THE TOP-DOWN VERSUS BOTTOM-UP DILEMMA

According to Al Ries and Jack Trout, notorious marketing gurus from the US, a lot of organizations follow a dead-end street. The authors of best sellers such as Positioning, The Battle for your Mind , Bottom-Up Marketing , and Marketing Warfare argue for an alternative to the path that the business in America has generally followed. Loaded with examples, everything must be turned "upside-down" (Ries and Trout, 1982, 1989, 1997). You no longer start simply with a strategy but with a tactic. It is not top-down but bottom-up that brings glory , and a broad product scale also leads to calamity. If you are focused, you can master the competition.

They make the point by representing a mirror for the overly traditional approach of top-down strategic marketing thinking. In their work one extreme approach needs to be abandoned and exchanged for another. But the more skeptical European spirit would probably be persuaded by a less extreme proposition. If we look closer, using the same lenses we use throughout this book, we can see that - once again - a series of dilemmas must be reconciled.

According to Ries and Trout's books, positioning theory in the human mind has a limited number of places available for the organization and its products to fill. This is very easy if the position is open , but very difficult if a competitor has already taken that place. General Motors, for example, never tried to take over the position of the Mercedes with the Cadillac. Repositioning of the competition, though, would be a possible approach.

Most writers take this new view that marketing is not a one-dimensional process of serving a customer. The nature of modern marketing is one of being more malignant, stronger, and richer in purpose than the competition. Marketing is war and the competitor is your enemy. The position and its ground must be conquered. How is that best done? By what Ries and Trout have called bottom-up marketing.

But just what is the value of a strategic plan if you cannot predict the movements of a competitor? Nevertheless, each day, piles of strategic marketing plans are written. They are rather like owning a surrealist painting, say one by Salvador Dali. You don't have a clue what it represents, but you'd miss it if you suddenly had a blank wall. We shouldn't start with internal matters such as strategic plans, missions, budgets , and aims. These limit the freedom of movement of the top marketer.

We quoted from the introduction to Bottom-Up Marketing in our parent book to this series. It is relevant enough to bear repetition here: "In almost every category, today's business arena has become warlike. We agree that this change in the environment has made the traditional "top-down" (only) approach to marketing obsolete. What good are long-term strategic plans when you cannot predict future competitive moves? How can you react to a competitor if your resources are tied up in a long- term plan?" But you do need to reconcile across this top-down, bottom-up dimension.

Based on our evidence, we argue that this dilemma for marketing is universal.

On the one hand...	Whilst on the other hand...
We need a strategy that gives us a long-term context and directions for our journey.	We need to be able to create different and unique ideas in our short-term needs to best serve our environment.

Graphically this dilemma can be presented as in Figure 9.1.

Figure 9.1: Top down versus bottom up

In the US Domino's Pizza has focused entirely on delivering pizzas within a thirty-minute radius of its outlets. Pizza Hut felt the competition and added a fast delivery service to its normal restaurant activities. Normally Pizza Hut, with its enormous market strength, could have crunched a number of Domino's. But this did not happen because Domino's had set up a network of establishments that had but one strategic concept: delivery within thirty minutes or your money back. For Pizza Hut this was an extra activity that lacked the focus to make life difficult for Domino's.

Of course it is too naive to assume that building a strategy from a tactic is the only effective means of doing marketing. Mintzberg had already identified this dilemma by speaking of grand top-down strategy and emergent bottom-up strategy (Mintzberg, 1998). We ourselves have seen enough organizations that thread the one tactic to the other but are not able to achieve strategic harmony.

Our research data confirms that in cultures that are more specifically oriented, the crafting strategy that links "up" and "down" detail, reconciled with the larger perspective, will more likely start with the tactical experiment from which a more holistic strategy is molded. In contrast, more diffuse cultures make a movement from the larger whole to specific market segments. In the end it is the relationship between the two that is the crucial aspect of international marketing success, not simply the starting point.

German cars

Germans seem to have more of a need to start from an overall, diffuse, holistic marketing strategy and to try out a number of tactics within this context.

In this way, Mercedes Benz, starting from a superior technical quality perspective, launched a diverse number of cars on the market from the very small and youthful Smart to the extravagantly large 600-series. Success speaks for itself.

Also, in recent years , Porsche launched the Boxster and the Cayenne from a strategic combination of engineering strength and speed with much success. Finally Volkswagen sold all its cars from the concept of high quality compact cars available to the masses.

 

Eventually any bottom-up marketing approach will also have to solve the dilemma between "aiming at champions " and "ensuring a broad consensus between inferior products and people representing them." The advantage of a more mundane approach is that personal agendas are pushed into the background by having such matters depersonalized. Conversely we need our gurus and champions - both in people and products - because each concept that gets maximum support will already be in use by competitors . The route to reconciling this dilemma is to have teams compete within a "champion system," such as that used in Goldman Sachs, 3M, and Intel over many years. This leads to cooperation in order to be able to act competitively. We should take them as exemplars; their marketing position needs no crown.

It is inherent in Ries and Trout's work that they believe that tactics in marketing will automatically lead to the soundest strategy. We disagree . Our evidence supports the assertion that both tactics and strategy feed into each other in a continuous crafting process. The starting point depends on your culture. Short-term cultures like to start with tactics. Conversely, long-term cultures might start with a strategy to contextualize their tactics. As always, the winners are those who can integrate the dilemma (reconcile). Which direction you start from is irrelevant.