A good brand knows when to say No!

Dear Friends

Welcome to Sunder Madakshira Blog.

Over the past 18 years, I have been a part of many great marketing efforts. And some really mediocre ones. I would like to share with you some thoughts and illustrations of both. I hope my thoughtswill resonate with your experiences.

My first thoughts are about the boundaries that a brand should have. A great brand always sets clear boundaries. Sharp segmentation, targeting and positioning (STP) are the pillars of great brands. Why does every brand not become great? The answer lies in how tight the managers of the brand want to keep the brand.

What are the compulsions?

• Business world today is unforgiving to brands which do not grow
• Frequent changes in corporate and thereby brand strategies
• Frequent dabbling with the brand management structures
• Merger and acquisitions of brands bring together strange bedfellows of competing brands in the same brand portfolio

The result: Brand extensions and expansions into newer segments and geographies if not handled with care, lead to dilution and progressive economic weakening of brands.

Which brings us to the question Does your brand say no enough?

The art of positioning is to say yes to your target segment(s) with a clear message and no to many others. Positioning is as much about sacrifice as it is about embracing growth opportunities. What are the scenarios when a brand should say no?

• There is insufficient time to make a decision on an expansion opportunity. Better late than sorry
• A clear estimate of the size, type and definition of the target opportunity is absent. In real life one can seldom get this 100% right, but 15% information availability is certainly not a great starting point
• The gap in perception between current and proposed positioning is high
• One does not know the clear path to bridge the gap in the product pricing and distribution

Here are some examples of not saying no at the right time:

• Acquisition of IT consulting companies by many Indian IT majors. Culturally, the niches that consulting organizations operated in were not the mainstay for the IT majors. Progressively, there were severe strains between the organizations wrt clientele types, pedigree of people, type of work, margin expectations and gestation periods of deals. Some of these marriages exist even to this day, albeit strained.
• When Brook Bond acquired Lipton, there were many brands which were competing against each other. The same sales force was selling competing brands before a consolidation effort almost 10 years later.
• Kingfisher buying Air Deccan and making rather efforts in vain to integrate a premium and discount airlines.

In my next blog update, I will share some thoughts on Impressive Branding Performances. Meanwhile, please send me your comments on what you feel about the thoughts shared above.