Positioned For Failure:
By Paul MacArthur
(Editors' Note: This article was written in June 2001 and published in Wrestling Perspective Volume XII, Number 93 in July 2001. Minor revisions were made for the Web version in 2003.)
When Vince McMahon transformed the WWF from a regional promotion into a national force in the mid-Eighties, he implemented a series of shrewd business moves that earned him a reputation as a ruthless marketing genius. He raided talent from other regional promoters, got his wrestling programs on national cable outlets, set up infomercial-style syndication deals, exploited a then-nascent medium called pay-per-view, and violated the time-honored tradition of not crossing territorial boundaries. All of these moves were important, but not as significant as how McMahon utilized a marketing concept called positioning.
The subject of several books and articles -- most notably the seminal marketing tome Positioning: The Battle For Your Mind by Al Ries and Jack Trout -- positioning is simply how you differentiate your product from the competition in the mind of the prospect. Positioning has more to do with how you manipulate the minds of your prospects than the product itself. In pro wrestling, positioning takes place not in the ring, but in the mind of the fan.
The need for positioning is based on the premise that for a product to be successful, it needs to occupy a place in a prospect's mind. In a society overrun by advertising, the only way a product can occupy that space is by having the prospect associate that product with an important unique attribute. For example, FedEx is positioned as an overnight delivery service and has sold the service in a way that is important to the consumer: When it absolutely, positively, has to be there overnight.
Wrestlers are positioned all the time: Steve Austin is the bad ass. The Rock is a loveable narcissist. Hulk Hogan was a super hero and later a Hollywood buffoon. Ted DiBiase was the Million Dollar Man and so on. Lex Luger rarely drew the crowds his push suggested he should because he was rarely positioned in a unique and meaningful way to wrestling fans. Yes, he had a sculpted physique, but that's hardly a unique attribute in wrestling circles. Aside from his appearance, Luger had little else to offer pro wrestling and what little he did have was never properly positioned. So he never fulfilled the expectations of several promoters. Just look at his box office history.
Once a product is successfully positioned, changing the public perception of the product is difficult. Volkswagen built its reputation on selling small cars. Its attempts to sell large cars have been unsuccessful. The re-launch of the Beetle, however, shattered all industry and company expectations. When people tie a concept to the product, they are not willing to change that connection. People don't like to change their minds, so they don't. To quote Ries and Trout, "The single most wasteful thing you can do in marketing is try to change a mind."
That statement helps explain why wrestlers lose drawing power after too many heel/face turns. Heel wrestler goes face. Okay, the public can buy that if there is a compelling reason for the change or if they really liked the wrestler. Former heel goes back to being heel. Okay, the public knew he was a snake all along. Heel, who was a face, who was originally a heel, goes face again ... Huh? No, thank you. When a wrestler is constantly vacillating between heel and face, fans can't attach a meaningful concept to the wrestler, so they write him off rather than deal with the confusion. See Luger and Randy Savage.
In the mid-Eighties, McMahon differentiated his product from the competition by targeting kids, using slick television production, exploiting the MTV connection and using celebrities to create a carnival atmosphere. He positioned the WWF as pro wrestling with a lot of show biz. That position was different enough to capture the imagination of the public and more importantly, the media.
The media played a crucial role in the WWF's long-term success. McMahon's biggest marketing coup was not getting Saturday Night's Main Event on NBC, exploiting the MTV rock and wrestling connection, or even selling Hulk Hogan vitamins. It was in his selling the WWF to the media. McMahon positioned the WWF to the media as the only major league pro wrestling promotion and most of the media outlets reported it as if it were so. When McMahon declared the first Wrestlemania to be a smashing success (it wasn't), the media reported it as a success. McMahon positioned the WWF as the country's dominant promotion. The media reported it, the public read it and everybody but pro wrestling diehards bought it.
To the average fan, pro wrestling became synonymous with the WWF. Every other promotion was second best. Long before the WWF actually dominated pro wrestling, it dominated the concept of pro wrestling in the minds of the prospects. The media didn't report on Starrcade or the Crockett Cup, but they did report on Wrestlemania. Why? Because the media and the public believed the WWF was the number one promotion in the country. Why? Because McMahon told them so and there was no one to refute him. From a marketing standpoint, it was better to create a national clamor about a lame boxing match with Mr. T than no noise around a classic Ric Flair bout. By the time the NWA tried to generate its own buzz, it had already lost the battle.
Once the WWF established itself as the market leader in the mind of the public, actually becoming the market leader was a forgone conclusion. "If the media says the WWF is better than my local promotion, then they must be right," said the casual fan and so, when given a choice, the casual fan usually opted for the WWF. McMahon won the battle in the media, then in the mind of the consumer, and then and only then did he win the actual battle for the industry. Perception became reality.
By getting into the national consciousness first, the WWF was able to effectively pre-empted Pro Wrestling USA and Jim Crockett's World Championship Wrestling. By the time they arrived, the play was already in progress and seating was done at the convenience of the fans. To the general public, they were also-rans. To paraphrase Ries and Trout, it's better to be first than to be better. What do Coke, ESPN and Hertz have in common? They were first in their category. They are also the dominant players in their categories -- cola, cable sports television, and car rentals respectively.
The WWF wasn't the first pro wrestling promotion, but it was the first one to launch a full-scale national assault at a time when the business was regionalized. More importantly, the WWF was the first to get into America's collective national mind. The WWF gained the power of incumbency and as far as the consumer was concerned, every other "national" wannabe promotion was a new player trying to become another WWF. By 1987, when the WWF was pro wrestling's true market leader on just about any scale, it had already been the market leader in the mind of the public for two years.
Becoming number-one is hard. Staying there on the other hand is rather easy. A decade and a half after WWF attained the status as the true market leader; it still holds that position. Don't expect that to change any time soon, regardless of what new competition appears in the next few years. The power of incumbency is hard to overcome. Look at the election returns. Incumbency also applies to products. Ries and Trout looked at the leading brands in 25 different consumer product categories (from gum to tires) in the years 1923 and 2000. Twenty-two out of the 25 brands that lead their category in 1923 were still leaders in their category 77 years later.
Past Positioning Failures
Pro Wrestling USA never had a chance because it was poorly positioned.4 It was a national wrestling promotion featuring the wrestling stars of the NWA and AWA. Okay, so what was unique about it? Well, its wrestling was better. Unfortunately, promoting your product as just being better isn't a winning positioning strategy. If your product is better, then "Why haven't I heard of it?" asks the consumer.
Consumers usually don't buy something because it's better. A Rolls Royce doesn't sell because it's better; it sells because it has prestige. People don't watch Bravo because the programming is better; they watch it because it appeals to their artistic sensibilities. Fox News isn't taking viewers away from CNN because it is better; it's taking away viewers because of its right-wing commentary. Few products can be successful using the "better" strategy and pro wrestling isn't one of them. With no other discernible differences between Pro Wrestling USA and the WWF, the public opted for the WWF because the WWF was first in their mind. The WWF was already the leader and the public usually goes with the leader. (It would be foolish to suggest that the only reason Pro Wrestling USA failed was because the promotion was poorly positioned. But a product's position speaks volumes about how the parent company operates. Find a poorly positioned product and you'll often find a poorly managed company.)
The most obvious move for Jim Crockett Promotions would have been to stay regional. Nationally, JCP never created an important point of difference to the casual fan. To top it off, fighting McMahon on the national front was a losing battle from the start. The WWF was already firmly entrenched as the national wrestling promotion. You never attack an opponent's strength. You attack his weakness. Crockett had no business attacking New York when McMahon was weak in Florida. Attacking a weakness doesn't guarantee success, but attacking a strength guarantees failure.
Instead of making a national attack, where McMahon was already the incumbent and dominating, Crockett should have stuck to the Southeast, where he was the star player. The WWF was always soft in the Southeast. Crockett could have carved out a unique position by emphasizing epic wrestling. If Crockett focused on just the Southeast and on promoting the concept of epic wrestling, he could still be in business today. Crockett opted for attacking the WWF at its strong point. The public had no real reason to change -- and certainly Crockett never marketed one effectively -- so they didn't. Lesson learned? You would think.
Every promotion that failed to defeat the WWF monster actually fell into the same trap. They brought in celebrities. They created music and wrestling connections. They developed more kiddie characters. They emphasized women wrestlers. In each case, the WWF was the first to do it on a national level. The promoters looked like copycats -- and with good reason. They usually were.
Few promoters created unique ideas to effectively compete with the WWF. Those that did learned another marketing lesson. You can come up with a new idea and start marketing it. But even after you've launched that idea, the market leader can take that idea and eventually own it.
Making A Competitor's Advantage Your Own
Two of McMahon's biggest marketing victories were over promotions that were attacking his weaknesses. Jim Cornette sought out an uncontested area in the Smoky Mountain region that the WWF wasn't strong in and wasn't going to spend money promoting. Smoky Mountain Wrestling made some gains, but the WWF shrewdly made a deal with Cornette and, for all intent and purpose, became partners with SMW. WWF wrestlers appeared on SMW shows. In the process, SMW's point of differentiation was lost. To the fan, it became another, smaller version of WWF wrestling. SMW is no longer, but Cornette still works for McMahon.
McMahon did something similar with Extreme Championship Wrestling. ECW carved out a niche by emphasizing hardcore violence, profanity, and blatant sexuality. The WWF was still behind the times promoting cartoon characters to an audience that wanted hardcore action. But McMahon witnessed ECW's niche success and he pulled an SMW move by creating a talent sharing arrangement with ECW. He also copied the more successful elements of ECW's programming as he upped the violence, profanity, and cup-sizes.
Here's where the power of being the market leader came into play. It didn't matter that ECW launched the new concepts first. The WWF played on a much larger stage to a much bigger audience. The casual fan, unaware of ECW's innovations, thought the WWF created this new style of wrestling. Any casual fan that saw ECW's poorly produced TNN program for the first time in 1999 no doubt concluded it was a cheap imitation of the WWF. One year later ECW was off TNN. In its place was the WWF. ECW is no longer and Paul Heyman works for McMahon.
Being first in the marketplace doesn't do any good if you can't follow up. What company introduced the first automobile? Hint: it wasn't Ford, Chrysler or General Motors. By introducing new concepts and seeking out untapped markets, SMW and ECW implemented classic marketing attacks. The sought out new ground to make their own. McMahon essentially did the same thing when he went national, as there hadn't been a successful national territory since the NWA pulled out in 1960. But Cornette and Heyman, for all their talent, didn't have the financial resources to properly compete. McMahon did. As the number one promotion, McMahon was able to copy what he wanted and take what talent he needed and there really wasn't anything SMW or ECW could do about it except go out of business.
Remember staying number one is easy.
Line Extending Wrestling Into Totally Heinous Territory
By being the first national promotion in 25 years, McMahon was able to ingrain the WWF into the minds of millions. He created that mental link between his brand and the consumer. To the general public, the WWF meant pro wrestling with show biz and eventually it just meant pro wrestling. Tell anyone you were a wrestling fan circa 1992, and they would say, "Oh you mean the WWF?" In five years, the WWF became the generic brand name for pro wrestling. Just like Xerox means copiers, Kleenex means facial tissue, and Q-tip means cotton swabs, the WWF means pro wrestling to the general public. That generic link is one of the most powerful marketing tools a company can have at its disposal. But once that link is made, it's also almost unbreakable.
Yet ever since McMahon created the WWF/pro wrestling link with the national public, he's been trying to break it. His insistence that the WWF is not professional wrestling but sports-entertainment has been ignored by the masses. His brand means pro wrestling and that's why the WWF owns the pro wrestling category. But McMahon thinks the WWF brand is bigger than pro wrestling. He's wrong and that error has cost his company millions.
McMahon's biggest marketing mistake involves the concept of the line extension. A line extension is simply taking the name of an established product and putting it on a new product. Adidas cologne, Crystal Pepsi, New Coke, 7-Up Gold, and MSNBC are line extensions.
Intuitively, line extensions make sense. The new product will benefit from the credibility of the established brand name while the old brand will benefit from the increased exposure afforded by the presence of the new brand. In reality, line extensions rarely work in the long run. Once consumers identify a brand with a product or service, extending it into a different arena only creates confusion. The mind refuses to accept the new product and/or loses interest in the old product. Failed line-extensions abound, from USA Today on Television to Life Savers Chewing Gum to Coors Water. Other line extensions have been successful only at the expense of the master brand. See Bud Light.
The Harvard Business Review -- a publication we're sure McMahon reads -- published a study detailing the problems of line extensions. The authors note that line extensions do not increase product demand and line extensions actually stagnate category demand. They also create poorer trade relations, open up opportunities for competitors, increase costs, and lower brand loyalty. In other words, despite their popularity, the Harvard Business Review says line extensions are bad for business.
A study published in the Journal of Consumer Marketing concludes "master brands" may be "...diluted regardless of the outcome of the extension." See Bud Light. The study also says that failed line extensions produce negative impacts on the master brand. A classic example is Zima. In 1994, Zima owned two percent of the beer market. Then they launched Zima Gold, which had a different taste. A dismal failure, Zima Gold was gone by 1996. Meanwhile, regular Zima saw its market share drop by 50 percent.
The WWF and Vince McMahon are brands. The former is pro wrestling and the latter a pro wrestling promoter. Those two brands are powerful and they enable both the WWF and McMahon to communicate with potential prospects. But, it's because those brand names are strong, McMahon's attempts to line extend his brands have failed.
Take the World Bodybuilding Federation. What was the WBF? Wrestlers who lifted weights or bodybuilders who wanted to wrestle? Well, neither, really, and that was part of the problem. Bringing in Luger as the WBF's top personality further confused matters. Muscle fans didn't think a wrestling promoter could run a bodybuilding show, wrestling fans didn't want the WWF promoting bodybuilding, and no one was interested in Icopro.
The WBF line extension failed to the tune of some $15 million. Diminished WWF ratings and house show attendance followed in its wake. That's not a surprise. See Zima.
The WBF is not McMahon's only failed line extension. He tried his hand at pay-per-view boxing events. Did the public buy a boxing event sold by a wrestling promoter? Nope. McMahon's rock concert pay-per-views made barely a peep and Hulk Hogan's cartoon show didn't animate the ratings.
Slight problem. Movies operate in a totally fake universe, pro wrestling in a different pseudo real one. Put a movie character in the wrestling ring and fans won't buy it ... and they didn't. Damage to the product in the short term? A lousy pay-per-view rate. Long term? The product was discredited and the WWF would slowly begin its downfall. The buy rate for the Wrestlemania following the No Holds Barred pay per view was down by 20 percent. No Holds Barred certainly played a part in that. One would think McMahon would have learned about how to use a movie star when he brought in Mr. T. It wasn't Clubber Lang from Rocky III or B.A. from the A-Team in the ring at Wrestlemania, it was Mr. T, a guy with a tough-guy persona. It worked because the public thought Mr. T was legit.
WCW did the same thing with Robocop and Chuckie. Were we really supposed to believe Rick Steiner was going to feud with a doll? How about Arliss, who happened to be a TV character on another Time-Warner property? How about David Arquette as WCW champion? Or having Jay Leno in the ring? Okay, the last two aren't fake, but they have no credibility. If your company promotes pro wrestlers as legitimate tough guys, bringing in movie characters and scrawny actors damages your brand.
The fake Diesel and Razor Ramon were also line extensions. Diesel and Razor Ramon were brands. They were not just the names of characters on a TV show. The names were synonymous with Kevin Nash and Scott Hall. When McMahon attempted to put the brand names on two new individuals, fans didn't buy it. Why? Remember New Coke?
WCW's line extension history is also dubious. The New World Order was a brilliant effort to establish a unique brand. Supposedly the NWO was unaffiliated with WCW. In fact, it was trying to overtake WCW. The NWO had a separate Web site, separate phone number to order T-shirts, and a separate mailing address. The feel and look was that of a legitimate hostile takeover.
The emergence of this new brand resulted in increased ratings and house show attendance. In the NWO, WCW had a powerful brand synonymous with main event caliber outsiders. In a matter of weeks, the NWO was the hottest brand in wrestling. Then WCW line extended it.
The first extension involved putting the NWO brand name on mid-carders. The NWO went from meaning elite wrestlers to anyone who wanted to join the club. Having Hall and Nash was one thing. Putting Hulk Hogan into the mix was workable because he was still the most recognizable main eventer in the sport and that association facilitated his heel turn. Still, one wonders if the NWO would have been more successful without him.
Putting the NWO name on Scott Norton and Mike Rotunda was another story. It damaged the NWO's position and diluted the brand. Two car analogies immediately come to mind. The first is the Cadillac Cimmaron. The Cimmaron was Cadillac's attempt to produce smaller, less expensive cars. Problem is, Cadillacs are supposed to be big and expensive. The Cimmaron didn't look like a Cadillac and it was cheap. It bombed and damaged Cadillac's credibility.
Then there was the problem when customers discovered General Motors put Chevy engines in Buicks. Buick owners didn't like paying for Chevy engines. Even if it was a good engine, it didn't have the Buick prestige. "I paid for a Buick, give me a Buick engine," said the customer. Norton and Rotunda were Chevy engines and Cadillac Cimmarons rolled into one and the NWO slowly started to lose steam.
The WCW brain trust followed up with the Latino World Order. Then the NWO members started feuding with each other. What did the NWO mean at this point? Exactly. Kiss the NWO concept and your promotion goodbye.
All of this brings us to the XFL, McMahon's biggest and highest profile failure. The XFL was a line extension of the worst sort. Technically the WWF's name was never put on the product, but for all intent and purpose it was WWF football in the collective mind of the public. The skepticism was there from the outset. What does a wrestling promoter know about running a football league? Apparently, nothing.
Trying to attack the NFL, the market leader, was ridiculous. But McMahon's ego got in the way of understanding why the USFL and the WFL and every other FL have failed. He simply didn't do his homework and now he is paying dearly for it.
The XFL was a repeat of the WBF. A wrestling promoter tried to use the power of his brand to sell a different product. It didn't work and cost the company more than $35 million. But that's just the short term. The long-term damage to the WWF brand is much more costly.
The WWF means pro wrestling, but today it also means hip, over the top, edgy entertainment and slick production. The XFL didn't fit that description. When football fans watched the XFL, they didn't get what McMahon promised: smash-mouth football. So they stopped watching. When wrestling fans watched it, they didn't get what they expected from Vince McMahon and the WWF. They stopped watching and felt betrayed. The WWF's and McMahon's credibility was damaged with his core audience.
When the XFL died after only one season, McMahon's Midas touch facade was also exposed. The magic is gone. Few companies can withstand such a public beating without the core business experiencing a significant fall off. The WWF is no exception. See Zima. Heck, see the WBF.
Despite his history of failed line extensions, McMahon is unfazed. He's still running the WWF New York club. Do people trust a wrestling promoter to mix your drinks and cook your food? Only on Mondays and Thursdays apparently. Long term prognosis: Forget about it, it's history.
WWF Attitude Racing? Get ready for a financial crash.
McMahon went after the Debbie Reynolds Hotel in Las Vegas. That venture was doomed from the start. Would you trust a wrestling company to keep your linens clean? What's the most profitable hotel in Las Vegas? Hint: It's not the Hard Rock Hotel.
It gets better. Apparently forgetting the millions he lost with No Holds Barred, McMahon wants to get back into the movie business. Prediction: Hollywood will happily take his money, the movies will tank, and the WWF will suffer further audience erosion.
Competition Is Your Friend
The biggest obstacle the WWF faces is a lack of competition. Zero competition has contributed to the decreased interest in the WWF and, unless the new WCW is perceived as actual competition and not an angle, pro wrestling in the United States is in big trouble.
That competition would help the WWF may seem counter-intuitive. But when has the WWF enjoyed its greatest success? During the mid- to late Eighties, when it squared off against powerful regional promotions and during the late Nineties, when it faced strong competition from WCW.
Wouldn't it be better to be the only national pro wrestling promotion, rather than have to deal with competition? The answer is no and all you have to do is look around your neighborhood for proof. Across the street from a McDonald's is a Burger King or a Wendy's. Next to the Exxon station is Texaco or Shell. The mall with a Sears has a J.C. Penney. Next to the Hard Rock Cafe is Planet Hollywood. Find a Barnes and Noble and a Borders or at least a Walden bookstore is in the same town.
Successful businesses usually have at least one successful competitor and that competitor actually makes things better for the market leader. According to Al and Laura Ries, "The best thing to happen to Coke was Pepsi."6 Competition drives up category demand. Before Pepsi arrived, Coke owned the cola market. But per capita consumption of cola was nowhere close to what it is today. Today, with per capita consumption greater than before, Coke owns the majority of an exponentially larger cola market. It's also an exponentially more powerful and profitable company.
Why does this happen? First, in a competitive atmosphere, the consumer believes he or she will get the best product because competition theoretically drives up quality. There is some debate about this -- look what increased competition has done for quality in the airline and long distance phone company arenas. But in marketing perception is reality, and when the consumer believes there is choice, then he or she is inclined to believe increased quality is one of the benefits of that choice.
Second, competition drives advertising and advertising drives demand. With Pepsi on its heels, Coke can't afford not to advertise. With Coke dominating the category, Pepsi can't afford not to advertise. The increased advertising facilitates product category demand. If it didn't, no one would advertise.
Third, there is a natural suspicion of monopolies in the United States. We don't trust them. There's something about competition that makes consumers believe it keeps companies "honest" for lack of a better word.
Finally, if the brand has no competitors, consumers are likely to think the product isn't very good. If no one else is producing the product, then how good can it really be?
It's easy to see how this applies to the WWF. When the WWF took over the wrestling landscape in the mid-Eighties, wrestling was hot nationally and regionally. It wasn't just the WWF that sold out arenas. Competition benefited the market leader. When most of the competition closed up shop, the WWF's ratings, buy rates, and house show attendance started to fall. WCW became a non-entity to the public and with no real competition the WWF gave us Papa Shango.
The best thing to happen to the WWF in the past decade was not Steve Austin or The Rock or the Bret Hart double-cross. It was Eric Bischoff and Monday Nitro. When Bischoff launched Nitro, he was laughed at. He was accused of trying to destroy pro wrestling when in fact he was saving it. By running Nitro opposite Monday Night Raw, Bischoff created competition across the street. He put up a Burger King across from McMahon's McDonald's and went to war. He even hired a few of McMahon's burger flippers.
What happened? The demand for pro wrestling increased dramatically. It became hot because there was fierce competition. Prior to the Monday Night Wars, approximately 2.5 million homes watched Raw on Monday nights. At its most dominant, 60 percent to 75 percent of 7 to 8 million homes tuned into the WWF. During the ten o'clock hour 100 percent of approximately 6 million homes tuned into the WWF. Today, with no competition, 100 percent of about 3.5 million homes are tuned into the WWF on Monday nights. Do the math. (The numbers used in this example are Nielsen approximate averages. They represent how many households on average are tuned into wrestling at any given time on Monday nights. The total number of households that tune in over the course of any Monday evening (a.k.a. the cumulative audience) will be significantly larger.)
Competition exposes the fallacy of monopoly thinking. Forget about the Federal Trade Commission, being a monopoly is bad for business. The monopolist thinks there is only one choice and thus the consumer will choose his product. McMahon figures there is one choice on Mondays -- his program and wrestling fans have no choice but to watch it. In fact, there are two choices: pro wrestling or no pro wrestling. Each week more people are opting for the latter.
Pro wrestling has one player and that player is getting colder with every pinfall. That the WWF may be less interesting than five months ago is irrelevant (and is it really? Steve Austin's psycho heel performance would make Bruce Dern proud). Whether or not the matches are better or worse than they were five months ago is unimportant. The casual fan thinks the WWF isn't as good as it was five months ago. In the collective mind of the public, pro wrestling is no longer hot.
The WWF is cold because, like many other failed CEOs Vince McMahon believed the WWF -- his product, his brand -- was different. He thought his brand could mean more than pro wrestling. He thought buying the competition was a good thing. He thought with his ego, not his mind. To quote Ries and Trout, "Success often leads arrogance, and arrogance to failure."
Stepping Your Way To Success
There is hope. It's in how the McMahon runs WCW. For pro wrestling to flourish, the WWF and WCW have to be perceived as completely separate entities. Forget about getting mileage off of a WCW vs. WWF feud. That's a short-term bandage that might spike things for about a year. What McMahon needs to do is take the old GM step approach -- something that MTV and VH-1 have done with solid success.
In his 1996 book Focus, Al Ries details how General Motors became the market leader in automobile industry. In 1921, GM had seven overlapping brands that caused confusion in the marketplace. Check out GM's 1921 price scheme:
Chevrolet: $795 - $2,075
GM was a mess. A Chevy was supposed to be the cheap entry-level car, but at the same time Chevy's most expensive product cost more than the lower-level premium brands. Well Buick owners didn't want cars that cost less than a Chevy and who wanted an expensive Chevy in the first place? The marketing was incoherent and the products cannibalized each other.
Enter Alfred Sloan, who introduced the step concept to GM. As the head of GM he instituted the following price list:
Chevrolet: $450 - $600
Without any price overlaps, each brand was able to carve out its own niche in the marketplace. No longer would a Chevy cost more than a Buick. Chevy was the cheap car. Your next steps were Pontiac and Oldsmobile. Buick was the upper class car and Cadillac the prestige car. As consumers got older and richer, they moved up the GM ladder. By 1931, GM passed Ford to become the market leader and dominated the automobile industry for decades. Hence the saying, "What's good for GM is good for America." But, as what was that about success? GM would abandon the step approach and their market share, which was around 50 percent during the company's peak years in the Fifties and Sixties, has slid below 30 percent.
MTV and VH-1 have been very successful using not money but age for their step approach. VH-1, long the weak sister of MTV, never got off the ground until the network started targeting "the MTV graduate" -- the person who grew up on MTV. MTV's target audience is the 12-to-24 crowd. VH-1 aims for 25 to 49 year olds who've outgrown MTV. Do some 30-year-olds watch MTV? Of course. Do some 15-year-olds tune into Behind the Music? Sure. Crossover is inevitable. But MTV is clearly tailored for the youth market, while VH-1 goes mature. Eventually, teens grow old and get sick of MTV (just like they get sick of the teenybopper radio stations) and move on to VH-1.
McMahon needs to set up each organization as unique entities with separate identities. Each company needs to target a different audience. The WWF should continue to target 18-to-34-year-old males. WCW could target 35 to 49. WCW could be for the pro wrestling graduate.
Market division need not be age based. Wrigley's divides the gum market with different brands that dominate different flavors and types of gum. (Wrigley's Spearmint, Eclipse, Extra, Doublemint, Juicy Fruit, Big Red, Winterfresh and Freedent are all Wrigley products.) WCW could try to skew female, or focus on epic wrestling sans some of the over the top violence and T&A. There are numerous possibilities. The idea is to limit the overlap between your brands. Instead, you want to divide the market up and create intense loyalty for each brand. If crossover happens, so be it. But each brand should target core audience and make them yours. Otherwise, one brand will be perceived as a diluted version of the other.
(Changing the nature of your product to contradict your current image may seem to run afoul with the concept that minds don't change. Here is where having an established brand works to your advantage. Brands can evolve over time to meet the new needs of the marketplace -- and entertainment companies can do this better than most companies because new product is constantly being created. MTV has done this for years. It constantly evolves to meet the needs of its core demographic, even if that alienates the old audience. However, any brand evolution must be carefully and slowly implemented to be successful... and often it doesn't work. Changing a brand is a major risk and there are far more failure than success stories.)
In the case of WCW, McMahon will be making a detrimental decision if he uses WCW merely as a rival promotion to boost WWF interest. The initial WCW/WWF war angles have been anywhere from loosely entertaining to poorly executed nonsense. They have short-term written all over them. McMahon spent $20 million on WCW. Using it solely for a one- to two-year life preserver would be the worst move he could make.
Word is McMahon plans to cross-pollinate talent between the promotions. Well, then what's the difference between the two? Why should a person choose to watch WCW? What will be WCW's point of difference? Are we about to see McMahon just create WWF-I and WWF-II? If so, he might want to check out 60 Minutes. 60 Minutes was a perennial top-10 program. Then they launched 60 Minutes II. Less than three years of 60 Minutes II later, the original 60 Minutes is about to finish out of the top 10 for the first time in 24 seasons. Mr. McMahon, are you paying attention?
Short-term, a WWF/WCW angle could work. Long term, it will damage the entire pro wrestling business. The only way the WWF can ensure long-term success is if WCW is perceived as actual competition, not just an angle. To do that, WCW needs to be removed from WWF television completely. WCW needs to be removed from the WWF Web site. Essentially, publicly the WWF needs to ignore WCW. As for importing WWF wrestlers into WCW, and vice-versa, it should be done infrequently. It should be done for the purpose of creating new compelling match-ups -- and never at the expense of the promotion that is losing that wrestler.
This strategy means making WCW a separate brand, not a sub-brand. That will make getting WCW off the ground more difficult. It means saying no to the short-term profits of a feuding promotions angle. It means having courage. It means having grapefruits instead of ego. But it's the only way the WWF and WCW can be healthy five years from now.
It won't happen. WCW will become a watered-down version of the WWF. It will be the redheaded stepchild of the WWFE family. In two to three years the combined ratings of the WWF and WCW will be lower than the WWF sans competition.
Watch and see.
Paul MacArthur is a co-publisher & co-editor of Wrestling Perspective.
Footnotes/Endnotes for this article should read as follows:
MacArthur, Paul, "Positioned For Failure: How Vince McMahon Is Losing The Marketing Battle ... With Himself," Wrestling Perspective, Volume XII, Number 93, (2001): 1 - 6.
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