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: 

• Enterprise purchases of expensive complex products are validated against a broad range of buying criteria, making product and vendor positioning inherently multidimensional.

• Every contender is positioned – sometimes involuntarily -- according to the same set of dimensions.

• Messaging strategies that support certain parts of your positioning can undermine you in other dimensions.

• Competitors can and do undermine each others’ positions.  Message choices are moves in that game. 

As conceptual tools to develop strategies that reflect these points, I’m 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 as well.

Modeling Enterprise Technology Buyers

Enterprise technology purchases are often made by committees.  Even when they’re 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: 

1. The 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)

2. The 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)

3. The 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 product’s 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 vendor’s positioning is inherently multidimensional.     

Positioning is multidimensional 

Consider, for example, the database management system (DBMS) market.  Oracle’s 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.    IBM’s 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.   That’s 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 Microsoft’s products supposedly can’t handle top-end application loads.  Often, these negative characterizations are gleefully spread by competitors.   It’s 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 since. 

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 vendor’s 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 buyer’s 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 list.   

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, I’m 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.   Let’s call a message of that sort an explicit message. 

Even more important are implicit messages – things you communicate about your product or company that aren’t or can’t 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 product’s positioning; but it often also tends to weaken other aspects.  For example, during the Internet boom Oracle’s 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 Oracle’s 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 IBM’s 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 IBM’s website tended to focus on the use of IBM software and hardware and services; while supporting IBM’s 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: 

1. 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.

2. 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 communications.

3. 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 aligned!

4. 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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Updated: 05/10/04