The rigors of keeping a business afloat in turbulent economic waters can try the most resilient and practiced of strategic muscle. And often, the harbor that is sought is the one which promises weathering the storm. Just maintaining your business is sometimes the smartest approach during a severe economic downturn. On the other hand, tough times can provide a springboard for fortifying your brand.
Following is a “PRIDE” framework of principles for better brands, enhanced profitability, and more-preferred products for the consumer.
P = Performance. Performance is what the brand does, or is supposed to do, particularly when it’s compared to the competition. But even though the product does something, this does not mean that the consumer recognizes its intended benefits. The consumer can guess what the product does, but needs product claims to decide what the product is supposed to do and why it is beneficial. The claims also help to ensure that the product is used properly for optimal benefit.
Thus, brand performance may not be what you think it is. Spend the time and money to determine what the benefits really are, how the consumer views them, and readjust the positioning of the brand based on what you learn. You may find yourself with a very different outlook on what you are selling.
R = Requirements. Requirements are the costs-of-entry for the brand to exist. If the brand does not meet the rudimentary needs that the user requires, then the product will not survive. A company can leverage both qualitative and quantitative tools to conduct market research on the business categories its brands compete in. These tools can be as simple as internally developed questionnaires to existing customers, and as complex as the engagement of a professional firm to conduct extensive market research.
Your brand promises something. This “something” is delineated by the existence of the product itself, by the claims you make about the product, and by what the consumer believes are the needs the product fulfills. The product must “do” what the user believes it must.
I = Investment. The investment to build value in a brand is the relationship between its overall costs and its overall performance. The cumulative costs of innovation, development, manufacturing, selling, and marketing need to be stacked up against margins and selling price. Understanding the value equation is paramount, since the company may have a fatally biased view of why the brand should command a high price.
An analysis of how much to invest in a brand also needs to consider the costs of winning share, to get consumers to try the brand, and to encourage consumers to repurchase the brand. If not viewed in their totality, the cumulative costs can prove fatal if the market is not able to support the pricing that the company needs.
D = Development. The development of a brand is the totality of decisions the company makes to create and to commercialize the product. Success factors have to be delineated for key parameters such as manufacturing, distribution, and advertising—and for determining the brand’s contribution to the company’s profit. “Soft” factors also need to be addressed, such as how the brand fits with the company’s other product lines and business strategies.
Making the decisions that lead to a brand’s growth also becomes exemplary of how well and how quickly a company makes decisions. Slow decisions might lead to the wrong decisions, just as hasty decisions might. Inherent to these decisions are the resource-allocation issues which arise because a company has finite resources. The company’s mettle is tested when it has to make decisions on which brands to develop, and which ones to forego.
E = Environment. With its external factors, the environment in which a brand exists has a significant impact on whether a brand will be profitable. Hence, during brand development and at regular intervals during the brand’s lifecycle, the company should be evaluating the competitive landscape. The key is not which tool is chosen to do this competitive intelligence, but the fact that the company does the analysis.
Products need to be benchmarked against other products, and companies need to be benchmarked against other companies. It could be that during tough times another company alters its strategy and starts competing in areas it historically did not. If this is against your brand, constant vigilance of the competitive landscape will keep the brand from being ambushed.
Times are tough, so make your brand tougher. Study what your brand claims to do, and how consumers use your brand. Look at the totality of costs and investments in the product, and see where more are truly warranted. And finally, look at how the company treats the brand, and how it is affected by what other companies are doing.
Decide to ride the waves, or make the waves.
Bob Lijana, a Professional member of IFT, is Vice President of Advanced Food Systems, Inc., Somerset, N.J. 08873 ([email protected]).