Multidimensional Positioning of Enterprise Technology
Traditional marketing concepts typically share a common
set of assumptions, namely that markets consist of simple-minded buyers making irrational
buying decisions. In the business of selling
complex enterprise technology, however, these assumptions are so inaccurate as to render
those consumer-oriented concepts almost meaningless.
This is the first of a planned series of essays in which I attempt to put
enterprise technology marketing onto a sounder theoretical footing, and show some of the
practical consequences for enterprise IT marketers.
The key points of this first essay are:
purchases of expensive complex products are validated against a broad range of buying
criteria, making product and vendor positioning inherently multidimensional.
contender is positioned sometimes involuntarily -- according to the same set of dimensions.
strategies that support certain parts of your positioning can undermine you in other
can and do undermine each others positions.
Message choices are moves in that game.
As conceptual tools to develop strategies that reflect
these points, Im introducing several new or under-used terms: The positioning
vector, explicit and implicit messaging, and
the counterpositioning game.
For convenience mine and the readers alike
-- most of the examples below are from the database management systems (DBMS) market. But the same principles apply broadly to the
enterprise technology industry and, I suspect, to many other business-to-business markets
Modeling Enterprise Technology Buyers
Enterprise technology purchases are often made by
committees. Even when theyre
essentially made by a single person, that person has to satisfy multiple constituencies. Each constituency, in turn, usually has a multitude of needs and requirements.
For most purposes, it is adequate to model the
enterprise decision process as follows:
enterprise establishes a multitude of binary criteria that the product must meet. (E.g.: Works in our environment, has various features we
need, comes from a sufficiently stable vendor)
enterprise further establishes a number of other criteria by which each candidate product
is measured, and a weighting for each criterion. (E.g.: Price
and other cost factors, vendor reputation, nice-to-have features, ease of use)
weighted scores are added up, and the highest-scoring product, among those that meets the
minimum must-have criteria, is selected.
Each part of this process can be influenced by both
marketing and sales.
The actual decision process is usually more complex and
less rational than this model suggests. Even
so, an enterprise will rarely make a large technology purchase unless it can construct a
plausible rationale, roughly along the lines outlined above.
The Positioning Vector
In consumer marketing theory, a products
positioning is a summary of its image, boiling down a lot of details into a simple word,
slogan, or image Volvos are safe, BMWs are ultimate driving
machines, etc. Maybe that works for
consumer products, even complex ones. But it does not work for enterprise technology. Even with maximum simplification, each
enterprise buyer truly evaluates a product (or vendor) according to a medium or large
number of criteria. Thus, any reasonably
accurate description of a product or vendors positioning is inherently multidimensional.
Positioning is multidimensional
Consider, for example, the database management system
(DBMS) market. Oracles chosen
positioning is: market-leader,
highest-technology, richest feature set, internet-oriented, integrated technology stack,
suitable for the most demanding applications (e.g., fast, scalable, reliable, available,
secure), and open (with respect to hardware and operating systems), all from a vendor that
is worthy partner for even the largest of organizations.
IBMs chosen positioning is: market-leader
(also!), high-technology, rich feature set, suitable for the most demanding applications,
open (with respect to application packages), strong services operation, and a decades-long
reputation for customer care. Microsoft
is positioned as the un-Oracle: Low-cost,
easy to manage, good-enough feature set, well-integrated with other Microsoft products,
superior price-performance thanks to Wintel, very friendly to certain kinds of partners,
and the obvious choice for small/medium businesses and departments of large organizations.
seven high-level claims each.
Note: All empirical claims about the DBMS market in this
essay are based on my own subjective observations, as an analyst of and consultant to the
DBMS industry for the past 22 years.
If anything, those seven-point summary positionings are
oversimplified. For example, each
vendor further tries to establish a special focus on and fitness for particular market
segments and application types.
Every contender is positioned according to the SAME
set of dimensions
Besides their chosen positioning, vendors and their
products also have less favorable characteristics that the market ascribes to them: Oracle supposedly is arrogant,
over-promises, and sells hard-to-use products; IBM supposedly is still tied to its
proprietary hardware; and Microsofts products supposedly cant handle top-end
application loads. Often, these negative
characterizations are gleefully spread by competitors.
Its been about 15 years since an Ingres manager told me that her top
message in competing with Oracle was simply Oracle are the bad guys, and
successive generations of Oracle competitors have kept that image at the forefront ever
Ultimately, the generic enterprise buyer has a summary
list of buying criteria. This list includes
every attribute that is included in at least one major vendors chosen positioning,
and everything that the leading product analysis firms (e.g., Gartner Group) say should be
on the list. Each vendor starts the
sales cycle with a provisional score for most or all of the criteria, determined by its
own marketing efforts, its competitors marketing, word of mouth, press and analyst
opinions, or the buyers own judgment and experience.
Let me reemphasize something here: Every
competing product is positioned according to the SAME list of attributes. This claim is violently counterintuitive, since the
whole point of strategic marketing is often to change the criteria by which products are
measured. And vendors indeed can, by sales
and marketing, get attributes added to the list. They
can also change, sometimes greatly, the importance customers place on various attributes. And some buyers may focus on higher-level
attributes, while others may drop down to the underlying detail. But despite all that -- at the end of the day,
there is one list (at least for any particular
buyer), and all competitors are assigned positions corresponding to every element of the
Indeed, this summary list of attributes, or any one
vendors lists of scores in those attributes, may be regarded as a positioning vector. (For now, Im using vector
in the quasi-mathematical sense a list
of values, each measured along a different axis.)
Explicit and Implicit Messages
A big part of technology marketing is selecting and
communicating a bundle of messages. Commonly, a message can be expressed in
a few words such as Our DBMS is the fastest or Our DBMS is optimized for
transaction processing. Such a message
is commonly reinforced by longer statements, pictures, trade show exhibits, and all the
other tools of marketing communications. Lets
call a message of that sort an explicit message.
Even more important are implicit messages things you communicate
about your product or company that arent or cant be expressed in a few words. The best examples of an implicit message are
product characteristics: Is the user
interface better-suited for experienced power users or for novices? The answer conveys an implicit message about
which kind of users should want it. Does the
application have features that use terminology specific to a particular industry, or is
the marketing collateral heavily weighted with examples from a particular industry? If so, there is an implicit message about
industry focus. Implicit messages can
be just as clear as and more credible than -- explicit messages.
Typically, an explicit message supports one or more
favorable aspects of a vendor or products positioning; but it often also tends to
weaken other aspects. For example, during the
Internet boom Oracles ads drummed home several versions of the message Our
DBMS is used by almost all of the busiest and most prominent websites. This well-substantiated claim was very supportive
of Oracles position in market leadership, speed/scalability, and reliability, not to
mention Internet leadership. However,
the same message somewhat undermined any Oracle claim to simplicity and ease of use, areas
in which Microsoft has long maintained a positioning advantage.
Implicit messages, which are necessarily less carefully
worded, are even more commonly double-edged. For
example, IBM, while playing catch-up against Oracle, published database performance
benchmarks that supported its performance claims. But
these benchmarks were typically run on IBMs own hardware, a point that Oracle
exploited to keep IBM unfavorably positioned in the open vs. proprietary
hardware dimension. Similarly, the
customer success stories posted on IBMs website tended to focus on the use of IBM
software and hardware and services; while supporting IBMs
positioning in customer care and service, these stories tended to further undermine its
claims to platform openness.
And now, because of the way I set up my definitions, we
come to an important conclusion: A positioning vector is simply the sum of the effects
of all of the applicable messages (explicit and implicit alike). Thus,
any discussion of positioning really reduces to a discussion of messages and their impact
recognizing, of course, that for all but the newest vendors and products there are
a lot of past messages that can not be quickly or easily changed.
The Counterpositioning Game
The fundamental goal of sales and marketing is to emerge
from the sales cycle with a win. In our
lingo, you win if buying organizations assign you a
positioning vector that they evaluate more favorably than the positioning vectors they
assign to each of your competitors. So
the positioning and messaging challenge is really fourfold:
Choose a target positioning vector that will lead to
victory among a sufficiently large subset of the marketplace. This is the classic positioning task but
with a couple of twists.
Promulgate explicit messages that support and do
not undermine your chosen positioning. This
is the classic messaging task of strategic marketing, product marketing, and market
Promulgate implicit messages that support and do
not undermine your chosen positioning. This
is a big part of the standard job of product management and/or product marketing
but make sure your explicit messages, implicit messages, and target positioning are all
Undermine your competitors positioning.
Taken together, these four efforts comprise the counterpositioning game.
For more information, please contact Curt Monash or Linda Barlow.
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