Tuesday, January 19, 2010

What aisle, what shelf?

Whenever you go to a store, you subconsciously position products by the aisle and shelf on which they reside. Premium products are often on the shelf that is shoulder height so you can easily see and select them.

Selecting a profitable target customer segment and then attractively positioning value to them is one of the most difficult aspects of Marketing. We see every day where organizations and companies struggle to position themselves.

For example, Sears has struggled for years to differentiate itself first from K-Mart, and now Target, Costco, Wal-Mart, and many other more specific retailers, such as tire, clothing, appliance, and tool stores. Sears is now going online, repeating pretty much every cyber move that other retailers have already done. Instead of becoming more specific and differentiated, Sears has become broader and more non-descript. Also, is Sears clear on who their target customer is?

Accenture positions itself as using a research-driven approach to assist companies in developing a strategy for success. Its advertising campaign with Tiger Woods was very effective because the golfer appeared thoughtful, analytical, and driven to success. Now that the world knows differently about Woods, Accenture is coming out with a new campaign using animals, such as an elephant on a surfboard. Other animal stars will include frogs, fish, and chameleons. I haven't seen the ads yet, but I have a hard time understanding how they will support the company's positioning to its intended audience: senior business executives.

Ski areas are struggling in the vice grip of lower snowfall and higher operating costs. The percent of new entry-level skiers and snowboarders is decreasing. One of the main reasons is the cost of skiing -- with lift tickets, accommodations, meals, equipment rentals, and gas, a family weekend can easily cost hundreds of dollars. How can a ski area profitably attract more skiing customers?

Bear Valley, a moderate-sized area in the California Sierras is now touting itself as the "Friendliest Ski Area in the West". When we recently visited they had customer service employees sprinkled around the lodge and at the base of several lifts. They were helpful, but is it differentiated and will it be profitable? By the time I ran into one of their friendly employees, I'm already committed and I've spent the money I'm going to spend. And also, employees are costly and often provide little leverage (will you tell another person who will tell a third person that will tell a fourth person that Bear Valley is a friendly ski area?).

The area's terrain is moderate so it cannot be position as big or difficult. The nearby village is aging. It is not a destination resort for high-end clients. At this point, it might make sense positioning itself as an area that is ideal for families, developing transportation options, lodging, daycare, lessons, pricing packages, a lively atmosphere, a range of winter and summer activities, and fun events for families with kids from 0-18.

As you can see, differentiated positioning in a way that matters to your target audience is key.

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