Brand Planning: Understanding Driving Forces, Success Factors, and Brand Analysis | Exercises Brand Management

Brand Management (MKT624) VU

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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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 loss^1. 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:

On what basis customers choose between brands of different sellers?
What should a seller do to be competitively successful – what resources and competitive capabilities does it need?
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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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)

Geoffrey Randall: “Branding – A Practical Guide to Planning Your Strategy”, Kogan_ Page (92-100)

Brand Planning: Understanding Driving Forces, Success Factors, and Brand Analysis, Exercises of Brand Management

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