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Brand Management (MKT624)

Lesson 9

BUILDING BRAND VISION

Answers to filling the growth gap

The answers could be best obtained with the help of the following figure 13.

Figure 13

Source: Scot M. Davis: "Brand Asset Management Driving Profitable Growth through Your Brands"; Jossey-

Bass, A Wiley Imprint (46)

The company plans to register sales revenue of RS.170 million by the end of 2010. The

existing revenue level of year 2006 is RS.100 million. The plan, in other words, envisages a

growth of 70 percent, which translates into a yearly average growth rate of 17.5 percent. (This

is a hypothetical situation and does not represent a real life company case; in real life a growth

rate of 17.5 percent is very high and is witnessed only in high growth industries).

The challenging part is how to achieve what is envisaged. The senior management is convinced

that additional revenue of RS.70 million will come from a combination of the following

strategic moves:

· Strengthening of existing brand(s)

· Introduction of new products, and

· Acquisitions

The questions of brand managers regarding how to fill the contribution gap stand answered.

What the above reveals is that no single move can bring the company the desired level of

growth; rather, it needs to move into three strategic directions to achieve the objective.

The brand and marketing management know what they need to plan to strengthen the existing

brand(s), to introduce new brands, and to formulate moves for brands that are planned to be

acquired.

The intended targets of acquisitions may not be revealed to brand management immediately at

the time the top management envisions to do so. But, the fact remains that acquired brands will

also bring their part of contribution. Generally, acquisitions bring with them staff members at

the level of brand managers, who get immersed into company's management and continue

performing their functions to maintain consistency.

Brand Management (MKT624)

With the questions answered, brand managers find themselves a step further in building the

brand vision toward a clear picture of the brand.

3. Collect industry data and create a brand vision starter

Translation of visionary thinking into financial and strategic goals must have a base. Nothing

could provide a better base than analyzing the industry the company is a part of. Industry

analysis comprises the following:

· Defining the industry

· Determining industry growth and size

· Key growth factors

· Seasonality

· Industry lifecycle

Defining the industry: Defining the industry is the first step toward the analysis. You must

consider the following:

A description of the economic sector that the industry occupies manufacturing,

services, distribution, or any other

The range of products and services offered by the industry

A description of the geographic scope of the industry whether local, regional,

national, or international

The industry definition may also include a listing of major market segments. For example, a

computer manufacturer may divide its market into desk top computers, laptops and

notebooks, and servers for web hosting.

The idea is to find a definition that is broad enough to include all of the company's major

competitors but narrow enough to permit useful comparisons. However, it is better to be a

little broad than being too narrow.

Market Share

Industry size and growth: You have

Figure 14

Years 2006 - 2008

to determine the current size of the

industry for the company's products

2006

or services. You can determine this

through published data or informal

ABC

MNP

XYZ

means and arrive at numbers for total

units sold and revenue generated by

29%

38%

33%

all the players in the industry.

You can then go on to determining

the annual growth rate of

yesteryears, project for the next few

2007

years and compare that with your

company's. That will show you how

you seem to be growing as much as

33%

31%

37%

the industry, faster, or slower. Such

analysis will also enable you to

compare your company's growth

with other major competitors.

2008

Figure 14 exhibits market shares

enjoyed by three different companies

33%

23%

44%

ABC, MNP, and XYZ as projections

for a three-year period.

Brand Management (MKT624)

Company XYZ shows a consistent rise in its market share at the expense of the other

two companies. Company MNP is losing over the three-year period, while company

ABC is barely maintaining the marginal growth it is projecting to register in year 2007.

This kind of a comparison helps managers develop a realistic picture of the industry

and, hence, the standing of their own company while they are in the process of

developing a vision for their brand.

Another factor that brand managers should

Industry Growth

Figure 15

consider while analyzing market is the

Years 2006-2008

growth of the category or market. The rise or

2006

drop of market shares as projected for the

ABC

three companies can be interpreted in yet

29%

another way giving the managers better

38%

MNP

insights into the movements of different

33%

XYZ

players.

It is evident from figure 15 that company

2007

XYZ has a market position stronger than it

may look from the preceding figure 14. This

33%

company is gaining market share in a fast

30%

growing category, which is different from

having the same level of shares in a category

37%

that is growing slower or is static.

Company MNP is dropping its share fast over

the three-year period, but may not be losing

2008

the volume as fast. The volume may still be

the same as it is in the year 2006. Although a

consolation by way of utilizing the

33%

production capacity, the company definitely

23%

is not growing and is on the declining path.

Company ABC may be static in terms of the

market share, but it is gaining volume on

yearly basis. The situation, however, is not as

44%

rosy as that of XYZ and company ABC is not

reaping optimal benefits of the category

growth. Refer to the advantages that number

one brand enjoys as per the PIMS findings in lecture 2.

Such analyses arm the brand managers with analytical insights into realistic

comparisons and solid basis for developing the right vision for their brands.

Key growth factors: Growth factors are trends and conditions beyond the control of the

industry or firms within it. Such factors significantly affect market growth and the level

of demand, hence having impact on all.

The car and electronic industries in Pakistan have undergone a tremendous growth

phase owing basically to bank financing, which is easily available. The access to bank

financing is the key growth factor, which has given a new shape to the whole supply

chain of the two industries. The level of demand on part of those who are into

manufacturing of car accessories and electronic parts for TVs, for example, has

witnessed a growth rate unprecedented in the past.

Cyclical Influences

Cyclical industries are those that are directly affected by the rise and fall of external

economic cycles, usually the national business cycle. Cyclical industries generally do

Brand Management (MKT624)

well during strong periods of growth and do poorly during recessions. Typical cyclical

industries are manufacturing (consumer durables) and construction (cement and other

building materials), to name a couple.

Cyclical patterns should be identified to know the strengths and weakness of such

industries, if those affect your business.

Seasonality: It refers to the distribution of business activity during the year. If an

industry is subject to seasonality, then its sales in one part of the year are

disproportionate to the other part of the year. For example ice cream and cold drinks

have a higher level of demand in the typical season of summer. Brand managers must

consider such seasonal variations while they are in the process of developing the brand

vision.

Industry life cycle: It is important to know the level of maturity of an industry. There

are four stages that characterize maturity:

o Embryonic

o Growth

o Mature

o Aging

You, as brand managers, have to see what stage the industry is in and how you relate to

that cycle (one of the above four stages) in terms of growth rate, market share, product

line planning, investment in technology etc.

4. Meeting with top management to create the vision

Equipped with all the relevant details and information, you are now in a position to make a

presentation to the top management. In all chances, the findings should be acceptable to all

since many vital factors in the report owe their inclusion to information from the top

management. It can still be debatable, but you have a chance to defend the bases that have led

to the conclusion. It offers a good opportunity to iron out any differences that brand and

marketing management may have with other departments for the good of the brand.

A consensus on the report puts the company on the course to developing a clear brand picture,

which is the next strategic step in the brand management process.

BRAND PICTURE

The second step of the strategic brand management process is development of brand picture.

Toward creating the right picture, you have to do everything possible to create the right image.

The whole exercise of creating the right picture is to create meaningful parallels between the

brand's identity and its image. We know by now that more the image coincides with identity

the more brand managers are successful in communicating the right identity and creating the

right image.

Creating the right identity is of paramount importance, for it means that the product has been

given the right meaning that will be rightly received at the consumer's end. Creating a brand,

therefore, is the end of the process that is the sum total of all company resources deployed to

create the point of difference that highlights brand's identity.

Brands therefore are born out of the marketing strategies of differentiation and segmentation, as

is already clear from the discussion on all preceding concepts in general and the example of

company XYZ's vision statement in particular.

Brand Management (MKT624)

The soul of branding

Branding is not just putting a name on top of a product. Branding is that you do inside of the

product, that is, give it meaning through creating the point of difference in a way that its

identity is taken at the receiving end the way it is intended. It is because of such an identity of

powerful brands that you look at them as relevant and genuine even in the absence of a label2.

You do not give the same treatment to a fake brand even if it carries the label that may look

genuine. Why? Because the actual brand (the inner soul) is not there! The brand name is

visible, yet the brand is absent. The image, in other words, that consumers have of the two

products is different. In case of the original, it has the top of the mind image; in case of the fake

one, it has the bottom of the mind image.

How to develop the right picture?

The question is how do you create a brand that injects into the product what gives it the right

image? The first task toward doing that is to envision3:

· What attributes materialize?

· What advantages are created?

· What benefits emerge?

· What obsessions does the brand represent?

A brand picture has to answer all the

Brand Picture Process Starter

questions. A simple question that embodies

all the above-mentioned four questions is,

"what would the market lack if our brand

Right Segment

was not there?" If the answer is nothing, then

the brand managers may not go ahead with

the brand development.

If the answer is substantive, then the

substance will be found systematically

through the above four questions in knowing

Right

the features, advantages, benefits, and the

Differentiation

Figure 16

obsessions the brand offers. Therefore, once

brand managers are gone ahead with the right

vision and the purpose, the right image will

result.

Figure 16 illustrates the process of

Right Product

developing the brand picture - right segment,

right differentiation, right product, right

identity, the right image!

The right picture gives you the right basis for

the brand strategies that will leverage the

brand the way it is envisioned. An important

thing to keep in mind is that brand picture is

Right Identity

externally driven with customers as the focal

point3. It takes into account customer needs

and the competition. The competitive

environment gives you the right customer

perspective regarding your product vis-à-vis

competition.

Right Image

Brand Management (MKT624)

Summary - lectures 8 and 9

Building brand vision is the first step of the strategic brand management process. To leverage

your brand, you should build up the brand vision by considering all possible strategic factors

like growth the company envisages, the ability to reach strategic goals, introduction of products

and then sustaining those products.

Brand managers must start the process by seeking top management's input on matters of

strategic moves before they develop the right vision, which leads to developing the right brand

picture. The whole process is very strategic and therefore must take into account why a

particular segment should be served and how the company offering will best serve that segment

of the market.

Identification of the right segment will enable the brand managers to develop the right product.

Identity of the product, if created right, will lead to the right image that lays the foundation for

the right brand picture.

Bibliography:

1. Jean-Noel Kapferer: "Strategic Brand Management"; Kogan Page (47)

2. Jean-Noel Kapferer: "Strategic Brand Management"; Kogan Page (47)

3. Scot M. Davis: "Brand Asset Management Driving Profitable Growth through Your

Brands"; Jossey-Bass, A Wiley Imprint (53)

Suggested readings:

1. Scot M. Davis: "Brand Asset Management Driving Profitable Growth through Your

Brands"; Jossey-Bass, A Wiley Imprint (37-48)

2. Jean-Noel Kapferer: "Strategic Brand Management"; Kogan Page (46-59)

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