Friday, March 31, 2006

Positioning Roundup

Here is a roundup of my series on positioning. Your product manager should be able to answer a number of questions before deciding how to position your product:

Hope you enjoyed the series! For more information on positioning, see my article, "How to Formulate Marketing Messages".

Thursday, March 30, 2006

Positioning: Competitor's Biggest Strength

What is the competitor's biggest strength?
This question is the sixth of several questions I've enumerated that a product manager should answer to most effectively position a product.

After you've determined your product's biggest competitor, determine that competitor's biggest strength. To reach the largest market, you generally want to attack at the biggest competitor and the biggest strength. Find the weakness within that strength and position your product to exploit that weakness.

Answering this question is much like answering the third question, "What is [your] product's biggest weakness?" You can identify your the competitor's biggest strength by considering both the perceptions of their product and the business and operational impact it has on their company. Often, the competitor's biggest strength stems from their distinctive competence.

Wednesday, March 29, 2006

Positioning: Biggest Competitor

What is the product's biggest competitor?
This question is the fifth of several questions I've enumerated that a product manager should answer to most effectively position a product.

When determining your product's biggest competitor, think broadly. Even the very first search engine on the web had a competitor: the manual process of surfers browsing and linking to what interested them. Your product's biggest competitor may not be immediately obvious, but it exists.

Identifying your product's competitors helps you determine how you can differentiate your product from them. It also helps you determine the potential size of the market for your product.

The next entry in this series will describe how to position your your product against its biggest competitor.

Tuesday, March 28, 2006

DeMarco and Lister on Standards

Joy Beatty recently posted an entry about standards on the Requirements Defined blog. She wrote, "[D]evelop them as a team, so that the standards are not forced on anyone who is not bought into them."

I agree with the notion of consensus and buy-in that Joy suggests. Whenever someone mentions standards, I like to quote Tom DeMarco and Timothy Lister. Here is what they wrote about standards in Peopleware: Productive Projects and Teams:
"Identifying an ideal practice, or at least a candidate ideal practice, is a useful endeavor. But the programs that mandate such a practice are something else entirely."

"[Big 'M'] Methodologies seek to force convergence through statute. There is an inevitable backlash, the result partly of enforcers' heavy-handedness and partly of thinking workers' strong sense of independence, the cowboy mentality so common to those who populate any new frontier. Better ways to achieve convergence of method are training, tools, and peer review."

"It's only after this kind of gently guided convergence that you may think of publishing a standard. You can't really declare something a standard until it has already become a de facto standard."

"The opposite approach would be one in which every new undertaking is run as a pilot project. To the extent that there was a standard way to carry out the work, that would be the only way you weren't allowed to carry it out. The standard would be for at least one part of the effort to be run in a non-standard way. (This seems to be an informal rule within certain divisions of Fujitsu, for instance.)"
In general, seek standardization through convergence, not by mandate.

Monday, March 27, 2006

Positioning: Strength within Weakness

What is the strength within the product's biggest weakness?
This question is the fourth of several questions I've enumerated that a product manager should answer to most effectively position a product. You've already identified the biggest weakness of your product. Now find the strength within it.

As I mentioned in the previous entry, Listerine's weakness of tasting like medicine serves as a good example. The other side of the coin is its supposed effectiveness in killing germs. Its bad taste actually strengthens this positive message.

Another example is a product that is expensive to produce (relative to the competition), such as food containing all-natural ingredients. If your product is expensive to produce, you either need to lower production costs or tout the benefits to the customer that result from the expense.

When you position your product according to the strength within its biggest weakness, you:
  1. Differentiate your brand in a manner clear to prospective customers.
  2. By embracing your weakness, you increase the credibility of your positive message.
  3. Make it difficult or impossible for a competitor to attack the product's weakness without indirectly supporting your key message.
Keep in mind that identifying the strength within your product's biggest weakness is but one question you need to answer before deciding how to position your product. Stay tuned as future entries examine the remaining questions.

Sunday, March 26, 2006

Positioning: Biggest Weakness

What is the product's biggest weakness?
This question is the third of several questions I've enumerated that a product manager should answer to most effectively position a product.

Every product with any chance of success in the marketplace has weaknesses. Your product can't be all things to everyone. Your challenge is to ensure that the weaknesses correlate with strengths that resonate with your target market. You can then market your product so that customers translate perceptions of weakness into those corresponding strengths.

One of the classic examples is Listerine. Perhaps Listerine's biggest weakness is its taste. But its taste instills confidence that it effectively kills germs.

You can identify your product's weaknesses by considering both the perceptions of the product and the business and operational challenges it presents for your company.

More on the relationship between strengths and weaknesses in the next entry in this positioning series.

Friday, March 24, 2006

Positioning: Prospect Problems

What are the top three problems the product solves?
This question is the second of several questions I've enumerated that a product manager should answer to most effectively position a product.

Identify the problems the product solves by asking, from a user or buyer perspective, "Why would I use or buy this product?" But don't stop there. Relentlessly follow up with, "Why does that matter?" until you end with satisfaction of basic needs.

Take Promised Land Strawberry Milk, for instance:

Q. Why would anyone buy it?
A. Because it comes from cows that aren't treated with artificial hormones.
Q. Why does that matter?
A. Because other milk comes from cows treated with artificial hormones might contain unhealthy ingredients.
Q. Why does that matter?
A. Because I fear those other milks will damage my long-term health if I drink them.
Q. Why does that matter?
A. Because I care a lot about my long-term health and feel stressed when I think I am jeopardizing it.
Thus anxiety due to a concern about the drinker's health is one of the the problems that Promised Land Strawberry Milk solves. Note that artificial hormones are not themselves the problem; they merely cause the problem.

Once you've identified the top problems, you may end up positioning your product as the antidote to one or more of them. As the folks at Pragmatic Marketing teach, target problems that are:
  • Urgent
  • Pervasive
  • Customers are willing to pay to solve.
If your product doesn't solve or help a customer avoid problems, ditch it. There's no point in marketing such a product.

Thursday, March 23, 2006

Positioning Series: Distinctive Competence

What is the company's distinctive competence?
This question is the first of several questions I've enumerated that a product manager should answer to most effectively position a product.

As it faces competition, your product will usually fail in the marketplace unless your company has some sort of sustainable advantage. The company's distinctive competence is the source of this sustainable advantage.

Examples of distinctive competence include:
  • Market leader or first to market. Being the market leader or first to market sometimes means that competitors will have difficulty ever catching up.
  • Unmatched staff. If you have an extremely talented or skilled staff that no other competitor can hope to acquire, you may be able to leverage it for sustained advantage.
  • Location. Your company may have an ideal location that no competitor has. That location may give you a low tax rate or some other financial advantage. For a brick-and-mortar business, it may mean visibility from the street or convenience for your customers.
  • Intellectual property. Technologies and other IP that your product owns may prevent competitors from being able to duplicate your success.
The position of your product should be compatible with - and, ideally, leverage - the company's distinctive competence. If not, competitors are bound to undermine or destroy it.

Wednesday, March 22, 2006

Positioning Series

When you hire a product manager, one of the first series of tasks she should complete is to position the product. Positioning a product means defining your target market and key messages you will use to appeal to them.

Positioning the product in the most effective way typically requires leaving the office and doing substantial market research, including quantitative research (questionnaires) and qualitative research (prospect interviews and ethnographic studies).

Positioning a product should be an iterative effort. But as your new product manager educates herself by interacting internally within the company (talking to executives, sales, marcom, and developers; reading existing documents), she can begin filling out a preliminary template. She should answer the following questions:

  1. What is the company's distinctive competence?
  2. What are the top three problems the product solves?
  3. What is the product's biggest weakness?
  4. What is the strength within the product's biggest weakness?
  5. What is the product's biggest competitor?
  6. What is the competitor's biggest strength?

This list is by no means exhaustive but includes the most important questions for simple cases. Fitting the product into the positioning umbrella of the company or a line or suite of products may be necessary. Profiling prospective buyers and sizing the market are also important.

However, answering these preliminary questions goes a long way towards determining the best position for your product. After taking an initial stab at them, your product manager should conduct the market research necessary to validate and flesh out the answers.

In future entries, I will discuss what each of the questions means and how to obtain the answers.

Tuesday, March 21, 2006

Image Should Reinforce Substance

When positioning your company or product, don't focus purely on image. Use image to reinforce perceptions of substance.

I began purchasing Sony laptop computers in the late 90s. The main reason for choosing Sony was that their "desktop replacement" laptops had all the features that made me more productive: large display, high resolution, and a touchpad. A bonus was that the laptops were sleek and stylish.

Though the stylishness of the laptops was not the primary reason for my purchasing them, it reinforced my purchasing decision. Rational or not, somehow the stylishness made me more confident in the quality and reliability of the product. My first Sony laptop did not disappoint. As a matter of fact, I am using it to type this blog entry. It has been durable and reliable.

After less than a year-long honeymoon, my second Sony laptop has been a major disappointment. It is even more stylish than my first Sony. However, it developed an overheating problem, the support for it was lousy, it went out of warranty when I needed it serviced for overheating, the backlight crapped out, its battery life is pathetic, and it weighs too much.

I had a similar experience with a Sony video camera.

Sony seems to be trying, like Apple, to establish itself as a fashionable brand. All of its products seem to be stylish is some way. But Sony is no Apple. Apple has substance to back up its image. Sony no longer does, at least in many of its newer products.

I would like to buy a new laptop, but I will not be buying a Sony, no matter how stylish it is. To me, there is no longer any substance in the "Sony" brand.

Monday, March 20, 2006

Laura Ries on Positioning

Readers of this blog will be shocked to find me citing someone with the last name "Ries", but Laura Ries has a recent entry in her blog that hits all the right points on positioning. She touches on:

She also describes 1-2-3 strategies in which a single company carves out three contrasting positions for three different products or lines of products.

Sunday, March 19, 2006

You Need an Enemy

One piece of advice that Al Ries has mentioned is that it helps for your brand to have an enemy. If you can't differentiate your product from others, it's hard to establish a brand. Identifying an enemy and portraying your product as the opposite is a simple way of differentiating. It also stimulates customers to personalize your brand, leading them to talk about it with their friends.

Saturday, March 18, 2006

Friday, March 17, 2006

Nick Usborne on Pricing

Nick Usborne has an article on about pricing. One thing that he points out is that you don't really know how much someone will pay for your product unless you test various different price points. He gives an example in which Google Adwords advertised a book at three different prices and three corresponding "sales pages" tracked the results. Such a straightforward "test" isn't possible for all types of products, but such experimentation can be informative.

Thursday, March 16, 2006

Definition of "Brand Equity"

In Building Strong Brands, David Aaker defined "brand equity" as follows: 
Brand equity is a set of assets (and liabilities) linked to a brand's name and symbol that adds to (or subtracts from) the value provided by a product or service to a firm and/or that firm's customers. The major asset categories are:
  1. Brand name awareness.
  2. Brand loyalty.
  3. Perceived quality.
  4. Brand associations.
Branding is mostly about building and maintaining brand equity.

Wednesday, March 15, 2006

Microsoft Paper Clip Video

If you've used Microsoft's Office applications much, you've probably encountered the little smiling paper clip that offers you help when it thinks it knows what you're trying to do. I've almost always found it to be a nuisance.

If you can relate, here's a funny video for you.

Via Kathy Sierra.

Tuesday, March 14, 2006

Google Click Fraud

A wire story touches on the risks of Google's click-based advertising model.

"Mountain View, Calif.-based Google makes virtually all of its money from text-based advertising links that trigger commissions each time they are clicked on. Besides enriching Google, the system has been a boon for advertisers, whose sales have been boosted by an increased traffic from prospective buyers.

"But sometimes mischief makers and scam artists repeatedly click on specific advertising links even though they have no intentions of buying anything. The motives for the malicious activity known as click fraud vary widely, but the net effect is the same: advertisers end up paying for fruitless Web traffic."
Time will tell whether Google will be able to successfully combat this phenomenon.

Monday, March 13, 2006

Al Ries Interview

Allison Enright recently interviewed marketing guru Al Ries. If you're not familiar with him and what made him famous, the article has a good summary of his background. It also has some good info on the current state of marketing and PR.

Sunday, March 12, 2006

Annual HOA Meeting

Tonight I presided over my building's annual homeowners association (HOA) meeting. I serve as one of three directors on the board of the HOA.

I enjoy these meetings because I get to play the role of facilitator. In most organizations and companies, meetings are long and unproductive. About six years ago, I took it upon myself to become a skilled facilitator. That meant reading books such as How to Make Meetings Work and The Art of Facilitation.

Tonight I was able to keep the meeting flowing so that it finished twenty minutes early.

Saturday, March 11, 2006

Jack Trout on WOM

An article on word of mouth (WOM) has some marketing bloggers up in arms.

Jack Trout, reknowned co-author of the classic book, Positioning, wrote a piece in Forbes in which he states that word-of-mouth marketing is nothing new, and that it is not the "next big thing".

I must say that I find Trout's piece to be entirely reasonable despite his characteristically provocative tone. Trout sums up his point near the end of the article:

"[Word of mouth is] not the next big thing. It's just another tool in your arsenal."
It makes sense that consumers have grown increasingly tired of, and immune to, constant bombardment of advertisements. The Internet has amplified and accelerated the effects of word of mouth. It's therefore true that word of mouth and other forms of PR have greater relevance these days. But word of mouth has its limitations and is no panacea.

Friday, March 10, 2006

Laura Ries on Snowboarding

Laura Ries tells us about Alta, a ski resort in Utah that doesn't allow snowboarding. In the entry, she describes three marketing strategies the resort employs:
  1. Identify the enemy.
  2. Preserve your focus.
  3. Create controversy.
Worth reading.

Thursday, March 09, 2006

How to Solve Problems

In How to Make Meetings Work, Michael Doyle and David Straus detail a process for solving problems in meetings. The process is roughly:

  1. Define the problem.
  2. Define criteria for evaluating potential solutions.
  3. Brainstorm potential solutions.
  4. Apply the evaluation criteria to the potential solutions.
Leaving aside the benefits of iterating on this process, note the parallels to product development.

A product solves problems that prospective customers face. Understanding these problems is the highest priority task of a product manager. Product managers formulate requirements that serve as criteria for evaluating whether the product ultimately solves these problems.

Product designers and implementers apply their creativity and skills to implement the solution, unfettered by requirements that contain design assumptions.

Wednesday, March 08, 2006

Product Returns

"Product developers, brought in to witness the struggles of average consumers, were astounded by the havoc they created."
According to this Reuters story, half of product returns are due not to functional defects, but to consumers' inability to figure out how to operate them. Furthermore, the average US consumer is willing to spend 20 minutes learning to use a product, after which he will give up.

I have a quibble with the conclusion of the scientist who led the study. He concluded that poor product definition was the root cause of these usability problems. I contend that the lack of usability metrics (requirements) is more specifically the primary cause. The first step is simply for companies to define the maximum amount of time and effort it should take for a typical new user to get the product working - and develop tests to ensure the products meet these requirements.

Tuesday, March 07, 2006

AT&T Brand Confusion

Once upon a time, there were five separate telecommunications companies:
  1. AT&T
  2. AT&T Wireless
  3. Cingular
  4. SBC
  5. Bell South
Over a year ago, Cingular merged with AT&T Wireless and proceeded to phase out the "AT&T Wireless" name. Then, SBC acquired AT&T and adopted the "AT&T" company name. Now, if all goes as planned, AT&T is buying Bell South.

Confused yet? Read on. The plan is for AT&T (formerly SBC), which will also gain controlling interest in Cingular, to drop the Cingular brand name and revive it as AT&T Wireless. Sorting through this circuitous mess, we will end up with the following brands:
  1. AT&T
  2. AT&T Wireless

I suppose that the simplicity is good from a branding perspective, but does "AT&T" have any coherent meaning anymore?

Monday, March 06, 2006

UX Disciplines

Scott Sehlhorst has one of his best entries yet about the different disciplines relating to user experience (UX). He distinguishes among:
  1. Information Architecture
  2. Usability
  3. Graphic (or Visual) Design
While information architecture and graphic design differ from usability, they both affect usability. The manner in which the product presents information largely determines how usable it is. Affordances ("image or element that suggests an action") in the user interface make your product more intuitive, therefore easier, to use.

Your product manager's role is not to be an information architect, graphic designer, or usability expert. However, she should specify, in measurable terms, how usable the product should be. The usability requirements are the metrics by which we judge whether the designers have done a good job.

For more information on the distinction between designing for usability and specifying usability requirements, see this entry from November of last year.

Sunday, March 05, 2006

E-Mail from Google?

To my recollection, I have never received e-mail from Google. Okay, possibly a confirmation e-mail for signing up with one of their services. But never a solicitation or newsletter. Something to think about when you are considering whether to send automated e-mail messages to your customers.

For more information on Google and its product management practices, see the Google product management series roundup.

Saturday, March 04, 2006

Snowboarding Lessons

As I mentioned a little over a week ago, I went snowboarding in Utah. I stayed with my friend, Chris, and his wife during my visit.

I snowboarded for six straight days at the Brighton resort. It was my first time, so I took lessons the first day. The instructors taught me the basics and, by the end of the day, I was able to do 'S turns'. An S turn is where you go down the hill, turn in an arc towards one side, then go down the hill and turn in an arc towards the other side. It keeps your speed under control.

Once I knew how to do S turns, I felt it was time to practice rather than take more lessons. So the next five days I spent perfecting my S turns, while progressively subjecting myself to more difficult courses (blues and even some segments of blacks).

For anyone, including experienced skiers who haven't snowboarded, I have the following observations:
  1. Take lessons. Practice is very important, but you have to know what to practice.
  2. The frustration of the first day or two learning to snowboard is well worth it. Be prepared for a lot of falling down and a lot of minor aches and pains.
  3. Don't skimp out on the protective gear. I fully decked myself out with a helment, wrist guards, knee and elbow pads, and goggles.
  4. Keep your speed under control. Snowboarding has a reputation for being a dangerous sport, but it doesn't seem all that risky to me if you protect yourself and don't go too fast.
Between snowboarding and visiting my friend Chris, I couldn't have asked for a better trip.

Friday, March 03, 2006

Product Manager Elevator Speech

Over time, I've developed an "elevator speech" for when random people ask me what I do for a living. Few ordinary people know what a product manager does. The title, even for people familiar with it, means a lot of different things to different people. I'm curious what others say in response to the question, "What does a product manager do?"

Thursday, March 02, 2006

Suspect Requirements

Any of the following specifications in a requirements document for an end-user product is a red flag indicating that your product manager has delved into design:

  • user log-in and log-out - specifies that the product will have users log in and log out for security reasons
  • CRUD - specifies that the product will enable users to create, read, update, and delete information
  • support for tags - specifies that the product will enable users to tag information to facilitate future retrieval of information
  • user interface widgets - specifies components included in the product's user interface
  • user manual - specifies what will go into the user manual for the product
  • support - specifies how the product will be supported

All of this information is appropriate in a user interface or high-level design specification, but generally not in the requirements document for an end-user product.

Wednesday, March 01, 2006

How to Extend Your Brand

In a article, "How Far Will Brand Extensions Stretch?", Ted Mininni argues that you should attempt to extend your brand only after conducting some careful market research.

Money quotes:

"While there can be significant benefits in brand extension strategies, there can also be significant risks, resulting in a diluted or severely damaged brand."

"The most common brand stretches include line extensions within the same category."

"Yet, a large number of brand extensions into new categories have proven to be dismal failures."

"Many marketing managers think that it makes sense to 'transfer' the promise and equity of their established brand. But that isn't always true. Companies sometimes go too far trying to extend into categories that are not a good fit, and they risk losing credibility in their flagship brands."

"If consumer perception, based on research, does not corroborate that the proposed extension is a fit with the brand's values, it will not be a success, no matter how needed or exciting the new product is."

"Once a brand extension is executed, it is still important to identify any changes, positive or negative, in perceived core brand values, using the consumer as the barometer for these measurements."
Extending a brand is not something you should take lightly, and doing it effectively requires market research and strategy expertise. Read the article to get more specifc tips on how to extend your brand - if you dare.