It is true of course that for the brand to
work, the service system or
operations behind it needs to deliver
the brand promise in new areas. So
for example, Dell is able to extend
from PCs to servers and televisions
not just because its brand offers
“brand value, customer loyalty and
savvy pricing” but because that brand
promise is sustained by the operating
system behind it that can also be
applied to a new area. The same goes
for, hotel brands like Sheraton, now
applied as a driver of growth in its
own right and as a brand endorser to
hotels across the world: it works only
because it is underpinned by
processes, people and systems that
enable consistent delivery of the
brand promise.
In consumer packaged goods, there
are various examples, ofwhich Nestlé
is probably the widest known, of
corporate brands being used
successfully to add trust and certification as endorsers to category
or country specific brands. In this
way, the corporate brand becomes a
source of value added, above and
beyond the brand value built in
individual categories.
One definite fallout of a downturn
is increasing sales cycle. As per
Market Sherpa Inc’s report, a sizable
number of medium-sized companies,
60%, are seeing increasing sales
cycles. Even small companies are
noticing this more than other
measures. Additionally, a decent
number of B-to-B and B-to-C
marketers, 47% and 43%
respectively, reported a longer sales
cycle. How do you think the
companies should buck this trend of
longer sales cycle?
Promotional deals are extremely
effective during the recession. Our
UK consumer survey, to take one
example, showed a marked increase
in consumer preference for special
offers over “everyday low pricing”.
Deals break through the clutter, and
communicate a strong message to
customers that their brand
understands their situation and is
doing what it can to help... they help
put the brand on the side of the
consumer, which is extremely
important. And they provide a reason
to buy today.
Many have advocated very
successfully that marketing should be
seen as an investment and not as a
cost. Yet, marketing is often the first
department to suffer when tough
economic times put the squeeze on
cash flow. However, some experts say
those who maintain spending often
emerge the strongest when things
pick up. How do you read this
dichotomy? What should be the
Chief Marketing Officers’ (CMO)
primary lookout, at least for now?
Multiple studies show that
successful brands were the ones that
maintained or increased marketing
spending during a downturn. The
analytical problem is – what cause is
and what effect is. Weak competitors
might have been too weak to finance
marketing during a recession and
might not have got a return if they had
spent the money; you can’t say that
they would have done better and
joined the stronger companies had
they spent on the marketing; maybe it
is companies that are already strong
that have something to say—that
spent on the marketing dollars; and
those that didn’t were right to stay
silent. You won’t hear that from your
advertising agency!
What is safe to say is that a recession
sorts out the weak from the strong.
What does make sense is to take a
rigorous look at the brand portfolio.
Some brands will be strong: sustain
them during the drought. Some may
have a particular role in giving your
highest spending customers a place of
refuge during the storm, a step down
in price and prestige, yet an
opportunity to remain within your
branding family, even in tough times;
such brands come to the fore. But
typically, brand portfolio reviews find
that in tough times, when volume is
down, many brands in the portfolio
have no real, distinctive consumer
role and can’t justify the marketing
support they need to survive. That is
where the argument begins with
manufacturing about retaining their
volume to fill the factory... so you
better sharpen up on the economic
advantages throughout the business
of having fewer SKUs.
