Difference between high tech and high touch positioning strategies

What is positioning? Identify the different positioning strategies presented in the chapter and give examples of companies or products that illustrate each.

The term positioning is attributed to marketing gurus Al Ries and Jack Trout, who first introduced it in a 1969 article published in Industrial Marketing magazine. As noted at the beginning of the chapter, positioning refers to the act of differentiating a brand in customers’ minds in relation to competitors in terms of attributes and benefits that the brand does and does not offer. Put differently, positioning is the process of developing strategies for “staking out turf” or “filling a slot” in the mind of target customers. 49

49 Al Ries and Jack Trout, Positioning: The Battle for Your Mind (New York: Warner Books, 1982), p. 44.

Positioning is frequently used in conjunction with the segmentation variables and targeting strategies discussed previously. For example, Unilever and other consumer goods companies often engage in differentiated target marketing, offering a full range of brands within a given product category. Unilever’s various detergent brands include All, Wisk, Surf, and Persil; each is positioned slightly differently. In some instances, extensions of a popular brand can also be positioned in different ways. Colgate’s Total toothpaste is positioned as the brand that addresses a full range of oral health issues, including gum disease. In most parts of the world, Total is available in several formulations, including Total Advanced Clean, Total Clean Mint Paste, and Total Whitening Paste. Effective positioning differentiates each variety from the others.

In the decades since Ries and Trout first focused attention on the importance of the concept, marketers have utilized a number of general positioningstrategies. These include positioning by attribute or benefit, quality and price, use or user, or competitor. 50 Recent research has identified three additional positioning strategies that are particularly useful in global marketing: global consumer culture positioning, local consumer culture positioning, and foreign consumer culture positioning.

50 David A. Aaker and J. Gary Shansby, “Positioning Your Product,” Business Horizons 25, no. 2 (May–June 1982), pp. 56–62.

A frequently used positioning strategy exploits a particular product attribute, benefit, or feature. Economy, reliability, and durability are frequently used attribute/benefit positions. Volvo automobiles are known for solid construction that offers safety in the event of a crash. By contrast, BMW is positioned as “the ultimate driving machine,” a reference that signifies high performance. In the ongoing credit card wars, Visa’s long-running advertising theme “It’s Everywhere You Want to Be” drew attention to the benefit of worldwide merchant acceptance. In global marketing, it may be deemed important to communicate the fact that a brand is imported. This approach is known as foreign consumer culture positioning (FCCP).

Quality and Price

This strategy can be thought of in terms of a continuum from high-fashion/quality and high price to good value (rather than “low quality”) at a reasonable price. A legendary print ad campaign for Belgium’s Stella Artois beer included various executions that positioned the brand at the premium end of the market. One ad juxtaposed a cap pried off a bottle of Stella with a close-up of a Steinway piano. The tagline “Reassuring expensive” was the only copy; upon close inspection of the Steinway, the reader could see that one of the keys was broken because it had been used to open the bottle! InBev, the world’s biggest brewer in terms of volume, markets the Stella Artois brand. While Stella is regarded as an “everyday” beer in its local market of Belgium, the marketing team at InBev has repositioned it as a premium global brand. 51

51 “Head to Head,” The Economist (October 29, 2005), pp. 66–69.

At the high end of the distilled spirits industry, marketers of imported vodkas such as Belvedere and Grey Goose have successfully positioned their brands as super-premium entities selling for twice the price of premium (“ordinary”) vodka. Ads for several export vodka brands emphasize their national origins, demonstrating how FCCP can reinforce quality and price positioning. Marketers sometimes use the phrase “transformation advertising” to describe advertising that seeks to change the experience of buying and using a product—in other words, the product benefit—to justify a higher-price/quality position. Presumably, buying and drinking Grey Goose (from France), Belvedere (Poland), or Ketel One (the Netherlands) is a more gratifying consumption experience than that of buying and drinking a “bar brand” such as Popov (who knows where it’s made?).

Use or User

Another positioning strategy represents how a product is used or associates the brand with a user or class of users. For example, to capitalize on the global success and high visibility of the Lord of the Rings trilogy, Gillette’s Duracell battery unit ran print and TV ads proclaiming that when on location in remote areas of New Zealand, Rings director Peter Jackson and his crew used Duracell exclusively. Likewise, Max Factor makeup is positioned as “the makeup that makeup artists use.” Pulsar watch associates the brand with a handsome man who is “addicted to reality TV” and enjoys reading Dostoevsky.

Competition

Implicit or explicit reference to competitors can provide the basis for an effective positioning strategy. For example, when Anita Roddick started The Body Shop International in the 1970s, she emphasized the difference between the principles pursued by “mainstream” health and beauty brands and those of her company. The Body Shop brand stands for natural ingredients, no animal testing, and recyclable containers. In addition, the company sources key ingredients via direct relationships with suppliers throughout the world; sustainable sourcing and paying suppliers fair-trade prices are integral to the brand’s essence. Moreover, Roddick abandoned the conventional industry approach of promising miracles; instead, women are given realistic expectations of what health and beauty aids can accomplish.

Dove’s “Campaign for Real Beauty” broke new ground by positioning the brand around a new definition of beauty. The campaign was based on research commissioned by Silvia Lagnado, Dove’s global brand director. The research indicated that, worldwide, only 2 percent of women considered themselves to be beautiful. Armed with this insight, Ogilvy & Mather Worldwide’s office in Dusseldorf developed the concept that was the basis of the Campaign for Real Beauty. To strengthen the connection between the Real Beauty campaign and Dove’s products, Dove launched a Web community in 2008. Visitors to the site could watch “Fresh Takes,” a miniseries that aired on MTV, as well as seek medical advice on skin care. 52

52 Suzanne Vranica, “Can Dove Promote a Cause and Sell Soap?” The Wall Street Journal (April 10, 2008), p. B6.

Global, Foreign, and Local Consumer Culture Positioning

As noted in Chapter 4 and discussed briefly in this chapter, global consumer culture positioning is a strategy that can be used to target various segments associated with the emerging global consumer culture. 53 Global consumer culture positioning (GCCP) is defined as a strategy that identifies a brand as a symbol of a particular global culture or segment. It has proven to be an effective strategy for communicating with global teens, cosmopolitan elites, globe-trotting laptop warriors who consider themselves members of a “transnational commerce culture,” and other groups. For example, Sony’s brightly colored “My First Sony” line is positioned as the electronics brand for youngsters around the globe with discerning parents. Philips’ current global corporate image campaign is keyed to the theme “Sense and Simplicity.” Benetton uses the slogan “United Colors of Benetton” to position itself as a brand concerned with the unity of humankind. Heineken’s strong brand equity around the globe can be attributed in good measure to a GCCP strategy that reinforces consumers’ cosmopolitan self-images.

53 The following discussion is adapted from Dana L. Alden, Jan-Benedict Steenkamp, and Rajeev Batra, “Brand Positioning through Advertising in Asia, North America, and Europe: The Role of Global Consumer Culture,” Journal of Marketing 63, no. 1 (January 1999), pp. 75–87.

Certain categories of products lend themselves especially well to GCCP. High-tech and high-touch products are both associated with high levels of customer involvement and by a shared “language” among users. 54 High-tech products are sophisticated, technologically complex, and/or difficult to explain or understand. When shopping for them, consumers often have specialized needs or interests and rational buying motives. High-tech brands and products are frequently evaluated in terms of their performance against established, objective standards. Portable MP3 players, cell phones, personal computers, home theater audio/video components, luxury automobiles, and financial services are some of the high-tech product categories for which companies have established strong global positions. Buyers typically already possess—or wish to acquire—considerable technical information. Generally speaking, for example, computer buyers in all parts of the world are equally knowledgeable about Pentium microprocessors, 500-gigabyte hard drives, software RAM requirements, and high-resolution flat-panel displays. High-tech global consumer positioning also works well for special-interest products associated with leisure or recreation. Fuji bicycles, Adidas sports equipment, and Canon cameras are examples of successful global special-interest products. Because most people who buy and use high-tech products “speak the same language” and share the same mind-set, marketing communications should be informative and emphasize performance-related attributes and features to establish the desired GCCP (see Exhibit 7-11 ).

54 Teresa J. Domzal and Lynette Unger, “Emerging Positioning Strategies in Global Marketing,” Journal of Consumer Marketing 4, no. 4 (Fall 1987), pp. 26–27.

Exhibit 7-11

This Portuguese-language Bridgestone print ad underscores the point that although Bridgestone is a global company, it is a local one as well. Translation: “There is only one thing better than a Japanese tire. A Japanese tire made in Brazil. Made in Brazil with Japanese technology.”

Source: Bridgestone Americas Tire Operations, LLC.

By contrast, when shopping for high-touch products, consumers are generally energized by emotional motives rather than rational ones. Consumers may feel an emotional or spiritual connection with high-touch products, the performance of which is evaluated in subjective, aesthetic terms rather than objective, technical terms. Acquisition of high-touch products may represent an act of personal indulgence, reflect the user’s actual or ideal self-image, or reinforce interpersonal relationships between the user and family members or friends. High-touch products appeal to the senses more than the intellect; if a product comes with a detailed user’s manual, it’s probably high tech. By contrast, the consumption experience associated with a high-touch product probably does not entail referring to an instruction manual. Luxury perfume, designer fashions, and fine champagne are all examples of high-touch products that lend themselves to GCCP. Some high-touch products are linked with the joy or pleasure found in “life’s little moments.” Ads that show friends chatting over a cup of coffee in a café or someone’s kitchen put the product at the center of everyday life. As Nestlé has convincingly demonstrated with its Nescafé brand, this type of high-touch, emotional appeal is understood worldwide.

“Chinese companies are certainly growing but they haven’t yet acquired the skills that make their Western peers so successful in ‘high tech and high touch’ industries.” 55

55 Pankaj Ghemawat and Thomas M. Hout, “Softening the ‘Red Edge,’” The Wall Street Journal (October 10, 2008).

Pankaj Ghemwat, Professor of Global Strategy, IESE Business School, Barcelona

A brand’s GCCP can be reinforced by the careful selection of the thematic, verbal, or visual components that are incorporated into advertising and other communications. For marketers seeking to establish a high-touch GCCP, leisure, romance, and materialism are three themes that cross borders well. By contrast, professionalism and experience are advertising themes that work well for high-tech products such as global financial services. Several years ago, for example, Chase Manhattan bank launched a $75 million global advertising campaign geared to the theme “Profit from experience.” According to Aubrey Hawes, a vice president and corporate director of marketing for the bank, Chase’s business and private banking clients “span the globe and travel the globe. They can only know one Chase in their minds, so why should we try to confuse them?” 56 Presumably, Chase’s target audience is sophisticated enough to appreciate the subtlety of the copywriter’s craft—“profit” can be interpreted as either a noun (“monetary gain”) or a verb (“reap an advantage”).

56 Gary Levin, “Ads Going Global,” Advertising Age (July 22, 1991), p. 42.

In some instances, products may be positioned globally in a “bipolar” fashion as both high tech and high touch. This approach can be used when products satisfy buyers’ rational criteria while evoking an emotional response. For example, audio/video components from Denmark’s Bang & Olufsen (B&O), by virtue of their performance and elegant styling, are perceived as both high tech (i.e., advanced engineering and sonically superior) and high touch (i.e., sleek, modern design; see Exhibit 7-12 ). As former CEO Torben Ballegaard Sørensen explained, “Our brand is about feeling good at home, or where you feel at home—in a car or in a hotel. When daily life is cluttered, you can come home to a system that works and is tranquil. It cocoons you.” 57

57 John Gapper, “When High Fidelity Becomes High Fashion,” Financial Times (December 20, 2005), p. 8.

Apple became the world’s most valuable tech company by combining state-of-the-art technical performance with a fashion orientation that allows users to view their iPods, iPhones, and new Apple Watches as extensions of themselves. As shown in Exhibit 7-13 , Apple positions its products on the basis of both performance and design (writing in the Financial Times, a reviewer called the iPod “an all-time design classic”). Positioning itself as a luxury brand with the 2015 launch of its watch, Apple has segmented the market by offering three pricing tiers: the $349 Sport model; a mid-tier model with a stainless steel case; and an Edition model that will sell for $10,000.

To the extent that English is the primary language of international business, mass media, and the Internet, one can make the case that English signifies modernism and a cosmopolitan outlook. Therefore, the use of English in advertising and labeling throughout the world is another way to achieve GCCP. Benetton’s tagline “United Colors of Benetton” appears in English in all of the company’s advertising. The implication is that fashion-minded consumers everywhere in the world shop at Benetton. English is often used as a marketing tool in Japan. Even though a native English speaker would doubtless find the syntax to be muddled, it is the symbolism associated with the use of English that counts rather than the specific meanings that the words might (or might not) convey. A third way to reinforce a GCCP is to use brand symbols whose interpretation defies association with a specific country culture. Examples include Nestlé’s “little nest” logo with an adult bird feeding its babies, the Nike swoosh, and the Mercedes-Benz star.

Exhibit 7-12

Renowned worldwide for Danish craftsmanship and innovation, Bang & Olufsen is a textbook example of high-touch, high-tech global brand positioning. This print ad showcases Bang & Olufsen’s Beosound 8 speaker dock. One reviewer called the Beosound 8 “a truly exceptional product … the coolest and most ‘now’ product B&O has made for years.”

Source: Used by permission of Bang & Olufsen.

A second option is foreign consumer culture positioning (FCCP) , which associates the brand’s users, use occasions, or production origins with a foreign country or culture. A long-running campaign for Foster’s Brewing Group’s U.S. advertising proudly trumpeted the brand’s national origin; print ads featured the tagline “Foster’s. Australian for beer,” while TV and radio spots were keyed to the theme “How to speak Australian.” Needless to say, these ads were not used in Australia itself! Advertising for Grupo Modelo’s Corona Extra brand is identified more generally with Latin America. The “American-ness” of Levi jeans, Marlboro cigarettes, American Apparel clothing, and Harley-Davidson motorcycles—sometimes conveyed with subtlety, sometimes not—enhances their brands’ appeal to cosmopolitans around the world and offers opportunities for FCCP.

IKEA, the home furnishings retailer based in Sweden, wraps itself in the Swedish flag—literally. Inside and out, IKEA’s stores are decorated in the national colors of blue and yellow. To reinforce the chain’s Scandinavian heritage—and to encourage shoppers to linger—many stores feature cafeterias in which Swedish meatballs and other foods are served! Sometimes, brand names suggest an FCCP even though a product is of local origin. For example, the name “Häagen-Dazs” was made up to imply Scandinavian origin even though an American company launched the ice cream. Conversely, a popular chewing gum in Italy marketed by Perfetti bears the brand name “Brooklyn.”

Exhibit 7-13

Following the worldwide success of the iPod digital music player, the iPhone, and the iPad, Apple introduced the Apple Watch in 2015. Ads reinforce the message that the Apple Watch is the ultimate in high-tech, high-touch “cool.” The brand appeals to global teens, the global elite, and everyone in between.

Source: Katsumi Kasahara/ AP Images.

Marketers can also utilize local consumer culture positioning (LCCP) , a strategy that associates the brand with local cultural meanings, reflects the local culture’s norms, portrays the brand as consumed by local people in the national culture, or depicts the product as locally produced for local consumers. An LCCP approach can be seen in Budweiser’s U.S. advertising; ads featuring the iconic Clydesdale horses, for example, associate the brand with small-town American culture. Researchers studying television advertising in seven countries found that LCCP predominated, particularly in ads for food, personal nondurables, and household nondurables.

The global environment must be analyzed before a company pursues expansion into new geographic markets. Through global market segmentation, a company can identify and group customers or countries according to common needs and wants. Demographic segmentation can be based on country income and population, age, ethnicity, or other variables. Psychographic segmentation groups people according to attitudes, interests, opinions, and lifestyles. Behavior segmentation utilizes user status and usage rate as segmentation variables. Benefit segmentation is based on the benefits buyers seek. Global teens and global elites are two examples of global market segments.

After marketers have identified segments, the next step is targeting: The identified groups are evaluated and compared, and one or more segments with the greatest potential are selected. The groups are then evaluated on the basis of several factors, including segment size and growth potential, competition, and compatibility and feasibility. Target market assessment also entails a thorough understanding of the product market in question and determining marketing model drivers and enabling conditions in the countries under study. The timing of market entry should take into account whether a first-mover advantage is likely to be gained. After evaluating the identified segments, marketers must decide on an appropriate targeting strategy. The three basic categories of global target marketing strategies are standardized global marketing, niche marketing, and multisegment targeting.

Positioning a product or brand to differentiate it in the minds of target customers can be accomplished in various ways: positioning by attribute or benefit, positioning by quality/price, positioning by use or user, and positioning by competition. Global consumer culture positioning (GCCP), foreign consumer culture positioning (FCCP), and local consumer culture positioning (LCCP) are additional strategic options in global marketing.