Why the Brand Equity Plan Is in Your Future
For years, articles, entire books and high-ticket seminars have been devoted to marketing in the future. What’s it going to look like? Who’s going to reinvent it? Who’s going to understand it? Why is what I’ve done for years not working? Who’s going to win between the build-a-brand-long-term angel on my right shoulder and the make-this-quarter’s-numbers devil on my left?
What caused this increasing anxiety?
The world changed.
The comfortable, way-we-did-it formulas stopped working. The network TV monopoly fragmented. Mass market magazines died. Mass merchants (like K-Mart) swept traditional retailers away. Then category-killer specialized discounters (like Toys-R-Us or Home Depot) began blowing away the K-Marts. Coupon redemption rates declined even while FSI’s multiplied. Retailers discovered that they were not in the business of sales- or brand-building but in product distribution. "If we can’t make it on the margins, we’ll make it on slotting fees and allowances."
At about the same time, herds of marketers launched desperate searches for the next breakthrough marketing tool not yet discovered by their competitors. Brand names around for years withered and died. Distribution channels contracted and tens of thousands of new products or line extensions (note carefully: not the same) were served up to the marketplace in search of needs they could fill, the overwhelming majority costly failures.
Despite the changes in the world around them, marketers still labor for months over the simulated "creation" of a Marketing Plan. In many cases, the index tab dividers remain unchanged, year after year, in mute testimony to the stagnation of the concept. Content can be painlessly "adapted" to next year’s Revealed Word. Numbers are updated, but the text is reassuringly familiar
"Everyone is comfortable with the format."
"That’s the way we do it."
"It’s worked for us so far."
"If it ain’t broke, don’t fix it."
Plowing and replowing the same old ground an Executive Summary (no more than two pages), Industry/Category/Brand Review/ Situation Analysis (lots of numbers, few conclusions, not a lot of implications … just let them know how tough it is, and how competently the Assistant Brand Managers handle secondary research), Planning Assumptions, Objectives, Strategies, Creative Platform, Media Plan, Promotion Plan, etc., etc., etc.
3-hole punch. Bind. Put on shelf. Done.
While this soothing ritual was being reenacted, some marketers had an uneasy feeling: something ain’t right here. Questions were being asked and answered on what everyone assumed was a very well defined playing field. But then the goalposts moved and the field began to tilt.
There’s a better way.
Perhaps because we stopped questioning the process, we also stopped questioning its underlying assumptions, the rules of the game. Perhaps we’ve been lulled to sleep by the familiar rhythms and patterns of this annual rinse and repeat.
The process by which Marketing Plans became obsolete was so gradual that most people didn’t notice. But it’s clear that what worked in the past simply won’t cut it in the future. Rather than dust off and reedit Volume 29, why not join the marketers who are challenging themselves to create Brand Equity Plans?
A good place to start? Throw out altogether the concept of Marketing Plan. If the old ways don’t work any more, maybe the old format doesn’t either.
If you are a brand holder, you “own” a brand image, the unique brand promise perceived by your marketplace. Brand equity is the worth of that image and its strength, as judged by its ability to remain unaffected by temporary changes in any of its components. Brand assets are those elements that create, build, detract from, add to, destroy or otherwise influence brand image, thus increasing or decreasing brand equity. To some, the term "elements of the marketing mix" might be more familiar. Brand assets, however, go beyond just advertising, merchandising and public relations, to include such elements as packaging, the discipline of the sales force, even the familiarity and contribution of the logo and tagline.
Starting from the premise that one should be creating brand equity, adding to equity that already exists, or milking established equity to generate cash, brand equity should be the point of focus … not just the objectives, strategies and tactics of brand marketing.
With that as a guiding principle, what evolves is a document that seeks to enhance the value of a brand in almost any environment. Challenged to approach problems in unfamiliar ways, opportunities can be suddenly uncovered, old rules can be broken, and questions such as "Isn’t there a better way to do _______?" can finally be asked … so perhaps answers can be found.
To create a brand equity plan, start by putting that which has gone before in deep storage. Last year’s marketing plan remains on the credenza (where it has been since last year’s presentation anyway).
With a freshly scrubbed brain, take the volumes of research, financial analysis and distribution data from previous industry/category/brand reviews to reexamine them from the standpoint of equity.
Essentially, one has to ask "zero-based" questions: if all your brand assets were stripped away, what would it cost to regain that position in the marketplace? Make honest assessments: Are the volume and profit worth fighting for? If you were starting from scratch would you be happy to be at that point? Who is in the position that you would like to be in, and what are they doing differently? What are the strengths of their brand(s)?
At the opposite pole, one must examine the brand from a point of view that assumes that the brand never existed. Is this a category that should even be attacked? Are the entry barriers too high? If you aren’t the number one or two brand in the category, can you get there with a prudent investment? If you indeed are number one or two, what competitive threat could take that position from you? At what cost?
Could you deploy your assets more profitably against another brand? Could you more profitably sell off your brand to a competitor, or abandon it? Or milk the residual sales without marketing support? Is there a better way to move to a dominant position than just throwing money at traditional methodologies?
The Brand Asset Audit.
When you have convinced yourself that you have made an honest assessment of your position in the market, the brand is ready for the next step in the development of an equity plan: an audit of brand assets. Just as a company’s assets are those things, tangible and intangible, that make up its value, brand assets create the value of a brand.
Brand assets include name, tradition, packaging, advertising content (creative leverage), advertising reach and frequency (media exposure leverage), consistency and continuity of message, promotion posture, pricing, trade acceptance and support, distribution strengths, sales force discipline and skill, customer satisfaction, repurchase patterns, etc.
Examine each to determine if it’s pulling its weight in the effort to build brand equity. Do it in the context of competitive brands and their assets. A determination has to be made about which assets can do the most to enhance equity, which can do it the most efficiently, and which are handicaps.
What is evolving to this point is a plan lacking the reams of numbers that usually make up a marketing plan. Don’t become unsettled. While this is more qualitative than quantitative up to this point, it’s not a Zen exercise or a detour into the squishy-soft sciences. Regrettably, a great many brand assets have been undervalued in the past simply because they did not lend themselves to numerical scorekeeping; not many MBA programs teach people to evaluate intangibles.
The numbers that are in the Plan at this point relate to observations about equity development. An observation is made, and the numerical "facts" are there either to support the statement or to challenge it. The problems and opportunities to be encountered in the quest to build brand equity are articulated, and ways to solve them or exploit them are noted.
It is now time to build that section of the plan that more closely corresponds to the old Objectives and Strategies section. It is, however, constructed from a different point of view. Rather than stating one or more objectives, numerical or otherwise, the roadblocks or springboards to greater brand equity are addressed from the point of view of the ability of individual brand assets to overcome them or take advantage of them. The section is constructed in an observation/implication/action option format.
The Action Option
… is an examination of the possible deployment or redeployment of brand assets that could be put into play to do something about the observation. All too often, marketing plans are written which contain truly inspired, breakthrough observations about the marketplace and the brands involved, but the executional responses are old, familiar and uninspired.
For each observation, or observation cluster, create alternative sets of action options.
It’s no longer a linear process: the old Objective A> Strategy B> Tactics C gets replaced by a more complex cluster of options. Some planners will find this intimidating; others will recognize the real world in it. The failure of consumers to take away a key benefit of a product, for example, could be caused by many different factors, and, similarly, could be cured by advertising … or promotion … or packaging redesign … or going door to door with baseball bats. Action options, like reality, won’t always be clearcut and unambiguous.
Construct optional sets by removing one critical brand asset to see how the others could be redeployed to minimize impact on brand equity. It’s a useful exercise to play "what if" with the disappearance of certain assets: what if you were forced to do without trade promotion, or coupons, or what if your wholesale distributors all went away? What if your sales force were cut in half? What if your financial services had to be explainable in 30 seconds in terms a 12-year-old could understand? This what-if game is a real-world exercise that marketers should be going through right now, to deal with the recurring challenges to advertising in general and outdoor advertising in particular. What if a nanny legislature limits the fat or sugar or caffeine or horsepower or whatever in your product?
This approach also lays the groundwork for a variety of test scenarios. Scanning data now allows for real-world measurement of sales results … but be sure to allow for longer test time frames, since it’s brand asset redeployment being tested, not the relative impact of a 25¢-versus-35¢-coupon.
After these observations have been addressed, an equity objective can be composed. Then, to achieve it, an equity strategy set can be developed which specifies the deployment of brand assets.
Roll up your sleeves.
Next, we visualize the introduction of an Information Plan, which deals with bringing the brand equity plan, in usable form, as far down the selling organization as possible. "Pushing responsibility as far down as possible" isn’t just a trendy management fad … it’s a critical skill for an organization to survive in current and future competitive environments. Key to a sales force functioning as the front-line guardians of brand equity is to get them all the information they need to implement the brand strategy. The Information Plan uses two-way communications, sales training, and ready access to management as the lifeblood of this customer service effort.
Numbers can now be reintroduced in the form of a Sales Plan. Again, it is a plan taken down to the lowest possible level. Whether you speak of decentralized, neighborhood or micro- marketing, the sales plan speaks the same way
After agreement on brand equity actions, the information plan, and the sales plan, tactical plans are written for each brand asset
Each one of these tactical plans serves as either a checkpoint so that nothing has been ignored, or an affirmation that this particular asset can do nothing to enhance equity: a signal that something needs to change
These tactical plans then serve as game plans for the individual brand assets for the plan period. And instead of just being handed over for execution, accountability is reviewed quarterly. They are, in fact, a scorecard for the executions that will emanate from them.
And don’t carve it in stone.
In fact, the entire plan is reviewed periodically. The marketplace changes too fast for a plan to gather dust on the credenza. Observations, brand asset deployment and tactics have to be reevaluated frequently
One could envisage, for example, a 12-month calendar for budgeting, but a rolling next-12-months calendar for tactics
The end results of the brand equity planning process, as opposed to the classic, familiar marketing plan process, are nimbleness, real-world complexities, whack-upside-the-head fresh viewpoints … plans which don’t simply echo past shortcomings or perpetuate outdated assumptions
More important, the brand is quite literally dissected and those assets which create its equity are put under intense scrutiny.
The results, we believe, will provide the answers to marketing in the future. The brand equity practitioner will know what it will look like, will understand it, and will in fact have helped invent it.