Brand Growth

The classical economic perspective holds that perfectly competitive markets are characterized by undifferentiated products sold based only on price. Any departure from such a characterization is viewed as evidence of an imperfect market. This view of markets has given rise to strategic thinking that focuses on the identification of market imperfections and the creation of structural barriers to market entry and the creation of supply-side competitive advantage.

If we’ve learned anything from the wrenching changes in society in recent years, it’s this: Business as usual is a losing proposition. The implications go well beyond culture—they hold profound meaning for commerce, as well.

Imagine that you work for the Chief Executive Officer (CEO) of Coca-Cola. He asks you for an opinion on a recommendation by the company’s Chief Marketing Officer (CMO) to raise their advertising budget from $3.2 billion to $3.5 billion. Should Coke spend an additional $300 million on advertising? The Chief Financial Officer (CFO) is opposed, saying the money would be better spent elsewhere.

In a now classic Harvard Business Review article, Ansoff (1957) identified four strategies for business growth. These four strategies also identify four basic types of marketing plans and the types of investments and activities associated with each. The strategies are defined by whether the focus is on new or existing products and new or existing markets.

In their quest for sustainable growth, brand owners may find themselves in one of two categories in regards to brand licensing: