Say Goodbye to Textbook Cases: How successful brands will be built in the future
by Walter Brecht
All it takes is a quick look at the business world to realize that
textbook organizational structures, even when implemented perfectly,
are increasingly coming into conflict with conditions in the real
world. Market conditions have changed, and will continue to do so in
the years ahead. The current economic situation will reinforce this
trend and ultimately make its effects permanent. The question is: how
will these developments influence brands?
To get right to the point, it is not advisable to make
helter-skelter changes to established brands. Even in cases involving a
solid brand positioning and a coherent brand identity, brand management
methods should be put under the microscope.
The parameters for brand success
There are eight key points that brands managers will need to keep in mind when devising a brand strategy in the years to come.
1. Efficiency
Inflated demands, growing cost-consciousness, increasing complexity,
and communication overspill all result in a need and a longing for
efficiency—the kind of efficiency that is not experienced as a burden
but as a relief. Investments in optimized brand management structures
and processes provide the efficiency that is needed. That’s what makes
them a wise decision. But they are also worthwhile because they create
value at a time when sales pressure is increasing and it is necessary
to exploit cost synergy effects and enhance efficiency.
2. Convergence
Brand worlds often collide when innovation cycles merge with new
technologies. This demands a great deal of flexibility and foresight on
the part of brand managers.
3. Multi-channel
The mushrooming diversity of new media and formats means brands can no
longer be visible everywhere in equal measure. At the same time, the
line between communication channels and distribution channels is
becoming increasingly blurred. Brand builders need to provide
sustainable, adaptable answers regarding the scope and type of exposure
they want their brands to have in selected media/channels, and they
need to manage them in an integral manner.
4. Self-segmentation
Like communication, distribution is also no longer a simple one-way,
top-down undertaking. In the future, clients will increasingly decide
on a case-by-case basis, at each point along the experience chain, how
much proximity or interaction is desired. The brand builders of
tomorrow will do well to adapt their expectations to the respective
situation, while always remaining true to their brand values.
5. Diversification
In addition to the trend toward increased integration of branding
measures, strategy-driven diversification is also becoming more and
more important, particularly in the branding arena. This is due to
expansion into new markets, and also due to the acquisition and the
creation of additional brands designed to make the portfolio more
resistant to crises. Future brand-building activities will include
analytic processes that provide quantifiable decision-making tools to
help minimize risk, as well as structural models and decision trees for
efficient management.
6. Individualization
The trend toward the individualization of product offerings continues
unabated. Branding activities must ensure that brand strength is not
diminished by the sheer quantity of variants. At the same time, it is
necessary to integrate stakeholders into the “service performance”
process.
7. Globalization
Globalization has been embraced not only by large corporations, but by
small-to-medium-sized businesses as well. However, there are still no
simple or self-evident answers to issues of global brand management. Do
branding activities have to be managed the same way the world over?
Should the brand identity be exactly the same in every region? Upon
what basis can the decision for or against a global brand be made?
8. Social and economic change
The world is changing. To name but a few issues, climate change, new
media, different ways of obtaining and processing information, food
scandals, and the global financial crisis, are effecting fundamental,
long-term changes in the way society thinks and acts. The keyword here
is “sustainability.” Brand-builders of the future will be called upon
to react to these changes, and in some cases take the lead in shaping
the world of tomorrow.
Although many companies have done their homework and made
significant advances in the area of branding over the past few years,
existing brand management structures (to the extent they are in place
at all) are often inadequately meeting the complex demands of the
future. A study by Bruhn on the subject of integrated communication
confirms this impression and identifies the organizational and
structural barriers to successful implementation of branding
strategies. This is an area in which management will continue to be
challenged, and will be called upon to take advantage of
state-of-the-art brand-building tools. In the future, managers will
need to establish organizational and decision-making structures that
transcend theory-based “either/or” considerations and instead allow for
pragmatic “both/and” solutions.
The way forward: thinking outside the box
When facing these new challenges, brands must avoid textbook
solutions, and instead think outside the box. Below are four new ways
to think about brand building.
1. Centralized and decentralized
Previously, centralized brand management was considered fundamental to
successful brands. However, currently market and business realities
point in another direction. There is now a need to be close to markets.
The transformation of company departments into profit centers shows all
too well that more factors influence the brand than was previously
believed. As such, brand building and brand management require more
decentralized structures.
Nevertheless, “totalitarian” brand management is not the goal.
Rather, the organizational process between company headquarters and
branches must be anchored to ensure that the consolidation of all brand
communication effort is the “sine qua non,” and counteracts the “silo
mentality.”
This requires clearly defined responsibilities between central and
decentralized departments, as well as authoritative entities capable of
ensuring that coordination processes facilitate cooperation on clear,
common objectives. Responsibilities must be assigned on the basis of
the brand’s experience chain and the relevant communicative focal
points, including their relevance for the brand’s business.
Establishing rules for dealing with conflicts can turn disputes about
power and resources into constructive solutions. Interactive
instruments such as CI-nets, brand management portals, and brand
filters not only enhance the exchange of information but also
facilitate consistent, efficient brand-building activities, even in
companies with decentralized organizational structures.
2. Integration and differentiation
Ever since the business of branding began, the issue of integration and
differentiation has been a salient one. But in light of the increased
significance of brands as a factor for creating added value, it is more
crucial today than ever before. Up until now, branding textbooks have
admonished companies to choose one of the two models to the exclusion
of the other. Today, however, it is no longer possible to adhere to a
purely integrated brand model. The need among companies for more
differentiation is putting pressure on the integrated brand model. In
the world of business, gut decisions are simply too dangerous. The risk
of damaging a successful brand through integration is too great. At the
same time, there is tremendous pressure to take advantage of the
alluring effects offered by integration. Brand management must find a
way to respond to these trends and enable both flexibility and
stability.
The future of brand building offers decision-making tools
for processes such as these. First, it requires a clearly defined brand
model for managing the portfolio, which sets out peripheral activities
in addition to the brand’s core areas. This makes it is possible to
bring all the various options, from integration to differentiation,
into alignment.
Second, it requires the necessary instruments and methods
to perform quantitative analysis. They make it possible to raise the
value, customer preference, and stretch of the brand. They develop and
bring to fruition strategic scenarios that add value to the brand.
These brand management instruments allow for a “both/and” option that
can achieve added value for an entire brand system.
3. National and international
As a result of internationalization, many companies see their brands
facing unknown challenges in diverse foreign markets. National brands
that led the field in their domestic markets must confront unfamiliar
socio-cultural conditions and communication channels in foreign
countries. A national brand in a foreign country is not automatically
one that’s international. And an international brand is not
automatically the same in every country. The spectrum of issues
requiring strategic steering decisions is broad, from different
languages and tastes, to local customs and cultural aspects.
Brand builders with a long-term strategic vision respond
to these challenges with an international brand management structure—a
set of clearly defined responsibilities, ranging from global
development and decision making to communication and regional
implementation, including any adaptations that may be required in
respective national operations. All this is established on the basis of
a clear (brand) vision and brand personality, with the help of ongoing
coordination among all companies and agencies involved. And it’s all
done by a competent, preferably intercultural team, and from a
strategically chosen location.
4. Cross-media and cross-channel
The blurring and merging of communication and distribution channels can
be seen as one of the most important developments of the past few
years. In the future, communication with indirect references to sales
offerings will be even more crucial than today, when it comes to
establishing customer loyalty, identification with the brand, and
proximity to purchase decisions. On the other hand, distribution is
increasingly becoming a facet of (brand) communication. Here again,
strict separation between the two categories hinders the exploitation
of the brand’s full potential. From now on, efficient interaction
between brand management and sales management will be a decisive factor
for brand success.
For example, Deutsche Telekom’s new shop concept includes
different options for a variety of consulting situations and
information needs. The most important aspect is that potential
customers can decide for themselves how much nearness or distance they
desire, and whether they want to access information at a terminal or
talk to a salesperson. So to make optimal use of brand management and
add value to the company, it will in the future be necessary to analyze
all of the diverse brand touchpoints. Once the most important
touchpoints have been determined, it will be necessary to formulate the
brand themes and define how each of the brand’s various appearances can
work in concert to create a coordinated brand identity. The crucial
point here is to think beyond traditional “advertising media.” In the
service sector in particular, where customers can’t “touch” what they
are buying, customer service—and therefore employees themselves—becomes
a key medium for transporting the brand identity. Once again, there is
great potential for success through carefully coordinated interaction
between the two disciplines.
The bottom line
The future of brand-building and brand management lies in defining,
integrating, and steering all of these requirements. In addition to a
more flexible understanding of brand management structures and
state-of-the-art instruments, this will also require a new self-image.
Whether it is a shift away from a “corporate design police,” to an
internal brand consultant; or from a brand administrator to a
valued-asset manager or ambassador of the brand. Because the
relationships are so complex, brand management must demonstrate a high
degree of intelligence and competence in the area of relationship
management. Successful brand-builders will not simply rely on existing,
static organizational structures, but create new, more suitable ones.
Walter Brecht
is CEO for Central and Eastern Europe, based in the Cologne office. He
is responsible for the strategic and operational management in these
important markets. Since 1995 he has played an integral role at
Interbrand Central and Eastern Europe managing important key accounts.
As a very experienced brand expert, Walter Brecht is always aware of
the challenges and demands that tomorrow will bring to our markets and
our clients.