BrandWealth Seminar 2013: ‘Biggest challenge to brand building is short term thinking by brand managers’: MG Parameswaran

This year’s Brandwealth Seminar, the executive development programme organised by Draftfcb-Ulka’s Cogito Consulting, began with the Mumbai leg on 18 July at WE School, Matunga. Attended by over 70 executives representing advertisers and agencies, the three-day programme features sessions by industry veterans on a range of topics under the gamut of advertising and marketing.

In the opening session of BrandWealth, MG Parameswaran, executive director and CEO - Mumbai Group, Draftfcb-Ulka, defined what a brand stood for. “Fundamentally every brand creates value for the product or service. Moreover, among many other things, a ‘brand’ provides consumers an imagery about the product or service. Hence, by definition, a brand serves as a promise of consistent delivery.”

“It is not necessarily the factory or employees who bring wealth to the product or service. It is primarily the brand which brings in the wealth,” he pointed out.

Among other things, Parameswaran touched upon arriving at the brand valuation of a company (and its brands) during a takeover.Observing that there needed to be an enthusiastic buyer and an interested seller for any transaction, he noted that the key things to keep in mind during a valuation were the current turnover and the profit margin of the business.

Elaborating on why brands are necessary, he observed that brands are key for both manufacturers and consumers equally. “While brands help consumers identify the product or service and also provide a signal of quality, for manufacturers a brand name also acts as a legal protection in case of lawsuits.”

Pointing out the challenges to brand building, Parameswaran noted that savvy customers and decreasing brand loyalty in many categories and maturing markets are some of the primary hindrances. Increasing promotional expenditure, decreasing advertising expenditure, emerging communication options and increasing cost of product introduction and support were also pointed out as some of the challenges facing brands currently.

The ‘biggest’ challenge

“Having said that, I believe the biggest challenge to brand building are the product managers themselves, especially in those organisations where they are driven by short-term goals rather than long-term objectives. Brand building requires a long-term strategy, and the quarter to quarter targets set by product managers do not provide justice to the requirements of brand building. Many brand managers end up rolling out promotional schemes which increase the sales for the immediate quarters, and sometimes do not realise that they are detrimental for the brand in the long run. A brand can be successfully built if the right balance between short term goals and long term objectives are achieved,” he added.

Identifying the rules of building a brand, Parameswaran said, “Understanding the consumer is the primary rule. Other than that, staying close to the brand DNA, innovation and long term financial commitment with a simultaneous topline and bottomline orientation are the key rules for building a brand.”

Talking about the pillars of brand equity, he noted that every product has a difference, and as a brand manager, one needs to identify and use it to the brand’s advantage.

To illustrate the point better, he cited the example of Schiltz Beer, where a common occurrence of washing the used bottles with steam was highlighted by the agency as a differentiator in the communication. Examples of Birla Super Cement and Tropicana were also cited by the ad veteran to explain the point better from an Indian context.

In the case of Birla Super Cement, the brand was promoted with the tagline ‘India’s first 43 Grade cement’ - even when a competitor was also doing the same, but didn’t talk about it. In the case of Tropicana, the disadvantage was the taste and colour of the packaged juice which was not preferred by Indian consumers. The agency turned around the disadvantage by terming the drink as ‘100% Juice - Taste of good health’, and creating the perception of healthy juice tasting and looking like this instead of the sweet and dark colours usually seen by Indian consumers.

The second half of the day featured sessions on understanding consumer behaviour and creative strategy and evaluation by Dorab Sopariwala and Vidyadhar Wabgaonkar.