Archive for January, 2009



Nick Wreden on brand positioning

There is a heated discussion on the LinkedIn discussion group “Branding 3.0” about “What is your position on brand positioning?”  A number of marketing professionals on both the corporate and agency side have weighted in.  Most are drawing on their experiences of what actually works and what doesn’t.  Real world, not theoretical.

One of the most cogent critiques of brand positioning comes from Nick Wreden, 

Nick Wreden wrote:

“Positioning” was a great theory for the mass economy, but it is about as relevant to branding today as vinyl LP is to music for the following reasons: 

1. Top executives are demanding accountability from marketing. Yet “positioning” is unmeasureable. Can anyone say, “our positioning is 6% better than last year’s” or “our positioning is 2% better than our competitor’s” or, even more important, “we’re receiving a 12% ROI on our positioning.” 

2. This is a peer-to-peer world, where brands are defined by customers, not by companies, based on their economic, experiential or emotional value. “Positions” are top-down, hierarchical statements from corporate execs or their agencies. Do we automatically believe what companies tell us, or do consumers form their own opinions based on the brand’s execution? 

3. The theory of “positioning” is based on a false premise. It basically assumes your mind is like a parking lot, and all a brand has to do is to drive itself into an empty parking space in your mind. What consumer, bombarded by 5K messages a day, has empty slots for your brand? 

4. Marketing strategies must be customer-centric. Yet “positioning” theory, with its emphasis on competition (always be 1 or 2 in the mind, find a “position” not occupied by competitors, etc.) is shaped by the competition. Success will always be defined by how proactive you are in respect to customers, not about how reactive you are to competition. 

On the discussion board there are also a number of passionate defenders of the brand positioning model.  One of the best and smartest is Carlos Carrion.  He was one of the executives at Telefonica during the pivotal years when the company consolidated dozens of local brands into a single Telefonica brand.  The success of that branding strategy is evident today in the enduring strength of the Telefonica brand.

A key to marketing success in Pharma

There is a strong trend in healthcare of giving the consumer greater control over their own health.  You can see this in the growth of advertising to consumers for prescription only products ranging from Viagra to Ambien.  It was trumpeted by President-elect Barak Obama in his campaign speeches about prevention, electronic medical records and better management of chronic conditions.  And it is accelerating as more information is more widely available online.  

This is creating some strain within pharma companies as they shift from a focus on physicians, who want narratives about efficacy and medical studies to a new focus on consumers who respond to emotional and less technical narratives.  There have been several insightful stories about this challenge at the pharma website, Eyeforpharma.  

They have a new story on how Narrative Branding (R) is one of the keys to marketing success in 2009.  You can read the article at Eyeforpharma. 

My slight quibble with the article is that it understates the results from the study, Shifts in Marketing.

Co-creating meaning

Narrative Branding (R) builds upon the ideas of co-creation.  But first, to give a brief explanation of co-creation in the branding context, I have an anecdote about sandcastles.

When I go to the beach with my daughter, she loves to create castles and other edifices in the sand.  She’ll start in a promising spot, not too far from the ocean and not too close.  With a pail and a shovel, she has all the construction material she needs.  In her mind she has the blueprint for her next creation.

I am usually recruited by her to help out with the project.  After all, building a castle can be a labor intensive proposition.  I try to follow her directions but sometimes I have my own ideas about how to create the ideal sandcastle.  

“What are you doing?” she will shout.  “That is not what I had in mind.”

“Watch,” I say.  “I have an idea about the moat that you might like.”

We compromise.  Side by side we create the sandcastle.  Together we create the sandcastle.  You might even say that we co-create the sandcastle.

The sandcastle has many associations for me.  Looking at it, I am reminded of being Coney Island with my grandmother.  I have associations of sitting in the sandbox in kindergarden.  And images come to mind of the way James played in the sand in the movie, James and the Giant Peach.  And I am also deeply satisfied at the way my daughter and I have collaborated on this wonderful sandy building.

I am sure that the very same sandcastle is conjuring up different images and associations in my daughter’s mind.  Perhaps it reminds her of other sandcastles we built together.  And maybe of other things we’ve built together like a snowman.  And maybe it reminds her of burying her friend Clara under the sand so that only Clara’s head was visible.

So here we have an interesting phenomena.  We both co-created the sandcastle.  And there is only one sandcastle.  But it means different things to each of us.  

Certainly there is some overlap in the meaning, but not 100%.  I bring to this adventure my past memories.  My daughter brings her own vision of how a sandcastle should look, who is living there and the story of this grainy construction.

This is a useful analogy when we look at brands.  The very same brand can conjure up different associations and images in two different people.  Because each person brings their own past, their own memories, their own mind, to the interpretation of the brand, each person has a unique meaning that they have co-created.

A person is not a one way receptor.  What a company wants a brand to stand for is not always what a consumer wants it to stand for.  Is that a bad thing?  Is it wrong if a consumer has a slightly or even dramatically different association with a brand than what the company envisioned?  Maybe we should just consider it a fact of life, a part of the human condition.  We co-create the meaning, whether we intend to or not.

A brief acknowledgement, incomplete as it may be:  Co-creation and the ideas around co-creation have been introduced and explained (more ably, no doubt) by Gerald Zaltman of Harvard, C.K. Prahalad of U of Michigan, Joseph Plummer when he was at the ARF.

In a future post, I will explore further this idea of co-creation and some implications it has for how we measure brands.

Chariots of Fire and Branding

On New Year’s Eve we settled in to watch the old movie Chariots of Fire.  Oh, it’s been quite some time since I last watched it.  But the teenagers in our home had never seen it before.  And with one of them running Track, it seemed like the right kind of inspirational movie to kick-off the New Year.

Briefly, the movie is about two runners in the UK, Harold Abrahams and Eric Lidell, preparing for the 1924 Olympics.  They are both undefeated in running until they meet each other.  In that pivotal race, Abrahams loses to Lidell.  Abrahams then turns to a professional trainer who reveals the importance of reaching for the tape, not watching out for the other runners.   The winners keep their eyes on the prize (to borrow from the old folk song) and not on the competition.

In other words, when you are running from the front, your odds of winning go up when you keep your eyes on the ultimate goals.  But if you are wasting energy judging your position vs. your competition, you may lose.

So what does this have to do with branding?  

It is a useful analogy for how Narrative Branding (R) is helping companies win, while brand positioning is misspending resources by focusing on the competition.

Consider for a moment the standard practice of brand positioning.  It is all about jockeying for relative position.  A brand is defined by its position vs. other brands.  Corporations spend much time and money defining themselves in contrast to their competitors.  This is known in branding patois as “differentiation.”  What makes my brand different from my competitors?   This is like the mistake that Abrahams made in his race against Lidell.  Abrahams was focused on Lidell.  But Lidell was focused on the finish line and got there first, without wasting energy looking at Abrahams.

Applying this analogy more fully to branding suggests that corporations are best when they focus on the desires of their audience.  They are more likely to create a compelling narrative with strong metaphors in that situation.   The brand and the audience co-create meaning together.

And branding is at its worst when it is too conscious of the competition’s brands.  It becomes a conversation between brands.   Each is looking over the shoulder at the other.  Each assumes that the other corporation is gaining some edge or has some special insight into their brands.  Each brand is defined relative to another brand and not relative to the desires of the audience.  They are conversing with each other, not engaging with the audience. The race for “differentiation” all too often becomes circular, insular.   The audience is a spectator at best.  And then the audience moves on, ignored.  

Now this doesn’t mean a corporation should completely ignore the competitor’s brand.  To do branding well, you need to have some sense of the other brands.  It should be a secondary consideration, not a primary one.

This lesson was absorbed by Abrahams as he focused on preparing for the big showdown in the Olympics.  

We paused the movie shortly before midnight, switching back to the local channels instead to watch the ball drop in Times Square.  Outside our windows we heard the fireworks going off in Central Park as the midnight race began.

Consistency vs. coherence in branding

“Do I contradict myself?  Very well, then I contradict myself.  I am large, I contain multitudes.”  Walt Whitman 

Consistently we are lectured about the need for brands to be consistent.  They need to look the same everywhere.  They need to say the same thing everywhere.  They need to act the same every time.  The brand needs to say the same thing to all audiences.  That is one of the core principles of the  brand positioning theory.  A brand can only stand for one thing.  

In fact, in the current issue of Ad Age, Al Ries says “Almost every successful brand in the world started as a narrowly focused brand that stood for a single idea.”  And he goes on to say that brands need to narrow what they stand for.  They can stand for one thing and one thing only.  http://adage.com/columns/article?article_id=133561

Yet 87% of marketing decision makers say that branding needs to be more flexible today because business is more dynamic and fast moving.  (This is from new research we conducted with JupiterResearch.  You can download the full study, Shifts in Marketing at www.versegroup.com)

Here the brand positioning theory directly conflicts with the needs of marketers.  

Something has to give.  Should the needs of marketers bend to the theory of brand positioning?  Or should marketers look for another model of branding?

I am simplifying the matter here.  But the clear answer is that the needs of marketers must align with the branding method they are using.  That is where Narrative Branding (R) has an advantage over brand positioning.  Narrative Branding recognizes that the brand needs to evolve, to tell different parts of the brand story to different audiences.

To be clear, this post is not suggesting that brands should be contradictory.  Certainly nobody  is advocating for a brand to contradict itself.  Unless, of course, their brand is Walt Whitman or maybe even Alan Ginsberg.

A narrative approach to branding replaces the idea of “consistency” with the idea of “coherence.”  A brand needs to share its story to several audiences.  Customers, perhaps several different segments of customers.  Employees, investors, business partners.  These different strands or narrative threads must be coherent.  They need to complement each other.  They need to add up to the larger narrative of the brand.  

Certainly we do this as people.  

Consider New Year’s Eve.  Several people asked me about my New Year’s Eve, and I told each of them a different facet of that evening.  I told my sister about watching the movie, Chariots of Fire, because we both have a love of running.  To my friend Madeleine, I spoke of being home and playing Taboo and other games.  They each learned different facets of my evening.   My conversations with them were rich and engaging.  Had I told them both the same story, I would diminished myself, I would become one dimensional.  I am not as large as Walt Whitman, so I cannot afford to contradict myself.  But I am not as limited as brand positioning would have me.

The same is true for a brand.

The resilience of McDonald’s

McDonald’s is one of the few stocks that actually increased in value during 2008 — a year in which 95% of stocks fell.  Not only that, but sales have continued to grow.  The strength of McDonald’s is amazing! 

Is this simply because a lower cost restaurant will do better in a recession?  If we look at the last recession, the stock price of McDonald’s actually fell rather dramatically.  So it cannot be only the greater economy that is driving McDonald’s performance.

If we look back, we can see that McDonald’s actually began this decade in rather tarnished shape both as a business and a brand.  As a brand it had lost relevance and trust.  In the last recession McDonald’s was weak and in this one it is strong.  In fact, today McDonald’s is one of the strongest businesses and brands in the world.  Remarkable!

How did this happen?  

The changes began at the top, with new leadership.  One of the most important hires, and most counter-intuitive, was bringing Larry Light on as the Chief Marketing Officer.  Larry Light had a storied history working at the advertising agencies BBDO and Ted Bates.  Bringing in someone with that background was unconventional for McDonald’s.

To turn around the McDonald’s brand, Light jettisoned traditional brand positioning.  He was prescient in seeing the traditional brand marketing model as being broken.  In his own words, “We reject the outmoded view of the positionistas… declaring an end to the out-of-date, simplistic concept of brand positioning…”

Light’s great insight was that brand positioning was too limiting for the McDonald’s brand.  It narrowed the potential audience for the brand down to a single market segment.  For the brand to grow, it needed to appeal to many segments of the market, not just one.

He needed a new model for brand marketing.

Always resourceful, Light developed a narrative method for brand marketing.  He called it “Brand Journalism”  It was custom made for McDonald’s.  It was far, far more than just an advertising campaign.  It was the basis for rebuilding the internal culture of McDonald’s, for shaping the company’s business strategy, for changing menus and for redirecting their overall marketing efforts.  Because it was a new model, it also required developing new market research tools and metrics.  Existing market research was designed to assess the key elements of brand positioning.  It was not appropriate for assessing a brand based on the principles of  brand journalism.

“McD’s Abandoning of Positioning is ‘Lunacy'” screamed the headlines in AdAge.

Less than a year later the magazine changed their mind.  AdAge awarded McDonald’s “marketer of the year.”  A turn around indeed! 

Brand Journalism is, at its heart, a narrative method for creating and managing a brand.  The full story of it and McDonald’s turn around remains to be written.

This narrative method is part of the reason why McDonald’s continues to be so resilient today as both a brand and a business.

The economy, consumer demand and branding

There is something curious happening in the economy today.  Something that we have not seen in 70 years.  Demand is falling.  Consumer desire to purchase things is falling.  Business desire to purchase things is falling.  Everywhere you look people would rather put their money away than spend it.

If nobody is buying, then the economy will continue to contract.

The economist and New York Times columnist Paul Krugman recently wrote, “Once again, the question of how to create enough demand to make use of the economy’s capacity has become crucial.”

So what does this have to do with branding?  Usually we think of branding as driving preference for one brand vs. another.  Underlying this are some assumptions, unspoken, that consumer desires are limited only by their income.  That is why brand positioning is fundamentally about comparing one brand to another.  This concept is labeled “differentiation” in the language of brand positioning.

In other words, we have taken it for granted that consumers want to buy things.    Even in the last couple of recessions consumer demand has held up — people wanted to buy things.  

Today consumers are sitting on their wallets.  Businesses are sitting on their wallets.  Demand is dropping.

In this economy, branding needs to work harder, to serve a different purpose than simply “differentiation”.  Branding needs to create demand.  

Narrative Branding is a method that is concerned with the role of the brand in the life of the consumer.  A compelling narrative does more than change minds, it changes behavior.  It is more effective at generating demand than the standard brand positioning method.  

This is particularly important for companies in today’s economy.  Marketing dollars that create demand for your offerings are better spent than marketing dollars that “differentiate” you from competitors.  In other words, a company will be better served by using branding to create demand rather than to simply shift preference from one brand to another.

Of course no single company can solve the falling demand problems of the economy.  But if more companies adopt Narrative Branding or other narrative methods for creating and managing brands, there can be a substantial impact on consumer demand.  At a minimum it will create demand for each company’s offerings.  

What are your thoughts on how branding can create consumer demand?

Visual memory and branding

At dinner the other week a writer friend recommended a book to me.  She said, “Have you ever read Linda Seger’s Making Good Scripts Great?”

I said that I hadn’t.  

Later that night, when I was back home, I looked up the title on Amazon.  I immediately recognized the book’s cover.  In fact, I realized that not only did I recognize the book but that I already have it, read it and had a very positive opinion about it.  

I have a very strong visual memory of the book but a poor verbal memory of the author and title.

That got me to wondering about the methods we use to assess the strengths of brands.  One of the most common measures is Awareness.  In other words, can you remember the name of the brand?  In standard marketing research the Awareness questions are verbal.  It is asked first as an unaided awareness — “Tell me all of the brands of books on screen writing that come to mind.”  Then aided awareness, “Here is a list of brands of books on screen writing.  Please check all that you recognize.”

In that kind of research I probably would not have recalled Linda Seger’s fine book either unaided or aided.  Yet, if you had shown me the cover I would have instantly recognized it.  So is that a flaw of my memory, that I can remember what I have seen in a different way than I remember what I’ve heard?  Am I just a poor candidate for market research?

Which brings me to the title of this post.  

Many of the standard approaches to market research were developed in the 1960s and 1970s.  The technology of the time allowed for conducting research either in person or on the phone.  In person surveys were very labor intensive, time consuming and expensive.  Phone research had the great advantages of speed and lower costs.  These influenced the types of questions asked.  Jump ahead a few decades and we find ourselves in the internet age where the surveys are now conducted online.   This allows for the same phone questions to be asked online.  

The typical brand tracking study now asks the standard unaided and aided awareness questions online.

This gives rise to an interesting phenomena.  The standard research questions were developed around the  limitations of an old technology.  The new technology should allow for a rethinking of how the questions are asked.  It is now possible to visually  show the brand in context in the awareness questions.  And, in fact, some companies are moving in that direction.

In general, market research is using new technology to do old things.  Instead it should allow for creating more robust techniques for uncovering what is in our minds.  

As we learn more about the way memory works and have new technologies for market research, it provides a wonderful opportunity to develop better methods for assessing brands.  

As the late Peter Kim was fond of saying, “Question everything.  Assume nothing.”

What are CMO priorities for 2009?

We wanted to know how CMOs would arrange their priorities for 2009.  So we analyzed some new proprietary data from a new survey we conducted among CMOs and other senior marketers about their priorities for 2009.  The study was done in partnership with Jupiter Research (which is Forrester as of January 1st).

Two themes came through clearly — the need for greater accountability and the challenges of managing brands across all of the new forms of media.  

Here are the top 5 priorities of marketing decision makers for 2008

#1  Achieving measurable ROI on my marketing efforts

#2 Developing marketing programs that integrate online and traditional media

#3 Translating the brand experience across different touchpoints

#4 Cutting marketing budgets without cutting performance

#5 Optimizing our portfolio of brands

The Jupiter Research data is available here.  jupiter-cmo-priorities-for-2009

You can read more about the study by downloading it from our website, http://www.versegroup.com

Consumer new year’s resolutions

A new Marist poll reports that 12% of consumers who are making resolutions say that “spending less money” their New Year’s resolution.  That is not good news for the economy since consumer spending makes up about 70% of GDP.  

If consumer demand is falling, that will make the recovery more difficult.  Generating consumer demand therefore will play an important role in the economic recovery.  And one of the critical factors is brand marketing, since that helps to create demand.  

There is no national brand marketing department charged with increasing demand for consumer products.  That job falls to individual corporations. 

So we can see how important brand marketing is for both individual companies and for the economy as a whole.  

At the same time we are seeing that corporations are cutting their spending on marketing.  Some of the cuts are in media spending.  And some of the cuts are in the marketing departments themselves.

That creates an interesting conundrum.   Demand is falling.  At the same time, marketing, which stimulates demand, is being cut.  

One solution to this conundrum is to find more effective and efficient methods of brand marketing.   If we continue to do brand marketing as usual, with the standard techniques, we can expect the same kind of results that got us into this economic mess.


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