Continuing this series of blogs where we are looking at the positioning statement format that Lustratus uses in our REPAMA research methodology. In this blog entry we’re going to look at one of the elements that usually, but not necessarily, picks itself. This entry is looking at the “IS A [product category]” element here.
So as usual let’s look at the context of this element in the wider positioning statement.
FOR [the ideal customer] WHO [has this specific pain or problem] OUR [product name] IS A [product category] THAT PROVIDES [this main benefit and reason to buy] UNLIKE [the primary alternative or competitor] OUR PRODUCT [has this unique selling proposition].
The product category is a bucket into which other similar offerings are placed whose definition is generally understood in the wider market. Product categories can be defined by convention, market analysts or by vendors themselves. It is typically used as a mechanism for a vendor to communicate quickly and generically, what type of product they take to market.
- OUR XYZ product IS A Database
- OUR XYZ product IS A Relational Database
- OUR XYZ product IS A Spreadsheet
From a marketing communications and lead generation perspective, selecting the correct product category is critically important. When prospects are actively looking to make a purchase, they may believe that they know what type or category of product will best solve their problem. Ensuring that you use language that matches with your prospect’s expectation is key. The product category should also ideally clearly communicate, in terms that the target customer would understand, what the product is and, ideally, does. Many highly technical vendors will use incredibly complex terminology to describe their product category. As long as the target audience within the ideal customer understands this terminology then there isn’t a problem. But if the target audience, as often happens, evolves over time to include individuals that do not understand such terminology then problems can arise.
The temptation to re-segment an existing product category (as with Database and Relational Database above) or to even introduce a new product category is great amongst vendors looking to differentiate themselves versus the competition. This is especially true in early market situations where some form of significant innovation might have taken place. The logic here is simple – “I need to make my prospects understand why we’re different so I will create a new product category that better describes what it is that we do.” It sounds like a good plan however the task of successfully re-segmenting or even creating a new category is often underestimated. With millions of dollars in marketing spend at my disposal throughout my career, I have only once been part of the sustainable introduction of a new product category and only once have I successfully re-segmented an existing category. The lesson I learned was that It’s often better to work from within the category and differentiate there.
Another key thing to remember when defining the product category, other than to question very hard whether you actually need to change an existing product category, is to keep an external perspective. Most vendors look in detail at the capabilities of their product and discuss this internally with the people they work with on a day-to-day basis. Instead of looking in the mirror, in my experience it’s best to look at the problem from the outside in. By putting yourself in the shoes of your prospects and asking how they will go about attempting to solve their problems you’ll gain greater insight. What category of product would a prospect turn to, to solve their particular problem? In many cases it’s moot anyway as, if you’re a market follower rather than a leader, you typically have to go with the category of the market leader anyway. And this is where competitive intelligence plays a key role.
In the example REPAMA reverse-engineered positioning statement I’m using as part of this series of blogs, we’re looking at how Microsoft takes its ESB Guidance product to market – as well as other vendors such as Progress, Oracle and TIBCO. (For no other reasons than I have just finished the primary research on the REPAMA SAS into the ESB market so its fresh in my mind.)
Microsoft describes its product category as follows:
IS A loosely-coupled messaging environment
(This paragraph for those interested in the SOA and ESB market only…) In the context of the Lustratus REPAMA Segment Analysis Study on the ESB market, this is significant as the other three vendors in the report all define their product as an Enterprise Service Bus. And whilst Microsoft generically uses the ESB term in its product name (ESB Guidance), it decides to refer to the category of product without it.
So that’s it for the “IS A [product category]” element of the positioning statement, other than to say that from my experience in infrastructure software marketing, this element is the one most likely to be omitted or combined with the OUR PRODUCT [product name] element. I think that’s a mistake, but as Lustratus competitive intelligence is based on comparing the relative positioning strategies of different vendors, I guess you’d expect me to say that.
In the next blog in this series I’ll be looking at the “THAT PROVIDES [this main benefit and reason to buy]” element. <More information can be found in the Lustratus REPAMA Guide here>
It should be borne in mind that Lustratus’ focus is on the high-tech software industry and whilst positioning as a concept will transfer to just about any business to business industry, many of the classifications we use assume that we’re dealing with a technical audience for infrastructure software. So please bear that in mind for your own industry.