I have been teaching and researching in marketing at Wharton for 42 years. In that time I have studied and advised many companies, from the largest global firms to entrepreneurial start-ups to social ventures.

What have I learned?

In this blog, I thought it would be fun to try to distill the really big lessons I have learned in that time.

The first lesson is that effective positioning and targeting are the crucial decisions for any CEO. “What are we selling to whom, and why will they buy?” are the crucial questions for any venture leader. The more detailed questions are, “How should our product/service offering bundle be perceived compared to the competition by our target market(s)?” (the positioning question) and, “Who should be our target market(s)?”

The positioning decision cannot be made in a vacuum. It  must instead be answered in a way that helps the venture to attain some sustainable competitive advantage over its competition and its potential competition. An effective positioning decision levers some distinctive competencies that the venture has or can develop that will be difficult to duplicate by competitors. These competencies can be technological and product-related, or they can be “softer” and related to reputation and image.

For example, Zappos was recently bought by Amazon.com for almost a billion dollars because of their reputation among their customers and potential customers for excellent customer service. In order to achieve that reputation, Zappos had to develop a culture of caring for their own employees that was then carried over to caring for their customers.

A key element in the above decision is the word “perceived.” Potential customers make decisions based upon their perceptions which may or may not be the same as “reality.”

In future blogs I will discuss some more aspects of these positioning and targeting decisions and provide more examples of firms that have been successful in implementing these concepts.