Brands are too important to be left to brand managers. Unfortunately, their value, both in the consumer’s mind as well as on the balance-sheet, is not always reflected in the time and attention given by many companies’ top management.
Brands represent the embodiment of a company’s differentiation and positioning. For service businesses, the organisation and its people are the brand. As the global economic downturn taught us, it is even more crucial to maintain, and if possible to build, brand equity. In fact, there are several lessons to be learnt from past downturns, all of which require dedicated CEO involvement.
The temptation to cut marketing investment in an attempt to be ‘leaner and fitter’ can lead to emaciation and, eventually, failure. Companies often make cuts across the board, especially where it is ‘easier’ to make short-term cuts such as R&D, training and marketing, but these are the value-creating activities which drive long-term equity.
If you have to make cuts, then this should not be across the board but through a careful analysis of marketing objectives and priorities and by cutting less productive activities and less profitable markets and customers, replacing them with specifically targeted activities.
The UAE, for example, was shrewd in responding to the downturn with the emergence of widespread discounts and deals. An obvious example is the Entertainer, the definitive collection of coupons, which now boasts several editions.
Working smarter and using more of a ‘judo’ metaphor to make budgets work more effectively is another response. This can be through greater use of guerrilla methods, word of mouth, digital marketing or by doing the unexpected.
There is an even greater need for focus — on clear brand positioning and across the brand portfolio.
Consumers have increasing buying power and much better information than in the past as a result of communications technology, globalisation and higher marketing sophistication. Younger consumers do not appreciate being ‘marketed at’ and are suspicious of traditional marketing communications, often creating or preferring their own word of mouth or community exchange.
The result of all of this is brand fragmentation, frequent lack of brand focus, and a dilution of marketing resources — i.e., failure to put enough muscle behind a focused range of brands. This is why many of the big consumer goods companies such as P&G, Diageo, Danone and Unilever have been pruning their brand portfolios and concentrating their investment on so-called power brands.
Successful brands occupy a strong position in the consumer’s mind, which is where the crucial battle takes place — consumers own the brand in this sense. In the strongest cases this can even be reflected in everyday language, for example Xerox; Kleenex; and nowadays ‘to google’ has become a verb.
Strong brands should exemplify a clear value proposition — Jumeirah stands for luxury, BMW for driving pleasure, and Emaar for engineering.
Another lesson — get the branding basics right. Maintain trust with the consumer and remain authentic and honest.
Trust has become a particularly salient value in all markets — consumers will be loyal to brands they can trust. The young, particularly have become sophisticated critics of marketing hype and are quick to spot conspicuous fakery or unethical practices. Heritage stories are particularly beneficial and it is the CEO’s job to ensure that this story remains central to the brand and company’s position.
So, in conclusion, when it is easy for companies to become distracted by adverse market conditions of one form or another, strong CEO involvement to manage and nurture brand equity as a key strategic asset is vital.
— The writer is a visiting professor on the Dubai EMBA at Cass Business School and Professor of International Management and Marketing, ESCP Europe.