Right now, the US replacement rate is well below the 2.1 children necessary for generational fulfillment. This number affects many socio-economic issues including labor pools, Social Security funding and the military. The current and future landscapes of brands are already being and will continue to be affected as well.

It is true that there is a US youth population similar in size to the Baby Boom generation. This demographic phenomenon means that manufacturers and brands are dealing with a population that is both older and younger at the same time. However, the lower number of babies relates to a different impact altogether. The fewer babies born, the more the challenges and the opportunities for brands. The impact of fewer babies on brands is already significant.

Demographics matter. Demographics matter for brands, not just demographers and army recruiting stations.

Brand-businesses must focus on more than digital and AI. It is imperative to focus on the actual people who will be buying brands that are marketed digitally or experienced through advanced AI technologies.

Forget about the past when demographics was the sleepy section at the end of every survey. Demographics is no longer just for survey screening. Demographics is the way in which our world is shaping up. And, unless there is some major global apocalypse, far beyond the scope of the recent coronavirus, demographics will happen.

Brands must be ready.

Let’s look at diapers. P&G and Kimberly-Clark face a new reality. The issues with diapers are not just about competitive features and benefits, as well as prices, which increased steadily. Diapers are one business where as demand goes down, price goes up.

A critical diaper issue is the fact that there are fewer babies to wear those diapers. Diapers are serious, profitable businesses for P&G and Kimberly-Clark. As reported on Bloomberg.com, the “stagnating birth rate” is intensifying the “rivalry” between these two diaper manufacturers.

The conflict came to a head recently. Kimberly-Clark changed the fit of its Little Movers diapers and advertised this change to customers as the best fitting diaper. P&G challenged the claim with the NAD (National Advertising Division of the BBB National Programs) and won. Little Movers will alter or remove its ads. Previously, Kimberly-Clark challenged a P&G claim and won.

Bloomberg points out, “P&G and Kimberly-Clark…  together claim more than half of the US diaper market. P&G’s yearly sales for Pampers alone are more than $7 billion globally, almost 9% of company sales. But the volume of baby-care products sold declined in the fourth quarter amid higher prices. The category is also large for Kimberly-Clark, which gets more than a third of its revenue, or about $7 billion, from baby- and child-care items.”

Both Kimberly-Clark and P&G spend money, time and effort innovating and renovating their lines of diapers. Bloomberg states that Huggies has moisturizing baby wipes, fragrance free diapers and baby clothes. P&G has focused on bigger sizes and overnight training pants. These are not for newborns. Pampers is a high priced brand, so revenues may be up but fewer people are buying. Luvs, P&G’s more affordable brand, is having a difficult time.

Adult diapers are a fast-growth category especially since Baby Boomers are well into their 70’s.

But even with adult diaper growth, data show that adult diapers are still not even half of the baby diaper marketplace.

Diapers for toilet-trained older children who need some extra protection at night is also a focus. P&G told Bloomberg, that the company is producing diapers for larger kids. In the past year, Pampers introduced a size 8, for children weighing 46 pounds or more. One observer stated, “The diaper makers have been finding ways of extending the lifetime of their customer—overnight pants for toddlers, overnight pants for even older kids. So that’s helped a bit.”

From a brand standpoint, the lower birthrate is problematic not just for diapers. There are problems for makers of baby toiletries such as shampoo, soaps, lotions, diaper rash balms. There are concerns for baby wipes, baby foods, baby furniture, baby formula, baby bottles, breast pumps, maternity clothes, strollers, books, car seats and baby toys.

Toys are an especially fickle market. Just look at how quickly people lost interest in Barbie after its blockbuster movie. Toys R’Us is precariously balancing its comeback with stores within Macy’s stores. And, even though Macy’s is in trouble, the demographic troubles will also be significant hurdles to Toys R’Us revitalization. Toys for babies and toddlers are big business. Once a kid discovers digital adventures, they are glued to the family computer. Toys R’Us becomes a less interesting place.

But, let’s take the word baby out of the picture. Imagine the consequences for public education, for example. School districts rely on funding based on number of students. What if there are fewer students? Child care is very expensive. But, imagine there are fewer children to be cared for by non-family members.  Or children’s sports such as T-ball or soccer.  There are entire infrastructures built into kids’ sports.

Zoo visits might decline, As will grandparents. You need children for grandparents to exist. Food purchases will be lower. Houses will not need as many bedrooms and bathrooms. Cities and towns will put fewer dollars into playgrounds. It is a rare occurrence to have a playground with activities for adults as in Philadelphia’s new Anna C. Verna Playground in FDR Memorial Park.  There you can find a megaswing that can handle more than 20 people at a time… not just kids.

Medical practices might alter. There would be fewer maternity wards; fewer children’s wards; fewer obstetricians; fewer children’s hospitals; fewer pediatricians; fewer pediatric dentists. Health care costs would change as well.

Lawyers will have fewer custody cases. Theme parks will have fewer kid visits. Child services will need to refocus. Some colleges may disappear. The pet industry may continue to grow.

A couple of years ago, McDonald’s promoted an adult Happy Meal. It was a big hit. But beyond being a sentimental traffic-driver, the fact is that when there are fewer kids, there are fewer kids’ Happy Meals sold. Burger King is urging crew members to put crowns on adults. Possibly because there are fewer kids to wear the crowns.

Although the demographic data may sound bleak, there are still babies in the US, and women are still having babies. There are just not enough babies being born. For all sorts of reasons, women are delaying pregnancies. Demographers indicate that women are saying they want to have children, just not now. Knowing how long the “not now” will last is tricky to forecast.

In the meantime, brands as well as organizations such as the military or libraries or municipalities must realistically focus on future-proofing themselves for a world with fewer infants leading to smaller cohorts of youth and young adults. Future-proofing means being prepared. Being prepared means that your brand is ready, agile and able to accept, withstand and make changes for enduring profitable growth. Future-proofing is not foolproof, but it is a serious step in the right direction.

What can brands do to be prepared?

To maintain market relevance, brands must do the following:

• Begin with having a thorough knowledge of the marketplace.
• Develop a true understanding of customer-defined market segmentation.
• Generate relevant insight into customers’ behaviors.
• Prioritize the market segments.
• Use knowledge and insights, define the Promise of the brand to appeal to the prioritized market segments.

Here are three fundamentals for creating or adapting products or services to a new demographic landscape.

Conduct Needs-Based Occasion-Driven Market Segmentation

The purpose of market segmentation is identifying and understanding a brand’s customers. Viable, actionable market segmentation addresses several key areas to assist in directing brand-business strategy and brand policy. Segmentation can also help in managing resource allocation.

Market segmentation requires craft as well as research skill. Contrary to what many academics, researchers, and consultants say, the output of a segmentation study does not reveal truth. In fact, it can raise more questions than you had beforehand. If analyzed and synthesized with intelligence and creativity, market segmentation can provide insight into the following:

• Superior understanding of the customer so the brand can provide outstanding competitive advantage 
• Strategic focus that is fundamental to effective marketing
• Identifying market priorities; effective market segmentation drives business strategy, not just brand strategy 

A proper market segmentation study should help you answer these three key questions:

• Who are the prime customers and prospects?
• What are their needs and problems?
• What are the occasions in which these needs and problems occur?

Satisfying customer desires and understanding the occasions in which these occur is the key differentiator between marketing and selling. Selling is about convincing customers to buy what we know how to provide. Marketing is about providing what we know customers want or might want or that satisfies their problems. Superior understanding of consumer needs and occasions provides the basis for outstanding competitive advantage.

Generate Genuine Customer-Driven Insights

Real insights are incredibly valuable.

Unfortunately, insight is now a marketing cliché. Insight is mis-understood, misused, mistaken and meaningless. Marketers made it a meaningless, useless term. Why? Because marketers have turned everything into insights. And, when everything is an insight, nothing is an insight.

• Is it insight to discover that people’s incomes are under strain and stress?
• Is it insight to learn that people want an easy-to-use clothes washing- machine?
• Is it insight to learn that people like food that tastes good?
• Is it insight to learn that people prefer a dog food the dog will eat?
• Is it insight to learn that a business-to-business customer wants a computer system that won’t go down?

These are not insights. These are observations of the obvious. Yet, in each case, these were reported as insights based on extensive research.

Meaningful insights are more than mere information. Meaningful insights need to meet two criteria:

1. Surprise at what you learned. And, as a result of this surprise,
2. A change in behavior based on this learning.

Real, actionable insight will not come from superior data analysis. Business schools are turning out MBAs who are analyzers rather than synthesizers. MBA has come to mean, “manage by analytics.” Soon, if not already, with all the MBA financial engineers, MBA will come to mean “murderer of brand assets.”

Superior analysis provides understanding of where we are and how we got to where we are. Superior analysis does not provide insight into what kind of future we can create.

One thing we do have today is lots of information. To generate genuine insights, go from information to insight. This insight will be informed insight; informed judgment not guesswork. Insight means seeing below the surface of information.  Insight relies on synthesizing rather than analyzing.

Analysis travels backward. But, brands move forward. Brands are a future promise as in “This brand will promise to do.…” So we must use synthesis. Synthesis means… “the combining of diverse concepts into a new coherent whole.” Analysis leads to understanding what is happening and why. Synthesis leads to  genuine insight into what might happen.

Solve Problems

Problem-solution is one of the best ways to generate a new or improved product or service.

For example, in 2004, McDonald’s had a problem with mothers of small children. Kids loved Happy Meals. Children were happy with the Happy Meals, but mothers were unhappy. Mothers told McDonald’s there was nothing for them to eat while their kids enjoyed the Happy Meal. All mothers found on the menu board was coffee. OK, sometimes, moms picked at their kids’ fries.  McDonald’s solved the mothers’ problem with a chicken Caesar salad accompanied by Paul Newman salad dressing.

Dyson solved a problem by eliminating bags from vacuum cleaners. TravelPro solved a problem by putting wheels on suitcases. Problem- solution should be at the basis of innovation and renovation. Products and services must address customer problems, satisfy customer needs or anticipate customer needs. 

Demographics will happen. How a brand-business addresses the demographic waves is not so certain. As one consultant told Bloomberg, “I wouldn’t count on the birthrates suddenly changing direction, it’s a cultural fact.”

But, by understanding potential market segments, generating genuine insights about these segments and solving problems, you can be confident that what you are doing is the better road to enduring profitable growth.

Contributed to Branding Strategy Insider by: Larry Light, Author of The Paradox Planet: Creating Brand Experiences For The Age Of I

At The Blake Project, we help clients worldwide, in all stages of development, define or redefine and articulate what makes them competitive at critical moments of change. Please email us to learn how we can help you compete differently.

Join 20,000 Marketers Who Have Taken A Transformative Journey To A Bigger Future In Mark Ritson’s Mini MBAs In Marketing And Brand Management Courses.

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Icons and Rituals work closely together.

You’re staring at this post, which is a ritual, and you’re looking at it on your computer or smartphone—which are iconic. You drive to work which is a ritual, and your automobile is an icon that, thanks to generations of automobile positioning and marketing, tells us a lot about who you are.

Rituals are our beliefs in action. If you want a good ritual get a hug; if you want a bad ritual, call your credit card company.

Success means building positive experiences within your community that not only attract people, but keep them coming back for more.

This buzzy connectivity within your community helps drive word of mouth and advocacy.

Think about what things you celebrate.

Sharing on TikTok, Instagram, Reddit, LinkedIn, Pinterest, Facebook, Thread and are all rituals. Not sharing is also a ritual. #intentionality

Ben Silbermann had a great quote differentiating between the social media when he said, “Facebook is what you’ve done, Instagram is what you’re doing and Pinterest is what you’re going to do.”

Googling, txting, selfies, Zoom, listening to Smartless are all rituals. So is learning how to play a guitar lick or watching Rick Beato on YouTube. If you’re still watching “Baby Shark Dance” by Pinkfong, you’re not alone.

When we try to build communities inside organizations, we also think about rituals. Because another word for ritual is “process.” Here’s how we do things.

Scrolling, posting, liking are rites that bring social communities together and interrupt existence in a series of dopamine-enriched joy pops.

Are we creating positive rituals, or are we building walls? Are we creating friction points?

What things do we celebrate?

UX (User Experience) tries to crunch down rituals.  For example, the series of interactions between spotting a product online and the path to purchase on Amazon, imogene + willie, IN FIORE, or Cowgirl Creamery — into a sequence that becomes painless and seamless.

Rites to purchase. Scrolling is a ritual. Shopping is a ritual. Paying is a ritual. Waiting for your package (or your pizza) to arrive is a ritual.

Walking the dog is a ritual. Brushing your teeth is a ritual. Taking the train to work is a ritual. Eating softshell crab is a seasonal ritual. Voting is a ritual. Paying bills is a ritual. Eating an ice cream cone is a ritual. 11/11 is a ritual. Rituals order our lives and help chaos makes sense. The full moon is a ritual.

The journey toward likes and advocacy is driven by a series of rituals that are interconnected—each click giving the person further positive experiences. Scrolling, posting, liking are rites that bring social communities together and interrupt existence which is why we walk into the funnel and emerge 40 minutes later wondering what just happened?

When we are building a belief system, we try to differentiate ourselves by designing rituals that are seamless, painless, happy, even fun.

Saying goodbye is a ritual.

Contributed to Branding Strategy Insider by: Patrick Hanlon, Author of Primal Branding

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When I say empathy, I’m not talking about sympathy, or compassion, concern or caring for someone. Rather, I mean seeing the world through the eyes of someone else. To walk in their shoes (to mix metaphors). To imaginatively get inside the gritty lived experience of someone else.

The marketing lens on the world tends to be an outside-in view, not a view from the inside-out. When marketers conduct research, consumers are put in the spotlight and asked to present their attitudes and behaviors to be recorded. This means that nearly everything marketers see is performative, not authentic. Empathy is impossible when everything under the microscope is performative.

This observation is nothing new. Researchers have long known that research is an artificial construct that has an impact on how people answer. The interviewer, whether in-person or implicit, is an audience for respondents.

The reluctance of many Trump voters to put their opinions on display to the interviewer is a performative effect. So is the difficulty of getting honest answers about socially unacceptable behaviors like drug use or the challenge of calibrating over-enthusiasm for new products.

I am not suggesting that qualitative is better than quantitative research. All forms of interviews entail a structured interaction in which consumers have a certain role to play. I would argue that the people in the room and behind the mirror make focus groups even more performative than surveys. And social media are performative by definition.

But performative doesn’t mean unhelpful. The shopper journey itself is a structured interaction with a small number of fixed roles for consumers. Every aspect of shopping, from watching ads to browsing stores to paying for something, is also an artificial construct.

Marketing research needn’t be about people’s true selves (whatever that means). It should be about the performative selves that people step into when they shop. Over time, the artificiality of research has become well-tuned to the artificiality of shopping.

Marketing research is not about getting behind the shopping mentality that people use to perform what they need to do in the marketplace. That shopping mentality is exactly what research must study if it is to be helpful to marketers.

Again, what I’m saying is nothing new and seems obvious to me. Yet, authenticity is often held out these days as the gold standard for research and marketing. It is a tacit element of the call for customer-centricity. It has become perhaps the most important metric of accuracy in our age of fluid self-expression and cultural affirmation. With authenticity comes the high priority currently placed on empathy.

My point is not to dispute authenticity. I believe it is part of an important socio-political shift, not merely a fashion. But I am not convinced that authenticity is the true measure of marketing, nor that empathy is a muscle that marketers need to pump up.

That said, there is one sense in which empathy is relevant. The best brands are always built by satisfying core needs. This means something vital in a genuinely human way—which, of course, is a fuzzy concept. I interpret it to mean cutting through the guff to deliver something fundamentally beneficial.

Benefits can be hard to sort out, though. In Maslow’s hierarchy, the performative needs of self-actualization and self-esteem are no less important than any so-called authentic physiological or security or belonging needs. Moreover, most markets today are developed enough that performative constructs are the ways in which physical and emotional fundamentals are expressed. Meaning that marketers need only focus on what’s performative rather than struggle with empathy to get to something authentic.

Perhaps empathy means nothing more than getting behind the performative mask. But if that’s all that empathy is, it loses any real meaning.

Marketing is supposed to sell. Marketing research is supposed to help marketers sell more. Maybe that requires more empathy. Maybe not.

Contributed to Branding Strategy Insider By: Walker Smith, Chief Knowledge Officer, Brand & Marketing at Kantar

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The press picked up on Howard Schultz’ very public concerns. Mr. Schulz was quite clear: Starbucks’ problems are not the weather and not “headwinds.” Mr. Schultz sees Starbucks’ problems stemming from a loss of focus on the US stores. There was some concern on the part of analysts as well. As one analyst said when questioning the quarterly performance and Starbucks’ C-suite responses:

“I guess, you know, I’m trying to think through the sequencing of how we got here today, and it seems like in October, and early November, at the Analyst Meeting demand was not a problem in the U.S.

“And, I hear you saying that you have a lot of unmet demand. But could you, excuse me, kind of help us do a hindsight on how these issues have come to a crux, so quickly just four or five months hence since those kind of very ambitious goals that were given?

Mr. Schultz wants Starbucks to remain the customer’s Third Place. Mr. Schultz understands that Starbucks Third Place between home and work, its “café society” positioning, has evolved due to technology and changed customer behaviors. But, the Third Place experiential context is still important and compelling. In a world where customers want and where brands create experiences, why are Starbucks executives seemingly not focusing on the Starbucks experience?

Mr. Schultz worries that Mr. Narasimhan’s executive team is more focused on transactional issues than experiential issues. And, judging from the earnings call transcript, there is a sense that how a person purchases Starbucks is front and center. The earnings call did not highlight what actually makes Starbuck’s so compelling and what can continue to keep Starbucks growing and profitable in the experiential role that it originated.

In his third stint as CEO, Howard Schultz provided a roadmap, a vision of a “reimagined” Starbucks Third Place. Mr. Schultz recognized that how we live changed over the past 35 years of Starbucks history. But, he also understood that the emotional and social rewards delivered by Starbucks were, and still are, critical human needs: the need to belong and the need to be uniquely independent.

We all need to belong. We want to belong to something bigger than ourselves: a community, a network, a business, a family, a cause, a union, a nation, a neighborhood or a place. Belonging requires connecting. Connections are part of the Starbucks experience.

At the same time, we want to be ourselves. We want to be individuals. We want to be seen and respected as individuals with special characteristics. We want to be independent and unique.

Starbucks offers both: belong to a community, a place and individualize your beverage. Be unique like all of your friends.

Social behavior research suggests that both independence and belonging are essential for finding and securing our place in life.  And, sociologists, psychologists, behaviorists and those who study culture speak of the power of the independent self and the interdependent self and the ways in which these interact. The personal self and the social self “mutually reinforce each other.”

Technology may have enhanced and altered how we behave independently and interdependently, but technology has not changed our driving human needs. The need for a place where we can be both individual and inclusive still remains. Starbucks’ café society experience satisfied our desire to be part of something, to connect while allowing us to be individuals.

In his post, Mr. Schultz suggested that focusing on the channels of how we receive our Starbucks is important but channels are all about the way in which we deliver a brand promise. Starbucks needs to work on making the third place experience contemporary.

In September 2022, Starbucks offered this vision for the brand:

“Fast forward 35 years, and as the world has evolved, so has the Third Place. Starbucks stores are serving more people each day than ever, with customers often ordering on their phones instead of at the counter. The menu has grown from just a handful of drinks to dozens, with stores built for mostly hot beverages straining to meet the demand for more customized drinks and cold beverages. And food is an increasingly important part of the mix – what was once a case of mostly breakfast pastries case is now a food platform that includes warmed sandwiches, available all day long.

“As Starbucks is reinventing the company, it is also reimagining the Third Place – keeping coffee and connection at the center.”

Additionally, Starbucks stated:

Today, we find ourselves at another unique moment; a moment that challenges us to reinvent and think differently,” said John Culver, group president, North America and chief operating officer. “Our partners have come to expect more from us. Our customers have come to expect more from us.  And it is clear our physical stores must modernize to meet this moment.”

Starbucks described its brand essence as “delivering experiential convenience, in a way only Starbucks can.” To do this, Starbucks needs to make it easier to work there and easier for its employees to connect with customers and vice versa.

Mr. Schultz provided a strategic map. There were three must-do’s: 1) purpose-built store design, 2) coffee and craft, and 3) elevating experiential convenience.

All three of these must-do’s focused on keeping Starbucks’ Third Place experience contemporary.

Purpose-Built Design would “’reimagine our store experience for greater connection, ease and a planet positive impact.’ Starbucks purpose-built store design approach would modernize physical stores to serve the increasing demand while creating an environment that is inclusive and accessible, through the lens of sustainability. To help drive innovation, Starbucks has turned to the team of R&D experts and baristas working side-by-side in Starbucks Tryer Center, to help streamline the work behind the counter, and enable more time for genuine human connection.”

Coffee and Craft would “reimagine the coffee experience with breakthrough beverage innovation that elevates coffee craft and quality. Whether the coffee is hot or cold – Starbucks is turning to proprietary, patented technology invented in-house, like the new Clover Vertica, which offers every customer a freshly brewed cup of coffee in just 30 seconds. Coffee is at the center of who we are and remains on the forefront of anticipating what customers love and our partners are proud to deliver.”

Elevating Experiential Convenience would focus on the total brand experience. “The Third Place has never been defined solely by a physical space, it’s also the feeling of warmth, connection, a sense of belonging Starbucks. Digital technology is helping augment and extend that feeling of connection with customers – whether they are in Starbucks stores, in their cars, on their doorsteps.

“One way Starbucks is doing this is through Mobile Order on the Starbucks app. Starbucks is enhancing Mobile Order to make it easier for customers to order, anticipate when their order will be ready, and make it easier and more efficient for partners to serve mobile order customers, eliminating some of the stress at peak times. Mobile ordering is also being extended to more licensed locations at airports and grocery stores.

“The company also unveiled Starbucks Odyssey, a new experience powered by Web3 technology that will foster connection and unlock access to new experiential benefits and immersive coffee experiences for Starbucks® Rewards members and partners in the U.S. Starbucks is one of the first companies to integrate Web3 technology with an industry-leading loyalty program at scale, while creating a community online that will enable new ways for Starbucks to engage with its members and its partners. As of Monday, customers and partners are now able to join the waitlist for a chance to be among the first to receive access to the Starbucks Odyssey experience, which will launch later this year.” “We have a heritage of continuously adapting how we serve customers, anticipating where they are going and innovating to take them there. Connection is who Starbucks has always been.’”

Nothing happens until it happens at retail.

Very few people are like Howard Schultz who deeply understand this idea. Place is more than a space. Place is more than its operations. Place is more than its offerings.

Years and years ago, with the Surgeon General’s report on cigarettes, Philip Morris decided to forgo the emphasis on the “smoke” of Marlboro and, rather, evoke a place. The place was Marlboro Country. Marlboro Country spoke to all Marlboro’s benefits and rewards. Philip Morris did the same with Miller Beer. Miller Beer created Miller Time, that special time and place after a hard day’s work.

The wonderful southern writer, Eudora Welty, believed place was the anchor when crafting a story. She understood how the powerful description of place grounded a story. She wrote,

“Place has a more lasting identity than we have, and we unswervingly tend to attach ourselves to identity. Experience has ever advised us to base validity on point of origin. Place … is the named, identified, concrete, exact, and exacting, and therefore credible, gathering spot of all that has been felt, is about to be experienced. Location pertains to feeling; feeling profoundly pertains to place; place in history partakes of feeling, as feeling about history partakes of place. Place is seen in a frame. Not an empty frame, a brimming one. Point of view is a sort of burning-glass, a product of personal experience and time; it is burnished with feelings and sensibilities, charged from moment to moment with sun-points of imagination.”

True of writing and true of retail. Place has power. Mr. Schultz loves the Starbucks “place.” He is committed to Starbucks thriving as a Third Place. Of course, he sees the financial issues and the shopping issues that are troubling Starbucks. But, he also knows that fixing the place which drives the total brand experience, making the brand place beloved, is task number one. Place is the face of your brand.

Mr. Schultz’ concern is that the current management focus is only on the sale and not the sensibilities. There is also a heavy focus on attracting new customers. The problem is that core customers, new customers, occasional customers will become increasingly transactional if the place loses its relevance and its differentiation.

As Mr. Schultz wrote, what is missing is a “maniacal focus on the customer experience.” And, he pointed out that data are OK, but “The answer does not lie in the data, but in the stores.” Falling under the spell of data allows management to put the onus on measurement. Further, Mr. Schultz reiterated his 2022 strategy that galvanized the brand around the total brand experience. “Through it all, focus on being experiential, not transactional.”

Current management has the opportunity to increase Starbucks‘ brand value by enhancing the Starbucks brand experience relative to the customer-perceived costs of money, time and effort. And, by building trust. Letting the third place become no place would be tragedy.

Contributed to Branding Strategy Insider by: Larry Light, Author of The Paradox Planet: Creating Brand Experiences For The Age Of I

At The Blake Project, we help clients worldwide, in all stages of development, define or redefine and articulate what makes them competitive at critical moments of change. Please email us to learn how we can help you compete differently.

Join 20,000 Marketers Who Have Taken A Transformative Journey To A Bigger Future In Mark Ritson’s Mini MBAs In Marketing And Brand Management Courses.

Branding Strategy Insider is a service of The Blake Project: A strategic brand consultancy specializing in Brand Research, Brand Strategy, Brand Licensing and Brand Education

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Alternatively, a strong brand can achieve a greater volume of sales at the same price. This makes it more attractive to distribution channels and creates efficiencies of scale in operations (sourcing raw materials, production, shipping etc.).

In other words, strong branding shifts the demand curve for the brand. Most brands sell less if they raise their price. However, marketing that builds the brand enables it to charge more, or sell more at the existing price, and so generate more profit.

Branding can be considered a good investment if it generates more profit than the cost of the activity.

Marketers face a challenge when making the case for brand-building investments. The financial upside often takes a long time to accrue. Take a new brand, for example. Early on, branding investment typically shows only a small return – less than the cost of the activity. The big payback occurs once the brand has become a serious contender with more established brands. It can take years of sustained activity to achieve this.

When you factor in the long-term effects of brand-building, the return on investment can be high. As a rule of thumb, the long-term return on investment from advertising is more than double the return seen within the first 12 months on average (Binet and Field, 2013). It is often five or more times greater than the return seen within the first three months.

The Brand Value Growth Matrix shows how advertising amplifies the growth strong brands achieve. The matrix was developed by the author and Peter Walshe, former Global BRANDZ Director at Kantar Millward Brown. It compares the value of brands between 2006 and 2015.

Brands with clearly defined identities, assessed by combining measures of distinctiveness and differentiation, grow more than other brands. However, brands with clear identities that promote themselves using strong advertising are the real winners. These brands grew by 168% over ten years. This compares to growth in the MSCI World Index of 71% over the same period. Strong brands deliver good returns; strong brands with great advertising deliver exceptional returns.

The commercial benefit of building a strong brand goes way beyond sales of the brand’s initial product range. The success of the personal care brand Dove shows how success with a single product in one market can be a springboard for success across multiple product categories and geographies.

Having a strong brand can also help a company attract the best talent and inspire employees to stay with the company and work productively. Marketing commentators often struggle to explain how Apple has developed such innovative products. One reason is that the world’s best designers are keen to learn from the people they most admire. They want to work with people like Steve Jobs and Jony Ive, so they apply for a job at Apple. The ability to attract and motivate high-caliber employees goes a long way to explain Apple’s success. Apple produces great products thanks to its talented employees and how they work together. The best of the best work on high-priority developments, and the environment allows them to create the optimum user experience.

Contributed to Branding Strategy Insider by: Dan White, author of The Soft Skills Book, The Smart Marketing Book and The Smart Branding Book

The Blake Project helps organizations and brands in all stages of development create marketplace advantages. Please email us to learn how we can help you compete differently.

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