 Assalamu alaikum khabatina khazrat. Welcome to lecture number five, brand management MKT-624. We've been talking about brand power, brand attraction, the brand value in the last lecture. And whatever we talked about brand of brand management before that also boiled down to the one fact that brands are very powerful, brands can be very valuable and brands have a lot of attraction. But this doesn't mean that the world of brands is full of power and full of value and attraction. That world is full of threats also. Brands face a lot of threats and run into situations which are very challenging due to competitive factors. The most fundamental determinant of brands facing challenging situations is market maturity. Market matures because of intense competition, because of having a lot of players in the marketplace, category expanding and blowing and not responding to the supply situation or not replying to all that factories or manufacturers can't produce the market can't take all that. This also means that growth of the category you're operating in saturates. It doesn't go beyond a certain point and the growth which has been taking place over the last years like see it may be 5% to 10% or maybe more than that that is not taking place anymore. And the increment of growth which has been offering attraction to different players is no longer there. It also means that consumer buying has hit a plateau which implies that purchases are not going beyond a certain point. What this means is that the discretionary or disposable income which consumers have at their disposal to buy consumer items for example has reached a certain ceiling beyond which they do not really want to spend. Consumers always spend their income disposable income in a certain pattern of frequency meaning for example if you buy certain consumer goods like once in two weeks you have that set pattern to follow. And when the category saturates it means that collectively all the consumers are very rigidly following their respective patterns of frequency of buying beyond which they're not going and the growth is not coming. When that happens the classic response of brand managers and marketing people is to make competition even more intense by creating more brands because they think they need to have more brands in order to have a broader appeal among different segments. Like I was talking earlier they think on the lines of creating appeal which goes across segments and if they really succeed in creating something which has kind of a cross-segmental appeal nothing like it but generally it doesn't happen that way. Generally brands run into a more competitive and a more difficult warlike situation. Competitive wars start off and everyone is out there to snatch the share the other one has. I would like to explain this concept with the help of a graphical presentation. Let's take a look at the screen. As we can see from this screen we have five different brands it is a hypothetical situation from brand A to brand E. Brand A is the market leader with 40 percent market share and then 25 percent brand B and 15, 10, 10. That's all hypothetical. What I was talking about the category not expanding any further and consumer purchases not going beyond a certain point. What I meant was that the slide which you can see what I was talking about in reference to category not expanding any further and consumer buying hitting a ceiling. What I meant was that this screen that you're seeing which comprises of five different brands it is not becoming beggar. When this does not become beggar it means whatever growth has to come to different brands it has to come from each other. There is no incremental growth. The size of the pie is not increasing. If the size of the pie is increasing it can be expressed in the following words. If this pie consists of like 100 units which is the total segment you are operating in and if this becomes bigger it means it maybe is 110 units or maybe even more. When it is not increasing it is staying at 100 and when it is staying at 100 all brands have to snatch share from each other in order to grow in order to have a bigger share of the market because overall pie is not increasing. So that's what I meant by category not increasing hitting a plateau and consumer purchases reaching a ceiling point and the classic response to this situation is more competition and more competition comes in the form of more brands. You can well imagine if you refer to the screen I was talking about I was showing you five brands and just imagine if this consists of like you know seven brands or even ten brands what's going to happen then? The market shares are going to be even more divided and subdivided which makes things even more difficult. Under such circumstances what happens is brands proliferate. There's a tremendous growth that's one of the consequences which take place as a result of the decisions taken by good brand managers to introduce more brands. Other factors which pose challenges in this kind of situation are consumer revolt, management pressures, retailer power and media fragmentation. We shall talk about these points one by one but first of all brand proliferation. Like I said this happens as a response to category getting mature. Different players come out with different brands. If you had you know five brands earlier maybe now you have ten brands. When that happens it makes your buying process a little more complicated. You go to the marketplace take a look at the retail shelf and find more brands than you are used to looking at. You are a little perplexed, a little confused what to do and what not to. You start as you start thinking as a consumer with all the products which appear on the shelf all of a sudden they all have differentiated features but you've got to convince yourself and here that mechanism gets set into your mind whether you should try it or not. The awareness is created because you're looking at those different new entries but you are not very knowledgeable of the benefits and features they offer you and generally what happens at the end of your thought process is that you go back to your original brand and you stick to the preference that you had. You still exercise that preference and end up buying the brand which you have been buying before because you are a little confused. So the net effect of brand proliferation is although competition becomes very intense the preferences stay the way you know they have been and new entries generally are not in a position to snatch as much here as brand managers thought they would. This is not to say that they do not gain any share of the market they do create some dents here and there but they may not create very heavy dents into the sales of those brands which are very established and which are powerful and which are which are variable but they do create problems problems in the sense that established brands have to invest more in the market they have to put in more efforts in order to sustain the brands and whatever they've been doing to maintain those they have to intensify their efforts and activities which means more money and more time. So this is one of the challenges which is supposed to powerful and valuable brands and I would say it once again do not take me wrong when I say that new entries cannot really affect the sales of the existing brands they do but to a certain extent what to also do they create some problems for consumers to make decision. So when consumers see differentiation taking place not in a very meaningful way and you know products proliferating not with the very meaningful features they become kind of irritated and they think that their buying process has been unnecessarily made complex. So this is one of the challenges that the brands face and no brand however powerful it is immune from this kind of a challenge. The second challenge which brands face in the marketplace is consumer revolt and this challenge is an extension of the first one which I talked earlier brand proliferation brands proliferate as a result of the pressures which the brand managers could feel upon themselves because of the category not expanding anymore. And the reason I say this is an extension because consumers do not really feel that the differentiated features of the which the new brand entries offer are very meaningful. So it is the trivial differentiation which really puts off consumers in many of the cases like I said earlier they feel that their buying process has been unduly made complex and they don't really have to look at they don't really have to consider the new entries and therefore they will rather stick to their own brands. If they try new brands it means they are cutting into somebody's sales and there are situations where new entries do attract consumers but generally what happens is that consumers look upon the differentiating features as offered by the new entries as trivial. The reason is that new innovations are not really easy to come by and it is not very frequent that meaningful innovations take place and under those circumstances there is not much in a which you really can do in order to add real meaningful extra additional benefits to the product therefore consumers get a little upset and reject that trivial differentiation. Talking a little more in detail about the triviality of these differentiating features I say differentiating features because the brand managers are marketing people think that they really have offered something which is which does carry a point of difference but in actuality it may not. The distinction may appear in terms of the package but the real differentiation in terms of the content may not be there. To give you one example there are many products on the market which you will see saying on top of the package new and you see the kind of a slanting or diagonal kind of a violator as the marketing people call the reason the call it violator because it violates intentionally the brand name or something important on the brand and one corner looks kind of you know truncated or kind of covered under that violator and that violator mostly in yellow color says new. You start wondering and thinking to yourself what is so new about the product if you reject it the product has not done justice to itself if you try it it has created difficulties for other brands because naturally if it wasn't there you would have bought something else so this is one of the challenges which brands face in the market but mostly mostly what happens is that consumers feel kind of put off and they divert back to the brands they have been buying nevertheless the challenge is there such situations leave irritated consumers who think that the buying process has been made complex unnecessarily. So whatever the situation is whether a powerful brand keeps selling or a new brand makes things difficult for the powerful brand brands are under threats because it is the same brand managers and it is the same players you know who are managing all those brands and everyone is facing the brunt of the situation somewhere along the line. This kind of a situation leads to a lot of pressures on brand managers. The biggest pressure they feel is from the top management and that pressure is about either losing sales or losing profitability and brand managers start scratching the heads what to do next. This is a tremendous challenge and under these circumstances generally the response of the marketing people is to start promoting brands and when I say promoting brands what I mean is they kick off some promotional schemes as they call those in the marketplace. Promotions are short term incentives offered to consumers and retailers to bull sales and since now they are short term they do not really address the long term goals of the company and promotions are carried out always at the expense of profitability. You must have noticed in the market and you must have bought many a time products which are on promotions like buy one get one free or buy one get 25% off. Now that 25% off or that free item which you are getting by just buying one comes to you at the cost of the company the company has to pay for that. So this is a tremendous pressure under which brand managers and all marketers define themselves. This compromises financial performance and long term goals and having said that it becomes obvious that this is a tremendous challenge for the brand managers and this takes us into another challenging area which we call retailer power. Retailers love promotions and you can guess why because they can sell more and they can make more money. When you offer promotions like buy one get one free retailer does not have to contribute to what that cost and a retailer never will. It's the company that faces that situation and that bears all the costs but retailer feels very comfortable because he can attract many more consumers and getting a temporary boost for the product or sell retailers like I said can make a little bit of more money and also knowing that managers from the companies are under pressure because they have launched these promotional campaigns and if they have launched promotional campaigns naturally it is in response to certain pressures they try to bring managers under more pressure because they know they are more vulnerable and more susceptible at this point in time so they keep talking about more and more promotions and they keep frightening the managers by saying if you take this promotional incentive off it's going to bring the whole thing to a grinding halt which may not be the situation or which may be the situation to a certain extent because whenever you take that off sales will slow down because consumers are not getting that free item anymore they're not getting that 25% anymore so this is kind of a predicament and this is a dilemma in which the managers find themselves are going to launch these kind of promotions and once they have launched these promotions are going to say goodbye to those promotions so this is a very very serious challenge which is faced by the managers to the ones in a while another challenging area for all the brands is the media fragmentation and increasing costs media fragmentation has come into being in response to growing information technology you know the number of television channels that we used to have in our market like you know a decade ago and if I give you the example of like you know the more than two decades ago we used to have in a just one television channel in our country and today we have maybe 70 or 80 channels so maybe more so the brand managers have got to be very very media savvy and they've got to be very careful in choosing the channels or the media to use for kicking off the communication campaigns gone other days when we used to have the one integrated campaign which will go through the one integrated media and do the trick for the companies today that you have to decide which are the channels that are suitable to your company because those are the channels those should be the channels which carry an appeal for the target market you are trying to reach so media fragmentation is a very important challenge about which the brand managers have got to be very very knowledgeable if you are not really choosy about which channels to use you can end up incurring a lot more cost I got to just imagine kicking off your campaign through two television channels as compared to all the 80 or 90 channels that we have in the country can you afford to make that kind of a mistake I don't think you can so the answer is no these are some of the challenges which and I would say some of the external challenges which brands face nowadays however powerful and valuable and attractive they may be the vulnerabilities and the susceptibilities are there so the brand managers have got to be very careful and very knowledgeable as to how to face those challenges and they've got to be proactive in terms of gauging that they are now just about to get into a challenging situation and instead of showing a reaction to that challenging situation they should carry out certain pro actions and they should they should try to preempt those challenging situations the chances are even if they cannot avert those upcoming situations to the 100 percent they might be in a situation to minimize the impact of the emerging challenges with this we are done with the external challenges which the brands face in the marketplace and after having talked about that I would like to talk about one more challenge which is very internal and which brands face that is the challenge of changing brand managers when I say that what I mean is brand managers could be ambitious young people that change their platforms at times too frequently today you know this company tomorrow that company and the companies run into those challenging situations because they cannot maintain the consistency which was created by one manager and it crops up crops up a situation where companies do not find themselves to transit in a seamless way but when they have another manager doing the same job you can well imagine the understanding that you have with the advertising agency the understanding which you have with your peers within the company and you have been part of the history whatever short history the brand may have or the brand may have in relation to your existence in the company the situation becomes very challenging when there is a change of management so that is another challenge which the companies can have to face and that makes the job of the top managers in particular the marketing manager well if the marketing manager is very consistent little difficult because the challenge of maintaining that consistency falls in the domain of the superiors who have to see to it that the transition from one era of one brand manager to the era of the new brand manager who's just starting off takes place in a very seamless and consistent way. Having said all that we are not done with the brand challenges and not only that we are done with brand challenges we are done with all the building blocks the macro building blocks that we started talking in the very first lecture up to this point just in order to have a very good macro understanding for developing a strategic brand management process or a brand management model. To have an understanding of the brand management model I'm going to refer to the book by Scott Davis which I refer to as the basic the textbook for the course and in order to maintain consistency of tutorial I'm going to now talk about all the concepts the chapter by chapter but nevertheless the handouts which you are going to get are going to be a combination of so many different materials also but my point is to let you know that if you can lay your hands on that book it is going to be good for you. The understanding about the model is going to be developed from the point of view of your developing yourself into a brand manager just think for a while that you are a brand manager who is going to develop a new brand or a brand manager who is responsible for maintaining an existing brand you have to have a very clear understanding of how the model works starting with how to envision a new product which is to be turned into a brand and then going through all the phases up to the stage where it becomes a very well established brand in the marketplace. So first of all we can say that a brand manager has got to have a vision of the brand and the vision relates to the future and all the future courses of movements of your brand in relation to for example market share in relation to markets to serve in relation to distribution improvements in relation to quality improvements which you envision that should come to your brand as the years could pass by and in relation to technological improvements which should come to the brand with the passage of time meaning product innovations which you think should come by and those product innovations are very much related to the quality parameters which you envision and I talked about earlier so these are the kind of future courses of the movements which you should have a picture of in your mind because only then you can have the right vision where to start and where to go so in other words could you have got to be very clear about the destination which the brand is going to hit and it's a long journey all the points the transit points on the path to the destination have got to be clear in your mind in order to have a very clear vision. With this strategic vision for the brand how do you go ahead with the future courses of movement or the future courses of actions it is a very heavy weight strategic question management meaning the top management have a vision for the company in terms of overall business you as brand manager have a vision for the brand and under those circumstances the vision that you have for the brand should fit into the vision of the top management that they have for the overall business and you can take it for granted and you can assume it to seek it very very confidently that top management does have a vision and they are quite very clear about the courses of actions because they should be taking in order to take the company from point A to point Z and the beauty of that strategic processes whatever is going to be a part of that has to fit into that just like different cogs of the wheel fit into the wheel and make it moving having said that it becomes obvious that brand vision is an extension of the overall business vision the top management has the vision for the overall business and you as brand manager has vision for the brand brand vision is all about brand future brand growth and brand destination and since earnings and cash flows and profitability all are function of the brand movement therefore brand vision statement as part of the strategic management process takes on and added importance it is the most important statement that we have to make before we start the process it is the brand that is going to help the company to achieve its goals short-term and long-term both financial and strategic are there's a difference between financial goals and strategic goals although financial goals also are very strategic but just for the sake of understanding I would explain these things to you within this lecture I think financial goals are going to deal with numbers that we have to achieve through the movement of the brand and strategic goals are going to relate to the qualitative market things like what kind of market going to cover and how much coverage we want what kind of improvement we need in market shares so on and so forth we should be talking about all these things as the lecture goes on the brand vision therefore is the starting point of the strategic management process and before we start talking about how to build the model specifically relating to the brand management you've got to have a very clear understanding of the overall strategic management process meaning the process which is set in motion by the company for the overall business and since brand management is part of that we have to talk about it later before developing an understanding for the overall model strategic management process consists of five different stages we can break down you know these stages into six or seven but primarily I would say there are five stages number one stage is developing the overall vision for the business which I talked about already the second stage is that you translate that vision into objectives and when you translate into objectives it automatically means that you have to quantify whatever you envision in terms of the brand movement you have to have numbers in place and we should talk about that third stage is that the based on the objectives that we have set to ourselves that we have to craft an overall strategy meaning the business strategy this business strategy is a combination of so many different associated strategies like you have a financial strategy I mean how to raise money you have to have a marketing strategy and part of the marketing strategy is brand management strategy you have communication strategy that you have you know packaging strategy that you have promotional strategy so there's it's a set of so many different strategies any move that you're going to make can be crafted into a strategy and here I would like to give you a very plain straightforward the definition of a strategy strategy in simple words is a game plan to reach a certain destination you have envisioned that destination and then we have to have a game plan to reach there how you reach there how you execute your moves to reach there is what you call execution and execution is tactics so difference between strategy and tactics is very clear once we understand the strategy is the overall game plan and tactics are execution executional framework after we have crafted the strategy we are out there to implement the strategy because unless we execute but we have crafted we cannot get results and the execution in itself is a very important area and in present-day's world there are experts who have written books and who are claiming that execution has become even more important than crafting a strategy because crafting a strategy is something for which you can seek outside help also but not for execution execution has got to be taken care of by the management of the company people like you so after execution has taken place meaning after all the strategies are implemented they are in place the stage is set for evaluating whatever is implemented and you evaluate all the achievements that are there as a result of the working of all the divisions and the subdivisions of the company the results that are achieved those are good and the results which are not achieved you have to look for the fixes as to how to make them work that maybe you have to change the strategy you have to change your tactics and you have to devise a new course altogether so whatever corrective actions are to be taken they are based upon this stage to which is the evaluation of what has been implemented as we can see from the slide the the management process the strategic management process consists of the five different stages but first of all we have the brand vision and the brand vision is all about what you have talked about and we should be talking about that even in more detail the second step in the management process as you can see from the screen is setting objectives as you can see from the slide the strategic management process has five different steps step number one deals with business vision we have talked a little bit about business vision in terms of it providing us the picture about the destination which the company wants to hit and what is it that is between today and that destination so that falls within the within the visionary area so to say the second step is setting objectives but once you are very clear about the vision you have to translate your vision into some some quantitative numbers because you have to achieve those objectives after those objectives are set you are concerned about how to achieve those you need certain resources that your disposal to start working in those in order to achieve those so here is the stage which is station number three and that is crafting a strategy strategy means business strategy and business strategy is a combination of overall strategies which are so many but all the actions which you think you should be undertaking in order to reach the destination can be classified into different categories you have you know going to so many different marketing marketing strategies like advertising strategy packaging strategy the promotional communication strategy and similarly you have financial strategy that you have the human resource strategy because you need people who really can deliver the goods so business strategy is a combination of so many different strategies and the ones you know that you have crafted with all those strategies that you are into the next stage which deals with implementing those strategies implementation of course is all about execution execution has taken on added dimension in today's management it has become very significant there are management experts who think that execution is even more important than crafting a strategy maybe this is an overstatement but what it means is that crafting a strategy is relatively less difficult because you can seek outside help whether you hire consultants you consult them and whether you can have so many different strategies in place but when it comes to execution implementation implementation stage it is the job of the management team of the company that has to do all that so it takes your best to be able to execute all that you have crafted once you have implemented your strategies the last stage or the last step number five is evaluation of all that you have implemented you've got to see what is it that you have achieved and what is it that you have not achieved what you have not achieved has got to be dissected so that the right corrective action can be taken to fix that if there is a need for having a new strategy in place you should do that if there's a need for bringing about some tactical changes within the strategic framework that you should handle that and if there is something wrong with the execution process only because you're short of good people or you're short of resources you've got to take all those corrective actions to be able to evaluate all that has been implemented so that all the goals and objectives can be fulfilled if not 100% say very close to it so at the very start of the strategic management process there are some very vital questions which managers could have to ask themselves before the process goes further down the line and those questions are where we are today and where we really want to reach what is going to be the shape of the business in times to come and times you already have defined with the maybe five years down the line or less than that three years down the line nowadays the business plans are made for a period of three years five years is a bit too long and 10 years even longer but when it comes to vision there is no harm talking about five years down the lane or 10 years down the lane when it comes to setting objectives it is about three year time frame because which is more practical and prudent than a five-year time frame was talking about the questions which managers should ask themselves because before the process can be further set into the purpose of full motion and the next question they should ask themselves what are the business areas they're going to be in times to come in the next three years for example if you're dealing with a three-year plan what are the markets you're going to cover and what are the product areas you're going to cover maybe you're going to get into more product lines and what are going to be the geographic areas that you're going to expand your presence into and what are the kind of human resources you need to improve your organization structure that is really compatible with the changes which you envision today so these are a few very fundamental questions which you have to answer and to be able to answer all those questions the managers could have to carry out a very careful analysis of where the company would be in the next three years or five years and I already have talked about the answers in relation to the questions when I was talking about those questions the kind of areas you want to get into the businesses you want to get into and the growth you know which you want to achieve and the brands you know which you want to introduce are in case you want to extend the present brand what are going to be the extensions and what should be the number of markets you should be present these are the kind of answers which you should have in place to all the questions which are very strategic in nature and which form the framework for this strategic management process this naturally brings us to the next stage but before we start talking about the next stage there is one more important element in between and that is what we call company's mission there's a difference between a company's vision and company's mission the difference is not very difficult it is subtle vision as you have understood very clearly I hope and I'm confident that the vision deals with future that this is where we are today and this is where we want to reach mission is what is it that we have to do today in order to fulfill the purpose of the organization with the meaning we have to achieve what we have at hand today so that we can move move toward tomorrow so the mission is present oriented and vision is future oriented mission deals with the resources that you have at work which you have deployed and mission deals with the markets which you already are serving mission deals with the human resource which you already have in place and the mission deals with all those variables which are which are at work so having understood the difference between vision and mission I should also talk about the values which all the companies have in order to make the vision and the mission of the company very purposeful toward attainment of all the objectives what those values are because those are the fundamentals for the achievement of your objectives I shall be talking about those in the next lecture I would like to wrap up whatever I have talked today in relation to the brand challenges which was the part of the overview I was giving to you toward the macro building blocks and I started talking about in this very lecture the strategic management process in relation to the brand management development process and we are right now in the process of developing an understanding toward overall the business management process which is going to lead us into understanding the brand management model thank you very much I look forward to talking to you in the next lecture good office