Reverse Positioned Brands

Published on: 10 Sep, 2018

“The writer-physician Atul Gawande has written about the phenomenon of ‘positive deviants’ in the medical profession, that small set of players who are mired in the same environmental conditions as everyone else but stubbornly refuse to allow themselves to be constrained by conventional wisdoms, and as a consequence are able to identify fresh and often counter-traditional ways to address seemingly intractable problems. In business, I believe that there will always be positive deviants, brands that are exceptional, not because they are able to run harder or faster than the rest, but because at some fundamental level they have made a commitment to not taking the status quo for granted.” – Youngme Moon in ‘Different: Escaping the Competitive Herd’ (2010)

Original Thinking + Focused Specialisation + Simplicity

In our first piece for The Ken, my friend – Anupam Gupta – and I concluded that the path to a more meaningful and successful life lies in deep specialisation allied to original thinking and simple rules. (Click here to read The Ken article: https://theken.com/story/tsundoku-mental-clutter/) No sooner was this piece published that we started consuming our own cooking i.e. applying this recipe to Marcellus Investment Managers. In the process, my colleagues at Marcellus and I came across a very interesting branch of marketing strategy – reverse positioned brands.

Changing the playing field

The standard paradigm along which competition evolves in any sphere of life involves gradually upping the ante. So if you and I are Indian politicians and I call you a scoundrel, you will call me an even bigger scoundrel. I will then call you and your previous generation various names. You will then retaliate by saying that my last three generations were wasters and thus this linear escalation in abusive competition will continue.

As Younge Moon explains in her short, lucid book on marketing, in business life, the standard paradigm plays out as:

• A company augments its value proposition by offering customers a new benefit.
• Customers are pleased.
• Competitors race to match (imitate) the augmentation.
• The augmentation becomes standard across the category.
• Satisfaction levels are re-calibrated, which is to say that customers now feel entitled to what they were grateful for yesterday.
• Meanwhile, the expanded value proposition has expanded and the minimal requirements for competing in the category have gone up.
• Repeat step 1.

The result of this iterative process in which everyone copies everyone else is that over time most of the players in the sector end up with very similar offerings. So, for 2 example, once upon a time, Jet Airways was markedly more comfortable than Indigo and Indigo was markedly cheaper than Jet. Now neither is Jet Airways significantly more comfortable that Indigo nor is Indigo significantly cheaper than Jet.

In this context, reverse positioned brands – i.e. brands which refuse to stick to the standard playbook – tend to change the paradigm and turn the industry on its head. When I was in college in the mid-1990s, I discovered the internet. I was clueless about technology and delighted to find Yahoo – a portal which would guide me to useful sites on sports, entertainment, travel, etc. From 1997 until 2000, I was a devoted Yahoo user. Then one day in 2001, a colleague told me about Google. Initially, I was puzzled by the emptiness of Google’s search engine page. It took me a while to understand that Google was a reverse positioned brand.

Youngme Moon defines a reverse positioned brands as: “A reverse positioned brand is a very particular kind of idea brand, one that makes the deliberate decision to defy the augmentation trend in a category in which customers have come to expect augmentation. What this means is that there is a commitment to withholding benefits that the rest of the industry considers necessary to compete. Reverse brands say no where others say yes. And they do so openly…In business…there are few greater sins than failing to meet customer expectations. So nothing is likely to raise eyebrows more quickly than a decision to strip away benefits that consumers expect to receive. This is why the concept of reversal goes against every instinct a businessperson has. When the entire category is racing north, it is no trivial matter to point yourself south.”