Selling like Water
Last week, while traveling in the interior of Minas Gerais, Brazil, I stopped at a gas station to refuel my car and get something to drink. While waiting in line, a person in front of me asked for a bottle of carbonated water. The owner of the gas station promptly put a bottle of Bonaqua on the counter. Then, the person replied, "Oh, sorry. Could you please give me a bottle of H2O instead?" The owner politely replaced the bottle of water with the other product, as requested. Looking at the bottle, I asked the person if this was a new type of soft drink. She answered, "It's not pop, it's water with a bit of lime in it... I hate pop. I would never buy this if it was pop!" I was astonished...
Positioning: Carbonated Water or Soft Drink?
I was surprised to learn that Pepsi had introduced a new type of soft drink called H2OH! in the Brazilian market. It seems to be a diluted version of Seven Up positioned as flavoured water instead of carbonated beverage. In my opinion, Pepsi just provided me with a great example of how to smartly position a product in a jam-packed market place.
Instead of fighting the competition and adding yet another pop in a crowded market, Pepsi called its new product “H2 Wow!” (direct translation of water in Portuguese). A superb move because selling water to locals is much easier than competing against Coke's Sprite, the absolute market leader in the carbonated lime juice segment in Brazil. Indeed, the idea seems to be working quite well: even people who are not a fan of carbonated drinks are buying this new soft drink! (I mean water!)
Product Positioning Matters
If your products are often mistaken for a competitor's products or you find yourself in an endless price war with your competition, you may want to revisit your positioning strategy. Clear positioning helps you differentiate your offerings from other products in the market. Investing in a sound positioning strategy not only helps you capture the right market segments for your products, but also helps your customers understand that your product offering goes beyond price and features.
While creating a positioning strategy, you need to contemplate some important aspects. In Pepsi's case, for instance, they may have decided to position the product as flavoured water and then used clear bottles to mimic sparking water. In addition, they may have considered the potential for bottled water customers to try the new product and expand their sales potential by adding a new type of customer to their target market – bottled water drinkers. On the other hand, Pepsi may have considered the implications of calling something “H2O” when it is, in fact, not water. Evidence of that possibility can be seen in the number of notes in small print on the label. In my opinion, the end result of this positioning strategy worked really well.
Perception is Everything
A common misconception when dealing with positioning is to focus solely on product features and to compare them to the competition. The problem with this approach is that when you position your product against a competitor’s products, your product doesn’t have its own set of perceived values. In the end, you are positioning yourself in the same workspace as your competition and losing the ability to differentiate yourself.
Creating a positioning strategy has more to do with identifying how your product is perceived by your customers and less to do with the actual product features. For instance, your customers may perceive your products as easy to use regardless of how complicated and complex your features are. If you resolve problems quickly, you can actively change how your product's complexity is perceived. In fact, customers may prefer working with you because they trust you to help them when problems arise, an inherent characteristic of your brand that is positively perceived. With that reputation, you gain an opportunity to provide something intrinsically different from anything else in the market.
Take Control of your Marketing Positioning Strategy
Take a look at your products and determine if they are more like cola or more like water. Instead of letting your customers decide by themselves, actively plan your marketing campaign by making sure you have a clear positioning strategy. Help your customers understand what your product does, but, go even further and help them understand what your product is. I assure you that your sales team will thank you.
