Many marketers think that companies should aggressively promote only one benefit to the target market. Former advertising executive Rosser Reeves, for example, said a company should develop a unique selling proposition (USP) for each brand and stick to it. Each brand should pick an attribute and tout itself as “number one” on that attribute. Buyers tend to remember number one better, especially in this overcommunicated society. Thus, Walmart promotes its unbeatable low prices and Burger King promotes personal choice—“have it your way.”

Other marketers think that companies should position themselves on more than one differentiator. This may be necessary if two or more firms are claiming to be best on the same attribute. For example, with its “Expect More. Pay Less.” positioning, Targets sets itself apart from Walmart by adding a touch of class to its low prices. And Microsoft differentiates its innovative Surface tablet as being both a laptop and tablet in one. It’s the “One device for everything in your life”—lighter and thinner than a laptop but with a click-in keyboard and fuller features than competing tablets. It’s “Powerful as a laptop, lighter than Air.” Microsoft’s challenge is to convince buyers that it’s one brand can do it all.

Today, in a time when the mass market is fragmenting into many small segments, companies and brands are trying to broaden their positioning strategies to appeal to more segments.

Not all brand differences are meaningful or worthwhile, and each difference has the potential to create company costs as well as customer benefits. A difference is worth establishing to the extent that it satisfies the following criteria:

• Important. The difference delivers a highly valued benefit to target buyers.

• Distinctive. Competitors do not offer the difference, or the company can offer it in a more distinctive way.

• Superior. The difference is superior to other ways that customers might obtain the same benefit.

• Communicable. The difference is communicable and visible to buyers.

• Preemptive. Competitors cannot easily copy the difference.

• Affordable. Buyers can afford to pay for the difference.

• Profitable. The company can introduce the difference profitably.

Many companies have introduced differentiations that failed one or more of these tests. When the Westin Stamford Hotel in Singapore once advertised itself as the world’s tallest hotel, it was a distinction that was not important to most tourists; in fact, it turned many off. Similarly, Coca-Cola’s classic product failure—New Coke—failed the superiority and importance tests among core Coca-Cola drinkers:

Extensive blind taste tests showed that 60 percent of all soft drink consumers chose a new, sweeter Coca-Cola formulation over the original Coke, and 52 percent chose it over Pepsi. So the brand dropped its original-formula Coke and, with much fanfare, replaced it with New Coke, a sweeter, smoother version. However, in its research, Coca-Cola overlooked the many intangibles that have made Coca-Cola so popular for 130 years. To loyal Coke drinkers, the original beverage stands alongside baseball, apple pie, and the Statue of Liberty as an American institution. As it turns out, Coca-Cola differentiates its brand not just by taste but by tradition. By dropping the original formula, Coca-Cola trampled on the sensitivities of the huge core of loyal Coke drinkers who loved Coke just the way it was. After only three months, the company brought the classic Coke back.

Thus, choosing competitive advantages on which to position a product or service can be difficult, yet such choices are crucial to success. Choosing the right differentiators can help a brand stand out from the pack of competitors.

More-for-more positioning involves providing the most upscale product or service and charging a higher price to cover the ­higher costs. A more-for-more market offering not only offers higher quality, it also gives prestige to the buyer. It symbolizes status and a loftier lifestyle. Four Seasons hotels, Patek Philippe watches, Starbucks coffee, Louis Vuitton handbags, Mercedes automobiles, SubZero appliances—each claims superior quality, craftsmanship, durability, performance, or style and therefore charges a higher price.

Similarly, the marketers of Hearts On Fire diamonds have created a more-for-more niche as “The World’s Most Perfectly Cut Diamond.” Hearts On Fire diamonds have a unique “hearts and arrow” design. When viewed under magnification from the bottom, a perfect ring of eight hearts appears; from the top comes a perfectly formed Fireburst of light. Hearts On Fire diamonds aren’t for everyone, says the company. “Hearts On Fire is for those who expect more and give more in return.” The brand commands a 15 to 20 percent price premium over comparable competing diamonds.30

Although more-for-more can be profitable, this strategy can also be vulnerable. It often invites imitators who claim the same quality but at a lower price. For example, more-for-more brand Starbucks now faces “gourmet” coffee competitors ranging from Dunkin’ Donuts to McDonald’s. Also, luxury goods that sell well during good times may be at risk during economic downturns when buyers become more cautious in their spending. The recent gloomy economy hit premium brands, such as Starbucks, the hardest.

A company can attack a competitor’s value proposition by positioning its brand as offering more for the same price. For example, Target positions itself as the “upscale discounter.” It claims to offer more in terms of store atmosphere, service, stylish merchandise, and classy brand image but at prices comparable to those of Walmart, Kohl’s, and other discounters.

Offering the same for less can be a powerful value proposition—everyone likes a good deal. Discount stores such as Walmart and “category killers” such as Best Buy, PetSmart, David’s Bridal, and DSW Shoes use this positioning. They don’t claim to offer different or better products. Instead, they offer many of the same brands as department stores and specialty stores but at deep discounts based on superior purchasing power and lower-cost operations. Other companies develop imitative but lower-priced brands in an effort to lure customers away from the market leader. For example, Amazon offers a line of Kindle Fire tablets, which sell for less than 40 percent of the price of the Apple iPad or Samsung ­Galaxy tablet. Amazon claims that it offers “Premium products at non-premium prices.”

A market almost always exists for products that offer less and therefore cost less. Few people need, want, or can afford “the very best” in everything they buy. In many cases, consumers will gladly settle for less-than-optimal performance or give up some of the bells and whistles in exchange for a lower price. For example, many travelers seeking lodgings prefer not to pay for what they consider unnecessary extras, such as a pool, an attached restaurant, or mints on the pillow. Hotel chains such as Ramada Limited, Holiday Inn Express, and Motel 6 suspend some of these amenities and charge less accordingly.

Less-for-much-less positioning involves meeting consumers’ lower performance or quality requirements at a much lower price. For example, Costco warehouse stores offer less merchandise selection and consistency and much lower levels of service; as a result, they charge rock-bottom prices. Similarly, at ALDI grocery stores, customers pay super-low prices but must settle for less in terms of the service extras. “You can’t eat frills,” says ALDI, “so why pay for them?” (See Real Marketing 7.2.)

Of course, the winning value proposition would be to offer more for less. Many companies claim to do this. And, in the short run, some companies can actually achieve such lofty positions. For example, when it first opened for business, Home Depot had arguably the best product selection, the best service, and the lowest prices compared with local hardware stores and other home-improvement chains.

Yet in the long run, companies will no doubt find it very difficult to sustain such best-of-both positioning. Offering more usually costs more, making it difficult to deliver on the “for-less” promise. Companies that try to deliver both may lose out to more focused competitors. For example, facing determined competition from Lowe’s stores, Home Depot must now decide whether it wants to compete primarily on superior service or on lower prices.

All said, each brand must adopt a positioning strategy designed to serve the needs and wants of its target markets. More for more will draw one target market, less for much less will draw another, and so on. In any market, there is usually room for many different companies, each successfully occupying different positions. The important thing is that each company must develop its own winning positioning strategy, one that makes the company special to its target consumers.