By Rene Falcon, Student Member, Austin AMA
The February luncheon, hosted by the Austin AMA Power Luncheon Series, was a great and informative success. Our guest speaker, Gerardo A. Dada, who is head of product marketing at Rackspace Hosting spoke about the importance of striving for the “premium position” in you market. Mr. Dada discussed reasons as to why leading with price is not always the best strategy, and also highlighted “seven strategies to establish premium positioning” for your product.
Mr. Dada started off by associating the term premium with value, not price. He explained that price is too often at the center stage. Some examples he used were insurance commercials and how the majority of them seem to lead with price as the most motivating factor in the consumer’s mind. He believes that these price-warring markets present an opportunity for differentiation. When everyone is fighting for the crowd that wants to save the most, that leaves the crowd that actually wants some value unattended. And tapping into this unattended market is where a brand can find opportunity and make a play for the premium position.
Our guest speaker also noted that “it is not about being better, it is about being different.” This is an important distinction because research shows that customer dissatisfaction is not always specific to individual brands, but to whole industries. And if that were to be the case, a company needs to be able to distinguish itself from the rest of the pack if it plans on making an notable impact on the consumer.
Mr. Dada also stressed the importance of focus. You, as a marketer, must be able to narrow in on who exactly your premium target is. If you are going to be better and different, who are you going to be better and different for? Mr. Dada went on to explain that premium positioning is “achieved by focusing efforts and optimizing products for a segment of the market that is willing to pay a premium price.”
With regards to your customers, Mr. Dada stated that “people buy emotionally and justify their decisions rationally.” Using this rationale, our speaker went on to highlight his seven strategies to establish premium positioning:
- Sell the Experience
- Appeal to Emotions (robots don’t buy your products)
- Align Prices with Value (are you selling your premium product at a commodity price?)
- Packaging and Price Communicate Value
- Understand the Intangibles (example: peace of mind)
- Be Different
- Empower Employees (happy and empowered employees delight customers)
I would like to personally thank Mr. Gerardo A. Dada for his time and cooperation, as well as everyone who made it out to our Austin AMA February luncheon. Hope to see you next month!