Tag: Brand Strategy

Why you may need to reposition your product

There may be times in a product or brand’s life cycle that it needs to be repositioned in the mind of consumers. A famous example is Listerine which was first sold as a general household detergent and which is now sold as a mouthwash against tooth decay and gum disease.

The most difficult thing with repositioning a brand is removing the existing brand image and expectations from the minds of target consumers. The longer a product or brand has been around, the harder it is to reposition.

Skoda cars is another example of good repositioning. For years, when Skoda models were produced under the Communist Czechoslovakian government behind the ‘Iron Curtain’, the cars were seen as cheap, poorly built, inefficient and unfashionable. When the Warsaw pact fell apart and Czechoslovakia became part of the EU Skoda was purchased by Volkswagen Audi. The Skoda brand was repositioned as a fighter brand; a cheaper version of a standard Volkswagen. today, with models like the Yeti, Skoda is a mid-market car brand showing good build quality and good value for money.

There are four reasons why you may need to reposition a product or brand:

  1. A competitor produces a product which is positioned in direct competition to your product and is therefore taking market share from your brand. The need to reposition may be strong if said competitor is larger and better resourced than your organisation. A larger competitor may be able to quickly take control of your market niche.
  2. You may need to reposition as consumer preferences change. In the UK food preferences have changed as our diet has become more international. In the 1950’s you could only buy Olive Oil at pharmacies where it was used to clear ear wax. Then, following the boom in Mediterranean package holidays exposed British travellers to the food of Italy, Spain and Greece. Olive Oil is now a staple in the UK diet and our consumption of animal fats like dripping and lard has reduced. Animal fat producers have had to repurpose their brands to meet the consumer preference for vegetable oils and fats.
  3. There may be new customer preferences. For many years Lucozade was marketed as a health drink for invalids. Advertising often included a glass bottle of Lucozade in it’s plastic wrapper on a hospital bedside cabinet. Today, given the expansion of fitness brands, Lucozade has been reformulated as an isotonic energy drink for athletes.
  4. A mistake was made with the original positioning. Ready Brek is an example where the product was repositioned because the original marketing strategy failed. Ready Brek was first marketed as instant porridge. It was rejected by those who liked porridge for breakfast. They saw the product as fake, they didn’t like the taste. Some rejected Ready Brek as it was ‘too easy to make’. Ready Brek was repositioned as ‘central heating for kids’ a warming breakfast for kids during the winter months.

Repositioning is risky. Changing consumer perceptions may alienate existing consumers and the new target customers may not accept the new definition of the product or brand. New positions may end up lees attractive than the former position. Continually trying to shift consumer’s perceptions of a brand, non-stop repositioning, may only cause confusion.

There are three sub-divisions of repositioning:

  1. Repositioning for Existing Customers: This is possibly the safest form of repositioning. You reposition the product with existing customers by offering new ways of using the product. This is why many larder staples come with recipes printed on the pack. This is a good way from shifting a product from being a standard item in the cupboard to one which is keeping up with new ideas.
  2. Repositioning for New Customers: Try to develop a new image for your brand amongst people who do not normally use it. Ugg sheepskin boots began by being marketed to male surfers to keep their feet warm when they had come out of the water. Now they are retailed as a female fashion item.
  3. Repositioning for New Uses: Often consumers will find new uses for a product. Astute businesses will spot these new uses and use them to promote their products. Powdered Gelatine was a food additive, but now it is also used as a way for women to strengthen their finger nails. Super glue was first created as a way of sealing wounds on the frontline during combat. That is why it is so good at sticking your fingers together. Today, it is marketed as a strong general purpose glue for repairing household goods.

All repositioning carries a degree of risk. If a product is selling reasonably in its existing market, it may be better to leave its position alone. A better option may to be to create a new product or brand to meet new customer perceptions. However, if your product is losing ground to your competitors, repositioning may be the best option.

Anyone who was around in the late 1980’s will remember the disaster of ‘new recipe’ Coca Cola. The recipe change was an attempt to reposition the Coca Cola brand in response to increased competition, particularly the success of Diet Pepsi. The repositioning strategy was an utter failure and caused Coca cola significant reputational damage.

Strategies to Grow a Brand

Last week I discussed the strategic options for market leaders and I pointed out that in most first world countries, most markets for goods and services are mature.  This means that options were restricted to three main choices:

  1. Growth through increased usage by existing customers
  2. Growth through taking competitors’ market share
  3. Growth through finding new uses for existing products

Here are some examples of brands being built through these strategies and associated tactics.

The first example is Bailey’s Irish Cream liqueur where the brand was built through building volume of use per capita.  This strategy involves shifting usage of the product from low volumes to higher volumes.

Bailey’s was a mature brand and it had developed a restrictive image.  It was seen as a drinks for special occasions, particularly Christmas and New Year. Bailey’s was a drink for little old ladies and due to it’s sweet taste it was served in small measures.

For Bailey’s to improve its market position and to have long-term survival, this image had to change as did the way in which Bailey’s was used.

An extensive marketing campaign making massive changes to Bailey’s marketing mix was instigated. Advertising promoted the liqueur to young women.  They were encouraged to consume Bailey’s over ice in large glasses. New Bailey’s glassware was sent to pubs and nightclubs. Consumer packs containing the larger glass were distributed to retailers. Bailey’s was promoted as a drink for any occasion, not just Christmas, a beverage for a night out on the town.  Bailey’s took the opportunity to sponsor Sex and the City, at the time the most popular television programme amongst women in the 18 to 35 age demographic.  the drink was reimagined as one for those who are outgoing and as one of fellowship.

This new image significantly increased usage and sales of Bailey’s amongst target segments.

There are three levels of growing usage per capita which were leveraged in the Bailey’s campaign.

  1. Abandoning Cost-Plus Pricing: Prices are set based on the price point of the most popular product in a geographical area.
  2. Gaining Local Monopolies: This does not mean gaining more than 35% of the market (the traditional definition of a monopoly situation).  Local monopolies are created by flooding the marketplaces with opportunities to purchase and consume the product.  Everywhere the target consumer goes or congregates, they should have an opportunity to purchase.
  3. Adapting Prices to the Buying Situation: So the prices for Bailey’s in a night club will be more than in a pub or bar. The price of Bailey’s in a retail situation will be lower than at a venue.

Specific marketing plans need to be created for each purchase opportunity.  For Bailey’s this could mean different marketing mixes for supermarkets, bars, restaurants, vending machines and hotel mini-bars, off licences and general stores.

Coca Cola, the long time market leader in the soft drinks market has continually developed and amended such segmental strategies for decades.

In addition Coke has two critical alliances to grow sales; with Macdonald’s and with Bacardi.

The McDonald’s alliance targets young consumers and looks to continually refresh Coca Cola’s customer base.  It aims to build the habit of consuming Coke amongst teenagers who will hopefully continue to consume the cola for the rest of their lives.

The alliance with Bacardi, which includes pre-mixed bottles of rum and coke, targets adult drinkers and the use of the cola as a mixer. Bacardi Rum is the world’s most consumed spirit drink.

The second way to grow a brand  in a mature market is to address barriers to consumption.

Surprisingly Coca Cola were slow to address the issues consumer’s had with their product, in particular health concerns and concerns that the soft drink contained too much sugar.  Sugar free soft drinks like Tab and even Coke’s main rival Diet Pepsi, were established in the market long before Diet Coke arrived.

However, Coke has used its market position to launch a series of healthy option to break down consumer’s reluctance to buy the drink.  They now produce a range of low sugar and sugar free options such as Coke Life (with added vitamins), Caffeine Free Coke, Diet Coke, Coke Zero (No sugar) and Caffeine Free Diet Coke.

However both these strategies only go so far.  The easiest and most cost effective option is to get your existing customers to consume more of your product.

There are two ways to increase existing consumers consumption. To get them to use more of the product and to get them to use the product more often.  You want to turn consumers who only buy a small amount of your product into customers who are medium consumers and medium consumers into heavy consumers.  You want to turn occasional customers into regular customers and regular customers into ‘dominant customers who will only purchase your brand)

Every marketer should be aware of the Pareto Principle (80% of your returns come from 20% of your activities). Similarly the heavy use/dominant customer group represents 10% of brand buyers and 50% of brand volume.  To grow this heavy/dominant group you need to use behavioural segmentation to target particular consumers.

You need to ask consumers why they are reluctant to buy your product and address their specific barriers to consumption. You need to build a marketing mix based on specific product improvements and higher experiential benefits.  It is very rare to find that consumers reluctance to purchase a product is simply to do with the product’s image.

You also need to ask why consumers prefer other brands.

The third way to grow a brand in a mature market is growth through addressing new uses and situations.

You have to ask:

  1. Your brand is for what?
  2. Your brand is for whom?
  3. Your Brand why?
  4. The brand against whom?

Consumers want solutions to particular problems. They want a five millimetre hole, not a five millimetre drill bit. Can your product solve multiple problems e.g. Listerine began life as a household detergent now it’s sold as mouth wash.

A Porsche 911 isn’t the car for the school run or going to the supermarket but the Porsche Cayenne 4×4 can be used for those purposes and provide sport’s car performance. Car firms often enter into joint venture to allow brands to meet new uses.  For example, Aston Martin have a joint venture with Toyota to produce a small, fuel efficient city car.

Growth can also be obtained through getting existing consumers to ‘trade up’.  This is why, when you go to a Volkswagen dealership you are bombarded with a multitude of options for your car. Brompton Bicycles go one further and allow consumers the opportunity to effectively design their folding bike from a dizzying array of product options. You can produce gift packs or extend your brand to related uses e.g. the Christmas box of fragrances which contain aftershave, deodorant, shaving balm, shampoo, shower gel, etc.

Special editions of products can also help consumers ‘trade up’.  Fender guitars produce special edition models of their guitars which are produced in small numbered batches. For example, the alternative reality series where each month a short run of guitars is produced with novel body shapes, different neck woods, different switching options and pick up configurations.

Most whisky distillers give consumers to trade up to 10, 15, 20 and 25 year old maturations, they produce cask strength whiskies and age their brand in different casks e.g. bourbon or sherry casks.

Growth can be developed through line extension.  Think of the number of formats and sizes in which Coca Cola is sold.  Coke’s largest sales are not in bottles or cans, single items or in multipacks, it is the sale of syrup to bars and caterers for mixing with carbonated water at the point of sale.

You can provide incremental variance (e.g. Volkswagen’s huge choice of engine options)

You can multiply the physical forms of your product, so Ariel washing detergent comes as a powder, a liquid, in tablet form and as a gel sachet.  You can provide different versions of your brand for different purposes; so Dettol produces an all purpose cleaner but also specific product options for bathrooms and kitchens.

Line extensions represent 85% of new products placed on the market.

However, when creating line extensions you should beware hyper-segmentation.  New line extensions must have mass appeal.

To manage line extensions well you need to:

  • Improve cost accounting to minimise additional costs in the value chain
  • Prioritise resources to high margin extensions
  • Your sales force should be able to describe the reason for the each extension in a few words
  • You withdraw products as consumers move over to line extensions (you will likely need to encourage such withdrawal).

Finally, you can grow a brand through innovation.  Colgate toothpaste is regularly reformulated with new innovative options such as sensitivity relief, whitening and gum health solutions)

Colgate is an example of incremental innovation so a premium product moves to being the standard product over time as innovations are introduced.

Some firms are seen as innovation champions and they are aware of the benefits and impact of an innovation from its inception.  these innovation champions know they can leverage higher price points than their competitors confident in the knowledge that the innovation provides real customer benefits.  Innovation champions also work to gain more prominent shelf positions, such as eye-level and aisle ends.  They will be willing to pay supermarkets for these locations.  Innovation champions will also clearly advertise innovation benefits including prominent display of innovations on packaging.

Is Your Brand Coherent?

There are two types of brand; generalist brands which are aimed at multiple market segments; and specialist brands; which are often targeted on a single market segment.

Generalist brands often have products which are sub brands.  For example, Heinz is famous for its 57 varieties (in fact there has always been far more than 57 Heinz product lines). Heinz Tomato ketchup is a sub-brand which has a number of product variants e.g. reduced sugar content and organic ketchup.  Generalist brands demand a differentiated marketing strategy.

Specialist brands have products which are variants. Morgan is a specialist sports car brand aimed at vintage motoring enthusiasts. The brands products are variants of the vintage sports car design (including the three wheel tricycle). Jim Dunlop is the go to brand for guitar plectrums and a wide variety of plectrums is produced using different materials to give distinct tones.  Specialist brands require a niche marketing strategy.

There are commonalities between generalist and specialist brands.  Both have physical and intangible attributes.  Both have core and peripheral facets. To be successful and to grow brands, these attributes and facets have to be coherent.

Commonly, brands grow through multiplication.  growth through the introduction of product variants.  In this way specialist brands can grow to become a generalist brand and market expansion occurs.  There is a gradual shift from a niche strategy to a differentiated strategy.

Often growth requires adaptation of a brand’s products as the initial market is expanded and growth may also require the adoption of new distribution channels.  The marketing mix may need to be adapted to suit the requirements of these new distribution channels. Care needs to be taken to deal with potential channel conflicts e.g. pricing disparities.

Often market expansion to grow a brand means going international. In such circumstances brands may need to be adapted to suit different cultural and social norms.  The use of local agents and distributors may mean that there is local reinterpretation of brands.

What is certain is that growing a brand introduces diversity.  So how do you grow a brand without losing the necessary facets and attributes of the brand identity?

The answer is the creation of brand coherence.  Growth of a brand should not be seen purely in terms of increases in sales and profits. You also need to grow the brand’s reputation, identity and its defences against competition.

This means that brand growth requires your business to be coherent in everything it does.

Brands are constructed in stages; from top to bottom.  Senior managers will create a brand platform, the core of a brand; its identity.  Functional management will then create products services and experiences which fit that brand identity.

Consumers however view brands in the opposite way. They see the products, services and experiences first.  Consumers assess the essence of a brand through their expenditure and the processes they have to go through to access and use the brand. The brand identity is perceived through repetition of this process.

A consumers first contact with a brand is the beginning of a journey to the understanding of a brand’s identity.

So managers across an organisation from Marketing to HR, Finance to Operations, need to know the perception an organisation is trying to create in the minds of consumers with respect to the brand.  They must be sure to eliminate that which does not conform to the required brand perception.  So a successful brand, to be coherent external to the organisation, needs strong internal policing of brand activities.

You need to build a brand through specific brand values, its exclusiveness and by the creation of motivational added value.

You need to teach and repeat brand coherence over time.

However, repetition of brand attributes to build coherence does not mean uniformity. Repeating an identical message over and over again is boring. To drill your brand coherence into the minds of consumers, you need surprise.  However if you overdo the variety in your message, your brand identity will turn out fuzzy and incoherent.

Brands need family resemblance, but everything should not be cloned. There and be difference but within a family resemblance.  The Kardashians are a family brand but each member of the family is different.  However each Kardashian shares family traits.

So when growing a brand you need to retain core family attributes and the core identity whilst carefully introducing variety and surprise.

A brand name is a point of reference and an indicator of added value. If you put a product under a brand name, you are attaching that brand identity to it.  If the product does bot conform to expected brand attributes, it is incoherent, and can risk the brand as a whole. Consumers must be able to visualise the family identity in the product.  Critical in this are product packaging, labelling and other physical elements of the brand.

If extending a brand, the introduction of big changes can weaken family identity.  Family identity cannot be reduced solely to physical appearance. You need to create and sustain the brand halo.

Brand coherence is not brand uniformity. An excess of uniformity kills consumer desire. Coherence involves little surprises but the maintenance of core brand values.

Brand coherence is a see-saw balance between those surprises and brand specifics.

Brand Architecture

Your choice of brand architecture has a strong influence on your organisational structure and your corporate marketing strategy: it affects how your organisation operates.

When you are developing a brand, someone in your organisation must meet the definition of a brand master; that is an individual who ensures that there is the necessary cohesion across your organisation’s divisions and territories to ensure the brand’s success.

The more a company moves to the position of a ‘branded house’, the greater the amount of cohesion required.

A brand master looks after brand values, not just the physical attributes and functional characteristics of the brand.

Developing a brand architecture is a critical responsibility of the brand master and other senior managers in your organisation. So what are the different types of brand architecture?

The Product Brand Strategy

This is the traditional ‘House of Brands’ approach.  An organisation’s products and services have individual brand names and brands have uniquely identifiable facets. Facets include brand symbols, logos, concepts and statements.

In the product brand strategy a brand name is associated with a single product.  The brand distinguishes that product from others in your range.  The brand has its own significance and meaning. It has exclusive positioning in the market.

An example is the Accor group of hotels.  The group has numerous hotel brands including Sofitel, Ibis, Suit Hotel, Formulae 1 and Motel 6.  Each brand has a unique identifiable market position.  Consumers may actually find it difficult to identify that each of these hotel chains belongs to the same corporate group.

In the extremes of the product brand strategy, a brand has an exclusive market position. The brand is its own market category. The product is so specific and unique that there is no other name for the category than that of the brand. The brand may be protected by patents and other intellectual property rights.

Usually in such an exclusive position, brand extension can only be achieved through reformulation of products.

A product brand strategy has the following advantages:

  • If your business is focused on one market segment, it is a strong offensive strategy with the aim of market domination
  • It is a strategy which allows each of your products to occupy different market segments with specific needs and expectations
  • It is a strategy to consolidate market share by becoming a category leader.
  • Your corporate name becomes discrete, if not hidden.  The focus is on brands, not your corporate identity.
  • The strategy can be used by innovative brands looking to pre-empt a market position i.e. to be the first brand in a new market or segment.
  • A unique brand identity helps consumers perceive brand characteristics
  • A product brand strategy allows risk-taking as the risks associated with one brand do not infect other brands in an business’s portfolio.
  • It allows a firm to dominate shelf space at retailers leaving little room for competitors and new entrants.  Think of your local supermarket cereal aisle, how much space is taken by Kellogg’s products?

However, there are drawbacks to a product brand strategy, predominantly economic drawbacks.

  • A product specific brand strategy can be expensive and it is not for the faint-hearted or businesses with tight finances.
  • It is a strategy which offers increasingly narrow segmentation options and which hinders rapid return on investment.
  • Often high sales volumes are required to justify the costs of the strategy.
  • It is not a suitable strategy for small or saturated markets.

The product brand strategy requires firewalls between brands.  These firewalls prohibit the development of a halo effect where the reputation of one product or brand does not assist the reputation of others in the brand.  Economies cannot cross brand firewalls.

The Line Brand Strategy

This is a variant of the branded house approach where a single brand name is used for products in different categories. One consistent and coherent response is used across market segments.  An example is L’Oreal Studio line, where the brand covers a range of hair products from shampoos and conditioners to hair gels and waxes.

The line brand strategy is often the result of successful brand extension.

There are multiple advantages to the line brand strategy:

  • It reinforces the selling power of a brand.
  • It facilitates further brand extension
  • It reduces launch costs of extension products
  • There can be a halo effect where the reputation of existing products in the line is transferred to new additions to the line.

However, there are also disadvantages.  in particular there are limits to brand extension strategies.  Extension products should have a clear link to existing products which is understandable by target consumers.

Range Brand Strategy

This is the strategy used by firms such as Campbell’s Soups and Black and Decker power tools.  All products are linked through a core brand principle, the brand concept.

Range brand strategy has the following advantages:

  • It avoids a random spread of external communications concentrating focus on a single brand name.
  • It creates brand capital across a range of products.
  • Consumer messages are concentrated on core products but the concepts contained in those messages can cross to peripheral products in the range.
  • A range brand strategy can make it easier to distribute new products as retailers and wholesalers trust the brand’s existing reputation.

A range brand strategy has the following disadvantages:

  • It increases brand opacity as the number of products in the range expands.  Consumers can feel that there is less choice available in the market
  • The range brand strategy can dilute a brand identity and can lead to the need to devise intermediate brand identities.  Findus, the now defunct frozen food brand had such an issue which led to the development of its Lean Cuisine, Gourmet and Seafoods intermediate brands.

Maker’s Mark Strategy

Brands such as Laughing Cow and Bel cheese use a maker’s mark strategy.  Often such a strategy derives from a historical symbol used to identify the products of a specific manufacturer of a generic product.  The brand relates to the manufacturer, not the product.  The oldest trademark in the world, the Bass Brewery red triangle began life as a mark used to identify barrels for collection at Taverns.

Endorsing Brand Strategy

Firms such as General Motors use an endorsing brand strategy.  General motors owns several brands of car including Pontiac, Chevrolet and Buick.  But the GM brand is used to link these entities at dealer networks.

In this strategy the main brand promotes consumer choice whilst the endorsing brand assumes a secondary, supportive position.

An endorsing brand strategy allows freedom of movement as brands are introduced or dropped from the corporate portfolio.  The endorsing brand may have less equity than the individual brands but it can evolve a powerful image capable of being recalled by consumers.  It can be an economical way to give substance to a corporate identity and a way of ensuring technical assurance for a brand.

Often the Endorsing brand strategy involves the development of a brand hierarchy:

  1. The endorsing brand is a quality guarantee
  2. The individual brand concept creates a specific promise
  3. The brand creates distinction, personalisation and even pleasure.

Umbrella Brand Strategies

The flexible umbrella brand creates a single brand level where products are given separate identities.  Apple uses such an approach where desktop computers are Macintosh; Laptops are Macbook, tablets are iPad, music players are iPod and mobile phones are iPhones.  An umbrella brand can cover several product categories and give a unified identity to a highly diversified range.

Inflexible umbrella identities gives subsidiaries a significant amount of autonomy.  This can be useful when looking to capture market share.  The brand is a corporate identifier not a product specific mark.  For example, the Mitsubishi trademark can be found on cars, electrical goods and even ships.  Communications are based on product attributes and advantages. The umbrella brand may appear distant and cold.  The brand identity can be diluted.  With luxury brands, an umbrella brand identity can communicate common attributes to consumers.

To align umbrella brands, there is often the use of a ‘Masterbrand’.  This appears similar to the endorsing brand strategy but in this case the parent brand dominates.  This is a branded house approach where the Masterbrand provides a frame of reference and sub-brands align to embody the Masterbrand.  The prototype Masterbrand was Nivea where a wide range of branded products is collated under a single concept; love and care.

A Masterbrand structure can create significant market power and economies of scale.

Source Brand Strategy

This strategy is similar to an umbrella brand strategy.  In this strategy the over-riding brand is more than a simple endorsement.  It is the brand which holds sway and which gives individual products a seal of approval. It is a strategy often used in the perfume and fashion markets e.g. Polo by Ralph Lauren or Jazz by Yves Saint Laurent,  However there is a danger that a source brand may devolve to become an endorsing brand.

A source brand can give a sense of difference and depth however the need to reflect the core identity of the brand gives strict boundaries that make brand extension difficult.