How Long Does Your Brand Lasts?
Built into much manufacturing/marketing philosophy is the notion that brands have a life-cycle
. Brands are developed in response to a perceived consumer need- a gap in the market left by other producers. They are enthusiastically developed, promoted in a new way, gain market share, and struggle to stave off competition. As the new product gain acceptance, as its market share stabilizes, it becomes a predominant feature of the market.
But as the product ages, as the support of its qualities wanes, as the market itself declines, some manufacturers are prepared to let their products run down- milk them as cash cows before they fade from the market place altogether.
What is the basis of survival for the manufacturer who lives in this sort or world? There are three broad areas on which the manufacturer can act:
First, he can try to escape the profit crushing constraints of a commodity market through innovation, through the constant development and improvement of an old product. Customers are easily attracted to innovations. Even if you just change the wrapper of your candy products, they will perceive it as a new discovery or new in the market, so they will buy it.
Second, he can try to evolve totally new products, which operate in a new market, and which afford the possibility of new profits. For example, if your newsletters dont create appeal well to the market even though you have tried many strategies like offering cheap newsletters, you can always initiate bargain newsletter printing, or a free item for bulk printing, and so on. You need to think of some new print materials that you havent tried yet. You can introduce business card printing, folder printing and even poster printing.
Third, he can attack the cost base which defines his profit margins, by trying to gain economies on sale. Being an entrepreneur you should know where and when you will get a high profit. If you do, take advantage of it.
Clearly, manufacturers will aim to use all of these strategies, the mix of which will depend upon the stage in the product cycle that each manufacturer (or the industry in which it operates) has reached.
Very few manufacturers operate at the forefront of technology in a product sense, even though their production processes may be highly advanced. They operate in markets which are more nearly commodity or highly standardized markets than highly product differentiated markets, and hence are more prone to incursion from other production centers around the world that have cheaper relative (labor) costs.
The pressures of product market convergence have been reinforced in the 1970s by two further developments. On one hand, inflation prevalent throughout the world during this period put pressure on corporate profits as manufacturers were unable to respond to rising costs of production. On the other hand, consumer market growth itself has begun to diminish as the Second World War baby boom has matured and population growth in the major markets of the world has slowed down, producing static markets. For these reasons, corporate priorities have switched- many manufacturers now aim to become the low-cost producer in their product category.
Some companies believe they can create a refuge from competitors by burrowing into one market. However, this kind of niche in the context of global competition becomes analogous to a pothole. When a strong competitor targets a market section that includes that niche, it will have the effect of a steamroller paving over the entire sector.
Commitment to this strategy involves in being sharp in the definition of long term objectives, frank about strengths and weaknesses, clear about the companys position in a world market, and sure of the enduring quality of its products. And, most of all, it means a commitment to making progress in the market place on the only truly long-term basis-product superiority.
by: Kaitlyn Miller
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