The Death of 'Positioning' & the Birth of Wikification

Well-known author and international brand consultant explains why companies like McDonald's are abandoning "positioning" as a marketing strategy. Driven by the "wikification" of brands and executive demands for metrics to justify large marketing expenditures , companies are turning instead toward strategies that sense, define, deliver and sustain brand value.

(PRWEB) June 1, 2005 -- "Positioning" is dead.

For almost 30 years, companies have relied on positioning," a marketing theory that seeks to own" a favorable image within target market minds, to increase sales. But the author of a forthcoming book on brand metrics claims that positioning" no longer reflects current customer, economic or market realities, pointing to such major firms as McDonald's who have abandoned the theory. Instead, companies are adopting a new strategy that recognizes the impact of the Internet and globalization on purchasing and business behavior.

The signs of "positioning's" demise are everywhere. The number of branding failures, many based on "positioning," exceeds 90%, according to the consultancies Ernst & Young and McKinsey & Co. McDonald's, the premier mass market branding giant, has announced that it no longer subscribes to the positioning" theory. Says Larry Light, McDonald's chief global marketing officer: "Identifying one brand position, communicating it in a repetitive manner is old-fashioned, out of date, out of touch." Even more bluntly, Light highlights "the end of brand positioning as we know it," calling it "marketing suicide." Echoing the developing consensus, top executives at Leo Burnett and other global agencies have said, "the old ways of marketing are not working any more."

The main reason for the fall of positioning" has been the rise of sophisticated and knowledgeable consumers. For example, the cover story in the April 2 issue of the Economist illustrated how consumers now buy based on research and personal value, not how on companies seek to "position" their products. "I am constantly amazed at the confidence level and sophistication of the average consumer," says Mike George, Dell's chief marketing officer.

From the beginning, 'positioning had a fatal flaw in its DNA that made its death inevitable," says Nick Wreden, an international brand consultant and the author of the forthcoming book, ProfitBrand: How to Build the Profitability, Accountability and Sustainability of Brands." The fatal flaw was a lack of measurement, which is critical in executive boardrooms today. 'Positioning lacks any methodology to measure success or failure."
   
Wreden argues that, in their landmark book "Positioning," Jack Trout and Al Ries turned marketing away from the benchmarks that drive the rest of business by stating "mind share is more important than market share." Market share is generally measurable; mind share, unfortunately, isn't.

For a long time, this inability to incorporate measurements did not matter. In 1979, when the book "Positioning" was first published, the mass economy ruled. Armed with the monolithic power of the mass media, companies could "position" mass-produced products to mass markets. Any measurement besides total sales was too hard, too rudimentary or too late.

But now, measurement is critical, whether it takes the form of customer equity, ROMI (return-on-marketing-investment), ROMO (return-on-marketing-objective), cash-to-order cycles, retention rates or any other spreadsheet-driven metric. Despite its importance, fewer than 20% of companies surveyed have developed meaningful metrics for their marketing organizations, according to the technology-based CMO Council. Over 80% of the companies surveyed expressed dissatisfaction with their ability to benchmark their marketing programs' business impact and value.

The result of focusing on "positioning" instead of measurability is having an unfortunate impact, Wreden points out. The research consultancy Forrester recently reported that companies are looking at disbanding marketing departments and distributing its function among sales, customer service, etc. While that is unfortunate, it's a logical outcome for a function that represents the second biggest outlay for most companies, yet cannot generate the metrics to justify those expenditures," says Wreden. Thats why 'positioning no longer has any credibility in executive suites."
   
"Positioning" has other defects as well. The exercise is a company-driven process that reflects how companies wish to sell ("the leading provider of ...") instead of determining what - and how - customers seek to buy. Such posturing worked well in the mass economy, but the tactic is doomed to failure in, as the Economist pointed out, a customer-driven world.

Another weakness is "positioning's" commandment to seek the #1 or #2 space in a category. If those spaces are occupied by competitors, then "positioning" advises creating a category where you can play top dog. In addition to the fact that it now extremely difficult to establish a meaningful category in a highly competitive world, it also means that your branding strategy is being driven by your competitors. Branding must be driven by your customer demands for value, not by the market timing of competitors. Finally, positioning" fails to address operations and service, which ultimately is how brands are created and judged.

So if "positioning" has faded into mass-economy history, what has taken its place? McDonald's advocates "brand journalism," or tailoring products and messages to both targets and media. "Positioning" advocates are apoplectic at such apostasy. "The notion that McDonald's should abandon the positioning philosophy and instead adopt a brand journalism approach is lunacy," says Laura Reiss, who is still echoing the precepts in her father's 25-year-old book.

Wreden disagrees, and points to how the abandonment of positioning" coincided with the burger giant's recent remarkable financial and stock market turnaround.

By recognizing that it is better served by adapting itself to customer requirements instead of preaching a 'position, McDonald's is definitely on the right track with 'brand journalism. but the term is awkward for several reasons," says Wreden. A better term for this customer-driven strategy that reflects today's branding realities is 'brand wikification."

Born from the Internet's ability to link an archipelago of people and information, wikis are the mirror-image of blogs. While blogs reflect one person's worldview, wikis, written collaboratively by contributors from all over the world, reflect a common judgment on an issue. Definitions depend not on what Funk or Wagnall or Webster say they should be, but on what thousands or even millions of people agree on what they are.

In much the same way, brands today are collectively defined by their customers. Based on personal or business requirements for economic, emotional or experiential value, this wiki-based definition derives from personal experiences, word-of-mouth, research and multiple marketing tactics. Companies can "position" themselves as anything, but unless there is essentially a customer-driven consensus on the brand, then the "positioning" is no more than corporate posturing. Instead of seeking to unilaterally "position" their products, companies focused on branding today must devote resources to defining, delivering, measuring and sustaining the value that customers feel they receive from a brand.

Wreden claims numerous advantages for brand wikification compared to "positioning." First, brand wikification is a customer-driven, not a corporate-driven, strategy, ideal in a highly-fragmented, highly competitive world where deeper relationships ultimately mean greater profits. Second, wikification forces companies to respond to customer requirements, or risk their brand. Companies can "position" themselves as customer-centric or leading providers or whatever, but the "position" means nothing if callers are put on hold for eternities. Finally, and most important, wikification incorporates measurement. If you know what customers value (or how they hold you accountable), then you can measure how you are delivering against those benchmarks for accountability.

The forthcoming book, ProfitBrand: How to Build the Profitability, Accountability and Sustainability of Brands," discusses the metrics required to measure the value of customers and brands. ProfitBrand" will be published by Kogan Page in the UK in July and in the US in September. The book is a follow-up to Wredens FusionBranding: How to Forge Your Brand for the Future," which was named as a best business book" of 2002.

Wreden is managing director of FusionBrand, a brand consultancy that helps customers find, grow, measure and profit from the best customers. He has more than 20 years experience in branding, and has worked with such companies as IBM, Cisco and other large firms. www.fusionbrand.com

Review copies will be available to the media. To request a copy, or for additional information, contact info@fusionbrand.com.

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