands.
Furthermore, even if the office of the future should turn out to be one big system supplied by one big manufacturer, it’s unlikely that Xerox would be a major factor.
Therefore, Xerox has nothing to lose and everything to gain by betting on a different scenario.
The “third-leg” scenario is a different view of the office of the future. It’s a view that sees the office of the future as still having three legs. The telephone leg of AT&T becomes a communication leg with the addition of voice mail and facsimile equipment.
The typewriter leg of IBM becomes an input or processing leg with the addition of computers, workstations, and networks. The question is what will Xerox add to the copier leg?
There’s a good deal of evidence that the merging of legs is not the way of the future. History points to the difficulty of many “cross-leg” activities.
Take Xerox vs. IBM. (1) Xerox has not been very successful with computers, workstations, or local area networks, all of which belong to the leg owned by IBM. (2) On the other hand, IBM has not been very successful with copiers, a leg, or position, owned by Xerox.
Take Xerox vs. AT&T. (1) Nobody, including Xerox, has done very well with facsimile equipment, a leg owned by AT&T. (2) Voice mail and facsimile will take off as soon as AT&T gets behind them.
Take AT&T vs. IBM. (1) AT&T won’t do well with computers, a leg owned by IBM. (2) On the other hand, IBM and Rolm won’t do very well with telephones, a leg owned by AT&T. (Satellite Business Systems is losing $100 million a year.)
Even since Scientific Data Systems, Xerox has been trying to bridge the copier/computer gap. Instead of being an obstacle, the copier/computer gap in the long run could turn out to be Xerox’s strongest ally.
If AT&T’s telephone leg has become the communication leg and IBM’s typewriter leg has become the input and processing leg, then what has Xerox’s copier leg become?
The obvious answer is the output leg. There are many “third-leg” opportunities for Xerox as offices add computer printers, scanners, and storage devices to complement their copiers.
Furthermore, a hot new technology is moving into the output side of the office. That technology is the laser. There are laser printers, laser typesetters, laser memory systems.
Furthermore, the laser is making a name for itself in many other places. In communication, the laser is beginning to replace satellites. In the hospital, the laser is revolutionizing heart surgery. In the supermarket, you find laser check-out counters.
McDonnell/Douglas talks about a laser that is “capable of transmitting the entire contents of a 24-volume set of encyclopedia in a single second.” United Telecom is setting up a nationwide laser network. AT&T is laying down a transatlantic laser link. GTE is bouncing laser beams off the moon.
In the consumer field, there is the laser videodisk player. The laser audiodisk player. And the laser everything disk which can play both video and audio.
No self-respecting rock show would end without a laser light show. Even Ronald Reagan’s “star wars” satellites would be equipped with nuclear-powered laser weapons.
In the past 30 years, three technologies have roared through the office and into the dictionary. The first was thermography by 3M, a photocopying process that uses infrared rays to produce a copy on a special type of paper.
The second was xerography by Xerox, a copying process that uses the action of light to produce a copy on plain paper.
The third is the microprocessor technology that computer companies like IBM have dominated.
There’s an opportunity for Xerox to put another technological word in a yet to be published edition of Webster’s Dictionary.
The fourth technology would be called “lasography.” It could be defined as the process of communicating, printing, scanning, and storing optical or printed messages with the use of laser beams and optical fibers.
Xerox is a $9 billion company with more than 100,000 employees. It ought to be impossible to position an enterprise as big and diverse as Xerox with a single word.
But in an overcommunicated society there is only so much room in the mind. Today Xerox means just one word—copiers. Tomorrow Xerox could use lasography to create a broader mental position.
Lasography says new and different, and the business world loves things that are new and different.
Lasography sounds like a basic technology somehow related to xerography. In other words, it connects with Xerox’s last big technology.
Lasography from Xerox, the company that’s perceived to be in the “ography” business.
Lasography uses lasers, which are perceived to be on the leading edge of technology.
Lasography is the one concept that takes advantage of Xerox’s position and broadens it to include the next generation of products.
In the positioning game you can’t sit still. You must constantly be alert to keep your position targeted to today’s problems and today’s markets.