The Importance of Positioning

by dmishesq on December 24, 2009

Now we go into the nitty gritty aspects of Guerrilla Marketing. What you discover from here on are the details, the nuts and bolts, the meat and potatoes of the whole enchilada.

If you have never heard of the term ‘positioning’ in marketing before, this article will clue you in. David Ogilvy (of Ogilvy and Mather), after spending several billion dollars in advertising, listed 32 things his advertising firm had learned. Of the 32, the single most important one was the importance of correct positioning. If it comes from Ogilvy, you’d better listen up. The guy knows his marketing.

As the name implies, positioning means to place the identity of your business in front of your prospective clients in a way that appeals to them. In order to get this right, you have to consider a few factors:

• Who your target markets are and their needs
• What services you can bring to these target markets
• What your strengths and weaknesses are
• What your competitors’ strengths and weaknesses are
• What trends there are in the economy

In other words, position your business as the solution to the problems of one particular segment of the market. Many legal firms offer a myriad of legal services. You would do well to focus on a few particular segments of the market and position yourself as the natural go-to firm for that segment of the market with their own unique needs. Let me give you an example from the aviation industry.

Air Asia is a Malaysian airline owned by a government-owned conglomerate, DRB-Hicom that started its operations in 1996. For the first 5 years, it did not perform well at all and had incurred enormous debts. In 2001, it was sold to an ex-executive of Time Warner by the name of Tony Fernandes for RM1 (about $0.27). Up to that time the national airline of Malaysia, Malaysia Airlines enjoyed complete monopoly of the aviation industry in Malaysia. Air Asia’s new owner knew he had his work cut out for him in attempting to break this monopoly.

What he did was position Air Asia as a low cost, no frills airline and slash the prices of the airfares at times to as low as RM1 ($0.27) for promotional flights. In addition, the airline embarked on an expansion of its flight destinations, increased the productivity of its crew, reduced aircraft turnaround time, cut overhead costs and even secured the cost of aircraft fuel into the future.

As a result, within one year Air Asia started to show a profit and the nation began to take notice. More and more travelers switched from Malaysia Airlines to Air Asia. Soon Air Asia went regional and then international. In 2007, it formed another company called Air Asia X for its long haul flights. In the inaugural flight to Britain, it gave away 200 flight tickets for free. Its remarkable achievements have even caught the attention of Sir Richard Branson (of Virgin Airways) who announced his intention to buy a 20% stake in Air Asia X in 2007.

In another milestone in 2008, Air Asia abolished fuel surcharges on all its flights and claimed to be the first airline in the world to do so.

Today, Air Asia is Asia’s largest low fare, no frills airline with impressive standards of operations. It operates with the world’s lowest unit cost of $0.023/ASK and a passenger break-even load of 52%. It has hedged 100% of its fuel requirements for the next 3 years, achieves an aircraft turnaround time of 25 minutes and an average aircraft utilization rate of 13 hours a day. Air Asia is currently the biggest customer for the Airbus A320.

All these achievements came about in no small part due to the shrewdness of Tony Fernandes who positioned the airlines as a low cost, budget and no frills airlines in the eyes of travelers. That’s the importance of correct positioning.

Understanding the exact nature of your business, your goals, your target market’s needs, your strengths and weaknesses and that of your competitors will enable you to determine your correct positioning. In this regard, small firms have a distinct advantage over larger ones because you can enter a small niche in your market and thoroughly dominate it. Perhaps you can become the market leader in one aspect of legal services like taxation, company law, divorce, estate management, criminal law etc. But you do not (and should not) just restrict yourself to one niche. Do your due diligence and aim at a few niche markets.

Research has uncovered 4 general target markets that apply to just about any industry. With careful planning, you can dominate one of these niches or any sub niches thereof. They are older people, women, ethnic groups (especially Asian Americans and Hispanics) and small businesses (especially home based ones).

Older people want to be independent and enjoy their golden years. Perhaps some may even be in the market to buy property despite their age. You could provide your legal services in this respect. Their own health and financial security are other major concerns to these older folks. What legal services can you provide that helps older people safeguard or regain their health and money? Will writing is one clear example.

Women represent a massive target market. You probably need to delve deeper to find a sub niche within this target market. For example, many women are entrepreneurs. They value their independence and some work from home to be closer to their children. To do so, they need lots of legal services in incorporating a company, drafting agreements, paying taxes etc.

The Guerrilla marketer would do well to venture into providing services to non-white ethnic groups as they are growing in number and economic significance. Here are some statistics. In 2004, the Caucasian Americans led in buying power accounting for $8,600 billion followed by the African Americans with $7,077 billion, then the Asians with $363 billion. Lastly there were the other races who held a total of $258 billion and the Native Americans with $47 billion. By 2008, the combined total buying power of the African Americans, Asian Americans and Native Americans will exceed $1.5 trillion. Many of these come to America to find freedom and chase the American Dream. Often they do so by going into business. Once again, legal services would be required. To reach them you might have to communicate with them in their own language. These days, it is not difficult to engage advertisement services that produce foreign language advertisements. You can search for such services in the Internet or from publications like Adweek.

Last but not least are the small business owners. Did you know that more than 40 million Americans work from home? Their most common work involves management or technological consultation, financial advisory services, specialized services like design or writing, wholesale or retail sales, Internet marketing etc. All these are possible avenues for you to provide legal services to.

So carve out your own niche by positioning your business in a way that provides the client with the exact type of legal services he needs. If you can position correctly, your business will grow by leaps and bounds.

{ 0 comments… add one now }

Leave a Comment

Previous post:

Next post: