"Product innovation is perhaps the most obvious way companies try to stay 'ever new'. The importance of product innovation is paramount. In categories where there is a less product innovation, private label penetration is typically 56% higher than those categories where there is more active product innovation. "
Michele Blake
Winning Strategies for Brand Loyalty
Wednesday, May 30, 2007
Thursday, May 17, 2007
website rewrite
Have spent the past 2 days working to upgrade the Golden Goose website - mostly textual changes. Amazing how much has happened since the text was last rewritten. Any comments welcome: www.goldengoose.uk.com
Thursday, May 10, 2007
paper on brand loyalty
There's probably an article in 'how brand licensing increases brand loyalty', just haven't had time to write it yet. In the meantime here are some conclusions from an excellent paper on the subject by Michele Blake:
Brand loyalty is increasingly earned by building intensity of desire.
Some industry commentators propose that there is only one measure really worth tracking and that is – how many of a company’s customers would actively recommend their products to others.
True loyalty increasingly requires companies to think about creating desire and involving emotion. But consumers are increasingly uninterested in developing relationships with brands.
Today, in developed markets at least, consumers are quite literally spoilt for choice, leading to “choice paralysis,” and making people less satisfied with the choices they do eventually make. Also consumers feel stressed trying to regain control over their schedules: they just have less time for brands.
In addition, they are generally more resistant to marketing and advertising. This is partly a protective response to the sheer volume of advertising messages to whichthey are exposed and partly due to their increasing cynicism about those messages.They trust less, having had that trust abused in the past.
Income polarization is contributing to polarization in shopping habits, causing brands to lose out to more premium options on the one hand and consumers’ price shopping on the other.
Private label also threatens loyalty as consumers are tempted away from branded products to private label equivalents with their price competitiveness, improved quality, increased innovation, and shelf space advantages.
Consumers are also increasingly substituting takeaway meals and eating out for food and drink bought in supermarkets and prepared at home.
Finally, the retail environment is now a key arena for brand and promotional messages delivered to consumers at the crucial moment at shelf-front when the final brand choice is made, meaning loyalty is in the balance until the very last moment a shopper puts an item in their basket.
Building loyalty is also about innovations in marketing. One trend is streamlined portfolios, where often it is the umbrella brands, rather than the individual products that are promoted – often via a ‘lighthouse’ idea, making the brand stand for something above and beyond product. For example, successful brands are taking positions reflecting current trends for increased corporate responsibility (e.g.Fairtrade, organic production, health and wellness and so on).
Canned, frozen and chilled foods suffer the lowest consumer loyalty.
Private label is the greatest threat to loyalty, followed by unplanned shopping as consumers are tempted away by lower price private label alternatives and/ or are influenced to buy another brand (or private label) at the shelf front. Loyalty towards private label economy and standard ranges will slip in the future.
66.0% and 58.3% of respondents rate innovation and premiumization respectively,as ‘very good for’ or ‘best for’ brand loyalty, whilst improving product experienceand generating positive word-of-mouth are the most effective strategies inpromoting brand loyalty.
It is true today and will continue to be true that customers will only remain loyal to brands – assuming they have more than one available choice – if those brands continue to meet their expectations, their needs and wants. Increasingly aware of their greater range of options and better informed about those options, customers are becoming more demanding and generally less loyal, so companies have to work harder than ever to achieve even the same levels of loyalty.
The most successful companies focus on that brand or those brands where the company has the best chance for success, fully committing the organization – from the most senior levels down – to the chosen brand(s) and their customers.
To engender greater loyalty, companies will want to explore how they could more holistically solve the customer’s ‘problem’ through innovation. The most successful brands go beyond practical benefits to deliver an idea that the customer can buy into.
See the full paper here
Brand loyalty is increasingly earned by building intensity of desire.
Some industry commentators propose that there is only one measure really worth tracking and that is – how many of a company’s customers would actively recommend their products to others.
True loyalty increasingly requires companies to think about creating desire and involving emotion. But consumers are increasingly uninterested in developing relationships with brands.
Today, in developed markets at least, consumers are quite literally spoilt for choice, leading to “choice paralysis,” and making people less satisfied with the choices they do eventually make. Also consumers feel stressed trying to regain control over their schedules: they just have less time for brands.
In addition, they are generally more resistant to marketing and advertising. This is partly a protective response to the sheer volume of advertising messages to whichthey are exposed and partly due to their increasing cynicism about those messages.They trust less, having had that trust abused in the past.
Income polarization is contributing to polarization in shopping habits, causing brands to lose out to more premium options on the one hand and consumers’ price shopping on the other.
Private label also threatens loyalty as consumers are tempted away from branded products to private label equivalents with their price competitiveness, improved quality, increased innovation, and shelf space advantages.
Consumers are also increasingly substituting takeaway meals and eating out for food and drink bought in supermarkets and prepared at home.
Finally, the retail environment is now a key arena for brand and promotional messages delivered to consumers at the crucial moment at shelf-front when the final brand choice is made, meaning loyalty is in the balance until the very last moment a shopper puts an item in their basket.
Building loyalty is also about innovations in marketing. One trend is streamlined portfolios, where often it is the umbrella brands, rather than the individual products that are promoted – often via a ‘lighthouse’ idea, making the brand stand for something above and beyond product. For example, successful brands are taking positions reflecting current trends for increased corporate responsibility (e.g.Fairtrade, organic production, health and wellness and so on).
Canned, frozen and chilled foods suffer the lowest consumer loyalty.
Private label is the greatest threat to loyalty, followed by unplanned shopping as consumers are tempted away by lower price private label alternatives and/ or are influenced to buy another brand (or private label) at the shelf front. Loyalty towards private label economy and standard ranges will slip in the future.
66.0% and 58.3% of respondents rate innovation and premiumization respectively,as ‘very good for’ or ‘best for’ brand loyalty, whilst improving product experienceand generating positive word-of-mouth are the most effective strategies inpromoting brand loyalty.
It is true today and will continue to be true that customers will only remain loyal to brands – assuming they have more than one available choice – if those brands continue to meet their expectations, their needs and wants. Increasingly aware of their greater range of options and better informed about those options, customers are becoming more demanding and generally less loyal, so companies have to work harder than ever to achieve even the same levels of loyalty.
The most successful companies focus on that brand or those brands where the company has the best chance for success, fully committing the organization – from the most senior levels down – to the chosen brand(s) and their customers.
To engender greater loyalty, companies will want to explore how they could more holistically solve the customer’s ‘problem’ through innovation. The most successful brands go beyond practical benefits to deliver an idea that the customer can buy into.
See the full paper here
Friday, May 04, 2007
valuable quote
The mechanics for a successful launch are simple, but often forgotten, says Dave Woodward, ex-P&G now head of Heinz UK & Ireland - "You need to gain distribution, stimulate trial, stimulate repeat purchasing and finally encourage multi-purchases and long-term loyalty"
Wednesday, May 02, 2007
Why Brand Licensing is like sex.
Licensing is like sex. With good sex, all the effort leads to deep satisfaction with both sides enjoying the moment. Bad sex leaves one side feeling dominant and the other feeling cheap, dirty and used. Ugly sex, on the other hand, leaves both sides mystified why it happened with noone wanting to talk about it any more.
Whilst there are plenty of guides to sex, there aren’t that many devoted to licensing. In fact in the guides to marketing and branding I’ve come across there’s usually several chapters about brand extension but rarely more than a cursory paragraph or two about licensing as a way of executing a brand extension. Licensing seems to generally be considered by marketing gurus as either a low-key, unimportant activity or a dirty little secret.
To read the rest of this article, you'll have to wait until the September edition of the Brand & Sport Licensing source book...
Whilst there are plenty of guides to sex, there aren’t that many devoted to licensing. In fact in the guides to marketing and branding I’ve come across there’s usually several chapters about brand extension but rarely more than a cursory paragraph or two about licensing as a way of executing a brand extension. Licensing seems to generally be considered by marketing gurus as either a low-key, unimportant activity or a dirty little secret.
To read the rest of this article, you'll have to wait until the September edition of the Brand & Sport Licensing source book...
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