Literature for the business leader published by SchmidPreissler International Strategy Consultants, The Lion’s House, D-83703 Gmund am Tegernsee, schmidpreissler@schmidpreissler.de, www.schmidpreissler.de

 

 

 
 

SchmidPreissler Brand Equity+Performance©  Programm

 
 

Issue: 12/200

Next Issue: Week 02/2008

 

 

Excerpt of further issues topics: Brand Equity and Brand Strategy, Brand Equity and Brand Diffusion, Brand Equity and Company Success, Brand Equity and Sales and Acquisition of Brands or Companies, Brand Equity and Marketing Investment

 

 

 

 

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Sales Oriented Thinking – One Big Management Misapprehension
Franz Maximilian Schmid-Preissler

The belief in the almost unlimited power of sales volume might be one of the biggest misapprehensions companies still succumb to today. He, who loses sales or even thinks about risking them, is going to be in hot water quickly.

How about the value of the brand? Without a doubt by many it is regarded as the most important corporate asset. However, do they act accordingly?

Surely, sales volume is a reference figure for the success and failure of a business. But in the end in many cases it is no more than a misleading and arbitrary factor. For companies in mature markets with a high degree of competition and pressure of competition, in markets where products become increasingly interchangeable, where desirability and attractiveness of brands increase and independence from retail is gaining in significance, a corporate strategy consequently aimed at brand equity is advisable.

1. Get a realistic picture of the level of your brand equity

There are a series of factors which determine the value of a brand. For instance, the distinct positioning, the image, origin and the history play the same role as establishment on the market, brand protection and brand awareness.

Distinctive for the brand is, of course, substantiated market research, the willingness to invest in research and development, a powerful marketing mix that gives consideration to the factors brand, product, distribution, service, communication and price, a solid relationship, shaped by trust and openness in the procurement market, sales market, capital market and employment market as well as the social environment, the ability to inspire your customer and forge ties with your customers through your brand, superior product features, first-rate quality in all regards and many more.

2. Gear your business towards brand equity growth instead of sales oriented growth

It needs to be prime goal of a business to increase the most important asset, the brand, and not sales volume or turnover “at all costs”. This is the core of every future-oriented corporate strategy. If a company can only keep pace with sales volume or can only increase it if it starts price wars or plays along during price wars, it is going to get into this ruinous downward spiral and is going to destroy brand capital over the course of several years.

3. Aim for an increase of the brand equity and control it

Jeff Wilke of Amazon once said:”Mathematical decisions are always superior to personal opinions and assessments.” How true.

To put brand equity into the center of all considerations means to set controllable monetary development targets. Not just use some universal phrases or desired attitudes, because objectives and controlling only become informative if those responsible for the brand can clearly answer the question where the base of operation lies and if an increase in brand equity has been achieved.

To plan, navigate and control the manifold and complex activities in connection with the manufacturing and marketing of brands requires today and in the future a brand handling that ensures a high degree of brand leadership. Those responsible for the brand are going to have to adapt to marketing budgets being questioned systematically; and not exclusively with the benefit of hindsight, but rather before their approval. The buzzword “marketing and brand controlling” is now circulating. Everything points towards a “return on marketing” being measured in the future in the same way as it is the case with other investments today.

Conclusion:

In saturated markets the increase of brand equity is the supreme discipline in a sustainable competitive strategy. To exert energy, discipline and consequence for this goal is going to pay off.  

 

 

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