The CE industry is changing. In the future brand marketing will be critical but very few are investing in their brand.
Ten years from now, our industry will look very different. It will be made up of a smaller number of large, well established vendors. These “stayers” will be vendors with very well known brands that, in the minds of their customers, are associated with product value and low risk.
The problem facing many companies today is that the brand is such an intangible concept. The importance of brand building is more often than not associated with the tangible marketing communications tools that are used to support it such as advertising, public relations, promotions etc and the cost associated with these.
Companies who have built great brands such as Nike, Apple and Virgin do not see marketing communications as a separate task but view it as an integral part of their business and view brand development as an investment that will create an asset for them.
For many businesses brand investment is difficult to justify. This is because it is perceived as “strategic” versus “tactical” and bottom line results may not be seen immediately. Brand is viewed as an investment for the “long term” versus the “short term” therefore harder to sell to impatient, less visionary execs. But brand building is a long term investment and does not happen overnight.
Fortunately, brand investment does have a short term impact as well. Marketing and sales should be working together to create a customer at the lowest possible cost. In a simplified scenario, imagine a sales team for any electronics product that has no brand awareness or promotion to support the sales effort: no awareness building and no visibility in the press or media. Without brand marketing, all of these activities are effectively forced into the beginning of the sales cycle making it that much more difficult which means significantly lengthening that cycle and the cost to acquire that sale.
Most technology marketers are not investing in brand building over a sustained period. If we look at the overall technology industry we can see that there are a few that are actively building a brand, there are a few powerful brands that are starting to loose their way by not having a clear brand and marketing strategy. Then there are those that are virtually doing nothing at all or relying on their brand heritage. The result within the market is a total domination by few key players. Over time those without a clear strategy will ultimately pay the price of longer sales cycles and higher overall sales costs. And longer term, the price paid will be erosion of market share and profitability.
For these reasons companies should continually reevaluate investment in their brand to look at creating a brand driven business.
Lets look at a few of the benefits associated with building your brand both from a consumers perspective as well as from the point of view of those selling it.
· Easier to identify products (Brand Recognition)
· Shopping efficiency is facilitated
– Search time reduced
– Association of product quality level increases
– Association of product innovation
– Perceived risk decrease
– Facilitates repeat purchasing increases (brand loyalty)
· Identify products (Brand Image/Differentiation)
· Selling efficiency is facilitated
– New product introduction/Acceptance
– Promotion of product (awareness)
– Brand loyalty is assisted
– Pricing at a premium
– Legal protection
It is clear to see that there are distinct advantages to building the brand but there are also certain disadvantages to the market or society as a whole which should be taken into consideration. For example the ability to over promote the image which can result in the consumer “tuning out” or not seeing your brand and the ability to try and differentiate by communicating on trivial features or benefits and making it more confusing to the consumer. By comparison these disadvantages are certainly outweighed by the benefits and can very easily be managed if planned and implemented correctly.
Businesses wishing to take the path of brand building should start by adopting a top down understanding of the benefits associated with it and how it influences consumer perceptions. Once the brand strategy has been embraced by the MD a concerted effort needs to be made to implement it throughout the company in a consistent manner, year after year, in order realise the true potential and create a real asset.
Paul Reeves is the Managing Director of Octane Marketing Pty Ltd who specialise in marketing planning and facilitation by providing solutions to assist businesses achieve profitable growth.
Contact Paul at [email protected] or 02 9922 4337 or visit www.octanemarketing.com.au