Sunday, January 18, 2009

How To Harness The Power Of Brand Management by Dr Alan Dowler

Although it is possible to dress it up in different subtle words such as the ‘drive for shareholder value’, at this moment in time, many businesses of all sizes are simply struggling to make money.

Many are cutting back on costs, some are reviewing product investment, and most are slugging it out to win the very few sales that are around.

In some parts of industry, however, business leaders are also taking a closer look at a well-proven method of creating value: brand management.

It is surprising that brand management is not more generally recognised to be the powerful tool that it is. It certainly has more impact than many things attempted over the past 20 years by different management teams.

During that time companies have not hesitated in reaching for passing management fashions such as ‘total quality management’, ‘process re-engineering’ or dot.coms as a means to create profit. These fads, sponsored by pundits, gurus, or the City, have come and gone, with dubious impact on organisations and their profits.

But by contrast, a number of companies have managed brands, with their associated price premium, in different markets over many decades. They have shown that it is possible to create an entity which appeals to a group of customers and, over time, becomes a very valuable asset.

This flies in the face of much recent management thinking (that everything is changing fast and that price is constantly under pressure) but it is, nonetheless, true. It is astonishing that more companies have not invested extra resources and attention into what is a proven technique.

Unfortunately, brand work tends to involve a wide spectrum of activities. At one end, creative companies help to design new images such as the international tail fins for British Airways or new names such as Consignia. These projects attract public attention and sometimes criticism or even ridicule.

At the other end, journalists have challenged the ethics and integrity behind brand building, suggesting that brands exploit consumers, causing them to pay more than they should for the goods on offer.

The range of experts operating in the field of brand management proliferates by the day. In addition to professional brand managers in large corporations, there are strategists, design consultants and valuation specialists.

Yet it is still hard to define exactly what a brand is and as a result, many companies have ignored, to their detriment, the precious role that brands can play in the life of both companies and customers. It is therefore possible that industry might miss a very powerful, proven source of profit.

Despite the disparity of work, it is beyond dispute that a carefully designed image rests in the memory of customers and helps them to buy. We also know that numerous firms have proved that, by managing that image carefully, a product or a service will appeal time and time again to a group of interested customers. It becomes a familiar part of their life, giving them consistent benefits in their day-to-day life.

As a result, they will pay a premium for this offer and develop a loyalty towards it. But this does not mean that this incremental cost is not valuable to them. Quite the opposite. Over time, they become fond of these entities and, if they think about it, regard them as part of the landscape of their life.

What starts as simple reassurance about quality or consistency becomes, on a deeper but harder to measure level, an emotional bond in a hectic modern lifestyle of constant pressure and change.
As a result there are people who feel warmth towards a tin of paint, a sugar-filled drink or sports shoes. In fact these items mean so much to them that they can be as upset and unforgiving if they think a favourite brand has been damaged, as when a favourite soap character is killed off.

So why hasn’t this marvellous technique been more fully adopted by all businesses? The answer lies in the fact that truly adopting brand management often involves major changes to an organisation.

The company must become market, rather than supply-driven. Customer segments need to be clearly defined and their needs understood in detail. Branded propositions then need to be created, giving direction to sales, service and operating functions.

Large firms do not typically have the political commitment to radically alter the balance of power in their internal operations in order to achieve this longer term benefit. They have to be driven there by relentless market forces, often going through traumatic management change en route.

Smaller companies, on the other hand, can be daunted by the world-class power of better known brands like Coca-Cola or Nike. They forget that many successful brands, such as Uniliver, Virgin or Body Shop, were built from scratch by business leaders with very modest initial resources.

However, whether brand success has resulted from vision as with Mars or luck in terms of Virgin or the ravages of the market as has happened with the motor industry, the steps needed to succeed are well-known.

It is possible for any sized firm to create a brand which customers prefer and pay a premium for over many years. But first they must first understand the key customer groups; second, understand their rational and emotional needs; third, design a clear, unique proposition; and fourth, deliver consistent, reliable benefits over time.

In order to thrive, companies of all sizes need to take a hard-headed look at brand management. This has been shown in different sectors of the world to produce real value over time and guard against the ravages of the market.

GURPREET SINGH
http://www.sikhpress.com

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