MARKETING MATERIAL
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[This section contains a number of journal and conference papers on the subject of marketing]
7144 BAM 92 - WINNING BRAND LEADERSHIP
BRITISH ACADEMY OF MANAGEMENT CONFERENCE (BAM) 1992
WINNING THE BRAND LEADERSHIP BY UNCOMPETITIVE MEANS
- THE RULE NOT THE EXCEPTION -
David Mercer - Lecturer in Marketing, Open University School of Management
ABSTRACT
The research, across the majority of 40 key FMCG markets which demonstrated dramatic changes in brand leadership over a twenty year period from 1969 to 1989, showed that the most important factors were not those of traditional competitive strategy - especially price (which was here rated relatively unimportant by the 'winners’) - but were those of longer term consistent, investment backed by management commitment.
The 56 brand/marketing managers/directors responsible for the 76 brands still in existence in these 40 markets were mailed a questionnaire. Twenty eight completed questionnaires were received. The overall response was 61%.
Analysis showed significant results at the two extremes:
IMPORTANCE OF
FACTORS
(average rating
on a scale from 1 to 5)
Relative commitment of management 4.24
Relative levels of investment 4.16
Physical product advantages 4.22
Distribution advantages 4.04
Advertising/image advantages 4.00
Weakness of competitor's organisation 2.56
Price advantages 2.54
As these brands were involved in the classic competitive battle, that for the brand leadership, it might be expected that the most important factors would be those traditionally reported as the key to such situations; competitive strength and, especially, price. In practice - and totally against such traditional theory - these factors were rated the lowest of all those investigated. Price, especially, was clearly rated as the least important of the factors; and, indeed, as relatively unimportant.
The positive marketing factors, product and image/advertising, were, on the other hand, rated highly. These are also the factors which apply across the longer term, as were the two factors rated most important; investment levels and management commitment. Long term investment, and consistency, was a feature of 85% of the unprompted responses from the ‘winners’; but, again, is the reverse of what might conventionally be expected in such highly competitive situations.
Even more unexpected, perhaps, was the emphasis on personal contributions; ‘marketing skills’ and, in particular, that on ‘management commitment’ — which was rated top overall, but would not feature in traditional reports.
The final overall outcome, again surprising in terms of what might be expected from traditional theory, was the emphasis on the importance of the overall ‘product package’; with only 15% of the respondents rating just one factor more important than all others.
WINNING THE BRAND LEADERSHIP BY UNCOMPETITIVE MEANS
- THE RULE NOT THE EXCEPTION -
SUMMARY
The research, across the majority of 40 key FMCG markets which demonstrated dramatic changes in brand leadership, showed that the most important factors were not those of traditional competitive strategy — especially price (which was here rated relatively unimportant by the ‘winners’) — but were those of longer term consistent, investment backed by management commitment.
BACKGROUND
Previous research, based upon (MRB) TGI data covering the period 1969-1989, had shown that the brand leadership had changed in 80 markets (out of the 150 FMCG markets studied) across the 20 year period. Half of these leadership changes involved large shifts in share (with changes in relative share of more than a third) in markets with leaders’ shares in excess of 30%.
It was decided to more directly explore the factors responsible for the changes in these 40 markets, since it is likely that they may provide a unique insight into the importance of these factors in the more general context.
METHOD
The 56 brand/marketing managers/directors responsible for the 76 brands still in existence were mailed the questionnaire shown in the appendix. It was possible to identify approximately half of these personnel by name, and the rest were addressed by title. A reminder was mailed after two weeks.
The questionnaire was deliberately kept very simple; just two sides of one sheet of paper — since these managers all hold very demanding positions, and as a result are likely not to have time to answer more elaborate questionnaires. It simply asked for an unprompted answer as to what had been the reasons for the change in leadership. It then prompted answers for the each of the 13 factors which had previously emerged from focus groups held with 40 managers not in the target group. In the first instance it asked for a rating (from 1 to 5) of the importance of each of these and then one for the brand’s relative position against these at the time of the change.
RESULTS
Twenty eight completed questionnaires were received. Responses were also received from a further six companies where the information was not available. Thus the overall response was 61%.
Perhaps unsurprisingly, slightly more than twice as many responses (19) were received from the ‘winners’ of the leadership contest as compared with the ‘losers’ (9 responses).
The analysis showed the following average results:
IMPORTANCE OF RELATIVE spontaneous
FACTORS POSITION mentions
(average rating) (of winner) (of total)
Relative commitment of management 4.24 3.96 2%
Relative levels of investment 4.16 4.11 13%
Physical product advantages 4.22 4.04 20%
Distribution advantages 4.04 4.19 5%
Advertising/image advantages 4.00 4.19 21%
Relative strength of marketing skills 3.68 3.67 11%
Advantages in other elements of the 3.58 3.46 7%
‘product package’
Advantages deriving from strengths of 3.50 3.75 2%
the parent organisation
Other promotional advantages 3.16 3.13
Relative strengths of marketing research 2.96 3.17 2%
Other logistical advantages 2.92 2.96 2%
Weakness of competitor’s organisation 2.56 3.17 5%
Price advantages 2.54 2.88 9%
As can be seen from the right hand column above, three of the top five factors also strongly featured in the ‘unprompted’ responses. Of the two which didn’t, the top rating ‘relative commitment of management’ might have been as unexpected an outcome to the managers involved as it was to me, and ‘distribution advantages’ seem to have an ambiguous role (where this factor did not rate strongly on relative position). At the other extreme, price was clearly rated as the least important of the factors; and, indeed, as relatively unimportant.
Further analysis also showed that the majority of respondents ascribed the change to a package of factors, 56% rating more than two factors equally ‘most important ‘; which was also reflected in the unprompted responses.
IMPORTANCE OF RELATIVE
FACTORS POSITION
% of respondents % of respondents
Number of factors receiving equal first rating:
1 15 52
2 29 7
3 15 15
4 26 11
5+ 15 15
Comparison of the responses from the ‘winners’ (those companies gaining the brand leadership) against those from the ‘losers’ was:
IMPORTANCE RELATIVE
OF FACTORS POSITION
(average rating) (of winner)
As reported by: winner loser winner loser
Relative commitment of management 4.22 4.29 3.94 4.00
Relative levels of investment 4.00 4.57 4.11 4.11
Physical product advantages 4.21 4.25 4.17 3.78
Distribution advantages 4.22 3.63 3.72 3.11
Advertising/image advantages 4.00 4.00 4.28 4.00
Relative strength of marketing skills 3.78 3.43 4.11 2 . 78
Advantages in other elements of the 3.67 3.38 3.56 3.44
‘product package’
Advantages deriving from strengths of 3.44 3.63 3.94 3.44
the parent organisation
Other promotional advantages 3.18 3.13 3.28 2.89
Relative strengths of marketing research 3.06 2.71 3.39 2 .89
Other logistical advantages 2.94 2.88 2.94 3.00
Weakness of competitor’s organisation 2.44 2.86 3.11 3.33
Price advantages 2.28 3.13 2.67 3.44
DISCUSSION
As these brands were involved in the classic competitive battle, that for the brand leadership, it might be expected that the most important factors would be those traditionally reported as the key to such situations; competitive strength and, especially, price. In practice — and totally against such traditional theory — these factors were seen as relatively unimportant, being rated the lowest of all those investigated.
The positive marketing factors, product and image/advertising, were, on the other hand, rated highly. These are also the factors which apply across the longer term, as were the two factors rated most important; investment levels and management commitment. Long term investment, and consistency, was a feature of 85% of the unprompted responses from the ‘winners’; but, again, is the reverse of what might conventionally be expected in such highly competitive situations.
Even more unexpected, perhaps, was the emphasis on personal contributions; ‘marketing skills’ and, in particular, that on ‘management commitment’ — which was rated top overall, but would not feature in traditional reports (and was, perhaps as a result, not included in the direct unprompted responses, though it appeared indirectly in the context of investment/consistency).
The final overall outcome, again surprising in terms of what might be expected from traditional theory, was the emphasis on the importance of the overall ‘product package’; with only 15% of the respondents rating just one factor more important than all others.
These patterns were reinforced by the comparison between ‘winners’ and ‘losers’. Even though the trends noted above still predominated, the latter tended to rate rather more highly the traditional ‘competitive’ factors; including ‘weakness of competitors’, ‘investment’ (which was rated 4.57 in importance by the losers compared with 4.00 by the winners) and, especially, ‘price’ (rated 3.13 in importance by them against 2.28 by the ‘winners’ - and
3.44:2.67 in terms of relative position), where the former looked to factors such as ‘product’ , ‘image/advertising’, ‘distribution’ (4.22:3.63 in importance and 3.72:3.11 on position), ‘marketing research skills and particularly ‘marketing skills’ (3.78: 3.43 in terms of importance, and — even more significantly — 4.11:2.88 in terms of relative position).
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