Feature

By Peter Longini, Managing Editor 

Neither the concept nor the practice of product positioning is particularly new.  Examples of its use in advertising - where markets are segmented and the product's features get addressed in ways that relate to buyer interest - go back at least as far as the 19^th century.  But despite the long association of positioning with conventional sales and marketing, there's a compelling case for applying that concept at a much earlier stage in the product's life cycle - well before you ever come up with a sales message or tagline.  Just ask Erin Cosgrove, product line manager for GE Healthcare, whose responsibilities center around the company's surgical navigation devices - essentially GPS systems that guide surgeons in following their patients' pre-operative scans.

"Product positioning is something that happens very early - ideally it's before you even start the development cycle," Cosgrove advises.  "By the time you look at positioning messaging, you already have the product; it is what it is.  And you're thinking: what's the most effective way to message around this product to show that it meets the customer needs?"  

By then, however, the time and money that goes into developing a product has already been spent.  And in the case of GE's pricey surgical navigation systems, with development cycles in the 18-24 month range, it involves a whole lot of both. "The upfront work is really about answering: how are we positioning the product?" she said.  "Is it a surgical navigation product?  Are we going to say it's better than the competition?  Or are we saying that here's a completely new category?  That's one of the things you have to decide upfront because it drives which features are you going to put in and what you think the price could potentially be.  And that, in turn, drives how much you're willing to invest in the program." 

Classical positioning

"In classical advertising, you had to decide: is this a high-end product?  Is this a low-end product?  Is this a value product?  But in order to get there, you had to have the product itself," she noted.  And that sharply restricts your flexibility.  "If you've made the decision early on to say we're going to build a high-end product, it's going to be very difficult to change." 

That's not just theoretical.  It's a lesson that Cosgrove and her associates found out the hard way.  "We had gone pretty far down the path of making a very large investment in developing some complex technology for a surgical navigation system," she recalled.  "As we started to go through the positioning exercises, we looked at how this stacked up relative to customers' needs and to what we could expect in sales volume.  And the more we looked at our position relative to the competition and the business case behind it, we saw that this really wasn't an investment that made sense.  So we ended up making the difficult decision to cancel that program.  We hadn't done the upfront work to help us say: what is this product going to be?  We hadn't done the positioning exercise.  If we had, we certainly would have positioned ourselves higher relative to the competition.  But by that point, we couldn't justify what we would have to do to get there." 

Systematic analysis

At GE, the exercises Cosgrove referred to are both well-developed and multi-faceted.  Positioning represents only one aspect of a far more comprehensive analysis.  "We have a template that we walk through with the program," she said.  "It says okay, here's everything we need to know before we move into the development.  We're going through the business case and we ask where we are going to be positioning this?  How are we going to stack up against the competition?  What are the customer's buying criteria?  We have a whole series of things that we'll do upfront to ask: are we really ready to go into the development cycle?" 

The individuals selected to go through those exercises represent a variety of disciplines.  "The people I'll typically involve in the positioning exercise are cross-functional," she pointed out.  "They'll include representatives from engineering, because obviously they're going to be the folks who are going to be doing the development; the sales team because, as the feet on the street, they need to be comfortable selling this to a customer and knowing that the customer's perception is going to match the product; and the marketing communications folks.  And in our case, because we make medical devices, we also include someone from the clinical team who spends a lot of time training customers on how to use the equipment.  

"That's a lot of folks and they're not all involved in everything.  We'll pull them in for parts of it because, first, it's good insight and, second, there's buy-in as we go through the whole cycle from development to launch."

But only when the analysis is complete and product's positioning has been identified, are the product's marketing requirements written out.  "At that point we say: okay, here's what we're trying to do, Big Picture.  Here are all the details about what the user needs to see in the product.  And those user requirements drive the input for the engineering requirements.  That's part of our formal design control," she said.

Short cycles

With their long product development cycles and the constant involvement of FDA in approving surgical instruments, things can move slowly in the medical device market.  "Markets are different," she acknowledged.  "Because the development cycles are so long in the medical device field, we know we probably won't see a huge shift in the competitive positioning during that cycle.  We may see some changes, but we probably won't see a competitor make a drastic move.  But other industries, with faster development cycles, may be different.  So they can make the decision to change what they're doing now based on the new competitive positioning."   

But even if your development cycle is comparatively short, an upfront positioning assessment still makes sense.  "If you're trying to keep the development cycle short, the better the information you have upfront and the more strategic decisions you've made upfront about what the product is going to be, the less time you're going to spend during the development cycle," she said.  "The concept is the same: if you know what you're going to do upfront; you've got a lot of time savings down the road." 

That doesn't just apply to new products.  With some modification, the same idea can be applied to upgrades of existing products, even though the upfront work has presumably already been done.  "As the market gets more mature, you have to be a lot more focused in where you put your dollars - both resources for development and resources for marketing and sales," she said.  "That's what doing the positioning work early will let you do.  Every time you go through a new release, you're trying to figure out how much to invest in doing an upgrade versus investing in a new product.  What are the key features that can keep this product at its current position in the market or enable you to change it?  So there's certainly some work to be done that drives those decisions, even with a shorter development cycle."   

Mar-comm

Either way, once the positioning has been worked out and the development process has been aligned with that chosen position, the job of sales message preparation can begin to get serious.   But Cosgrove brings her marketing communications people themselves into the process even earlier.  "The folks who are doing the marketing communications are going to be thinking: how am I going to do this in terms of my literature, my Web site - everything I'm doing that the customer looks at?  And sometimes, as you're going through the positioning exercise, that leads to insights which find their way into the product." 

In fact, every once in a while, a powerful sales statement can drive the product's design and feature set.  "Once you know what you want to say, you can go through the whole exercise to get to the point where you can actually make that statement.  Because the last thing you want to do is spring the product on the mar-comm team and say ‘oh, by the way, can you make me a nice brochure?'"

About the Author:

Peter Longini is the Managing Editor for Inside Product Strategy™. He can be reached at   .

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