Developing branding strategies to position a brand, even in the time of recession :: A Global Perspective.
Brand strategy is aimed at influencing people’s perception of a brand in such a way that they are persuaded to act in a certain manner, e.g. buy and use the products and services offered by the brand, purchase these at higher price points, donate to a cause. In addition, most brand strategies aim to persuade people to buy, use, and donate again by offering them some form of gratifying experience. As branding is typically an activity that is undertaken in a competitive environment, the aim is also to persuade people to prefer the brand to competition.
A global brand needs to provide relevant meaning and experience to people across multiple societies. To do so, the brand strategy needs to be devised that takes account of the brand’s own capabilities and competencies, the strategies of competing brands, and the outlook of consumers (including business decision makers) which has been largely formed by experiences in their respective societies.
There are four broad brand strategy areas that can be employed.
(1) Brand Domain. Brand domain specialists are experts in one or more of the brand domain aspects (products/services, media, distribution, solutions). A brand domain specialist tries to pre-empt or even dictate particular domain developments.
This requires an intimate knowledge, not only of the technologies shaping the brand domain, but also of pertinent consumer behaviour and needs. The lifeblood of a brand domain specialist is innovation and creative use of its resources. A brand domain specialist is like a cheetah in the Serengeti preying on impala and gazelle. The cheetah is a specialist hunter with superior speed to chase, and the claws and teeth to kill these animals. The cheetah is also very familiar with the habits of its prey. It finds ways of approaching, singling out and capturing its prey. The cheetah is one of the most accomplished of hunters within the wild cat species; it catches up to 70% of prey that it hunts.
(2) Brand Reputation. Brand reputation specialists use or develop specific traits of their brands to support their authenticity, credibility or reliability over and above competitors. A brand reputation specialist needs to have some kind of history, legacy or mythology. It also needs to be able to narrate these in a convincing manner, and be able to live up to the resulting reputation. A brand reputation specialist has to have a very good understanding of which stories will convince consumers that the brand is in some way superior. A brand reputation specialist is like a horse. It can be pure-bred, have a certain nobility and bearing, and exhibit qualities that can be traced back to these (e.g. grace, speed, temperament, looks). Like a horse, the brand reputation specialist can also thrive on association with celebrities.
(3) Brand Affinity. Brand affinity specialists bond with consumers based on one or more of a range of affinity aspects. A brand affinity specialist needs to outperform competition in terms of building relationships with consumers. This means that a brand affinity specialist needs to have a distinct appeal to consumers, be able to communicate with them affectively, and provide an experience that reinforces the bonding process. A brand affinity specialist is like a pet dog. A dog is generally considered to be man’s best friend, due to its affection, its obedience, its loyalty, the status and the protection it provides to its owners. Different kinds of dogs will command a different form of affection.
(4) Brand Recognition. Brand recognition specialists distinguish themselves from competition by raising their profiles among consumers. The brand recognition specialist either convinces consumers that it is somehow different from competition, as is the case for niche brands, or rises above the melee by becoming more well-known among consumers than competition. The latter is particularly important in categories where brands have few distinguishing features in the minds of consumers. In some cases, a brand recognition specialist needs to be able to outspend competition to gain unbeatable levels of awareness. In other cases, a brand recognition specialist needs to convince a loyal following of consumers that it is unique. A recognition specialist is like a peacock. Most of us will know little about birds, but we can recognise a peacock from a large distance. We may not know its precise qualities, but if we were to choose between birds we are more likely to plump for a peacock than for a more ordinary specimen, because of its beauty and presence.
THE BRAND ENVIRONMENT
A brand operates in a space that is defined by its own company or organisation, its competitors, and the societies where it operates. There are both internal and external factors that influence how a brand is finally perceived and experienced by consumers.
Factors that are internal to a brand’s company or organisation can be categorised as being strategy-related, performance-related and stemming from the brand’s past. The strategy-related factors are those that derive from the business strategy and the marketing strategy. There is a strategy hierarchy, whereby business strategy takes the lead, guiding brand strategy. Brand strategy in its turn guides marketing strategy.
The business strategy is aimed at achieving particular consumer behaviour. Only if consumers actually purchase, use (more often), pay a higher price or donate (more) will objectives of a business strategy be met. These objectives may include a larger market share, increased returns, higher margins and increased shareholder value. Brands are designed to persuade consumers to exhibit the behaviour that will make these objectives come true for the organisation. Thus the influence of business strategy upon brand strategy is direct and compelling.
The marketing strategy aims to translate the brand strategy into actual products or services, with a specific price, to be sold at specific outlets, to be promoted through specific communications activities and channels, and to be supported by specific service. The influence of the marketing strategy is thus indirect in that the correct translation of the brand into the marketing mix determines whether consumers get the correct impression of the brand. The performance-related factors are dependent upon the marketing implementation, i.e. the actual production and delivery of the products and services, their accompanying messages to consumers, and the actual product or service experience. The implementation eventually determines whether consumers experience what the brand strategy set out to provide. The marketing implementation may make or break a brand at the moment that is of most importance to consumers: e.g. when they actually experience the brand through advertising, promotions, purchase, usage, and after-sales service. The factors that stem from the brand’s past are the brand’s internal legacy and its internal conventions. The brand’s internal legacy is about who have developed it, who have managed it over the years, and what the role of the brand has become for the organisation. This influences how management, staff, partners, distributors and shareholders view the brand and its future potential. It may prove difficult to change such perceptions once a brand has been slotted into a specific position. The internal conventions of an organisation are such issues as how things are typically done, support systems, what the culture is like, who has the power to decide, who has the power to frustrate decisions, the structure of the organisation, its policies, and its (other) activities. For a global brand, such influencing factors exist at central as well as at local levels. More often than not, there are tensions between central and local as specific factors work in opposite directions, and people within the organisation have different agendas for the brand.
External influences upon a brand strategy come mainly from three quarters: competition, consumers and media. These external influences will vary between the markets and societies where a brand operates. Therefore, these influences need to be determined locally. When a brand is introduced into a foreign society, it will encounter particular brand strategies that are being practiced by competitive brands. Unless competitors are very complacent, head-on confrontations with them are generally not the best way of winning the hearts and minds of consumers. It is, therefore, important to determine competitors. Brand strategies and to find ways of flanking established competition by choosing an alternative strategy.
Category conventions are the unwritten rules that govern the way in which products or services are designed, advertised, distributed, serviced, priced, experienced, etc. Challenging such conventions may provide a brand with a competitive advantage. It is imperative that such a challenge has value to consumers and that they are willing to go along with the challenge. This is only the case if the particular convention is no longer rock solid. Such opportunities emerge when competition is complacent and underestimates the effects of the challenge.
An example is the advent of on-line share trading, which became possible due to the combined development of the Internet and the popularisation of shareholding. Established stockbrokers failed to respond adequately to the challenge to their conventional mode of operations and thus lost a lot of their business to Charles Swab cum sues. Cultural conventions determine how people in a society interact, what they believe, how they make decisions and what meanings they attach to certain representations. Cultures are not static, but develop through intergenerational and interpersonal learning and experience. A cultural convention can be challenged if it is already losing its value to consumers and is ready to be replaced by something new. Therefore, one needs to be on the lookout for such cultural shifts. Once identified, it becomes a matter of deciding whether the challenge will be of perceived value to consumers and will provide competitive advantage.
Needs conventions determine the forms in which consumer’s needs are manifested. Human needs are not universal and neither is the importance placed upon each need. However, the major differences lie in the manner in which a need is articulated or the form of a solution that is provided to a need. For example, although there is a general need for nutrition, there are considerable differences between societies with regard to which foodstuffs are acceptable for specific meals. Not to mention foods that are totally unacceptable to specific societies, as witnessed by the controversy over the consumption of dog meat during the upcoming world cup soccer finals in Korea. The media can seriously affect a brand strategy in a positive or a negative manner. In some developing countries foreign brands are promoted by the media as examples of modernity, while in others these same brands may be portrayed as the vanguards of a foreign domination. Particularly, bad news about brands can spread like wild fire across boarder, as Coke found out in Belgium, where the outsides of some bottles were contaminated with a fungicide, causing a health scare.
Benefits of brand strategies
Branding, once the brand is established, should create an increase in profitability and customer acquisition and retention, so there’s every reason to kick-start it early in the process as long as the products are good enough to sustain the brand promise, of course.
Branding creates highly visible success stories which encourage other companies to follow suit, more enthusiastically and faster than they otherwise would. Brands are the rock stars of commerce, and create many fans, both at home and abroad.
Branding creates expectations of product quality which the manufacturer has to work twice as hard to maintain: this accelerates the development of a first world-style approach to both quality control and innovation. Putting your own brand name on your products “raises the bar”.
Examples of single companies in the West tend to show that the companies that understand the importance of brand early on in their growth — and practise it well and build their corporate strategy around it — are often the ones which grow fastest.
Having a powerful brand — even if it is merely in strategic form, without solid customer recognition yet behind it — makes companies more powerful. They are perceived by investors, competitors, suppliers and other businesses as more valuable, and carry more weight in all kinds of negotiations. Potential value, if it is clearly reasoned and intelligently planned, is universally recognized as real value; strategy, creativity and ambition are universally recognized as indicators of potential.
Building a global image
If we’re talking about branding a product and the product is good, if you have the distribution and marketing, if you have the money — and it does cost money — then you can start building a global brand within a couple of years. If you are talking about the reputation of a country, it depends very much from what base you are starting. If you are starting from a strongly negative base, then I would normally say 15 to 20 years, but things are changing so fast these days that it might be 10 to 15 years. If you are a transition economy, and things are going pretty well for you anyway, it could be achieved in 5 to 10 years. In all of these cases, the brand image is never changed by spending huge amounts of money on logos, slogans and advertising campaigns but by having a good strategy and investing in change. In the end it comes down to creating a culture of innovation in the public and private sectors.
The 9 characteristics of a brand
A strong brand is defined and characterized by the following 9 dimensions:
1. A brand drives shareholder value
2. The brand is led by the boardroom and managed by brand marketers with an active buy-in from all stakeholders
3. The brand is a fully integrated part of the entire organisation aligned around multiple touch points
4. The brand can be valued in financial terms and must reside on the asset side of the balance sheet
5. The brand can used as collateral for financial loans and can be bought and sold as an asset
6. Customers are willing to pay a substantial and consistent price premium for the brand versus a competing product and service
7. Customers associate themselves strongly with the brand, its attributes, values and personality, and they fully buy into the concept which is often characterized by a very emotional and intangible relationship (higher customer loyalty)
8. Customers are loyal to the brand and would actively seek it and buy it despite several other reasonable and often cheaper options available (higher customer retention rate)
9. A brand is a trademark and marquee (logo, shape, colour etc) which is fiercely and pro-actively protected by the company and its legal advisors
Suggestions for Recession Proof Branding
Fix the fundamentals
The current conditions are a ‘wake-up call’ for marketing, forcing teams to become much more business-savvy and bottom-line focused. This is how marketing always should have been run,
these fundamentals have in many cases been forgotten.
Follow the money
One of the most important mottos is ‘follow the money’. It is more relevant than ever today. It means cutting the bull**** and buzzwords, and being much more business savvy. Brand teams should be crystal clear about which growth drivers marketing activity will focus on, such as increasing trial or weight of purchase. It also requires more rigour than before in assessing the effectiveness of marketing activities once they are in market. Interestingly, several of the marketing directors we interviewed were building a team of in-house experts working on measuring return-on-investment (ROI), rather than relying on their advertising or media agency to do this for them.
Sharpen your vision
In today’s tough time you need a razor-sharp brand positioning, and crystal clear portrait of your target consumer. Clearly positioned brands have a much better chance of cutting through the clutter of price-cutting messages, and survive the threat of cheaper competition. Smart brands are sticking to their vision, but adapting their message in line with the needs of consumers to save money.
Hit the right price
Focusing on hitting the right price is the point. Consumers are paying more attention to prices on shelf, just as raw material costs are pushing prices up. Rise above a key price-point, and they’ll switch.
Cut costs, not corners
Another opportunity is marketing process efficiency. Better briefing can save valuable time, and budget.
Kill the dwarves
Tough times are forcing more ruthless focus. It’s time to kill the ‘dwarves’, cute but small new products that eat up valuable time and resources; or at the minimum cut their marketing support so they die a natural death. Budgets and people can they be focused on driving growth of ‘hero’ products that drive i) significant business growth and ii) desired changes in brand image. We expect to see a cull of many new launches where brands have strayed from their core business and taken on big competitors with big marketing budgets, without having a clear point of difference and compelling value proposition.
Grow the core
Today’s tough times made growing the core an imperative. In most cases this core business is both the most profitable, and the one where the brand has the most authority, and so the best ability to defend itself from attack.
MORE BANGS FOR YOUR BUCK
Pressure on marketing budgets will only increase over the next couple of years. Boards will freeze or even cut marketing investment, despite all the studies showing that this is bad in the
long run. But they’ll still expect the sales forecast to be delivered. The only way to do this is to get more bang for your marketing buck.
Be brave, make waves
Now is the time to work your brand idea hard to create ‘PR-able’ marketing ideas. Brave ideas that generate free publicity allow you to maximise your budget’s impact.
Everything must sell
Every bit of the brand (e.g. packaging, websites, secondary packaging) can be used to actively encourage existing users to use more.
How many packs a year do you sell? For many companies this runs into the millions. And that’s several million bits of free media space, or ‘packvertising’, that you can use for free. For example, packs can be used to cross-sell, as done by Pantene, using its shampoo and conditioner packs to cross-sell the brand’s new styling range. Simple, but effective as it is placing a message at exactly the moment when hair styling is done – after you wash your hair. This can even work on small packs.
Fuel your fan clubs
The smartest companies we talked to are using two under-utilised sales forces to help grow their brands. The first sales force is loyal users of the brand. With a bit of effort you could increase their effectiveness in spreading positive word-of-mouth about your brand, and research has shown that this can increase the efficiency of your marketing budget by 40%. Like Sunsilk has created its own fan club by the name ‘Gang of Girls’ to make the girls more brand conscious and bring a sense of self belongingness towards the product.
Share the pain or entertain
Many of our marketing directors highlighted the need to get closer than ever to consumers during tough times, to maintain and even strengthen their bond with the brand. The most obvious way to do this is by ‘sharing the pain’ by pro-actively helping people through the hard times, and showing you care. Low-priced brands are of course well-placed to do this.
Like Mc Donald has its punch line like ‘purane zamane ke daam’. This makes the consumer think if the prices are low and its cheap to buy they would refer it to the other members of the family.
Recession: A perfect time to build your brand?
Sounds strange doesn’t it? But it is true! A financial downturn is the perfect time to build your brand and reinforce it with your target demographic as well as expand your audience. It may sound counter-intuitive but when people are not spending money is usually the best time to get them to learn about who you are.
In a time of tight finances people are far more wary about what they spend their money on. We all do it. It is a very logical and financially responsible thing to do. However, from a business perspective that kind of thinking is the perfect mentality required for brand building. People are studying products more intensely than they normally would simply because they want to wisely spend their hard earned money. So, you as a business owner should be pumping your brand more and working harder to make your presence know.
People will study your brand more intensely when they are watching their wallets.
Notice sales haven’t been mentioned once. That’s because your objective should shift during a recession. You should focus more of your energy and money on building the public awareness about your product and its existence. With people focusing so intently on each and every little thing they buy you should take advantage of that mentality in your advertising and marketing plans. It is not necessary by spending more money on advertising but your approach to it should change. If you’re not involved in social networking this is the perfect time to get into it. Let people know you’re out there and you offer a fantastic product or service they can keep in mind once things get rolling. If someone sees your product and studies it more in-depth than they normally would you have a rare opportunity to gain a foothold in their conscience and become a brand they are familiar with when the financial tides turn.
It is advisable new companies to launch new products and ad campaigns during financial downturns simply because people are more likely to study your product and collateral than they normally would. It most likely won’t translate to immediate sales but you will see them when people have money to spend. Don’t think you have to stop or even cut back your advertising and marketing, just take a different approach and take advantage of the mindset of the market.