Invest the time to understand the technology and value proposition and do not be afraid to ask questions—To build trust among engineers and customers, marketers must strive to learn as much as they can about the technology.

 
THE SCIENCE OF BRANDING 1-3
UNDERSTANDING MARKET LEADERSHIP
 
According to a study by Dartmouth’s Tuck School of Business Professor Peter Golder, leading brands are more likely to lose their leadership position over time than retain it. One 1923 leader that did not maintain leadership was Underwood typewriters. Underwood’s primary mistake was lack of innovation. According to Golder, Wrigley’s success as a long-term leader is based on three factors: “maintaining and building strong brands, focusing on a single product, and being in a category that has not changed much.”
 
Golder and his co-author Gerard Tellis argue that dedication to the brand is vital for sustained brand leadership, elucidating five factors for enduring market leadership:

• Vision of the Mass Market—Companies with a keen eye for mass market tastes are more likely to build a broad and sustainable customer base.
• Managerial Persistence—The “breakthrough” technology that can drive market leadership often requires the commitment of company resources over long periods of time.
• Financial Commitment—The cost of maintaining leadership is high because of the demands for research and development and marketing. Companies that aim for short-term profitability rather than long-term leadership are unlikely to enjoy enduring leadership.
• Relentless Innovation—Due to changes in consumer tastes and competition from other firms, companies that wish to maintain leadership positions must continually innovate.
• Asset Leverage—Companies can become leaders in some categories if they hold a leadership position in a related category.

 
THE SCIENCE OF BRANDING 1-4
MARKETING BRANDS IN A RECESSION
 
There are tactics that can help marketers survive—or even thrive—in a recession, both in the short run and over the long haul:

• Explore the Upside of Actually Increasing Investment—Firms willing to capitalize on a marketing opportunity by investing during a recession have, on average, improved their fortunes compared with firms that chose to cut back.
• Now, More Than Ever, Get Closer to Your Consumer—A downturn is an opportunity for marketers to learn even more about what consumers are thinking, feeling, and doing, especially the loyal customer base that is the source of so much of a brand’s profitability. Any changes must be identified and characterized as temporary adjustments versus permanent shifts.
• Rethink How You Spend Your Money—A recession provides an opportunity for marketers to closely review how much and in what ways they are spending their money. Budget reallocations can allow marketers to try new, promising options and eliminate sacred-cow approaches that no longer provide sufficient revenue benefits.
• Put Forth the Most Compelling Value Proposition—Rather than overly focusing on price reductions and discounts, marketers should focus on increasing—and clearly communicating—the value their brands offer consumers, making sure consumers appreciate all the financial, logistical, and psychological benefits compared with the competition.
• Fine-Tune Your Brand and Product Offerings—Because certain brands or sub-brands appeal to different economic segments, those that target the lower end of the socioeconomic spectrum may be particularly important during a recession. Bad times also are an opportunity to prune brands or products that have diminished prospects.

 
 

Branding Briefs

 

BRANDING BRIEF 1-1
COCA-COLA’S BRANDING LESSON
 
One of the classic marketing mistakes occurred in April 1985 when Coca-Cola replaced its flagship cola brand with a new formula. Pepsi-Cola’s “Pepsi Challenge” promotion involved advertising and in-store sampling showcasing consumer blind taste tests between Coca-Cola and Pepsi-Cola. Invariably, Pepsi won these tests. Fearful that the promotion, if expanded nationally, could take a big bite out of Coca-Cola’s sales, Coca-Cola felt compelled to act.
 
Coca-Cola’s strategy was to change the formulation of Coke to more closely match the slightly sweeter taste of Pepsi. To arrive at a new formulation, Coke conducted taste tests with 190,000 consumers. The findings indicated that consumers preferred the taste of the new formulation to the old one and thus, Coca-Cola announced the formulation change. Consumer reaction was swift but, unfortunately for Coca-Cola, negative. After several months of slumping sales, Coca-Cola announced that the old formulation would return as “Coca-Cola Classic” and join “new” Coke in the marketplace.