There are two actional brand strategies to compete in existing markets – gaining brand preference and making competitors irrelevant.
The first commonly used route for winning customers for gaining brand preference amongst the brand options considered by them. Brand preference war is played by most marketing strategists. A customer decides to shop for a longtime product category or subcategory, like SUVs. Several brands have the visibility and credibility to be considered—perhaps Audi, BMW, and Toyota. A brand, perhaps Audi, is then selected. Winning involves ensuring that customers prefer Audi to Toyota and BMW. This means that Audi has got to be more visible, credible, and attractive within the SUV space than are Toyota and BMW.
The brand preference method dominates the goals and strategy of the firm. Creation of offerings and marketing activities that will earn the approval and advocacy of consumers that are buying the established category or subcategory.
Be Preferred Over The Competitors’ Brands That Are Therein Category Or Subcategory, Which Successively Means Being Superior In A Minimum Of One Among The Size Defining The Category Or Subcategory And Being A Minimum Of Nearly As Good As Competitors Within The Rest. Seemingly One Of The Essentials For A Long Term Brand Building Strategy.
The relevant market consists of those who will buy the established category or subcategory, is a primary measure of success of that target market.
The strategy is to create incremental innovation to make the brand ever more pleasing or reliable, with the offering to be less expensive, and a simpler efficient marketing program.
This conventional brand preference model as a brand strategy is a difficult road to follow success in today’s dynamic market scenario because consumers are not likely to vary their brand loyalties. Brands are perceived to be similar with respect to their functional benefits and the way they are delivered, and often these perceptions are precise.
Why reinvent the wheel on product and brand decisions that have worked when the options are similar? Why attend the difficulty to even locate alternatives? Seeking alternatives is a mental and behavioral effort with a little perceived payoff.
Further, people prefer the familiar, whether in reference to a route to figure, music, people, nonsense words, or brands.
It is quite difficult to come up with an innovation that will sufficiently alter the market momentum. When there is an added offering that would stimulate consumers behavior, competition usually responds with such desperate measures that any advantage coming out of it becomes short-lived.
Further, marketing programs that upset the market are rare because brilliance is tough to return by and resources for implementation are scarce.
As a result of the difficulty in altering consumer behaviour coupled with decreasing returns, maintaining margins in the face of well-funded competition becomes challenging.
A market with competitors engaging in brand preference strategies is typically a recipe for unsatisfactory profitability.
Brand preference strategies, the main target of most firms, are particularly risky in dynamic markets because incremental innovation will often be made inconsequential by marketplace dynamics. VUCA by Bob McDonald, CEO of P&G, describes the current scenario as – volatile, uncertain, complex, and ambiguous. Product categories and subcategories are less stable. Products are multiplying at a faster rate than the market in itself.
There are a host of exemplary trends that provide the momentum for new categories and subcategories. For existing examples or indications, consider the following:
- The emergence of Websites as knowledge centers has allowed brands to become go-to authorities. Pampers rediscovered its business from selling diapers to baby care innovator and a spot for social interaction around babies.
- The green & clean movement for sustainability has affected brand choice. Firms from autos to stores to grocery, and on and on have adjusted their operations and offerings to be responsive.
- The growing popularity of Asian cuisine has created subcategories in restaurants and in grocery.
- The projected growth of the younger generation over the older has created opportunities to develop subcategories from gift stores to cruises to cars.
- People in control of their health are indicating towards a host of medical support categories to emerge, ranging from weight management to physical & mental therapies.
So What Is The Right Brand Strategy?
Especially when change is in the air everywhere and the change affects what people buy and what brands are relevant. Marketing strategies need to keep up. A strategy that is winning today may not see the light of the day tomorrow. Because it may not remain relevant.
Success becomes a moving target, and therefore the same management styles that worked within the past could also be losing their ability to get ongoing wins.
Blindly following a strategy that advocates a firm to “stick to your knitting,” “keep your focus,” “avoid diluting your energies,” and so on may still be optimal but is riskier than ever.
While we all know the importance of having a brand strategy, it is challenging to make it right and effective.