Touch
DIVERGING APPROACHES TO CREATING A BRAND
‘ The critical point of a brand is not to create emotional
appeal or to create buzz. The point is to shift customer
demand.
Well managed brands shift demand via commanding a
higher price, generating more volume or some of both
A brand’s equity or its power to shift demand can be
measured through discrete choice modelling – a
technique for revealing the relative strength that brands
have when customers make choices among competing
products/services
The power of a brand to shift demand applies whether a
company pursues a low-price or a premium-price
strategy’
BRANDS SHIFT DEMAND TO
COMPANIES THAT MANAGE THEM WELL
Price
Whole Food
10th largest US grocery chain
Operating Margin 6.9%
Wall-Mart
Largest US grocery chain
Operating margin: 5.3%
(experess stores)
Stronger brands
US grocery average
Operating margin: 1.2%
Weaker brands
Wal-Mart’s brand highlights the
companies ‘great value’ strategy to
increase volume while Whole Foods
brand places emphasis on organic
food an in-store presentation
BRA
STRA
THAT S
DEM
LESS
MO
ECONO
American Apparel and Benetton are examples of brands that invested significantly
in provocative advertising aimed at raising their brand profiles. However focus on
advertising has not resulted in business performance with sales stagnating and
declining operating income
Contrastingly Patagonia spends less than 1% of Sales on Marketing and had yet
built a powerful brand which revolves around high end outdoor clothing. They rely
on promotion via word of mouth partly successful due to its commitment to green
operations.
Zara on the other hand does not spend on marketing at all and relies on smart store
locations, powerful in-store experience and fast retail
Property of MAS Innovation
CLICK TO VIEW
ADVERT
CAMPAIGNS