Marketing and selling in tough economic conditions :

The power of brands

In the present economic situation, certain organizations have curtailed investment in brand building, as a process of cost-cutting.

My question is simple. Are brands assets or liabilities? Brands are considered probably as the most valuable asset of any organization. Hence, is the decision to stop investments in brand building justified, in tough times? Should brand building be done only in times of economic buoyancy?

My view is that brands should be invested in times both good and bad. In tough times, consumers keep faith in brands that are tried and tested. They do not want to experiment with their limited disposable incomes.

Take for example brands such as Gillette, Lux, Signal, Clogard, Exide, Anchor, Newdale and Munchee to name a few in the consumer sector. In the services sector, brands such as Singapore Airlines, Cathay Pacific, Arpico, Cargills Food City and Keells Super are good examples.

When investing in brand building it is important to note the following.

1. Avoid unnecessary line extensions and product modifications. Line extensions increase inventory and promotional expenditure.

2. Be cautious about re-branding and repositioning exercises. Do not create a doubt in the consumers mind. Of course, if re-branding or repositioning needs to be done, you need to go ahead with it.

3. Examine the possibility of cost innovations, to rationalise brand development costs. For example packaging innovations, promotional innovations and many more.

4. Be cautious when embarking on co-branding strategies. There are many brands that are struggling looking for a lifeline. Formingalliances with these brands can be a disaster.

5. The growing power of private labels and retailer brands. This is pronounced in tough economic climates, where retailers try to woocustomers through lower priced own brands. The manufacturers response should be to keep investing in their brands and build brandloyalty. This pays off in the long term.

6. Keep a careful balance between ATL (Above-the-line) and BTL (Below-the-line) brand building expenditure. Don’t go overboard withBTL, since ATL is essential to build brand awareness and recall.

7. Medium term brand marketing plans are essential. (At least three years). It is worthwhile remembering the old saying ‘If you fail to plan, you plan to fail.’ There is no substitute for brand planning, irrespective of good or bad times.

8. Do not forget to market your brand amongst the ‘internal customers.’ (employees). Employees and their families constitute a sizeablemarket segment.

9. Keep investing in marketing research as a prudent exercise, and not to satisfy ISO auditors only. In turbulent markets, consumer needs are changing rapidly and marketers need to identify and respondaccordingly.

10. Avoid marginal customer segments but instead focus the brand on the segments that are sizeable, both in terms of profits and sales.

11. Be mindful of gimmicky brand slogans that may destroy brand value. Instead stick to the fundamentals of brand positioning, and execute positioning strategies effectively.

It is worthwhile to note that the Superbrands in Sri Lanka, both consumer and business, have been trusted by customers over economic periods both good and bad.

For the majority of consumers, brands are insurance policies, which guarantee their investment.

‘Brands will always be the engine that drives economic growth.’