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Recession Marketing

Brand Strategy And Increasing Profits

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It is hard to underestimate the importance of a strong brand in relation to the company’s other assets. A senior manager at Coca-Cola once said that he would prefer to sell all the factories, equipment, and other company assets—as long as he could keep the company’s name. We understand this: Brand consultancy Interbrand estimated that Coca-Cola is worth $71 billion in brand value in its 2011 Ranking of the Top 100 brands. It was followed by IBM ($70 billion), Microsoft ($59 billion), Google ($55 billion), and GE ($43 billion).

What can a brand do to stay profitable during a recession? Here are some realistic possibilities:

• Add a lower-price item with fewer features to your product line. You might even launch it under a different brand name. Most companies should produce a line of products at different price points.

• Add some additional value to the offer, such as free shipping or installation.

• Maintain the current price but advertise heavily as to why customers should pay more for this brand. Procter & Gamble (P&G) uses this strategy with Tide, instead of cutting the price.

• Change the brand’s image through a new campaign. Dove introduced its “Real Beauty” campaign in China in 2011 based on the notion that most women have real beauty—and Dove can help them realize it.

• Innovate something new. Apple introduced its iPhone just before the Great Recession and caused Nokia’s market share to decline from 50 percent to 10 percent in five years.

• Shift to win the low price position but maintain the brand value and promise. Insurance provider Geico sells auto insurance mainly online and, as a well-known brand, owns the low-cost position.

Contributed to Branding Strategy Insider by: Philip and Milton Kotler, excerpted from their book, Market Your Way To Growth with permission from Wiley Publishing.

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