The Paradox of Choices in a Marketer’s world

If I had to write a one liner job description for a brand marketer it would be

“Making difficult choices every single day under conditions of uncertainty”.

Choosing involves decisiveness though nine out of ten times brand managers do not have the luxury of data or information to support their decisions. So hypothesizing and extrapolating becomes a routine and without adequate backing leads to hierarchy winning over the feet on ground.

From my multi – industry, multi category experience of 13+ years as a brand marketer, I have identified 10 dilemmas that confront us on a day to day basis and most of them are a choice between a small, immediate win and a long, sustained victory. The difficulty lies in determining whether it is an ‘either – or’ situation versus an ‘and’ while making sure that the smaller wins do not deflect the brand from its journey of longer term sustainable growth.

The 10 dilemmas (both strategic and tactical in no particular order) are

1.       Same brand or new brand (while launching a new product)

Theoretically, this one is a no–brainer.

 All marketing gurus from Kotler to Kapferer tell you to leverage an existing brand’s equity only for the categories it can intuitively extend its value proposition to. Anything beyond this leads to an unnatural stretch and therefore needs to be assigned to a new brand. However, this theory looks good on paper but is easier said than done! Most companies look to optimizing resources and start evaluating from the perspective of ‘how many brands we need’ to ‘how many brands can we feed’? The word of caution - without the investment in a new brand, the likelihood of a brand extension succeeding is minuscule.

A via media solution that one usually resorts to is that of the ‘Sub–brand’ where the new ‘daughter brand’ tags along with the ‘mother brand’ capitalizing on its equity and requiring minimal incremental equity building. But whether the progeny takes off on her own or remains tied to the parent depends on the consumer’s perception which is again inextricably linked to the marketing investment.  Hence theory and practice often diverge in the beginning with converging depending on the extent of importance the marketing head places on conventional brand-building principles.

2.       Competition or Consumer (while crafting annual marketing plans)

The consumer is technically still the king.

When the competition is vying for the same consumer pie it seems nonsensical to have our strategies based on them. It is only bound to lead to duplicate marketing plans that might not solve a real need. However, it is true that one cannot lose sight of competitive actions and does need to keep anticipating their future moves

Hence this dilemma needs to be approached through a heuristic.

Strategic decisions => Rely on the consumer (after all the king has to have the last word)

Tactical decisions => Consider the competition (but only consider, do not blindly copy)

3.       Price increase or Grammage Reduction

When there are cost pressures, the price versus quantity question stares right at the face of every brand manager for how else can a marketer bring about contribution improvement? The short answer is “Never do both together” (unless you have self–masochistic tendencies)

There are heuristics to rely on for those who want to approach it in a structured way

a.       Essentials such as groceries and personal care which are bought by consumer in terms of weight (Grammage)  => Increase prices but within the range of consumer acceptance and comparison

b.      Non-essentials that are monthly purchases and are bought at specific price points with purchase behavior such that anything above this price leads to a volume drop => Reduce the quantity but carefully and touch only what can be termed as a consumer surplus

c.       Discretionary items => One can play with both price and quantity considering the strength of the brand in comparison to its competition (the stronger the brand, the greater the price elasticity)

Anything apart from these might require a deeper dive but you will find that most categories can be slotted into the above segments.

4.       Volume driver or Margin Driver

When there is a new launch business case being deliberated, should the P&L focus on maximizing topline or bottom-line? This one question attracts nose-pokes and naysayers from across departments and hierarchies. However, the answer should solely rest with the marketer who should take command of the decision by linking it inextricably to the brand portfolio.

Is the brand in consideration meant for the value seeking price sensitive consumer or is it for the higher order benefit desiring user who is willing to pay more. Again the choice is theoretically easy but practically difficult since it’s fraught with further questions such as

-          Should I launch a product that brings down the weighted margin of the portfolio but grows the revenues manifold?

-          Should I take higher volume targets on a premium product or increase prices further and realize in value?

Hopefully proper portfolio planning during inception of the business, referred to and updated every year basis relevance will help marketers solve for such situations without yielding control of the decision to other functions that typically should be supporting and not interfering.

5.       Advertise or Distribute first

For every media campaign that a brand manager embarks on, the doubt is to whether maximize availability through a push strategy versus create pull by advertising first and relying on consumer demand for the retailers to want to stock the product. This is an ‘and’ situation where it’s ideal to do both together. But in a non–ideal world, we need hacks to make a choice and from my experience, I have seen that

-          The shorter the purchase decision cycle and lower the involvement with low switching cost to the consumer, it is better to distribute first and then start the ad campaign

-          For longer purchase cycles and with scope for the consumer to do more detailed research before buying, advertise first and then ensure availability

With digital commerce becoming prevalent and the omnichannel approach taking over most marketing plans, online shops have become a permanent full funnel where these hacks could end up backfiring. But online is still an exception to the rule and not the rule itself. Yet!

6.       Advertise Mass or Niche variant

Ideally both, but in different ways based on the user profile. Still, when there is dearth of marketing monies identify which variant gives you the most halo effect for the entire portfolio and make sure to maximize the visibility for it. In many cases, the top-end variant might give the best halo but will fall short of scale in terms of physical availability across outlets. So if it is a category where unavailability leads to a brand switch do not advertise it. Instead go for the mid-segment (affordable-luxury/premium–economy) where the pricing is in the sweet – spot of catering to a wide audience, representing the gold standard in the category while simultaneously yielding enough margins for the business to grow profitably.

7.       Trade or Media promotions

A relatively simpler choice to make, if you know your objective.

To build long term equity you do need to create and strengthen brand associations for which advertising and communication is the ONLY key. And it needs to figure in every annual plan without fail.

There are certain extenuating circumstances, however, when trade promos become unavoidable.  

a.       During the launch of a new variant that should not cannibalize the core and hence needs to be stocked incrementally (not in place of)

b.      As part of an outlet expansion drive in markets where the brand is a challenger without strong equity

c.       To increase the depth of certain product lines to gain share of the shelf

d.      In a tactical seasonal drive of categories where ‘ seeing’ enhances ‘buying’

It’s however imperative to treat a trade promo as a transient move and not make it a benchmark for every sell–in, while the media investment deserves to be regarded as a stepping stone for sustained growth.

8.       Category code or Differentiation

First of all, I disagree with the terminology.

It is either a consumer code or a competition code and it continues to get heatedly debated especially in the FMCG industry where packaging plays a critical role in brand storytelling.

So new brands can do two things

a.       Emulate the category leader (in terms of colors and templates in packaging) to create instant association to the category

b.      Opt for a starkly different visual feel to stand out and be unique

How the user shops should be the key to deciding the modus operandi. For instance, if the color indicates the ingredient (such as a flavor or fragrance) in real life then moving away from this consumer code is at one’s peril. However in many agnostic categories (such as stationery, homecare products like sanitizers and detergents) the leader would have set the category code and not the consumer. Hence it is advisable to move away from this and create your distinctive marks which if possible should be based on a ‘life code’

9.       Performance or Content marketing

The first is trial driving with action orientation while the second is consideration and engagement driving to trigger perceptions. If the marketer knows what he wants from the creative and the campaign this choice is the simplest of all. However my word of caution to digital marketers who debate between performance and brand marketing – all marketing is brand marketing only! It has to be rooted to the brand’s vision, positioning and ethos. Hence the only debate is whether the campaign needs to trigger an action or a perception. In the think, feel and act spectrum, a performance ad does more of the third and a little of the first while a content ad focuses on the second. Since a brand’s growth is contingent on all three it is a marketer’s prerogative to include both types of marketing in their planning and not choose one over the other.

10.   Manufacturing or Sales

How can one prioritize when both are important stakeholders?

The brand manager's job is to ensure sales are maximized while production is optimized. It's a tough life because we not only get blamed for stock-outs and liquidating higher unsold inventory but we also get blasted if it leads to a sales loss. This will be an ongoing monthly debate and unfortunately has no heuristic to refer to for ease of decision making.

The only way to minimize friction is to ensure thorough scenario planning at the beginning of the year by anticipating all variables that could influence demand and ensuring it is reflected in the production plan. Yes, it is tedious, but will avoid many a headache and traumatic contentions with cross-functional teams.

 While I finish describing the 10 common decision areas that stump brand marketers, I realize they are not exhaustive but are certainly representative of a day/week/month in our lives.

The following primitive illustration says it all