A brand can be a name, sign, symbol, design, unique packaging or any combination of these. According to Philip Kotler and Gary Armstrong in Principles of Marketing (Prentice Hall, 2009), it is a powerful marketing tool in the battle among competing organisations for long-term consumer loyalty and it can insulate a firm from its rivals’ promotional campaigns.
All of us would probably admit to being brand conscious to a certain degree. When we’re grocery shopping, for instance, there will be some specific brands that we’ll insist on buying rather than other products because we associate with them the level of quality that we require. To a large extent they represent safe ground.
Some brands have even transcended the name of the product or service that they represent. How many of us still “Hoover the carpet” when there are countless other brands of vacuum cleaners on the market, for example? Or how many of us “Google it” rather than “do an internet search”?
Brand management can even sometimes be too successful, achieving associations that are entirely different from what was originally envisaged.
One of the reasons cited for Gillette’s 1980 withdrawal from sponsoring televised cricket in the UK is that the success of its 17-year brand management campaign using this medium made the firm a household name mainly for the Gillette Cup, rather than for its shaving products and men’s toiletries.
Planning, control and decision-making are at the heart of what managers do: strategic managers plan long-term objectives; tactical managers set processes and organise resources to achieve those objectives; and operational managers measure the extent to which the objectives are being achieved. Brand management can therefore be defined as developing and implementing a strategy with the long-term objective of putting a brand at the forefront of consumers’ minds. This approach aims to influence the initial buying decision and build customer loyalty, creating a habitual purchasing relationship between brand and buyer.
For strategic managers, this will involve aligning business objectives with consumer objectives, which is how marketing in its purest sense is defined – establish what consumers need and desire, and satisfy these needs and desires profitably. The tactical managers’ role in this process will be to ensure that appropriate marketing methods are used and sufficient resources are mustered to meet demand while maintaining a consistent level of quality – if a product is out of stock or falls short of what it says on the tin, customers will soon switch to a rival and often don’t return. Operational managers will design and implement monitoring systems to ensure that information is fed back to senior decision-makers. This information will be both quantitative and qualitative.
Companies with a wide range of brands often create a product management or brand management organisation. This approach was first adopted by Procter & Gamble in 1929 when its new soap, Camay, was struggling in the market. It appointed an executive to focus exclusively on improving the performance of the ailing product, which proved to be a highly successful move. The company soon adopted this organisational structure throughout the business. Most of P&G’s brands have since become household names and many companies in the food, soap and toiletries industries have copied its approach.
Implementing a strategy is widely recognised to be inherently harder than planning one. Different firms may choose identical strategies, but one will be more successful than another because of superior execution. This is where the marketing toolkit that organisations use to build their brands becomes essential. Here, too, it’s not so much about which tool you choose; it’s how you use it that can make the real difference.
Confucius said: “I hear and I forget; I say and I remember; I do and I understand.” Experiential marketing is a technique that attempts to put the wisdom of this philosophy into practice by interacting with prospective customers, often face to face, and encouraging them to use the product. By engaging consumers via product trials, the marketer hopes to turn an intangible set of apparent features into actual benefits or “satisfiers”, based on personal experience.
Experiential marketing is not a new concept. One of the earliest examples dates from the late 1800s when John Culpepper, a travelling salesman, touted his elixir of bitters, alcohol and cayenne peppers around the US. He invited boys from the gathered crowds to swing on his long black hair as evidence of the medicinal powers of his $1-a-bottle elixir. As you might imagine, this was a scam, the hair in fact being that of a horse’s tail, but experiential marketing has endured as a popular – and bona fide – technique. In 1914, for example, Nils Granlund, marketing manager for Loew’s Theatres, produced the world’s first movie trailer. Although it was designed to advertise a stage show, his idea was soon adopted by Hollywood as the main method for marketing new films. This experiential approach has clearly stood the test of time.
In practice it is rare for one marketing activity to be used in isolation and a campaign will invariably comprise other approaches, each one providing a link in the chain towards attracting and securing customers. Any permutation of the seven “Ps” of marketing – price, product, place, promotion, people, processes and physical evidence – can be used as part of an experiential approach or to reinforce it. Here are some examples of how they can be applied:
Price. At their check-in desks, some airlines offer passengers a heavily discounted upgrade to business class. The idea is that some people who take advantage of this will remember their enhanced flying experience and be prepared to pay a premium for it on the next occasion they book a ticket. This approach has the extra benefit of generating useful marginal revenue for the airline.
Product. Many software providers offer a free trial period so that users can try applications in a real situation before buying. Developers build a “time bomb” into the coding so that their programs will stop working by a certain date unless the user buys an activation code. Even well-known brands such as Adobe now offer such free trials.
Place. Golf equipment manufacturers such as Ping, Callaway and Taylor Made run “clinics” at public driving ranges where aspiring amateurs can hit shots using their latest products. This type of marketing campaign is location-dependent, because private golf clubs largely restrict access to members only.
Promotion. Ikea implemented an unusual experiential marketing campaign in 2010. It used distributors to hand out its catalogues to people in public spaces such as railway stations and shopping centres in an effort to engage them indirectly with its products.
People. The Red Cross of Argentina recently used a man integrated into a plastic sculpture in order to raise awareness about the adverse effects of climate change. The “melting man” distributed leaflets urging passers-by in the Plaza Francia, Buenos Aires, to buy eco-friendly goods, recycle as much as possible, use public transport etc.
Physical evidence. As individuals we tend to give more credence to the views of other consumers than we do to sales pitches. Marketers often enhance their promotional material with testimonials from satisfied customers. It’s not uncommon these days for firm’s websites to have dedicated “consumer reviews” sections.
Processes. How we are able to acquire the goods or services is all part of the marketing experience. This depends on the context, so rapid service at McDonald’s provides a positive experience, for instance. Conversely, we tend to want the opposite at an upmarket restaurant, where a more leisurely and relaxing dining experience is desirable.
The benefits of successful brand management strategies and experiential marketing campaigns can be measured in terms of robust and repetitive cash flows. As competition for consumers’ disposable incomes intensifies, particularly in regions where austere times are evident, successful brands cannot rely on consumers’ past behaviour to guarantee their future profitability. Austerity brings with it increased price-consciousness and consumers may be forced to sacrifice some quality in order to save money. As a result, established brands must continually look over their shoulders for the next rival – after all, who had ever heard of Sony in 1968, or of Dyson in 1983?
Exam practice
Try the following question to test your understanding.
A model answer will be published in the December issue of Velocity, CIMA’s online student magazine (www.cimaglobal.com/velocity).
Company F is a medium-sized family-owned business that has engaged in root-vegetable farming for three generations and now owns four farms. It employs 60 people, of whom 12 are members of a field sales team covering all regions of the country. These are supported by a telesales team of four, who sell directly and also make appointments for the field sales reps.
The managing director – the founder’s grandson – believes that F’s current business model is unsustainable given the squeeze on farming margins. He is planning to branch out into the premium crisps market with a new product, HLF crisps, using healthier production techniques and organic ingredients. F has ample buildings on one of its farms to house the production line.
While HLF crisps will carry a premium price tag, F’s initial market research suggests that 90 per cent of the crisp-buying population will be able to afford them. The retail market is dominated by large players producing household brands and by supermarket chains with which F has no supplier relationship, so the only realistic market opportunity is to supply independent retailers with the product via direct contact or intermediary wholesalers, some of which it already supplies.
The firm has a relatively healthy balance sheet, but funds for the product launch will be limited and the MD is under pressure from other family members not to over-gear the business unnecessarily in order to establish the HLF brand.
You are required to:
Explain how F can develop and implement a brand-building strategy that will enable it to establish
HLF crisps in the marketplace (15 marks).
Explain how F can use experiential marketing as part of its brand-building implementation strategy (10 marks). |
