If building a business rigorously around a coherent positioning strategy offers a great path to success, betraying the fundamental promise of that positioning threatens to unravel success even more quickly.
We’ve been part of many brand positioning engagements, from the development of new product brands to the repositioning of corporate brands. Positioning poses some of the most thorny—and rewarding—challenges to marketers and researchers. But, of all the headwinds brand positioning can face, the stiffest is getting true buy-in across the organization. While marketing groups should typically lead positioning efforts, their enthusiasm is a necessary, not sufficient, condition for success. Start to worry when other key organizational stakeholders—especially product teams and sales/distribution—aren’t in the room. As recent headlines teach us, billions of dollars of equity are on the line.
Positioning isn’t just a marketing veneer or a tagline. It needs to be an organizational north star, the core strand of DNA that not only embodies your differentiated value to the marketplace, but also shapes every aspect of the business—from product design to marketing communications to customer experience at the point of sale. The companies that nail it, like Apple, drive enormous brand premiums in the marketplace. Among other brands that have built their success around disciplined adherence to savvy positioning strategy, I would have added Audi…until this week.
Sorting through my mail as I arrived home last night, I found a promotional offer to test drive a new Audi. I was struck by their tagline—which has transformed itself from a masterpiece of branding execution to an exercise in executing your brand, virtually overnight: Truth in Engineering.
“Truth in Engineering” has been an apt summary of Audi’s brand promise, implying that a superior driving experience (both in performance and finish) is a natural expression of scientific devotion to pure engineering. That appeal to authenticity has been perfectly pitched, especially for a cohort of Millennials entering the luxury category, and it’s resulted in stunning sales performance. Earlier this year, Audi recorded its 52nd straight month of record US sales. While I don’t drive an Audi, it was the runner-up in my last purchase process, in part because of the deep chord their positioning strikes for me. Ordinarily, I might have responded to the test drive promotion—but, in this case, it was that bold claim of “truth in engineering” that prompted a bitter laugh and a quick trip to the recycling bin.
A Failure of Brand Discipline
If building a business rigorously around a coherent positioning strategy offers a great path to success, betraying the fundamental promise of that positioning threatens to unravel success even more quickly. While details of the recent Volkswagen diesel scandal continue to unfold, the most current accounts cite that any cars using the firm’s Type EA 189 engines—including the Audi A3—are affected. Nothing could be further from the concept of “truth in engineering” than a car engineered to fraudulently defeat emissions inspections…and, in so doing, undercut the company’s marketing claims that its new diesel products successfully combine environmental protection and performance. The scandal couldn’t put a dagger in the heart of the brand’s claims more perfectly if it had been cooked up by one of Audi’s competitors.
And that makes it a perfect example of a company that forgets that brand positioning needs to be baked into its operational DNA. Marketing strategy needs to be an expression of a brand’s fundamental truths, not an external façade. In an organization that truly lives the positioning of “Truth in Engineering,” can you imagine an engineer observing to his boss, “You know, I think I can trick emissions testing”? Or that manager escalating the idea further up the chain? It’s even worse to contemplate the possibility of senior management, who should embody brand principles for their teams, championing the idea of fraudulent engineering from the top. At the root of the diesel scandal is not only a failure of business ethics, but also a failure of brand discipline. For a critical moment, the brand forgot what it means.
The Road to Redemption
The question will be, how well and how quickly can Audi rebound? It’s had significant help thus far from the media coverage, which focuses almost exclusively on Volkswagen, its corporate parent. In the American market, most consumers know that Chevrolet is a General Motors marque, but fewer know Audi’s parentage. The more interesting question is, among those who are aware, how much permission is there for redemption? It would not, after all, be the first time a company recovered from a gaffe—even one that touched upon its core brand promise.
You may not remember the uproar surrounding Intel’s floating point unit (FPU) bug in late 1994. Some processors in its Pentium line were found to return infinitesimally small errors in certain calculations. Because the vast majority of users would never notice the issue (Byte magazine estimated that only 1 in 9 billion floating point operations would produce an inaccurate result), Intel’s initial policy was to replace processors only for users who could demonstrate they had been affected. With core brand pillars of technology (strike one, based on the FPU itself) and safety (strike two, by insisting consumers retain a processor with known flaws), Intel’s response did not measure up—and elicited immediate criticism. But deviation from brand promise did not last long. Within a month of the problem hitting the mainstream press, Intel promised replacements for anyone who asked, returning to its long-term brand pillars.
It’s too early to see how much impact the diesel scandal will have on Audi. In these days of nimble crisis communications, we can expect that Volkswagen will work quickly to create a sense of transparency in its investigation. The more fundamental task, for whoever takes on Martin Winterkorn’s job, will be to reinstate a sense of mission in the employees, restoring truth in engineering and, through that, truth in brand.