Many of you may wonder why I spend so much time dealing with the financial markets, when my overall focus is on marketing and branding. Well unlike most advertising, marketing, and branding professionals, I believe branding/marketing efforts can be quantified in a meaningful way that give insight and direction to the overall direction of an organization. I just finished a book about marketing metrics that successfully ties in marketing metrics to analyzing corporate financial data. I learned that effective branding can't explain a quarterly earning report, but it can explain yearly performance. This particular clip from CNBC (Squawk Box) has a few ironies embedded in it. Before I get to the topic of discussion, I would like for your to notice two things.
If you notice on the screen of the video clip, you'll see that Fed Chairman Bernanke has been muted in the background to hear information about XBox sales. It appears that talk about bank capital, financial instruments, and interest rates have taken a backseat to products and people - at least for a little while.
Another interesting part of the video was the question about XBox sales being higher than normal. My position has been for a few years that we as a society are moving to a glocal economy - yes I spelled that right. Video On-Demand, Home Entertainment, and anything related to low-cost/low-travel will be embraced by the majority of this society. Oh yes, we will still get our party on, but in a way different than expected. It's what the markets are calling the 'New Normal', which used to be just plain normal until everyone needed a 3000 sq ft loft, plus a vacation home.
But the point of my discussion actually happens at the end of the clip when there is a brief credit given to the strength of brands. Why should you brand, and when does it matter? It's a question every senior manager of an organization should be asking at the big meeting. For those linear thinkers, branding happens at three points during the purchase decision process - before it ever happens, the final selection/choice, and after it's over. The rest can be attributed to the 4 P's of marketing. The most important part of incremental sales for a company will always be the final selection/choice point. The most important part of growth for an organization is after the process when individual recommendations occur. However, none of this may happen if there is no branding before the need occurs.
So, to answer the question "Why Brand?", the answer is simply if your product or service is being reviewed with comparable products or services, the selection will favor the familiar, if the 4 P's don't vary much. Thus, all things given equal, I'm buying an Oldsmobile like the rest of my family. Oh wait, the 4 P's took care of that even happening. Okay, I'll go with a Blackberry since all my co-workers are bragging on them. You get my point, the social/psychological aspect constitutes the tie-breaker in a close race.
On to the other question, "When Does It Matter?". It matters in times like these where money is spent more conservative than the market would expect. Thus, more logic is being applied by the consumer, and every company is working on, at the very least, three of the p's (price, product, and promotion). At this point, who doesn't have a 2 Meals for $20 deal? The average consumer will only find value in this proposition if the company is perceptually valued above the promotion either through their food (products) or service (products). My point being, if you haven't started a comprehensive branding effort, it's too late for this tight market, because it matters NOW. What is your value proposition? Are you valued beyond your promotion? Is your price premium above 1? Are you placed in a marketing channel that gives you an advantage? Can your product make the necessary adjustments to meet the requirements of the consumer? These are important questions that you need to have answers for to go beyond survival to prosperity.