Keep running…someone moved the Finish line

There is an aspect of brand building that makes it simple but equally complex. This aspect is knowing that ‘brand building is a journey and not a destination’. Brand building is a journey. There are no doubts or second guesses about it. If you believe you have reached your destination, your brand stagnates or starts becoming irrelevant. Even worse is when you are beaten by competitors fair and square because of their agility, nimbleness and desire to keep moving. Kodak believed it had reached its destination. We all know what happened to it. Blackberry decided to rest on its laurels a bit. Nokia believed that its first-mover advantage will last over its lifetime (I am personally very happy that they have announced their re-entry into the smartphones business and this time without any first mover advantage; they will be starting at the back of the grid of a race that runs faster than Formula One).

In a seminal article published in the July-August 2007 issue of the Harvard Business Review, Prof. Leonard Lodish and Prof. Carl Mela argued and put forward the case of investing in building a brand’s long term equity rather than focusing on promotions and discounts to drive sales. The article highlights the turnaround of Clorox as a brand in one of the more product-driven categories (bleach) through investments in advertising and brand building activities.

https://hbr.org/2007/07/if-brands-are-built-over-years-why-are-they-managed-over-quarters

In short, there is a need to rescue brand building from the quicksand of ‘short term thinking’. There is a huge dichotomy about how organisations address shareholders, institutional investors and industry bodies on corporate and business strategy vs. how brand strategy is formulated and implemented. Actually, the word ‘strategy’ is not even applicable for month-on-month marketing and sales initiatives that are implemented. They are simply ‘tactics’ and not ‘strategy’. There are some common fallback options used by marketers to rationalise the overuse of ‘tactics’ in their brand building plans – growth and profitability targets, shareholder pressure, senior management pressure, notoriously difficult to find growth opportunities, activism, civic society, stagnant markets and depressed consumer confidence.

All the above factors, in the first instance, may sound like plausible factors for short-term tactical thinking. In reality, all of them actually require medium and long-term thinking for effective resolution. Consequently, short-term actions taken by marketers to eat the low hanging fruit of sales jumps invariably leads to a situation wherein a brand witnesses dilution of equity, loss of distinctiveness, becomes increasingly commoditised and last but not the least, is perceived to be a discounter / cheap alternative.

In this 2009 article in Advertising Age, Al Ries discusses the impact of short-term marketing fixes on long-term brand equity, using the example of Cadillac:

http://adage.com/article/al-ries/damage-brand-short-term-gains-a-recession/135766/

In 2016, The Motley Fool published a detailed analysis on General Motors’ plan to revive the Cadillac brand. While reading through the article, it becomes evident that the revival strategy hinges on the success of long-term projects (and not short-term ones).

http://www.fool.com/investing/general/2016/03/12/is-general-motors-cadillac-a-relic-or-is-the-best.aspx

Let’s talk about the motivations behind building a strong brand (or in the truer sense of the word, giving justice to brand building). I am not an advertising man by profession, but I do give attention to David Ogilvy’s thinking behind brand building. One of his very famous quotes on building brands that stand out in their respective categories goes as:

“There isn’t any significant difference between the various brands of whiskey, or cigarettes or beer. They are all about the same. And so are the cake mixes and the detergents, and the margarines… The manufacturer who dedicates his advertising to building the most sharply defined personality for his brand will get the largest share of the market at the highest profit”

Building a strong brand requires a building a strong personality to support it. If I were to take a human equivalent – Building a strong personality requires the inculcation of strong positive habits. It’s also about delaying instant gratifications. It’s about not succumbing to impulses and behaving in a knee-jerk fashion. It’s about creating and leaving a legacy that survives for generations to come. For a committed marketer, brand building never stops (hence it is a journey and not a destination). Brand building requires continuous value creation, strengthening reasons to believe, and keeping the brand relevant in an age characterised by rapidly shifting consumer preferences.

If we were to create a hypothetical case study to illustrate some of the characteristics of a strong brand building mentality, it can take an interesting form and shape. Suppose your brand has a decent presence in the middle and high-tier gifting market. You are a committed brand builder displaying all the personality traits outlined in the paragraph above. So you didn’t succumb to the urge and you didn’t discount your brand’s offerings during the festive season while all your competitors followed through. Even though you didn’t discount, your brand offered special hampers for the festive season, introduced ‘limited edition’ ranges and attractive ‘multipack’ options and expanded the accessories line. The consequence of this different strategy was evident on revenue figures at the end of the festive period – your competitors enjoyed a 15% increase in revenues. On the other hand, your brand saw a 15% improvement in brand perceptions on key image attributes like ‘premium gifting option’, ‘attractive ranges’ etc.

Disciplined brand builders think long term and look beyond numbers (which are in itself low hanging fruits). Both the numbers above are 15%. The so-called competitors will book in a tangible increase of 15% in revenues in their brand’s P&L accounts. You, who is the disciplined brand builder, will record an intangible increase of 15% in your brand’s equity account. But over time and even during normal calendar months your brand starts generating more revenues due to enhanced brand perceptions.

In today’s hyper-competitive categories and fragmented markets, marketers are always looking for opportunities to grow their brands (even under the guise of brand management). The word ‘management’ in the phrase brand management is a fallacy now. Brand management today is all about charting new growth paths, identifying new territories to occupy, strengthening visibility and positive memories through purpose and meaning and being present at the right moments as a meaningful choice. Even for those who are Gung ho about price being a strategic differentiator – the focus has moved away from ‘price’ to ‘value’. Discounts and promotions are the biggest predators for consumer loyalty. Any brand that thinks that promotions will keep on getting them a larger share of the revenue time on and off is suffering from a delusion.

Any form of experiments with the critical elements of the marketing mix is a recipe for disaster. Spreading yourself too thin is another instigator for brand equity loss. In the last two years (2015 and 2016), we have seen a massive exodus of organisations selling off their non-core businesses. These are all examples of short-term initiatives going wrong. The latest is Marks & Spencer exiting the clothing business, attributing the failure to lack of focus and going outside their area of expertise:

http://www.bbc.co.uk/news/business-37906466

While we are at it, let’s also take a sneak peek into the raging world of startups. The graveyard of failed startups is getting so crowded that there is hardly any space left. Startups, barring a handful, are generally quite pathetic at brand building. The rate of failure is now putting the discipline of innovation (or should we say disruptive innovation) at shame. Again, it is an exemplification of short-term thinking and too much easy access to capital. Also it is about trying to solve a problem that does not really exist. In sum, the failure rates of startups may have actually exceeded the failure rates of new product launches that Nielsen diligently tracks and measures.

This Harvard Business Review article should actually become necessary reading with every bedroom entrepreneur toying with an idea and all in-house corporate innovation teams gleefully waiting to get their hands on writing the next product concept:

https://hbr.org/2011/04/why-most-product-launches-fail

Building a brand requires sheer discipline. Building a strong brand requires resilience, creativity, courage, foolhardiness, staying power, conviction and the ability to have a vision for the future. None of these traits have the word ‘short’ appearing anywhere in their descriptions.

To end with the words of the inimitable Philip Kotler:

“Don’t buy market share. Figure out how to earn it”

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