Is Positioning still relevant today? Part two

Recently I wrote a blog post questioning the relevance of positioning today. You can read the full post here. A fellow blogger called Pepita responded with some well thought out and pertinent comments. Below are her comments, taken from the comments section and re posted here together with my responses embedded within the questions.

Pepita: You state chat a model that was developed for the US mass market in the seventies is not applicable to other countries or through time. Why does a market have to be similar in order for a model to work? All markets have the same elements (competitors, customers, manufacturers etc.) don’t they. If you extend your statement to other theories it is the same as saying that economic theories cannot be applied in Malaysia because they were thought up by Americans or English in another era. This reasoning in my opinion is flawed.

Marcus: I think that one of the reasons so many products fail to become brands (According to Ernst & Young this figure is 90%) is because companies assume that a model that works in one market will work in another. The mass economy was powered by mass market products that were standard and mass media was used to sell those products in multiple markets. As a simple example, for years British car manufacturers had a monopoly on the Malaysian market even though their cars were build in the UK and shipped here with UK specifications. So, a customer in the tropics was expected to buy a car with a heater. Limited choice meant customers had to accept this and British cars had over 90% market share. Then someone imported an American car with aircon. To this day, British auto manufacturers (of which there aren’t many) have been unable to make up that lost market share.

Pepita: Bad claims or outrageous claims developed by agencies for the clients doesn’t mean that the concept of positioning is no good. It means that agencies did poor work.

Marcus: Ries and Trout developed the concept of positioning because audiences were receiving multiple and confusing messages from more and more companies. Positioning’s goal is to create a ‘position’ in the consumers (any consumers) mind that is a reflection of the strengths and weaknesses of the offering. If you are first in that category even better. If you are not first, the goal was to create another new category. Positioning, according to Ries and Trout is about being ‘first in the mind than first in the marketplace’. Companies had to shape information communicated to consumers. Mass media was the obvious vehicle with its massive reach. For this they used and still do use agencies. The outrageous claims were a result of the pressure to create those new categories or influence perceptions. If companies didn’t like the work created by agencies they are able to reject it.

Pepita: I am not sure what you mean by your statement that positioning is only suitable for mass markets. As long as there is competition and there are customers you can use the concept. Even if there is no competition you can still position your company or your brand.

Marcus: You are right, as long as there are customers and there is competition, you can attempt to position your brand. Even if there is no competition you can still try to position your brand.

Pepita: Mission and vision, values, BHAG’s; there are tons of stuff in business that are immeasurable. Or they are measurable but aren’t measured. Does that mean that the concept doesn’t hold? I don’t think so.

Marcus: Generally speaking, in today’s customer driven marketplace where customers not companies define brands and with the tools available to marketers to collect data and use that data, positioning, with one or two exceptions is no longer relevant. Brands are built through retention (you have a 15% chance of selling to a new customer and a 50% chance of selling to an existing customer) not acquisition yet positioning tends to focus on acquiring new customers not retaining them.

Pepita: Wikipedia is no official standard. It could be my opinion or yours; whoever comes last. So dimissing positioning because you do not like the definition in Wikipedia is a sophism. Skipping that and going back to Ries & Trout, the wrote a book on bottom-up marketing and always had the consumer/customer/prospects in mind.

Marcus: I’m not trying to deceive anyone. I googled the ‘definition of positioning’ and got 12 million responses. The beauty of the Internet and tools such as Wikipedia is that we seek references and definitions from others through these platforms. Opinions shared across social media and other peer to peer networks play an increasingly important role in building profitable brands. Positioning simply cannot address these voices, opinions, concerns and so on.

Pepita: You state positioning is one way communication. The company is telling the customer how the products are positioned. I think that you are confusing claims with positioning again. I hope companies would be smarter than to communicate their positioning to their target audience. Who cares?

Marcus: I agree, nobody cares or pays any attention yet positioning, according to Ries and Trout is about, “what you do to the mind of the prospect.” Once it is created, the position has to be communicated via communications and claims are made in those communications that reflect the required position.

Pepita: To me positioning is both competition and consumer/customer driven. That is the way I work and I know that others do too. And Ries & Trout say the following: “To find a tactic that will work, you have to leave your ivory tower and go down to the front where the marketing battle is being fought. Where is the front? In the minds of your customers and prospects”.

Marcus: A couple of responses to this, firstly, using the actions of competitors to determine your brand strategy is a complete waste of time and resources as you will forever be playing catchup. Secondly, my mind is so full of clutter that you will have trouble finding any space to position your product! Much of that clutter is made up of negative connotations related to claims made by brands when trying to position their products in my mind. This is probably a universal state which is why we have the sad statistic from Ernst and Young above.

Pepita: Of course the world has changed significantly over the last 40 years but that doesn’t mean that theories and models aren’t true or usable anymore?

Marcus: Actually, although this is a sweeping generalisation, I don’t think you should be using models developed in one market 40 years ago to build a brand in another market. It would be nice if it could be done but the reality is the agencies want firms to because it makes it easier for them and also marketing professionals. But more importantly, consumers have changed, the way they source and gather information, their influencers and so on. Furthermore their requirements for economic, experiential and emotional value are very different and vary considerably from country to country.

Pepita: You state that positioning uses mass market channels. To me positioning is a strategic concept and not equal to marketing communication. So what you really seem to be saying here is that mass market channels aren’t of this day and age. I agree with you there, but it has nothing to do with the concept of positioning.

Marcus: As I mentioned above, positions have to be communicated. Most agencies recommend mass media to do this because of its reach. But this is an agency issue.

Pepita: Advertising can cost a lot of money. You are equaling positioning and advertising. Positioning is a strategic concept and Advertising is a possible form of execution of the strategic positioning for a company or a product.

Marcus: Again, positions have to be communicated. Don’t forget, this is a blog post not a book! I’ve only got so many words to play with. The most common method to communicate positions is via mass media advertising.

Pepita: Of course tennis rackets have changed throughout the years because of the possibilities technology offer, but since 1873 tennis has been played with a racket. The concept of the tool is still the same. People still play tennis with a racket. If I apply this analogy it would mean that the theory of positioning can be innovated and developed throughout the years, and still be a tool to be used.

Marcus: I don’t see how positioning has been innovated and developed throughout the years.

Pepita: You state some undeniable facts. Markets and consumers have changed. Communication channels are of another era. But your arguments for positioning being outdated and unusable are – in my opinion – flawed and have not convinced me. I also miss an alternative. It would be great positioning for your agency: The brand agency with the alternative to positioning!

Marcus: Nice idea for a tagline, thank you! So much has been written and so much time spent learning about the power of Positioning and the 4 Ps by a whole generation of marketers. But the world is a very different place, the way consumers live their lives and their knowledge and the tools available mean that we have to think past using increased budgets to build brands.

There is no silver bullet to building strong, profitable brands. Every brand is different as are its customers. Some brands are B2B, some B2C. But there is a process to building a strong profitable brand. It requires a focus on research, organisational excellence, planning, personalisation, retention and doing business on customer terms. It’s not particularly sexy and won’t see many brands staring down from billboards, much to the delight of brand owners and ad agencies, but it will go a long way to building strong, profitable brands.

Because without profitability, a brand is irrelevant.

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8 thoughts on “Is Positioning still relevant today? Part two

  1. Hi Marcus, you gave it some good thought. Thank you for taking the time. I will not respond to each point otherwise we will be dialoging until day’s end.

    I find the statistic of Ernst & Young interesting. If you have any more info (a link for instance) on that I would appreciate it. My first reaction for the cause of failure would not be that the models fail, but that the application of the models fail. Just like with computers; it is usually a human error.

    I believe in positioning. If only for the exercise of reflection and choices an organization will have to go through. For me it is a process of making choices. And of course you can make the wrong choices. And of course the implementation of those choices can be all wrong.

    And if that wasn’t all there is, consumers have changed, methods of communication has changed. You are absolutely right. But that doesn’t mean that as an organization you do not have to make choices about what you are, where you are and what you want to be for the world around you and how you will go about that. The way to go about building brands has changed and is not the exclusive domain of external communication anymore.

    My conclusion is that positioning as strategic choices is still valid, useful and necessary. These choices are influenced by internal and external factors. The execution of these strategic choices has changed. External communication is not the only critical factor in being succesful. And the character of external communication has changed.

    Positioning in my mind is now more necessary than ever. I summed it all up here: http://sparkers.typepad.com/thinkingsparks/2011/02/positioning-is-all-about-making-choices.html

    But then maybe it is all a matter of definition.

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    • Hi Pepita

      I think the key is that companies have to learn to do business on customer terms, and positioning has no place in that process.

      The Ernst and Young statistic is from about 6 years ago and may actually be from AC Nielsen or even McKinsey. I found a similar quote from AC Nielsen that I have posted in my latest posting.

      I know that I am swimming against the tide of public opinion. After all, generations of marketing professionals have grown up being taught that positioning is the holy grail of marketing. Someone who has similar beliefs to me is Nick Wreden. I sincerely recommend his book Profitbrand which is available on Amazon. It is a superb read and although it was voted best business book a few years ago by Strategy+Business, did not get the recognition it deserves.

      If you ever find yourself in SE Asia, let me know and I’ll buy you a drink and we can discuss this further!

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  2. Pingback: 735 – Brandconsultantasia's Blog | The Tennis News

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  4. Together with every little thing that seems to be developing throughout this subject material, many of your perspectives happen to be somewhat refreshing. Nevertheless, I am sorry, but I can not give credence to your whole plan, all be it stimulating none the less. It appears to me that your opinions are generally not entirely validated and in simple fact you are yourself not really wholly confident of your assertion. In any event I did take pleasure in looking at it.

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    • Hi Aleta

      Thanks for commenting. Which opinions are you referring to? Let me know and I’ll validate any that are external and can be validated. My personal opinions are of course just that however I do try to back them up wherever possible.

      I have to disagree on the confidence part. I am extremely confident of my propositions and am not alone. If you get the chance, grab a copy of Nick Wreden’s excellent book: Profitbrand, How to increase the profitability, accountability and sustainability of brands. It is a great range and explores the demise of positioning in a far more articulate manner that I do.

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