Companies must take a moment to assess their core business and their brand in order to remain relevant.
The dramatic changes in consumer behavior have affected respected brands, from Starbucks (closing over 600 stores) to auto giants who have cut back on production in North America and asked the federal government for help to save them from bankruptcy.
These organizations anticipated the downturn and made the necessary adjustments before it happened.
Take, for example, Starwood Hotels & Resorts Worldwide. This company is forward-thinking and has done so. Starwood Hotels & Resorts Worldwide announced in May 2006 a plan for reducing its dependency on real estate while creating new brands that were tailored to the needs of a new generation. In 2006, the company adopted an “asset rights” strategy that included selling non-strategic real estate worth more than $5 billion. It retained ownership of the most valuable assets, which could be redeveloped, repositioned, or have vacation-ownership potential. Starwood continued to mine the value of its owned assets as it restructured its real estate portfolio. In the second quarter of 2008, it saw an increase of 11.7% in management and franchise revenue compared to the previous year. Starwood connects with guests emotionally through brand-specific innovations and memorable experiences. This leads to the cultivation of brand loyalty and preference.
A company can benefit from stepping away from the business to conduct a situational and strategic analysis. How often do companies assess their brand and business together? Do they also take the time to fully understand the present and future landscapes of the industries that they serve? Do they then use this information to plot a course, like Starwood Hotels, in order to maintain the viability of their core business?
Imagine a Brand Toolbox
What is the value of this process? When it comes to brand strategy, many organizations keep things the same. Their activities are mainly focused on tactical promotion and short-term planning. They spend very little time evaluating the current situation (brand positioning) and even less time plotting their future directions. This process goes beyond just the brand and includes strategic business planning. The management team will have the vision they need to meet current challenges and take advantage of future opportunities by using a toolbox that examines your brand strategy and business at the same time.
This toolbox compares up to two elements at a time. The three elements are attributes, how customers behave, and the circumstances surrounding this interaction. You can develop a better understanding of the current economic climate by evaluating these three elements.
View each of the elements that make up the Brand Toolbox.
Attributes
When comparing, contrasting, and determining levels of acceptance, attributes can be used to reach people, places, things, and their respective uses or consumption. Every day, we use points to determine and validate our identity and place on earth. Why do you choose a particular car, clothing brand, or cup of coffee? Why do you choose to be in contact with certain friends, associates, or neighbors? In the opposite direction, why do you reject and distance yourself from certain products or services or reproof them? We rely, whether we like it or not (intellectual or emotional), on the associations (aka brand) that surround people, places, and things.
The attributes we use to make our choices are based on the features that we consider. Facts by themselves will not satisfy anyone. To form these perceptions, there must be a process and foundation by which the details are delivered and executed. We will then consider how we respond to more information and what this means for us when we consume.
Behavior
Do you consider yourself to be a rational buyer? The majority of us would answer yes. What we do and the way we do it often goes against our best intentions, but we are not always able to justify ourselves. Do we not all behave in the same manner?
You enter a shop to purchase a can. Two products are on the shelf. One has a white label with no name, and the other is red with Campbell’s printed on it. Which would you choose? The type of reasoning shared by both the buyer and the seller is the foundation of any relationship. You are not just buying a can. Your purchase is a reflection of who you are, what you value, and how you perceive yourself (at the register). The synergy of behavior and attributes becomes our paradigm for consumption, no matter how contrived it may be.
Marketers can gain greater insight into the attributes/behavior relation by observing what people do versus what they say (as with surveys). You wouldn’t think of the iPod if you asked CD player owners how they could improve their players. You could have observed their CD Players and seen how they used them. This would have revealed the gap between what was offered and the desired solution.
Let’s now consider the final element, which is where we consume.
Circumstances
It is best to consider our purchasing decisions in the context of the situation. Marketers may have all the right attributes in place, but if their setting isn’t the best, they will fail. Let’s take the automotive industry as an example.
The next-generation vehicle was the focus of buyers. Automobile companies were able to compete on an equal basis with the emerging market because they had similar resources, processes, and values. Design, functionality, and capability were already present, as was the consumer behavior to continually improve their driving experiences.
A company’s problem was a result of circumstances. The public didn’t want to abandon their gas-guzzling cars in favor of a small, limited-range electric vehicle that the company had invested heavily in.
EVs were not a good match for the times, so the electric car died a quick death. Toyota and Honda, on the other hand, took the next logical step in creating a hybrid vehicle (gas/electric), which was more like a regular car but had the added benefit of high mileage and being environmentally friendly.
What valuable lessons were learned? Although people desire higher-mileage vehicles (attributes/behavior), the idea of a car that relies solely on battery technology (charge each night, limited range, and very small size) defies the circumstances of mainstream consumers.