The Blake Project, the brand consultancy behind Branding Strategy Insider, delivers interactive brand education workshops and keynote speeches designed to align marketers on essential concepts in brand management and empower them to release the full potential of the brands they manage.
Archive for March, 2012
The most frequently used metric of marketing spending is a percentage of the entity’s revenues. This is a “top down” approach that is often mandated from the executive suite. This percentage ranges quite a bit depending on whether the organization in question is selling industrial products, consumer products, professional services or something else. Further, the ratio varies by industry. And finally, a higher percentage is spent by organizations launching new products or brands or repositioning existing brands or taking their brands into new territories or markets.
The general rule of thumb is that consumer product companies should be spending between 6% and 12% of revenues on marketing, while B2B companies should be spending between 2% and 6% of revenues on marketing. A 2010 Chief Marketing Officer (CMO) Council Report showed that 16% of companies spent between 5-6% of revenue on marketing, with 23% spending over 6%. Companies that are launching new products or brands or entering new markets often spend up to 20% of their revenues (and sometimes more) on marketing. And many upscale, high image consumer product brands also spend a significantly greater amount of their revenues on marketing.
Another consideration is how much the brand in question is spending in total on marketing relative to its competitors’ brands. Assuming the same target markets and equal advertising effectiveness and media efficiency, the brand that spends more will have greater mindshare, which results in greater market share. In down markets, many brands reduce their marketing budgets, giving the brands that don’t an opportunity to increase their mindshare and especially their market share by maintaining their levels of marketing spending as seen here by Proctor and Gamble.Read More
The context of consumer engagement for brands these days is that of a social economy, a marketplace in which nothing is worthwhile or valuable unless it is shared with others. This is not an easy environment for brands. It requires more than simply adapting a brand’s promise or performance to new needs or new priorities. Instead, it demands that brands be utterly un-brand-like.
Perhaps the best way to say what a social economy means for brands is simply to observe that people don’t want relationships with brands; they want relationships with other people. Maybe this has always been true, but it has gotten special emphasis in recent years. Since the mid-1990s, brand marketing has been about nothing but building strong relationships with consumers. This brand focus is rooted in the one-to-one marketing concept of customized design and individualized service that became popular with the development of deep, robust databases and new technologies like the Internet. These innovative marketing capabilities gave rise to an over-the-top enthusiasm among marketers that brands could finally make genuine personal connections with consumers that would be highly relevant, truly meaningful, and worth the price. The idea of brand relationships ruled the day, defining the essence of what it meant to be a powerful brand. The best brands were those with the best relationships with consumers.
The purpose of business has always been to deliver the best possible solution to customers. As the late Harvard marketing guru Ted Levitt famously said once about consumers, “They don’t buy things, they buy solutions to problems.” One-to-one marketing and the parallel idea of brand relationships were organizing principles to help brand marketers accomplish that. But these ideas, while more useful in a marketplace in which consumers have fewer ways of exerting control and making connections, do not serve marketers well in the social economy.
What the newest technologies now enable is less the ability of marketers to engage with consumers and more the opportunity for people to engage with other people. Brands matter only when they have something to offer that people can share with one another. Brands have value only when they give people a chance to connect with other people, not when they themselves try to make a closer connection with consumers. People are trying to be social not commercial, to relate to one another not to transact with brands, to share with friends not open up to marketers. Technology has shifted from putting brands at the center of power to diffusing power across a network of social connections among individuals.Read More
In marketing, focus is always critical. Losing focus, especially in challenging economic times, can lead to ‘the end’ for brands. In what ways should a brand marketer focus? First, one should be very specific about the target customers and audiences to which the brand is intended to appeal. That drives everything else. Next, knowing the target customers/audiences, one should be very specific about the brand’s promise (unique value proposition) and its marketing messages. Finally, one should choose highly targeted media/vehicles through which the messages are communicated.
When it comes to focus, these are the most common mistakes:
- Defining the target markets too broadly
- Creating too many different marketing messages (one must focus on one or two messages at most)
- Pursuing the least expensive marketing media/vehicles rather than creating a media plan that is optimized for the target markets
- Extending or licensing the brand into the wrong business categories
At The Blake Project, we recommend focusing on the most advantageous customers for the brand in question and then hitting them hard with exposure to the brand and its unique value proposition. That is, being very tight in the target market definition, creating a unique brand promise and messaging that is highly appealing and then emphasize frequency in the media plan. Brand marketers can also apply the 80/20 rule when budgets are tight. Spend money only on those marketing activities that have the highest impact/ROI. In lean times it’s important to transfer money from the least productive marketing activities to the most productive ones.
To hear our 60 minute radio segment on this topic, click here
Sponsored by: The Brand Positioning WorkshopRead More
We regularly answer marketing questions here on Branding Strategy Insider. Today we hear from Victor, a brand marketer in Seattle, Washington who asks this question on brand positioning research…
“As a creative firm, we want to ensure our solutions on all deliverables are brand savvy. And discovery research is important to accurately defining the problem to solve. What are the important things to keep in mind when conducting quantitative brand research with company stakeholders vs. their consumers, specifically around brand positioning?”
Thanks for your question Victor. The first task is to identify the primary, secondary and tertiary target markets for the brand. Likewise, one must also identify the different stakeholder groups. Then one must understand how the different groups view the product/service categories in question, including how they shop, what influences their purchase decisions and how they use the products/services. One must also understand the values, attitudes and other motivations of the target markets, including their anxieties, fears, hopes and desires. These first insights are usually discovered through qualitative research using projective techniques, guided imagery and laddering exercises, among other techniques. In the quantitative research phase, one must explore top-of-mind brand associations for the brand in question and competitive brands. One must also explore the importance of various values and functional, emotional, experiential and self-expressive benefits to each target market and how they perceive the brand in question delivering against each of these versus competitive brands. One might also explore several potential brand positioning statements in the quantitative research. We test each statement for believability, uniqueness, emotional appeal and ability to motivate purchases. Regarding internal stakeholders, you should know what their business model and strategic intent for the brand are, what preconceived notions they might have about the brand and its customers and what they hope to accomplish with the brand positioning project. Once customer and stakeholder insight is attained, then the creative process should begin in earnest using this insight to fuel the process.
Have a question related to branding? Just Ask…
Sponsored by: The Brand Positioning WorkshopRead More
Seems I've spent a lot of time in the interviewee chair over the years. Recently, I had a discussion with Jon Brulloths of PM360, a resource for pharma marketers. You'll see his questions in bold. Our talk began with what should be a central theme for all marketers — brand differentiation…
What can pharma learn from the successes and failures of your many campaigns over the last 40 years?
JACK TROUT: Find a meaningful way to differentiate your product, or in some respects reposition your competition, which is another strategy that can be fairly effective in pharma. But really—it all comes down to that simple concept of how do you differentiate yourself.
What did you learn from your branding flops? Because even though you're known for numerous successes, I know there must have been some flops in there.
Early on, the biggest lesson I learned is that you can't change people's minds. If you inherit a problem—there it sits; you could spend a jillion dollars and you wouldn’t change people’s minds. I made a few mistakes in that direction, trying to resurrect a brand that you just couldn’t resurrect, and it was a painful learning process. The other most important lesson I’ve learned was also learned the hard way. Essentially, if you don’t have the top people involved, you're done. In my latest book, Repositioning: Marketing in an Era of Competition, Change, and Crisis, which is just coming out, I have a chapter that says, “It all begins and ends with the CEO.” It is critical to have that person involved. He or she is the ultimate chief marketing officer. You’re not going to get anywhere unless you get the top people to a) understand the strategy, and b) agree to execute it properly.Read More