Branding Challenges and Opportunities “Brand management may be more difficult than ever” Savvy Customers: Increasingly, consumers and businesses have become more experienced with marketing, more knowledgeable about how it works and more demanding. A welldeveloped media media market market pays pays increa increased sed attent attention ion to compan companies ies!! market marketing ing action actionss and motiva motivatio tions. ns. "onsumer information and support exists in the form of consumer guides #Consumer #Consumer Reports$, Reports $, %eb %e b sites, influential blogs and so on. Chall Challen enges ges to Br Brand and Bu Build ilder ers: s: Exam Exampl plee of Multip Multiple le Consum Consumer er Infor Informa matio tion n Sourc Sources es
Economic Downturns: A severe recession that commenced in &''( threatened the fortunes of many brands. )ne research study of consumers at the end of &''* found the following sobering facts+ -( percent of consumers reported that they had bought lowerpriced brands of consumer packaged goods in the past two years. / percent of the switchers to less expensive products said “they found better performance than they expected, expected,”” with with the vast ma0ori ma0ority ty saying saying performa performance nce was actually actually much better than expected. 1 percent of the switchers said “they no longer preferred higherpriced products.” As the economy appeared to move out of the recession, the 2uestion was whether attitu attitudes des and behavi behaviors ors that that did change change would would revert revert back back to their their prere prereces cessio sion n norms norms.. 3egardless, there will always be economic cycles and ups and downs Brand roliferation: Another important change in the branding environment is the proliferation of new brands and products, in part spurred by the rise in line and brand extensions. As a result, a brand name may ma y now be identified with a number of different products with varying degrees deg rees of similarity. 4arketers of brands such as "oke, 5ivea, 6ove, and 7irgin have added a host of new products under their brand umbrellas in recent years. 8here are few single #or “mono”$ product brands around, which complicates the decisions that marketers have to make. %ith so many brands engaged in expansion, channels of distribution have become clogged, and many brand battles are waged 0ust to get products on the shelf. 8he average supermarket now holds 1',''' different brands, three times the number 1' years ago
Media !ransformation: Another important change in the marketing environment is the erosion or fragmentation of traditional advertising media and the emergence of interactive and nontraditional media, promotion and other communication alternatives. marketers are spending more on nontraditional forms of communication and on new and emerging forms of communication such as interactive digital media9 sports and event sponsorship9 instore advertising9 minibillboards in transit vehicles, parking meters, and other locations9 and product placement in movies. Increased Competition: )ne reason marketers have been forced to use so many financial incentives or discounts is that the marketplace has become more competitive. Both demandside and supplyside factors have contributed to the increase in competitive intensity. )n the demand side, consumption for many products and services has flattened and hit the maturity stage, or even the decline stage, of the product life cycle. )n the supply side, new competitors have emerged due to a number of factors, such as the following+ Globalization: Although firms have embraced globali:ation as a means to open new markets and potential sources of revenue, it has also increased the number of competitors in existing markets, threatening current sources of revenue. Low-priced competitors: 4arket penetration by generics, private labels, and lowpriced “clones” imitating product leaders has increased on a worldwidebasis. 3etailers have gained power and often dictate what happens within the store. 8heir chief marketing weapon is price, and they have introduced and pushed their own brands and demanded greater compensation from trade promotions to stock and display national brands. Brand extensions: %e!ve noted that many companies have taken their existing brands and launched products with the same name into new categories. 4any of these brands provide formidable opposition to market leaders. Deregulation: "ertain industries like telecommunications, financial services, health care and transportation have become deregulated, leading to increased competition from outside traditionally defined productmarket boundaries. Increased Costs: At the same time that competition is increasing, the cost of introducing a new product or supporting an existing product has increased rapidly, making it difficult to match the investment and level of support that brands were able to receive in previous years. In &''(, about -&1,''' new consumer products were introduced in the ;nited inally, marketers often find themselves responsible for meeting ambitious shortterm profit targets because of financial market pressures and senior management imperatives.
