buy provigil online south africa There’s an interesting polarisation going on right now in terms of brand size. Companies that have expanded are now consolidating their brand models in the hope of getting closer to consumers and achieving greater brand growth.
follow link The mega-megamergers, like that of the proposed marriage between Kraft-Heinz and Unilever, may grab the headlines, but some corporate owners with complex and extended portfolios are now several years into programs to pull back their brand assets.
Some brands have over-grown
Take the Marc Jacobs brand. The brand mooted for IPO just a few years back has now refocused its business model, unified its branding and doubled down on quality and design. And the drivers it seems are about more than just control. They seem to stem from a fundamental recognition that this focus is necessary in order to get closer to customers. In the case of Marc Jacobs, “the drivers of brand consolidation are simple: today, consumers are more educated than ever; they have access to more product at a range of price points and increasingly shop high-low. And as department stores and other retailers shrink their orders and licensing becomes a less popular strategy, brands are working to develop a stronger, more direct relationship with the end consumer.”
It’s not just fashion. P&G are also looking to battle weak growth and declining profitability. As consumers have switched to cheap generically branded household products, and new brands have risen up to take on the old icons, big portfolio players have found themselves increasingly on the defensive. Stretched wide, and with cash flow suffering, P&G is in the process of letting go of over 100 brands and has focused its attention on 10 primary categories in a new brand model that it believes take best advantage of its capabilities and scale, and that is capable of delivering brand growth through “cash operating return on assets.”
The shift will mean that P&G not only operates across a smaller number of categories, but that its profit generation will also narrow to top countries in each of its categories.
Finding brand growth through focus
The standard wisdom of course is that diversification spreads risk across sectors and geographies, giving managers more levers to play with should volumes stall or fall. This quest for brand growth seems to run contrary to that. By choosing to focus on specific categories in key markets, the company gives itself less leeway, but clearly backs itself to make that up through greater brand control and customer focus.
So which way should you go? Will your brand model follow Luxottica and Essilor and look to create a merged brand powerhouse that you then look to grow further, or will you slim down or sell off brands to become faster and sleeker? We’ll see a lot more of both strategies in my view, and it’ll take some time to establish where footprint triumphs over focus, and why in today’s re-localising markets. When it comes to brand growth, there’s a strong case for building out brand portfolios that have real consumer momentum to achieve critical mass and maximise reach, especially when there are powerful vertical synergies at play. On the other hand, brand managers with overfilled portfolios are only too aware of just thin they are spreading their overall marketing budgets to support winners, cruisers and losing marques alike. That leaves them with not enough resources to grow their brands thee way they’d like to.
Sizing your brand to the customer need
I think closeness to the customer is the critical lens here (if you’ll excuse the pun). For some, that won’t happen without expanding availability. For others, it will require more single-minded thinking around what will work in the light of increased competition from local brands, niche players and challengers alike. And these situations are not either-or. Brands that have needed to expand, like Marc Jacobs did, need to recognise that they may have gone too far and pull back. Equally, brand owners that over-shrink their portfolios could well find themselves needing to re-expand in order to avoid painting themselves into corners.
Brand strategy is no longer all-in. Because consumers aren’t all-in
Brand strategy is no longer all-in. Because, as we’re becoming more aware, consumers aren’t all-in. They want, then they don’t want. They love, then they criticise. They demonstrate interest and then they switch. The numbers are now showing what many of us have known instinctively for years (and many more have tried to deny.) Customers are not eternal in their love of brands, and we should stop assuming or strategising as though they are. Too many brand strategies simply aren’t human enough to deal with the randomness of human choice on a single-brand level, never mind with extended, and expensive, portfolios spread over countries, sectors and different aspects of consumers’ lives.
Brands need to breathe if they want to live and grow
The way I see it brand portfolios need to breathe: an intake of new brands and markets should probably be followed by, or maybe preceded by, an exhale (or at least a review) of what is currently underperforming on the books based on clear criteria around what constitutes brand success, both commercially and perceptually. Brands, in other words, need to move to the rhythms of the market. If you don’t, if you just hold your breath to see what happens, your brands will in time run out of puff.