 As Salaamu Alaikum, khawatheena khazrat. Welcome to lecture number 8, brand management, MKT 624 at the Virtual University of Pakistan. In the last lecture, I was talking about the brand management process, which starts with a brand vision. Before that, I've been talking about how to build the overall strategic management process, because an understanding of that is a prerequisite to knowing what brand management strategic process is. And we learnt that it is the overall business vision that has to take care of the brand vision. It has to address many elements of the brand vision. And brand vision is the starter when it comes to brand management process. Vision leads to so many different strategies which are all related with brand development, and is set off all those for the complete process which takes us toward the destination. And the destination is the achievement of goals that we have set to ourselves in terms of the brand movement. Having said that, now we are going to talk about how to build that brand vision. In the last lecture, we talked about the brand vision and why brand vision is important. That was a focal point of the previous discussion. Today, we're going to talk about, with a lot of emphasis on how to build that vision. It is a four-part approach. You start talking with the brand management as a part of departure toward the process, because unless you have the vision in place, you just cannot move forward in a well-structured strategic way. Nothing is to be left to chance. So therefore, you start talking with as the first step with the senior management. Why do you talk with senior management? Because senior management of the company has two fundamental jobs. One is to maintain business, and the other is to develop it. Business development being one of the most important jobs of the top management. Top management in a way is all about business growth and development. They keep developing business and they keep maintaining the growth. That's the other way of putting it. When you start talking with the senior management, you have to talk with them very candidly about your brand. And first of all, you have to ask them about their perceptions of the brand's role towards brand's own growth. Towards brand's role in the overall growth of the company and about their perception as to how far the brand will go. When you go to the top management seeking interview or seeking their input, it goes without saying that you go to them fully prepared with all your numbers ready and which brings us back to the translation of the vision into objectives. It is the commitment of the top management to the brand and its future movement which gives substance to the process of brand management and hence the job which you are carrying out. The questions that you ask top management about the three elements that I talked earlier, meaning as to what is their perception of the brand's role towards the brand's growth, what is their perception about the brand's contribution towards the overall growth of the company and what is their thinking about how far the brand will go. To get answers to all these elements, we have to ask very candidly a lot of questions to the brand management. Those questions will enable us to analyze their thinking of the past history as they understand it, be present as they see it because after all they are the creators of business, they are the managers of the overall business, they are experienced people, their perspective is very broad and there has to be a matching of perspectives when we are talking with them. So our perspective of brand movement, given the brand's history and given the brand's present, we have to talk with them to get their analysis of how far the brand will go. Let us start talking about these questions one by one. The first question that you must ask is what markets, business lines and channels the company will pursue. The perspective of top management about all these factors has got to be very clear and there is no doubt about that. When we talk about markets, what it means is how many markets we want to cover. Let us go back to the example of brand XYZ of the fast food that we talked about in the last lecture. You remember that we talked about starting business from the largest market of the country, which is Karachi. And we also talked about the possibility as part of the vision of the company to spread out into other markets and why not. So top management has got to be clear about what markets the company should be covering in the times to come. And when they talk about that, your understanding of the total marketing activities as they relate to the brand in terms of sales, in terms of distribution, in terms of logistics and in terms of communication has got to be very clear. And when I say it has to be clear, I am talking about the clarity of mind that you have to have in the light of the knowledge that you have about those factors. There may be certain factors that are inhibiting and there may be certain factors which are very encouraging. So depending upon how encouraging they are or how inhibiting those are, you have to make your decision, which of course you are going to convey to the management later after you have talked with them and you have gathered all the facts and figures. And which calls for a complete analysis. We should be talking about that in a moment. Business lines I talked about means if you are into the line of sandwiches, you have to have the perspective of management about any other line or lines that they envisage getting into. Again giving you the example of the fast food. If they are into sandwiches, maybe two years down the road they would like to get into pizzas or something very similar to the food line, still offering interesting items, food items in the restaurants, but those may not be really fast food. So these are the kind of questions which you have to ask them about which lines they envision getting into in the future. Let us now talk about accompanying which is into packaged goods and I keep talking about food items. Suppose you are working for accompanying which is into juices, the management may like or maybe thinking in terms of getting into mineral water. And after that another line which is for example cookies or chocolates. So this is the understanding that you have to have in terms of the vision not only about your brand, but also about the future lines which top management may be considering getting into. Remember we talked about brand power and brand value. If a brand is very powerful, you should get into different other categories and a powerful brand in other words does take you across categories. And that is how it renders value to the company and also to consumers. You also have to talk with the top management about their understanding of the geographic areas which the company should be covering in times to come. Going back to the same old example again that is company and brand XYZ in the fast food. We did talk about the company confining itself for the time being in the largest market of the country and we did talk about getting into other markets. You have to have the perspective of the top management as to how they think they should be getting into other markets and why they think the company should be getting into other markets. This is where the questions of logistics, supply chain management and distribution come in. And these are all very heavy weight questions until the time that we have very convincing answers to all these that we really have the ability to cope with all the factors encompassed by these questions. We should not go ahead with penetration into additional geographic areas. So I think of an understanding regarding the first question as to what markets and what lines we should be getting into is quite clear. Another question which is an extension of the first question I would say is about the channels. Channel development has emerged as a very important and significant area within the domain of marketing. The traditional channels whereby are going to be sold packaged goods were like from the company's manufacturing facility, the meaning factory, to the company's warehouses in various markets as transit points, to distributors, to maybe wholesalers, to the retailers and then on to the ultimate consumer. That model is still very intact and depending upon the kind of products you're dealing with or the area you're dealing in, you have to determine the layers of those channels. Maybe for one product you have from company to distributors to the retailers and for another product from the company to distributors to wholesalers and then retailers. It could also be from the company to distributors and to the consumers and could also be from the company straight to the consumers depending on the product, its nature and the logistics involved. So all these things have to be taken into account. I was talking about channel development. It has added a new dimension to itself. Because of the development of different kinds of retailing setups in different markets. So what I'm saying is, it is not essential that we stick to just one model. It may well be that we're dealing with two or three different models of distribution using different channels in order to reach the ultimate consumer. The importance goes to the understanding that we as brand managers should have about what kind of channels should be used to get to the consumers. We as brand managers could have that understanding but then we may also like to have the understanding of the top management. Because don't forget one thing, anything that we undertake within the business area means money. New channels, additional channels, new ways of logistics with warehousing, distribution, everything is cost. Everything is translated into rupees and top management does know what are the costs involved. In model A and what are the costs involved in model B. And they are the best people to guide you about the costing. If not the mechanism, they might like to keep that to themselves. At least about the implications of different costing models in terms of all the variables of the marketing mix. And then try to convince you, listen, this is the model which we think is going to be more effective in all respects. In terms of economies of scale, in terms of cutting costs, which of course automatically becomes part of the economies of scale. And also in terms of operational efficiencies. So what it boils down to is the matching of perspectives that you have to have in order to reach a sound finding. There may not be 100% consensus or agreement between yourself and the top management. But then if perspectives match comfortably and if they match in the sense that business can be carried forward. In a viable way, I think that's what it calls for. And that's the way it should be. And you should just move ahead with the future movements. Another question which you must ask the top management is about the financial and strategic goals of the company. You certainly have financial and strategic goals of the brand. But you must ask them how they envision the overall goals. We did talk in quite very details what financial goals are and what strategic goals are. You might get an answer from the top management about the level of revenues that the company is wanting to achieve. And through that level, the positive cash flows, good earnings, profitability, so on and so forth. All those financials the company would like to achieve, the top management might tell you. Or rather they will tell you. They will take you into confidence. Because you are the one who are going to help the company through the brand vision. And through all the details which have been translated from that vision to give results to the company. You are the one who is going to do that. So there is no reason why top management should not share how they envision the overall business in terms of financial objectives. They will also discuss with you rather any very forceful way that following are the strategic objectives which we want to achieve. And those are the level of market share relating different brands including yours. Those relate to overtaking competitors for example in terms of quality. Improving parameters of quality further in order to stay ahead of the market. So that nobody can catch you if you are in that situation. Or if you are in a situation in which you are a follower, you are a strong brand, but you remain a follower following the leader even then you've got to stay abreast of all these thought processes in order to make the right decisions for the brand. After talking about the financial and strategic goals you've got to talk with the top management about what they think are the strengths and weaknesses of the brand. Do not feel shy that you as brand manager should not be asking them about strengths and weaknesses of the brand because the brand falls into your domain. No, it falls into their domain also. Top management is all about business growth and business development. So the brand belongs to them as much as it belongs to you. They must know the strengths and weaknesses. The point is that you have to have their perspective of the strengths and weaknesses. Maybe they talk about strengths of brand which you are not really taking into account in relation to certain future moves for example. Because they may be having certain plans on the back burner for the time being which they're going to kind of unleash or bring to the front burner of which you do not have the knowledge at the moment. So when they start talking about all those plans with you maybe there are certain strengths which you think are going to be very important to know. By the same token the top management will talk about certain weaknesses. Remember no brand is without weaknesses. When I talk about weaknesses it may not only mean that brand doesn't look very attractive and it doesn't really satisfy its consumers. The brand doesn't have good colors or the brand doesn't have good quality. These are given and all these things have got to be there. The weakness may emerge in the area of distribution for example. You have been trying for the last so many years, not as brand manager but your peers. They all have been trying for the last so many years to improve distribution to the point where it should be but they are not successful. Why? Well they cannot find the right distributors in the marketplace. Maybe the kind of distributors they want to have are already engaged by the competition. When you want to acquire them they don't want to listen to you. Or maybe you do not even want to go talk with them because they are your competitors. You want to develop new ones. It takes time. It takes money. It takes time for them to come to the same wavelength, to come to the same level of vision, to develop their people, to have an understanding of the market dynamics the way you have. So this could be one of the weaknesses or the weakness may lie in logistics. This again is a very important area. If I talk with you going back to the example of company XYZ, let me tell you we talk about the fast food market in this country. The cold supply chain within the country is not very effective. It may be effective in relation to certain strong brands because they are so powerful and they are so successful that they have the means to make everything fall in place for them either with the help of other independent businessmen, other business parties or maybe through their own resources, getting into integration. And integration you understand what I am saying is maybe they would like to have a company of their own that deals with logistics or maybe a separate department. If they think this is something which cannot be handled very efficiently and also effectively by an outside party, what happens in that case? The followers or the small brands which are in the making, they suffer because the gap between the economies which strong brand or strong brands can attain is hard for the followers to achieve for obvious reasons. You are a small supplier. I mean, you are a small marketing company in that area and you do not have the means to carry your stuff to up-country markets from Karachi for example. What's going to happen? You are bound to go to somebody else talking about their willingness to take your stuff to up-country markets and they are saying no in a polite way. Why? It could very well be maybe your stock levels in terms of the volumes are not attractive enough or maybe they are already committed with the biggies. They are carrying the whole truckload for somebody else for a big one and they politely say no to you. What happens? You wait until that system of cold supply chain develops to the point where it becomes economical for you to carry your goods to up-country markets. What is the implication? The implication of all this that you are constrained to expand your market network. You cannot go to other markets. Your brand is very strong in just one market and you keep hearing from so many different quarters of the market including consumers. Why don't you come to that market? You've got such a wonderful brand and the typical answer of marketing people is, yeah, we are considering getting into the market B, market C and market XYC. It's going to take some time. It takes time to develop the brand, to develop all the systems, procedures, so on and so forth. The fact of the matter is that it is one of the very significant variables which is thwarting the process of development. This is one of the important questions in relation to strengths and weaknesses which you have to talk with the top management. I have talked about a weakness which is not only a weakness of the brand but which is a weakness in its overall manifestations. But if it affects the brand, so that is a weakness, we cannot stay oblivious to. We have to take that into account. So that becomes also the kind of a brand weakness. A brand just cannot move to other markets because the means of communication are not there. So your perspective of the top management perspective has got to be clear on that. Otherwise, not talking with them, maybe you will keep blaming them. I don't know why the top management does not really support us. Whereas they've got such a beautiful brand and so on and so forth. The next question which you must ask the top management also relates strengths and weaknesses. You must ask them, how are you going to reinforce the strengths which the brand has? Over that matter, the impact of that on the overall strengths of business of the company. Top management must talk with you about their plans as to how to further fortify and further strengthen the plus points or the strengths they already have. The way they look at those or the brand is so very strong that we are planning to get into other diversified categories for which we are going to have more brand managers because the bright people like you, they might talk in those terms which motivates you, which lets you know the future planning of the company in relation to future products. They may also talk about the human resource because they're going to need, of course it is not a part of your area, the kind of people they're going to need in different departments barring your own. If you think you can help the company in diversifying because it is going to be the same brand which is going to go across the segmental and the category lines. This is one example of the strengths which the top management might talk with you about your brand. There could be other examples but I would leave that to your imagination to think. What could be those? The point is when you talk with the top management about their perception of brand's strengths and how they plan to further fortify those strengths, in the same breath you must also talk with them about their perception of brand's weaknesses and how they think those weaknesses should be fixed. That's the basic objective. Another question which you must ask the top management is about the resources which they think the company should be committing or the company should be deploying for supporting the brand. Well, one of the resources for the brand managers because they must always talk about and they love to talk about is communication, advertising campaigns and this is where there's a lot of debate among different levels of management. One of that involves the brand managers, the marketing manager and the managers from other departments from finance in particular and the top management. It becomes quite very animated and heated as to what kind of money should be spent on sustaining the brand and for its further growth. Other areas where the top management must commit company's resources are very simple to comprehend and very simple to think about. The area of production for example, the area of technology in other words, the area of information technology in order to have the better and more efficient information systems in place so that communication among the various parts of the company takes place very efficiently and also effectively. Right on time, which fulfills your decisional needs. Information is power, don't forget that. Just like the brand carries power, information is also power. That's why so many people, so many managers like to hold it. They don't want to get apart with that. Information must come to you in its fullest, healthiest and vibrant form at the right time so that you can make the right decisions at the right time. Having said that, the commitment of top management can relate areas of human resource development and any other which forms the overall functions of the company. And I would again leave that to your imagination what areas besides the ones I've talked about could be where their commitment should be forthcoming. With this understanding, you are quite very clear as to how top management perceives the brand and the commitments they have to give a practical shape to the perceptions they have about your brand so that overall business objectives can be achieved. You can get on to the next question. And that again is a very, very important question. And you must ask very candidly, even if you're feeling shy, even if you suspect that that might throw the top management into an outrage, you should still ask in very simple, plain, polite words. Will the company be able to achieve its objectives? If not, why? Top management has got to be very candid in telling you yes or no. If the answer is yes, it doesn't take a lot of explanation because they already have talked about the commitments they have. But if the answer is no, you must listen to them. What is it that is going to affect non-fulfillment of certain objectives? Of course, the answer from them is not going to be, no, we just cannot achieve our objectives. Can you imagine that kind of a situation? No, it never will be. It should be like which part of the objectives or which areas are the gray areas because we might run into certain problems and the reason we might run into those problems could be the following. Like the plant we are putting up in such and such area, it may not be commissioned by that time, it may not be operational by that time. The supply chain that we are going to improve with the help of outside parties is not going to be in place. We suspect, that's the way the top management might say. And therefore, part of the objectives may not be fulfilled and then you must ask them, what is going to be the level of impact on the objectives in terms of non-fulfillment? Like for example, if we are wanting to generate a revenue of 100 million rupees, is it going to be like 90 million, 95, or is it going to be 50 million? If the answer is very drastic, you must seek clarification and if it is going to be on the margins, meaning the difference which are the non-fulfillment, the level of non-fulfillment which the top management perceives, then you must take that into account. And having said that, it doesn't mean that you stop working on that. No, you have got to do your best and all your peers and all your colleagues all across the functional lines have got to do their best because the objectives are in place and like I talked as part of the overall management process that everybody right down to the unit levels has got to have measurable objectives so that the level of their achievement could be ascertained and the company must know where one stands for the further development, for further achievement of goals on part of the company and for further development of those individuals themselves. Anyway, having said that, the next question which you must ask them is about any role models which the top management has in its mind. Role models could be competitors and top managers might start talking in terms of the achievements which your direct competition has achieved, maybe in terms of technology, maybe in terms of certain marketing practices, something which is so very obvious in the marketplace that top managers cannot resist talking about and start lecturing for you to emulate that not only you follow that but you also try to surpass whatever they're doing and the role models could also be within the group if the group consists of so many different companies which does happen in so many cases if you happen to be working with a multinational corporation or even if you're working with a local big group which has a lot many companies maybe the role model is not your company but some other company. So the top managers have got to talk about that so that you can follow certain good examples in order to be if not more efficient which primarily should be the case at least as much efficient as that role model is. Consideration is that you determine the financial contribution gap. What does this mean? This means closing the gap between the revenues that the company is generating today with the help of not only your brand but all the brands and the level of revenues which the company envisages in the years to come. We shall start talking about this model in graphical terms in a moment but before I reach there let me tell you the contribution gap has to be fulfilled by all the brands that the company may have and I keep talking about the existence or the presence of different brand managers within a company who are looking after different brands. So you being the brand manager of brand X you've got to be responsible for your P&L profit and loss account probably I've talked about this thing for the first time you being responsible for the profit and loss account of your brand because that certainly is one of the responsibilities of the brand managers. We shall talk about this thing in detail because once we get to this topic point is you are responsible for your P&L and other brand managers are responsible for their P&Ls. You're talking about a multi-brand company if it is a single-brand company that you are the only one responsible for the overall P&L because it's a one-brand company. When you have different brands playing their role, respective roles toward fulfilling this contribution it is obvious and of course without saying that all the brand managers have to come up with their P&Ls the idea is to close the gap which I said earlier let me also tell you that up to this point it is solely and solely the responsibility of brand management and the marketing department. Here you may also need input for the top management but the top management's input is going to come in terms of the various potential levels of various brands. It's a multi-brand company. Keep that in mind. The contribution of this brand has got to be a little higher. The contribution of that brand has got to be even higher. The contribution from that particular brand sounds too ambitious and we don't think that we are going to be in a position to achieve the 100% of that. Let us be realistic and let us not be overly ambitious. So these are the kind of things that you have to determine in order to work out the financial contribution gap that exists between the level of revenues today and the level of revenues which you want to achieve in the years to come. If it is a three-year business model or brand management model you are talking about at the end of the plan period which is year three. So keep that in mind because we are going through a process which is going to educate you as to how to come up with a business plan especially when it comes to brand management and this part of the plan believe me is the dominant part of the overall business plan. The company is going to have a plan from the production side and from the financial side and from the human resource side but the brand plan is going to be very dominant because it really overwhelms all other areas. Why? Because brands generate money. What really bears importance while talking about closing the gap is again a series of questions for brand managers. Now this time these questions have got to be answered by yourselves by the brand managers and not by the top management. You've got to have an answer to things like should we go for the price and fees? That's the first question which we all love to consider. I mean it is basic arithmetic when you work with a brand and you know this is the selling price multiplied by the number of units that I'm selling I get X number of rupees if I increase the price by another 10%, oh my god look at the revenue level the brand is going to bring to the company. The question is it all looks very rosy it looks very tempting but can we really go for the price increase? Is it really possible for us to go for that in a way that the market accepts that? The increase in price from consumers point of view is as or could be as discouraging as it is encouraging or it could be perceptibly encouraging for the brand managers they like to increase their revenues consumers may not like to pay it's not only consumers but also all the members of the trade who are in between when you increase the price can you imagine what happens that has a direct impact on the cash flows of your distributors the amount which they have been sending you as part of the transaction between themselves and your company goes higher if distributor X has been sending you like 100 rupees every time he buys products from you this is just a hypothetical example when he has to send 110 that pinches him so in the first place because he is going to the first fund to discourage you from going for a price increase now this doesn't mean that you shouldn't go for the price increase this doesn't mean that you should be influenced and you should be so much amenable to the discouraging advice of members of the trade maybe they are right and maybe they are not right at a given point in time when you are totally convinced they are not right you may like to put your foot down and go ahead with whatever you are planned again the question is what it boils down to can you really do it I mean trade members can be influenced by you as well as much as they influence you but you can influence them but influencing the consumer is very difficult that is why companies like to have brands which are very very powerful that is why any company introducing a brand or maintaining a brand would like to see that brand the most powerful in its category and that is why experts say that powerful brands or let's put it this way the brand in the category defines the category it transforms the category I mean that's the power of good brands whatever those brands do the category follows that everybody accepts that even consumers are so much in love with your product they wouldn't mind even if they do they still grudgingly will come forward and start paying you the increased price still remains do you have the ability to have the price increase in place so that you can go for a higher level of revenues in the months and years to come and make your brand more powerful, more valuable for the company the next question which you have to answer to yourself is can you expand markets can you expand availability of your brand now this relates to the discussion which we have been having the talk which I have been giving earlier it is very attractive to expand the market network and go to other markets what we have to convince ourselves about is do we have the competencies and do we have the abilities to do that meaning to expand the market network can we really go there we have to look at all the factors which could impede of a progress in doing so or which may prevent us from doing so which really which really stop us from fulfilling our plans to go to those markets and getting back to the old example of logistics I would say that maybe it is the transportation which might to keep you from going to other markets and a very specialized kind of transportation we did talk about the example of the coal supply chain it is such an important area that the government is paying a lot of attention to it and they are going to provide private businesses with the requisite support and in days to come you will see of this problem because of the dimensions that the problem has taken on I have talked about it for your benefit the objective I will repeat is to look into all those areas and to look at all those points which might stop us from expanding our network what those points are and how we can rectify the situation we may not be in a position to rectify the situation overnight but the journey for that has got to be started the next question which is very closely related to what I have talked about is distribution how are you going to make your distribution more extensive and more intensive we have got to have an answer before we move forward let me tell you the difference between extensive distribution and intensive distribution extensive relates more coverage of widespread areas there is an area where you are not present you would like to extend that area and therefore you say that I am extending my distribution and making it extensive you may reach the conclusion with the help of sales people of course with due respect to the sales department you know the finding that the distribution that you already have in place is not very effective only because the coverage that the distributors I mean the present existing distributors are providing is not the 100% it could be widespread but it is not very intense and the jump areas so you may like to have more distributors covering the same areas and intensify your distribution there so the answers which have got to have to your question is what are the areas where you would like to extend and what are the areas where you would like to intensify your distribution and distribution for the point of view of making your product freely available the product may not always mean a tangible product like a packaged good a pack of cigarettes for example a pack of juice a pack of biscuits a can of edible oil distribution can also relate selling of service products have you thought of the courier services maybe there is a courier service which is very efficient but you always think to yourself I wish they had more distribution points or more sales points from that point meaning I wish they had more offices so that I would not be traveling that far to go to their office so that also falls in the area of distribution and in other words by having better distribution extensive distribution or intensive distribution you make your product or services whatever you are selling more freely available after you have the answer to this question the next one is can you really improve communication this is another question which demands and warrants your attention and I know many brand managers would like to go for more and more communication more and more creative campaigns the answer again has to be what is the ability of the company to do for my particular brand and part of the answer to this question you already have received from the top management with that perspective I think it should not be difficult for brand managers to determine the level of communication that should be taking place because it involves money and the financial level which is going to be attached to the level of communication that you are wanting to have with your consumers is pretty well known to you so this is another ability or disability which you must know before you embark on developing the brand management process and model so to say before I talk about this point or this question in detail I would like to wrap up today's lecture for the paucity of time and I will continue my discussion in the next lecture from this very point which is about the segmentation and expansion of the offerings that you may have under the one brand that you are looking after let me give you the recap we started talking about the brand vision the purpose of brand vision and mostly the thrust of the lecture today has been the word how we build that vision we are still going through that phase and very much in the middle of it I would like to continue in the next lecture thank you very much for the time being and I look forward to seeing you next time with our office