Brands are the largest intangible asset in a company’s balance sheet, the gap between its book value and the market value. These are built painstakingly over years by companies. They give them the competitive edge, help act as an entry barrier for new players and offer an anchor of trust to the consumer. Brands are holier than thou. They have a sacrosanct position in corporations.
The power of brands — both within a company and in the market place — is subtle but humongous in terms of strategy and execution. The whole equity of the brand is embedded on one key factor: How loyal is the consumer while making a choice and imposes a trust on the brand, while the logical mind rationalises the offer versus the price.
My belief, as we go forward, is that the aura of brands — being global, having been present in a market for decades or centuries, symbolising quality/premium and so on — is going to diminish and will be more and more challenged by a more informed, rational and risk-taking consumer. The consumer will seek justification in every experience while buying and using the branded product. This in turn will put fresh sets of demands on marketers, agencies, category heads and company leadership in nurturing, investing and positioning brands to drive demand, gain shares and enjoy a premium.
I enclose the following caveats which will increasingly make demands on our brand and marketing managers whilst shaping their future brand strategies:
# Brand managers and category heads have a clear positioning of their brands — the target audience, messaging, demographics, value proposition and so on. Demand straddles across the pyramid of price points and across demographic and psychographic profiles. The challenge is that "one size fits all” is not going to work. One choice is to have multiple brands but that is expensive. The desired option is how to elevate the brand to a broader halo image which can embrace and encompass a wide range of expectations of the consumer, and use the point-of-sale offers to distinguish the positioning and gain shares. Airlines do it well — having a promise for both premium and coach classes. Virgin has always been an iconic example of stretching the brand’s promise and personality across a wide section of categories.
# Brands have to be revitalised and made current and relevant on a continuous basis. As category expectations change — driven by competing offers and rising wealth — it is critical that the brand does not get boring and jaded.
# Conventional media mix and pattern of communication have to be revisited and challenged. There is always a bias to buy the most expensive spots in the most popular serial at prime time based on TRPs (television rating points). Brands with deep pockets can continue to cast the net wide or do intense carpet bombing to cover all possible media mix. Brands with limited budget and seeking quick wins and a “return on all investments” have to master the art of picking the right media mix and positioning. Consumer engagements over mail, browsing, Facebook, Twitter, chat rooms are increasingly shifting viewership from prime-time soap operas on TV or popular magazines and journals.
# To enable the brand experience, the whole organisation needs to gear up — to reach products and services at the right price point, with the full portfolio of delivery, service and buying experience. All this has to be done in the context of the profit architecture demanded by the category or the company. FMCG’s are cracking the code. Durables are not too far behind. Services love a large critical mass to tap since it spreads the cost base like in telecom and banking.
We are in a fast-changing and amazingly-exciting world. Conventional wisdom says if it is working and not broken, don’t change or fix it. This mindset would be a recipe for failure. Emerging markets like India and China are breeding consumers with demanding expectations, rational minds and increasing disposable incomes. These markets also attract investments and new entrants from across the globe. Local Indian houses have become extremely savvy in segmenting the country further and positioning the brand and its promise.
It is critical we have a vibrant and dynamic approach in challenging what is working and why should it continue to work tomorrow, and thereby keep piloting and scaling different blends of the marketing mix. The task does not stop with the brand or category heads — it is a collective ownership of the whole organisation since the delivery of promise is a must in every experience to retain loyalty and trust.
The author is managing director and CEO, Philips India
