Tag: branding

It failed once so let’s try it again

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According to a Ministry of Health (Malaysia) survey carried out in 1996, there were 2.4 million smokers in Malaysia. This was a rise of 41% over the number of smokers in 1986. Today the country has about 5 million smokers, about double the number in 1996. One can deduce therefore that the number is doubling every 10 years or so. As of 2003, approximately 49% of all adult males and 5% of all adult females are smokers.

Of most concern is the prevalence of smoking among young Malaysians. 30% of teenage boys aged 12–18 years smoke while smoking among girls doubled from 4.8% in 1996 to 8% in 1999. The prevalence of smokers aged 15 and above has increased from 21% in 1985 to 31% in 2000. This compares with about 21% of the population in the UK who smoke in 2009, down from 45% in 1974.

No data is available on what smoking costs the country but we do know it costs the Canadian government around RM10.5 billion in direct health care and another RM38 billion in lost productivity. Meanwhile revenue from taxes on cigarettes totaled around RM9 billion. Canada is a good benchmark for Malaysia because in 2001 approximately 5.7 million Canadians smoked, about the same as Malaysia.

To combat the rising number of smokers in the country, a number of initiatives have been put into place. These include a rapid rise in the price of cigarettes and a number of health ministry driven initiatives to alert smokers to the dangers of smoking.

The first of these initiatives was an anti smoking campaign launched in 1991, in conjunction with the National Healthy Life Style Campaign. This extensive campaign that ran for over 10 years raised the level of awareness of the hazards of smoking among the general public, both smokers and non-smokers.

The “Tak Nak” campaign was initially launched in 2003 and consisted of TVCs, Radio, print and Outdoor (including school notice boards). Costing almost RM18 million (US$5 million) for the first year, and rumoured to cost in total RM100 million for the 5 year campaign, it was widely lambasted in the media.

This is because although the campaign raised the awareness of the effects of smoking, it did little to reduce the number of smokers. Even the Health Minister Datuk Dr Chua Soi Lek said in 2005 that there was no indication that the number of smokers had gone down since the campaign began.

Despite the ineffectiveness of this campaign, in August 2009, The Malaysia Ministry of Health launched the latest (and most harrowing) installment (see video) of its anti-smoking “Tak Nak” campaign via TVCs. The TVC’s feature gruesome images of mouth cancer and lost limbs due to gangrene caused by smoking.

This campaign follows the legislation, earlier this year that all cigarette packets sold in Malaysia must carry graphic images related to smoking. These include images of the results of neck cancer and a dead foetus. Displaying these graphic images on cigarette packets is a requirement of the World Health Organisation Framework Convention on Tobacco control of which Malaysia is a signatory.

It’s not clear if the latest series of graphic commercials that are obviously designed to shock, and the images on cigarette packets are part of a strategic plan or two independent tactical campaigns.

I’m not sure what the goals of the latest campaign are but I am sure they do not want to simply raise awareness of the dangerous side effects of smoking. I would imagine the goals include reducing the numbers of smokers in Malaysia and discouraging young adults of both sexes from taking up the habit.

If these are the goals then one has to question whether or not this is the best tactic. Certainly evidence from previous campaigns in Malaysia and other countries suggests that campaigns featuring shocking images and graphic descriptions of the consequences of smoking using old economy tools such as TVCs, print ads and outdoor are ineffective.

Malaysia spent RM100 million over 5 years on such a campaign that was inneffective in bringing down the number of smokers in Malaysia. In the UK, after extensive research of more than 8,500 smokers over a ten-year period, the Institute for Social and Economic research found that the warnings on cigarette packets that smoking kills or maims are ineffective in reducing the number of smokers.

Likewise, chilling commercials or emotionally disturbing programs are also ineffective. The study also discovered that when a close family member become ill from the effects of smoking, the smoker takes no notice. In fact, according to the study, smokers only reduce the number of cigarettes or sometimes quit when their own personal health is at stake.

And even failing health may not persuade a smoker to reduce or even stop smoking because smoking is linked to a lack of psychological wellbeing and often failing health results in psychological decline.

I have a hunch that this campaign will not reduce the number of smokers in Malaysia. Data shows that traditional marketing tools are even less effective today than they were 10 years ago.

What is required is a data driven approach to the issue. Specific and comprehensive qualitative research with relevant targeted questions related to each segment (and each segment will be specific and targetted) that are designed to deliver actionable data. It is imperative that the audience is identified and then communicated with using content that resonates with them. It will be a long term effort. That doesn’t mean repeating the same one size fits all commercials or messages, this means developing a relationship with these partners through engagement.

Also critical to the development of the strategy will be the buy in from stakeholders such as doctors, educators, retailers and others. Discussions must be held with these key elements to determine strategies. Once research is completed and analysed, a comprehensive strategy must be developed featuring a fully integrated program to communicate with all stakeholders with specific emphasis on education at kampung level and dynamic, preventative programmes for schools. Existing smokers will be targetted individually through interviews with doctors, rather than one-size-fits all shock and awe campaigns.

Only once the strategic blueprint is ready can the implementation begin. There is no easy way to reduce the number of smokers in Malaysia. It’s going to take a long term investment in time, effort and money. Wasting money on creative driven campaigns that have not worked in the past is not the way forward.

Warning: Viewer discretion advised.

Positioning, an exercise in naive manipulative futility

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I have a great dialogue going with Derrick Daye at branding strategy insider

I told him that positioning is an outdated strategy that wastes money, is immeasurable and should be confined to the marketing graveyard. He replied that I am wrong because although the world has changed in the last 40 years, the human condition hasn’t.

Here is my response in full.

Derrick you make the fundamental mistake that the majority of other marketers make – that the human condition hasn’t changed. Do you really believe that? Do you really believe that despite all that extra noise and clutter and, let’s face it, false promises on product capabilities and deliverables; despite the radical changes that have occurred in the way we lead our lives and so on, the tools and channels that we use to source information, the human condition is the same in 2009 as it was in 1969?

The world has been through unprecedented changes since Mr Trout published his first article on positioning. Yet advertising agencies and brand consultants continue to recommend positioning to clients, whatever their industry. I do agree that in its day, positioning could work, and I stress the word could, for large consumer-oriented firms but with MAYBE one or two exceptions, it is not the right way forward.

It is exactly because of the multiple sources of information available to the consumer, including from those that the consumer respects and, more importantly, believes and the subsequent over-communication of product controlled messages as mentioned by you, as well as the fact that there is an abundance of choice and channels, the consumer can now control the relationship the brand has with them and therefore define the brand.

Indeed, any attempt to ‘own a singular concept in the mind’, or as someone else put it, ‘find an empty space in the consumers mind and then park your brand there’ is basically an expensive exercise in naive manipulative futility.

Branding blunders – updated

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Despite the fact that it is breaking new ground, there wasn’t much interest outside of the energy business when Russian president, Dmitry Medvedev announced in late June 2009 that Russia was entering into a joint gas venture with Nigeria’s state oil company. Perhaps it was because it was in Africa and energy deals are quite common in that part of the world or it could have been because the deal was relatively small, in energy terms at roughly US$2.5bn.

Whatever the reason, the story seemed likely to show up briefly in the trade journals and perhaps as a footnote in the business pages of a few mainstream publications. And then came the name. Naming is, depending who you talk to, ‘a fine art’ (most agency types) or ‘yanking a word out of your butt’ (Nick Wreden).

I don’t know who was responsible for the name of this new organisation. I wouldn’t be surprised if it was a team of industry brains who put their heads together for hours on end to come up with a suitable name that would position Russia as the saviour of African energy. Having been involved in similar naming projects, I suspect they studied the companies and countries involved, as well as others from different parts of the world, the competition, the industry, maps, multiple dictionaries, probably in many languages, the planets, names of extinct animals, disused road names, drilling equipment and so on.

Finally, no doubt after many arguments, late nights eating artery hardening comfort food and tantrums that would shame any precocious 5 year old, and as the deadline loomed, these exhausted creative geniuses eventually made a call and decided to play it safe. They decided to use a combination of Nigeria and gaz. Let’s call it Nigaz!

As you can imagine, Twittizens were onto the story in a flash and are still tweeting about it a month later. Meanwhile, more sophisticated trade publications such as Brand Republic announced that the name had “rather different connotations” for English-speakers. Indeed.

So as this latest branding blunder plays itself out, I thought it would be an opportune time to take a look at some others that have made us chuckle over the years. There are ten of them (including Nigaz) listed below. I’ve created a poll and you the reader can vote and decide who is the winner!

10) One of the most successful taglines for Kentucky Fried Chicken was “finger lickin’ good”. The trouble is, when translated into Mandarin (or is it Cantonese?) it becomes “eat your fingers off”.

9) When UK telecom company Orange launched their tagline “the future’s bright, the future’s Orange” Catholics in Northern Ireland were angry because the term “orange” is associated with Protestantism.

8) The Mitsubishi Pajero won a number of awards around the world for being so robust. For brand consistency reasons, they wanted to use the name in every country. Unfortunately they didn’t do enough research in Spain and after the launch had to change the name because in Spain, Pajero means ‘wanker’. (In the UK a wanker is someone who masturbates).

7) Spain gets another mention for another failed automotive branding story. This one revolves around Chevrolet. Some time ago Chevrolet decided to introduce the Nova to the Spanish market. Sales were poor, why? Because in Spanish Nova means ‘no-go.’

6) No brand mistakes article would be complete without a contribution from Pepsi. My favourite one is the “come alive with the Pepsi generation” slogan, which in Taiwan is “Pepsi will bring your ancestors back from the dead”.

5) And if we mention Pepsi, it’s only fair that we mention Coke. About 5 years ago, Coke wanted to break into the bottled water business. The name chosen was Dasani. OK so far. Coke announced that its “highly sophisticated purification process” was based on Nasa spacecraft technology. Soon after it was discovered to be a reverse osmosis process used in off the shelf domestic water purification tools. To make things even worse, just as the project was about to launch, it was discovered that the UK supply was contaminated with bromate, a chemical better known for causing cancer.

4) Five years ago, Cingular bought AT&T Wireless. AT&T was considered number one in terms of poor service. After the acquisition, Cingular binned the AT&T name. Four years later, Cingular Wireless was rebranded as AT&T Wireless.

I suspect the firm’s customers would have preferred that money had been spent improving operational issues rather than being wasted on a pointless rebranding exercise. Despite the re re branding, in 2007, AT&T Wireless generated the most complaints overall and the most complaints per subscriber, according to the FCC.

3) As personal branding seems to be getting a lot of ink at the moment, one of my favourite gaffs was the one about Lee Ryan (of Blue fame) who gave an interview just after 9/11. During the interview he was quoted as saying, ‘What about whales? They are ignoring animals that are more important. Animals need saving and that’s more important. This New York thing is being blown out of proportion.’ Many industry insiders consider these comments to be the reason for the demise of Blue.

1) One of the greatest naming disasters of all time must be the attempt by Dragon Brands to change the Royal Mail of the UK from a 300 year old domestic mail only (government) institution to a multi dimensional distribution company. Dragon Brands did a lot of internal and external research over a two year period and then assessed the aims of the brand using measures that included ‘the three p’s’ – personality, physique and presentation.

Next they took three circular like shapes and filled them with words such as ‘scope’ and ‘ambition’ and apparently (I’m not making this up) this brought together ‘the hard and the soft aspects of the brand’s desired positioning.’

This remarkable process threw up hundreds of actual words as well as some that were made up. Apparently the brain storming team favoured Consignia because it included consign and the dictionary definition of consign is ‘to entrust to the care of’.

The cost of the new name was £2 million. It lasted approximately 18 months.

Since this article was written we’ve had a couple of suggestions to be included in the poll.

11) When the Citroen C4 was launched in Malaysia (and no doubt elsewhere in the Cantonese speaking world), sales were poor. The manufacturer recruited expensive research companies to determine why. Apparently, C$ in Cantonese sounds like ‘stalled’.

12) Ken Peters reminded me of the fiasco back in the late 1990s, surrounding the sports attire manufacturer Reebok who launched a running shoe for women the ‘Incubus’. According to legend, Incubus was a “male demon who had intercourse with sleeping women.”

Support for my stand on positioning

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I’ve drawn a lot of flak after my comments about the end of positioning (comments, incidentally, that I stand by). And then I read an excellent article by Larry Light in Adage that reminded me it was Larry who had first got me thinking about the demise of positioning.

In the Adage article, he talks about his six rules for revitalising brands. Not once does he mention positioning. In fact, he is essentially echoing the FusionBrand definition of a brand available elsewhere on this blog.

Anyway, deep in my hard drive, I found the inspiration for my article on the death of positioning. So here it is:

“Bringing our brand up to date means that we have to abandon marketing practices & principles that are out of date. So we reject the outmoded view of the positionistas, declaring an end to the out-of-date, simplistic concept of brand positioning; that marketing lock-box that locks brands into uni-dimensional, uni-segment, monotone marketing. Instead we are adopting an up-to-date, multi-segment, multi-dimensional marketing approach.”

Larry Light when he was CMO of McDonald’s 2002 – 2005. He was also voted Ad Age’s Marketer of the Year title in 2004

Principles of Nation Branding

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Here are my eight key principles for a strategic Nation branding initiative.

Having said that, I also believe these principles should be applied to government ministries, departments, agencies and the private sector as well. What do you think?

1) Research and data are fundamental: Qualitative and quantitative research is essential to data-driven branding (see below) and data-driven branding is essential to building a brand in the customer economy of today and the demand economy of tomorrow. Without research and data, branding decisions are no more than guesswork and the nation brand strategy is too important to base strategic decisions (or, any decisions) on guesswork.

Research is vital for uncovering perceptions, attitudes and requirements for emotional, experiential and economic value, the three key elements of a successful brand. Research also provides benchmarks for measurement and accountability.

Qualitative research gives you valuable data on the requirements of target segments in the future. It allows you to tailor communications to resonate with target segments and also identifies key influencers, thereby saving valuable funds that are wasted on a mass market, one-size-fits-all approach.

2) It is impossible to build a brand on creativity alone. Too much is at stake – both in terms of a country’s brand and resources invested – to depend on a creative-driven branding campaign (and that’s all it is because it is impossible to sustain) to form the foundations of a nation brand. Let’s face it, if you sit back and think for five minutes, how many country related advertising campaigns can you remember? More relevant, how many made you act?

Furthermore, a creative campaign is best suited for mass markets and mass media whereas data-driven branding enables segmentation and targeting of communications that ensures content resonates with target markets. For instance, divers don’t think, “Let’s go to Malaysia and see if we can dive.” They think, “Let’s go diving.” And then determine the destination.

Likewise, are potential investors going to be impressed by white sandy beaches or communications that resonate with them because they offer specific value?

Other benefits of data-driven creative driven branding include a focus on acquisition and relationships that ensure ongoing business, while creative driven branding focuses primarily on acquisition. Crucially, a data-driven approach to branding places strategy in the hands of executive management whereas a creative driven approach puts the strategy in the hands of an advertising agency.

3) Segmentation enables differentiation: “One-size-fits-all” branding doesn’t work. Despite the power and sweep of globalization, which has Malaysians wearing the same fashions as Italians and Aston Martins in hot demand from Brazil to China, each country has its own requirements and world-views.

Once research has revealed the differing characteristics of various audiences, branding must be devoted to tailoring messages, media, channels and activities to the specific values and requirements of target markets. Such segmentation not only ensures more receptive targets but also easily ensures differentiation from competitive countries trying to be all things to all people.

4) No buy-in, no success: Nation branding is difficult, requiring planning, support and coordination from a wide array of public and private entities. But even the best plan in the world will not succeed without buy-in from brand stakeholders. The most important step to ensuring buy-in is involvement in the research and planning process. As much as possible, brand stakeholders that are involved in implementation must have the opportunity to add their input to the plan.

Such buy-in has two advantages. First, it allows valuable perspectives and experiences to be incorporated into the plan, making the plan stronger and more effective. Next, it facilitates better execution. If all the parties involved have a complete understanding of the entire plan and their role in it and what its success means to them, then redundant efforts can be avoided and resources maximized.

5) A brand blueprint must be developed: A strong, visible Nation brand must have a blueprint based on the research findings to enhance the country’s reputation and image while enhancing economic, education and social growth and increasing its ‘share of voice’ in the world community. Specifically, the Nation Brand Blueprint must communicate a positive and dynamic personality with economic, experiential and emotional values that reflect target audience requirements.

The blueprint must be holistic and comprehensive to enhance export promotion, economic development, tourism, foreign direct investment and other key national initiatives. It must also communicate the intended message to the target constituents and stakeholders in multiple countries and at the same time, it must lay guidelines to strengthen the strategic, communications and visual impact of the Nation Brand.

The blueprint must also systemically connect the Nation Brand to the country’s core industries, corporate brands and Small and Medium Enterprise (SME) sector brands. This must be established via a systematic, holistic process that accommodates the requirements of both national and international stakeholders. This process must not only be effective to optimize the Nation Brand, but also maximize limited national resources.

6) Nation branding is a marathon, not a sprint: There are no silver bullets or quick fixes in any branding and this applies especially to Nation branding. Even in these technology driven times, establishing a Nation brand may take as long as a generation to develop. For example, the current view of Japan as a nation famed for its precision and electronics is not based on its efforts during the past decade. Rather, the seeds of Japan’s current nation brand were planted more than thirty years ago, when it began exporting transistor radios and two-stroke engines overseas. Just as Malaysia launched its Vision 2020 program in 1991 to become a developed nation by 2020, the country must adopt a similar long-term view for Nation branding. Malaysia and other countries must look at establishing a Nation brand not for us – but for our children.

7) Private sector must carry its weight: As an example, with responsible policies, funding and resource allocation, the Government of Malaysia can and has tried to do a lot for the Nation brand – but it cannot do it alone. Private-sector involvement and initiative are crucial. Private sector initiatives can range from promoting country of origin on foods and industrial goods, as Australia has done, to helping to fund trade missions to even good business ethics. The bulk of activities outlined in the Nation Brand Blueprint must be carried out by private and non-profit organizations

8) Measurement and evaluation: Why should money or resources ever be spent without knowing the return? Wherever possible, perceptions, activities and processes must be measured, ideally with quantitative benchmarks. Such measurement and evaluation must be used to establish accountability and to ensure continuous improvement.

These key priniciples form the foundations of any nation branding initiative but there are other equally important elements.

One example of these other elements is a crisis plan which should be incorporated into the brand blueprint.

Recent events in Malaysia and Angola show little signs of a planned response with either silence or multiple and often conflicting responses coming from various sources and little or no reactions to debates on social media.

This failure to engage consumers, citizens and potential investors will undo much of the good work carried out to date.

Luxury branding in Malaysia & Asia

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Despite the global economic meltdown, the development of the retail sector in Malaysia continues at a phenomenal pace with over 1,000,000 square foot of additional mall space becoming ready this year. Passing almost unnoticed however is the proliferation of international luxury brands in many of those malls. Familiar international names such as Asprey, Giorgio Armani, Prada, TOD’s, Van Cleef and Arpels and so on, have all entered the local market in recent years, encouraged by the success of exclusive names such as Bulgari, Cartier, Hermes, Louis Vuitton, Rolex and other famous names already familiar to KL shoppers.

Unusually in Malaysia, The Pavilion has clustered its luxury boutiques into a high profile area facing Bukit Bintang. Globally, this clustering of stores is nothing new. For centuries stores have organized themselves into districts based on what they sell – think Saville Row in London (tailors), Faubourg Saint-Honore in Paris (designer boutiques), Deira in Dubai (jewelry), and so on. The cluster approach allows the rich and famous to be dropped off in front of the store, rush in and make a purchase that would make a small African country drool and then rush out into the safety of the limousine without having to rub shoulders with the rakyat.

With its double story street facing façade the luxury section or ‘couture precinct’ of the Pavilion is an exciting development in the evolution of the retail sector in Malaysia. But there is one thing missing from this development. That is a luxury Malaysian brand.

And as Malaysia moves from an Original equipment manufacturer (OEM) economy to an Original brand manufacturer (OBM) economy, and the government rams home the need to move up the value chain, the retail sector, where so many Malaysian OEM cut their teeth, should be at the forefront of this step up the value chain. Especially as according to the MasterCard Worldwide Insight report, the value of the market for luxury products and services in the Asia-Pacific region will jump from US$83.3 billion in 2007 to US$258.7 billion in 2016. Not a bad segment.

What’s more, there’s already a ready made market because the largest number of tourist arrivals to Malaysia is from ASEAN countries, followed by Japan and China with India and the Middle East not far behind. And the burgeoning middle classes from these countries are notoriously brand conscious.

This interest almost obsession with brands is likely to continue according to Radha Chadha, author of “The cult of the luxury brand”. She believes that the Asian interest in luxury products is because of the massive changes – social, cultural, economic and political that have been affected by the traditional attitudes to who you are and where you are in the societal food chain.

She believes that over the past 50 or so years, many of the traditional cultural indicators of social standing in Asia – profession, family, clan, caste have been eroded by the onset of globalization, migration and education. Free of rigid social hierarchies, mass migration and the development of urban areas, more people are making money and making it faster. The way to differentiate oneself is by purchasing a luxury product that shouted, “I’ve got money, respect me.”

Displaying one’s status through outward appearances of rank and wealth is nothing new but Asians seem to have taken to it like the proverbial duck to water. And those LV bags, Chanel suits, Jimmy Choo shoes aren’t simple female indulgences, they are part of a new world order that identifies the wearers position in society. Indeed, these luxury brands are a modern set of symbols that Asian consumers are using to redefine their identity and social position.

The Japanese have been devouring brands for years. 94% of Japanese women in their twenties own a Louis Vuitton bag. In fact, the Japanese as a whole are the most brand conscious and a staggering 92 per cent of Japanese women own a Gucci bag, 57 per cent own a Prada one, and 51 per cent own a Chanel bag.

In fact, Japanese passion for luxury brands is so huge that they account for over 40 per cent of worldwide sales for most major luxury brands. Meanwhile, Asia accounts for a third of Louis Vuitton sales worldwide whilst Cartier depends on the region for half of its worldwide sales.

And what of China? According to the China Brand Strategy Association, 175 million Chinese people can now afford to buy luxury products. By 2010 their number is projected to reach 250 million. Already, Chinese consumers are responsible for about US$10 billion of global luxury sales. Following the announcement of the US$586 billion stimulus that is expected to encourage increased spending, 70% of consumers confirmed that they will spend more in the next 6 months than they did in the previous 6 months.

Rolls Royce, the iconic British luxury brand owned by BMW, expects to double annual sales volume from 1,000 to 2,000 when the new, smaller ‘Ghost’ is launched in 2010, many of the early enquiries for the yet to be launched model are from Asia. Not bad considering each car will cost over US$200,000.

So, with all this new found wealth in Asia, the time is ripe for the development of Malaysian luxury brands. And the good news is, Malaysian firms know how to manufacture quality products. They’ve been doing it for years for iconic brands such as Apple, GAP, Guess, Ralph Lauren and other well known global brands.

But developing a luxury brand is also like raising a family – it requires a long-term commitment and investment, attributes that don’t sit well with corporate Malaysia. It also requires limited production, value over volume, even with a successful line. It also requires quality, not only in production but also in marketing and service, especially service. Training of staff is key. Walk into the Cartier store in Kuala Lumpur and the staff will assess you based on a number of pre-determined factors. Pass the test and they’ll offer you a bottle of champagne to anesthetize the pain of the purchase!

Ongoing research is also critical to the long-term success of the luxury brand. Back in 1837, when Hermes was building its brand, the founders lent new products to customers to get feedback on how the products could be improved. Zara applies the same tactics today. If a new line doesn’t sell, it is pulled off the shelves immediately and replaced with a new range based on customer feedback on styles.

One mistake many brands make is that they ignore existing customers, preferring to always acquire new customers. The successful luxury brands have an ongoing relationship with their best customers who become brand ambassadors and grow the family.

And for those cynics who don’t think Malaysians can build luxury brands or that there is any money in luxury brands, think of Jimmy Choo, the closest Malaysia has come to a luxury brand. Six years after Jimmy Choo sold his 51% stake in his own company for US$25 million, TowerBrook Capital Partners recently paid more than US370 million for ownership of the iconic brand named after the charming cobbler born in Penang in 1961. And with annual sales that have grown since 2001 at a compounded rate of over 45% to more than US130 million today, the purchase looks like good value.

Another British based private equity group, Permira, paid US$3.5 billion a couple of years ago for the Valentino Fashion Group. This was one of the most talked about acquisitions of the year because although Valentino is a well respected brand in Europe, it does not have the penetration in Asia of say Giorgio Armani. This is reflected in the global sales of US$340 million for Valentino compared with US$3.1 billion for Giorgio Armani.

There is also a strong argument to suggest that luxury brands are recession proof. At the end of last year, when the American economy was in free fall, Saks Fifth Avenue had a massive sale, offering huge 70% discounts on iconic brands such as Manolo Blahnik and even Prada. However, at the Louis Vuitton shop inside the luxury department store, nothing was reduced. Recently, Moët Hennessy Louis Vuitton announced that sales in its fashion and leather goods division, which includes Louis Vuitton, increased by 11% to $2.1 billion in the first quarter of 2009.

So, as the average tourist spends only 22% of his budget on shopping in Malaysia compared with 50% in Hong Kong and Singapore, the time is ripe for Malaysian firms to start building brands that can take pride of place alongside Canali, Ermenegildo Zegna, Jean-Paul Gaultier and Versace in places like the Pavilion, Star Hill and other prominent malls in KL.

Is it time to put positioning to bed?

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40 years ago this year, Jack Trout published his first article on positioning. But the term didn’t really become advertising jargon until his articles entitled “The Positioning Era”, were published in Advertising Age in the early 1970’s.

There are numerous definitions of what positioning is today but to ensure we’re all on the same page, I propose this version: http://en.wikipedia.org/wiki/Positioning_%28marketing%29

But in today’s marketplace, positioning has multiple problems:

1) Positioning is immeasurable: You can’t say “our positioning has improved our sales by 5 % or as a result of our positioning strategy, our brand is 12% better than competitions. Furthermore, it is impossible to measure the ROI or benchmark positioning.

2) Positioning is only suitable for mass markets. Yet branding today is about segmentation and communicating and engaging with those segments via relevant channels and with messages that resonate specifically with those segments or niche markets. Does this mean that a company should develop different positioning for different niches?

3) Positioning is suitable for mass markets with limited competition and limited consumer access to media and information. Today, consumers can get any information they want on anything from anywhere.

4) The wikipedia definition is a top-down, company knows best, hierarchical marketing approach. Yet we live in a C2C environment in which consumers define brands.

5) Positioning is one-way. The company knows best and you must listen to us. We tell you how our products are positioned. But today, if you are not entering into 2 way conversations with consumers you are about to join the brand graveyard.

6) Positioning was developed for the US mass market of the 1970’s. But we’re in a globalized world now, with much more competition and more knowledgeable consumers.

7) Positioning is competition, not customer driven. The basic premise of positioning is that you want to be number 1 or number 2 in a category in a prospect’s mind. If you can’t be number 1 or number 2 in an existing category because of competition, you make your own category. In today’s congested marketplace, the investments required to develop a new category are enormous. Furthermore, besides the difficulty and expense of creating your own category, you are also letting your marketing be driven by the competition rather than consumer demands for value.

8) Positioning is dated. With limited competition (by today’s standards) in most categories, positioning was a compelling theory. The problem is that the world has changed a little since 1969. Yet agencies continue to recommend positioning as the foundation for any brand strategy.

9) Positioning uses mass market channels such as TV and billboards to reach as many consumers as possible using repetition to create interest. Yet ask yourself, what do you do when the commercials come on? Surf? Put the kettle on? Go to the bathroom? Text a friend? Surf the web? Basically, do anything but watch the commercial. Same with billboards. How many billboards can you remember from your morning commute?

10) Positioning requires massive, and I mean massive budgets that few companies have. If you do have a massive budget and you do execute your campaign across multiple channels for say six months, what happens if it doesn’t work?

So my question is, what are agencies doing recommending a theory that was developed before the PC was invented? I welcome your comments.