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The second step of the brand planning process, market analysis, focusing on driving forces and key success factors. It highlights how these elements impact business strategy and success. The document also introduces brand analysis, which involves defining a brand's essence, values, positioning, and objectives.
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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.
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:
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)