BRAND PLANNING PROCESS:Driver for change (continued), Brand analysis

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Brand Management (MKT624)

Lesson 44

BRAND PLANNING PROCESS

Introduction

This lecture is a continuation of the remaining part of the second step of brand planning

process, market analysis. This step will make way for the third one, brand analysis, which sets

the stage for the actual brand plan.

Driver for change (continued)

Product innovation: This aspect can be a major driving force if manufacturers undertake

innovations very frequently and make the market and industry grow faster. A faster growth

generally is a function of a wider degree of differentiation. This reforms customers' perception

about a reformed category. Japanese electronics industry has been demonstrating this

phenomenon for decades and still continues to do that. Mobile phones industry is another

example.

Market innovations: This driver can again change the market landscape owing to new methods

of product delivery and hence cause cost efficiencies, customer-friendly pricing, and efficient

deliveries. Growth of courier services in Pakistan is an example. This driver has the potential to

drastically change the way products could be distributed.

Entry or exit of firms: At times an entry of a foreign firm into the local market drives the

industrial change and dictates competitive adjustment. Their entry may bring the costs down or

offer something highly innovative and thus change the landscape.

An eruption can also be staged by a major local enterprise from a different category a

company that may like to extend its brand power into the area you are playing in. That may

change the rules of the game if the new player is very resourceful and impacts production and

marketing cost structures. You will have to consider making adjustments. It is a challenging

situation in which you must be very pragmatic in exploiting your strengths.

Changing lifestyles and attitudes: These are at times real major drivers of a change. You may

think of the anti-smoking sentiment almost every where and its impact on the smoke market's

strategic thinking and moves.

Growing sensitivities about salt, sugar, and chemical additives have changed manufacturers'

way of processing food items. Their communication campaigns essentially talk about what they

are not the positioning concept for example, they do not contain chemical additives; they

are sugar-free; they are low-salt etc.

Increased interest in physical fitness has given rise to a whole new industry and market of

exercising machines, mountain bikes, recreation areas and gyms. A whole new market of

vitamins and nutrition supplements has come up.

What is important is that shifting social concerns should make marketers more sensitive about

changing trends and quick to respond to those trends. Quick responders always seem to take

advantage, for they sense the drivers more quickly than others.

Link between driving forces and strategy: There is a very close link between the two. Sound

analysis of industry's driving forces is a prerequisite to company's strategy. Unless managers

can assess the changes the major drivers will cause in company's business in the foreseeable

future one to three years they will not be able to craft the right strategy. Therefore, it is a

must that managers first can rightly identify the drivers and then their implications for their

business to be able to cope with changes.

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Key success factors: Key success factors (KSF) are those abilities that a company can identify

and then capitalize on to prosper in the market place. They are also known as critical success

factors.

It is those strategic elements like product attributes, financial and human resources,

competencies, competitive capabilities and other business outcomes that spell the difference

between profit and loss1.

Businesses must pay so much attention to those strategic elements that they succeed financially

and competitively. If a business can answer three questions it can easily identify what the key

success factors are for its industry:

1. On what basis customers choose between brands of different sellers?

2. What should a seller do to be competitively successful what resources and

competitive capabilities does it need?

3. What does it take a seller to achieve a sustainable competitive advantage?

KSFs are industry-related. As such, understanding and then capitalizing on them to gain

competitive advantage is what is required of good managers. As an example, if one of the KSFs

in an industry is to utilize full capacity of the plant to achieve scale economies and sell high

volumes, you cannot have a marketing strategy that works best for niche marketing of

specialized items. Cigarettes, safety matches, biscuits, and other high volume consumer items

are examples of such a market situation.

If you are an apparel manufacturer of fashion garments, your marketing or brand strategy

tailored for mass volume garments like T-shirts is going to be at odds with something special

that you are doing.

The typical KSF in that case is the ability of the company to have specialist staff good at color

selection at the start of every season and designer staff to create fashions. Another KSF will be

channels of distribution that can enhance the appeal for you garments. Maybe you would like to

have your own stores for that line of garments to create a very coherent strategy that takes care

of fashion design, a compatible shop décor, and display of those garments.

Since competition follows fast, you may not be the only one in that line and therefore a

manufacturer who follows one or more of the KSFs faster than the others is generally the

winner.

KSFs are different for different industries and also keep changing with changes in driving

forces and competitive conditions. For example, global economic changes as drivers bring into

existence new KSFs that are related to those drivers. If global supply chain brings an industry

to Pakistan, then firms within that industry have to be quick in having the right quality of

management and labor. Those who happen to be within the industry and can capitalize on those

KSFs (good management and labor force) are winners.

Every industry generally has just a few 2 to 4 major KSFs. And, mostly just about 1 or 2

outrank the others. There are a whole lot of KSFs in different functional areas of business, let

us just talk about a few that will put our understanding in a proper perspective.

· Low-cost production efficiency

· Quality of production

· Access to adequate supply of labor

· Access to quality management and technical expertise

· Strong network of dealers/distributors/wholesalers

· Company-owned stores

· Fast delivery

· Fast customer service

· Attractive styling/packaging

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· Perpetual advertising

· Superior information systems

Think of all the above factors, one by one, as something without which success of your

business venture cannot be guaranteed. You will start appreciating the importance of key

success factors.

Brand analysis

The point of departure for this stage is the model that we discussed earlier.

The brand model: Whether we are dealing with a new brand or an existing one, we must make

sure that we are considering all the dimensions of the brand correctly.

We must be clear about the brand essence and values. The core meaning of the brand has to be

expressed internally and externally. The personality should be such that imagery works

instantaneously for customers to recognize the brand identity. To achieve that, we have to make

sure that communication media is integrated, working for the same end with a coherent

message and campaign.

You must be clear about the place of the brand as part of the architecture. There should be no

inconsistencies. What is extremely essential at this point is that all these factors are consistent

with the market analysis.

Positioning: The definition of the model automatically should take you to the areas of

segmentation and differentiation. You cannot consider brand's essence, core values, identity

and personality, and the imagery without taking into consideration the segment you are going

to target and the point of difference you are going to offer. These two elements of segmentation

and differentiation lay the ground for positioning.

In the context of brand planning, you come up with a statement that describes the brand from

the point of view of differentiation. The concept is that you position your brand in the mind of

the consumer relative to competition in a way that it points out key differences. You create a

position that is not yet occupied in the consumer's mind, a position the consumer will own

immediately. Positioning in a way is redefinition of the brand.

Objectives: It is here that you start working with numbers in terms of sales volume, revenues,

margins, and other financial returns on the brand. This necessitates coming up with sales

forecasts as the backbone of all projections and extrapolations that you make.

You rationalize your projections by taking into account competition and hence the total market

size to objectively arrive at a level that you think your brand can attain. Existing or a new

brand, in both cases you work with pragmatic parameters.

One of the strategic aims here is to project the share of the market that you envisage achieving

during the plan period.

Brand picture: This part deals with the creative elements like brand vision, brand's promise,

and brand's contract. The most important task here is to see that all the elements look as

coherent part of the focused whole. They should be so closely and consistently related at every

point that they must look like one organic body, with no foreign part.

To elaborate further, all these strategic elements should revolve around the essence and

positioning of the brand. Delivery of promises and upholding of the contract will first

legitimize and then strengthen brand's position.

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Products and its variants: You must consider all the range items and sizes by flavors,

ingredients, recipes or whatever way the product is ranged. You must consider all that is learnt

about range and brand extension. You must keep into consideration utility of different sizes

meant for who, when, what, and where aspects.

The considerations must center on the strategic elements of promise and contract. Any

distancing between the two is going to make the plan incoherent, disjointed, and illogical.

Name: Despite having different and divergent opinions on the importance of name or the lack

of it, you should opt for a name that expresses brand's position and enhances its identity. It

preferably should not be too general unable to evoke right imagery, and at the same time not

too narrow unable to offer you the opportunity of extension in future.

Packaging: This should highlight brand's personality and leave a mark on the consumer. The

utility and usefulness of it should be fully considered; it should "not be overdone" and nor

should it give the impression of "much is left to be desired".

Pricing: After having learnt the strategic side of pricing, it is our decision to go for either cost-

plus pricing or market-based pricing. As the logic goes, market-based pricing makes a lot more

sense, but then you must know both your customers and competition well. Any pricing

strategy, therefore, should be the cornerstone of margins that the company wants to make.

Equally important is to maintain the balance between the margins and the "value for money"

proposition to consumers. Any undue effort to make profits will attract competition.

Last, but not the least, pricing should be linked to the positioning of the product.

Advertising and promotions: To keep your brand into limelight and worthy of recall and

recognition, it is important to advertise according to a well thought-through plan. Advertising is

an investment and not an expense. It therefore should receive top level support toward brand

building. Media selection for the optimal impact is a very delicate and strategic decision. You

should work very closely with the agency.

Nonetheless, it also is important for the brand to show the potential of generating a healthy

return on that investment. Promotions and other tools of communication should also be

integrated into the campaign sensibly.

Channel partners: For the simple reason that you are out to not only sell, but also to leverage

your brand to the maximum, your decision about what channels to use should be very practical.

One way is to follow the market norm; the other is to think improvements by getting into

combinations of different members of the channel. Another way is to get you directly involved

into distribution.

The objective is to maximize the outreach and hence availability of your brand by keeping the

distribution cost-effective, customer-friendly, and result-optimizing.

Suggested readings:

1. Thompson and Strickland: "Strategic Management" (95)

2. Geoffrey Randall: "Branding A Practical Guide to Planning Your Strategy", Kogan

Page (92-100)

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