Modern approaches to branding — processes and priorities

UDC 33.338
Publication date: 19.03.2017
International Journal of Professional Science №2-2017

Modern approaches to branding — processes and priorities

Borodai Vladimir Alexandrovich
Doctor of Social Sciences, Professor
Don State Technical University
Abstract: The technology of branding is considered as a logically established algorithm of actions. It is shown that branding should start not with product visualization, but with the analysis of available and necessary technological capabilities, analysis of consumer behavior, the allocation of segments with similar requirements to the product, analyzing the actions of competitors, and preparing a positioning platform. Recommendations are given on the process of branding in commodity markets, first-price goods markets and long-range goods. The conclusion is made that systems, not brands, compete in the FMCG market, so it is necessary to pay equal attention to the company's commercial policy
Keywords: brand, quality, positioning, competition, marketing, distribution

  1. Introduction.

 Most Russian companies act as if branding were just a matter of inventing a name and drawing bright packaging. And although many Russian products label is a chaos of graphic garbage, it should not be started from the label and the logo. The label and packaging are nice little things, but this is not the foundation on which you can build a strong brand.

Very often we come across situations in which the word brand, branding, branding sounds. For example:

— it’s for us to sell at reduced prices for Range Rover and Jaguar cars;

— this is our «new and improved» from the old one differs only in the inscription on the label;

— this is the price we raise, not because the demand is ahead of the proposal, but because soon the New Year and everyone will be promoted.

What is branding? What do we mean by this? What kind of work needs to be done? The main dangers and delusions?

There are a lot of definitions of the term «brand». Under the concept of «brand» in marketing it is customary to understand a certain stable formed attitude of consumers towards a trademark. In Russia, most often in non-specialized publications, «brand» is used in the meaning of «registered trademark».
Initially, the idea of ​​branding was to mark and facilitate the consumer the choice of products with higher consumer characteristics, and most importantly — guaranteed quality, stable for a long time [1].

In our opinion, before embarking on branding, it is necessary to restore order in the production sphere, i.e. Where the product or service is produced. Defect-free production is the initial state of any company seeking to implement the branding process. Stably defect-free production for a long time. It is in Russia that manufacturers, after a successful start of production, somehow consider it their duty not to improve but to worsen it, reducing costs and making the recipe of production cheaper, in the hope that consumers will not notice it. An important step in the formation of branding is to ensure a stable quality of the product (service) for a long time. For many it is not difficult to make a single lot well. It is necessary that it remains so, regardless of the weather and equipment breakdown, and this is more difficult. It should be noted that all branding efforts will only make sense if the firm is guaranteed to be able to provide the expected level of quality of products or services that your customers want to see. Then, more precise adjustment to target groups will be made and an attempt to provide a product level that exceeds expectations [2-3].

  1. Materials and methods.

In our deep conviction, branding begins with the study of the product, service, consumer, the situation of consumption, the definition of target segments, development, the so-called positioning platform. Target segments are allocated on the basis of a similar requirement for products. Then they describe the consumer segment. Parameters of the description are different, most often found: by behavior patterns (active buyers of brands), by demography (18-24 lonely), by competitors (buy brand X), etc. The worst case is the description of the target audience: «A man + a woman aged 25 to 45 with an average income level.» Such amorphous descriptions do not give anything for pinpointing products and advertising campaigns. It can be compared with the following description of the segment: «A man + a woman aged 45 to 65 with an average income level, having a plot near the city, spend 50% of the time on their farm.» Which target audience will be easier to sell, for example, a cultivator?

Segmentation turns into an unnecessary toy, unless an excellent marketing policy is developed for different segments and the company does not adhere to it. Of course, all marketing communications should be narrowly targeted to a certain segment. It seems that Russian companies have completely forgotten about this, they diligently continue to cover the floors in the entrances with their leaflets. They try to compensate for the low response with poor design and poor quality of paper. It is better to select the segment in such a way that it does not intersect with its main competitors. It would be advisable to choose a target segment of a sufficient size, from 3% to 30% of the market share (in order not to attract the attention of industry leaders). It’s great if this segment grows over time rather than decreases. Ideally, if consumers from this segment have clearly expressed similar needs, wishes for a product or service. If a product or service has a successful sales history in a company, you should start by examining the current range of customers. It is necessary to make sure that the available consumers are the most economically profitable segment of the market [4-5]. How will they behave if the product is cheaper?

The greatest difficulty in branding is the process of developing a positioning platform, which is built on the analysis of existing and necessary technological capabilities, analysis of consumer behavior and analysis / prediction of the behavior of competitors [6].

What is in the proposed product or service such that the consumer will be interested? Is it important for him? What price does he consider reasonable? It is known that in the trading enterprise at the shelf the consumer will be delayed, no more than for 5-10 seconds. In a standard supermarket, up to 30,000 products. What is the chance of your goods being bought? Therefore, the development of the platform is very serious. As a rule, this work begins with the analysis of the commodity category: scrupulously and carefully consider all the competing brands for material and emotional benefits. Conduct a study on the unmet needs of potential consumers. Identify all the problems and dreams of potential consumers. It is important to understand what the preference for brands in a particular segment is based on. At the initial stage, in our opinion, it is necessary to determine the type of positioning: rational or emotional [7]. The latter has become very fashionable in recent years. Apparently, because it is used by brand icons. It should pay attention to some of the data that lead specialists in marketing. For example: dominant positioning in 1950-1960. — material rational — return on investment in advertising 10-15%. Dominant positioning in 1990-2010. — Intangible image — return on investment in advertising 1-4%. If the company is interested in making high-quality branding, you will have to learn to understand and understand what the consumer wants, what he needs, and what he is ready to pay money for. The latter is usually very encouraging. If we recall that satisfaction equals what was received, minus expectations, it turns out that the buyer should always receive more than expected.

If the brand of the company is not the first year on the market, it will be very useful to compare the desired positioning with the actual one. Most likely, all efforts to call for certain necessary associations with the product can drown in the chaos of differently directed advertising messages [8]. It should be tested, make adjustments.

An example of disappointing facts is, for example, the meat processing market, in which 70% of Russian brands do not have any position at all. One gets the impression that marketing executives simply skipped classes at their MBA school when they taught branding («Ostankino is a new standard!» — a new standard of what ?, «Nyam, yum, yum — buy Mikoyan» — I want to ask: This is about what?). Not surprisingly, the market share of major players is falling rapidly. It is also not surprising that we see a sea of ​​identical indistinguishable brands in retail network companies and the consumer has no choice but to choose at a price. [9]
Very often in Russian companies, the concept of «consumer characteristics» is replaced by «quality». In fact, the word «qualitative» is a relative term. There is no «quality» in marketing. The fact that for one target audience — an exceptional quality, for another target audience — an ordinary characteristic of the goods. It will be more correct to describe the product in terms of: «quality parameters» or «selection parameters for a certain target group», «important consumer characteristics». And, it is not enough to distinguish them, they need to be ranked according to the importance for different target groups [10]. But this task is extremely difficult and time-consuming. Moreover, different parameters behave differently in the situation «for the same price.» For some parameters, the consumer is willing to pay extra, other parameters he deems necessary to have by default.

«What the boss likes is something that our consumers will like.» Here is quite common, the most incorrect and the most dangerous approach to choosing the target buyers in Russian companies. You can not allow speculation for the consumer, it’s very risky. It is especially dangerous when managers start putting themselves in the place of a consumer. As a rule, they have a different level of life — higher, and they continue to impose their views on how the product should look in their opinion.

One of the well-known automotive companies conducted research on the topic: «For what reason did you buy a car of the X brand?» Expect to hear the answers: outstanding design, modern economical engines, spacious interior, etc. The most common answer was: «The lowest interest on the loan.» Not the most beautiful, not the most reliable, not the cheapest, but the most sold. Therefore, you should always find out why you bought this brand, — it may be that others just did not have time to bring it to the store.

In addition, the above should, in our view, pay attention to two common mistakes of branding.

The first is the phenomenon of commoditization. It is very difficult to brand raw products, such as granulated sugar, flour. However, they can be branded under the condition that there is a real consumer characteristic that is meaningful to the customer. For example, salt and flour, if it’s sea salt in cardboard packages or flour pancake with all the ingredients necessary for baking. If such uniquely distinguishable features of the proposed product does not exist, the company will throw money away by engaging in the branding of raw materials.

The second is the copying of the marketing strategies of the giants. Do not look at the brand icons Coca-cola, IBM, Nike, Mercedes, etc. They have their own marketing. You need to learn the rules, not exceptions. Coca-cola, IBM, Nike are exceptions. By the way, how long did Coca-cola have a major marketing success? And whether it is possible to remember the new commercials of the company, or, at least, the new taste of the product for the last about 10 years. With the loss of rational advantages, even such brand giants as Kodak quickly disappear into obscurity. You can not try to transfer situations with several cultic brands to hundreds of thousands of daily products of the FMCG (fast mooving consumer goods) category.

It is necessary to remember and cunning of products of the first price. If a company can afford the lowest price, it will have a slightly different marketing mix. It is necessary, in our opinion, to note that the marketing of FMCG products is very different from the marketing of pre-selection products.

In specialized literature one can find criticism of linear extensions. Many are now intimidated by the phenomenon of cannibalization. It may seem cruel, but if the company does not cannibalize its brand on its own, it will still be done by someone else for it. Therefore, do not be shy to attack your own brand.

In the FMCG goods market, repeated purchases are of particular importance. When conducting research after the launch of a new brand, it is absolutely necessary to pay attention to repeated purchases. It is especially effective to repeat the survey after several weeks of use. The company can learn a lot about how to improve and refine the product.

At the stage of creating a trademark, the company will decide the issue of a fair price, based on the opinion of consumers of its target segment and the competitive environment. Many companies simply can not accurately calculate their costs in terms of trademarks or, even more difficult, in the SKU (nomenclature position) section. Some financiers guard information such as secret weapons. But most often it is difficult to determine exactly the amount of costs even by the financiers themselves. Why do professionals focus on this. Everything is very simple — demand exists only within the price. Despite the pressure of the networks, one can not arrange at the stage of withdrawal of the product of the sale at reduced prices. According to experts, the consumer will consider this price as the real fair price of the brand being positioned [11-12].

In most marketing plans, some advertising support is expected for the withdrawal of a new product to the market. But from this support, there is always no trace in life. It’s easy to say that the company is going to spend two million on advertising. It is much more difficult for the head to sign such a payment. Therefore, it is possible that the new brand will not get the planned advertising support, but the result will still be asked with the responsible service.

But the most recurring mistake managers make is timing. In all Russian companies, the brand is created in an «emergency» mode. Justification is usually an irrepressible desire to catch the mythical season. The charts are always very dense. Many marketers do not have time to return from the general’s office, and it’s time to release a new brand. Instead of focusing at least a little on creating a new brand, the marketing director deals with operational problems and issues. In rare moments of calm, he tries frantically at least something to do with the new brand. And, finally, something not finished seems to the management, with a timid request to test. A guide filled with testosterone makes a decision to release an unfinished unprotected product. But, alas, the desire at any price to quickly enter the market — the biggest mistake. But most of all in this situation, the behavior of marketing directors is surprising, either they do not understand the actual terms for creating new products, or they really realize that by the time the deadline set by the boss approaches, they will no longer be in the company. Most likely, both the first and second.

For some reason, Russian companies often do not have time to make the brand right at the right time, but then they always have to redo something. As a result of the fact that different managers with different visions work at a different time, multidirectional communications are born, causing irreparable damage to the brand [13]. Experts recommend to lay at least two to three months for each of the three stages. The first is the research part and planning. The second is the development of a positioning platform. The third one is visualization and communication. If the test shows that the product «did not pass,» you should go back one step. It is better to pre-spend one more month to develop the product, then change something after the withdrawal and explain to distributors that your company will improve.

As practice shows, a trademark never has a second chance to make a first impression. On the expanses of Russian branding of marketing experts, there are many traps. An inexperienced regional producer can easily cater for them.

The fact is that in any market systems compete, not brands. Branding is only part of the system, and not a substitution of the entire system [14].

For example, it is impossible to achieve small success in the FMCG market without having a powerful distribution system. It should be noted that the global trend shows a decline in the influence of brands, and, conversely, an increase in the influence of distribution.). But after passing through this chain of intermediaries, the product will add to the cost and will lose in quality. It is necessary to be able to correctly plan the price on the shelf for the end user, taking into account all intermediaries. The thoughtless hobby for branding of some companies is surprising, which naively believe that branding alone can replace all other parameters of competition.

  1. Results and Discussion

Summing up the review of the process of branding, we should draw some conclusions — the so-called branding resume:

— a bright differentiating label and a name corresponding to the category are conditions necessary but not sufficient for the branding process;

— branding should start not with product visualization, but with analysis of existing and necessary technological capabilities, analysis of consumer behavior, the identification of segments with similar requirements to the product, with analysis of competitors’ actions, with the preparation of a positioning platform [15];

— should not, in our opinion, copy the marketing strategies of brand icons; the principle «we do not have so much money, so we have to think» should work;

— it is important to pay enough attention to the rational characteristics of the product or service; simply defect-free production is no longer enough, commodity markets, first-price goods and long-term goods develop according to their own rules;

  • it is advisable to set realistic deadlines; It is always necessary to test the product, the service before launch;
  • in the FMCG market, systems, not brands, compete, so you need to pay equal attention to commercial policy;
  • you should not trust the newfangled techniques that promise an instant result — marketing magic does not exist.



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