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Posts Tagged ‘Marketing Budget’

When I interviewed graphic designers for my agency, I’d always get a little nervous when they claimed they could double as a great copywriter. That’s because good design and good copywriting require two different skill sets rarely found in one person. I’d experience the same nervous reaction when clients discussed “brand extension,” or launching a new product related to their existing brand. It’s not as easy as it seems.

By definition, a brand extension (product or service) should offer a different benefit and/or attract another market or market segment than its parent brand. Brand extensions seek to capitalize on the positive perceptions and associations of one brand, translating them to the new brand. For example, if customers associate safety with a certain company, they may infer that any product from that company is safe. Loyal customers of a parent brand may be more willing to try brand extensions. This, in turn, may decrease the cost of marketing the new product. The extension may strengthen the parent brand as well.

Notice I keep using that pesky word “may.” Here’s why: many brand extensions end up disasters, draining the marketing budget and diluting their parent brand in the process. In their rush to grow, even large corporations overlook the simple fact that brands should only be extended when the new product or service addresses genuine consumer needs and is based on accurate knowledge of the parent brand’s core strengths in the minds of its customers. Having more products doesn’t always mean achieving more profit – especially in the long term.

Let me give you a true example of a poorly thought-through brand extension. Not long ago, a leading manufacturer of motorcycles introduced cake-decorating kits. One nationwide survey “awarded” the product “worst brand extension.” After all, the baking world and the biker world don’t seemingly intersect. The product doesn’t seem to fit with the brand’s core values.

What a Brand Extension Should Do:
A brand extension should:
– strengthen the existing brand
– address additional opportunities or find new uses
- bring new users to the brand only if existing costumers are not put off by the extension

A brand should move into a new industry only if it can do so without losing relevancy (i.e., cake-decorating example above). The new market should be a natural fit with the original market, because most brands become linked to a specific industry in the consumer’s mind. As a result, few brands can wander outside their flagship market. Virgin (as in Virgin Mobile, Virgin-Atlantic, etc.) is one example of a brand whose values transcend industry segment.

Another way a brand extension can be successful is by creating a new category versus moving into an existing one, where it may get lost among more established competitors. Before Starbuck’s, who would dream of paying so much for a cup of Joe? Starbuck’s revolutionized an industry with its introduction of a new category: the European-style coffeehouse.

Keeping your focus narrow doesn’t mean you have to carry a limited product line. For example, Starbuck’s has stuck (for the most part) with its original market, but offers lots of choices to that market, including extensions like coffee liqueur. Companies who stay focused on a particular market are perceived as specialists, and specialists are usually thought to know more or be better.

Ask Yourself 5 Key Questions:
If you are considering a brand extension, ask yourself:
1.    What is the long-term vs. short-term impact of the extension to my company and parent brand?
2.     Is my parent brand strongly associated with a certain product category or can it step into new markets?
3.    What value does the extension add to my parent brand?
4.    What unmet customer need does the extension serve?
5.    How does the extension leverage my brand’s strengths while avoiding its limitations?

As you calculate revenues from sales of your brand extension, be sure to tally up its true costs in terms of brand erosion as well. Maintaining long-term brand health is usually more important than short-term dollars.

What are your thoughts on the subject?

Small And Specialty Drug Branding: Tapping Niche Market Potential (PH83) :

Commercializing new drugs continues to challenge companies across the pharmaceutical and biotechnology sectors. This study is published to assist individuals and product teams who seek guidance in the allocation of pre- and post-launch marketing resources for small and specialty brands. The information contained in this report is based on primary research gathered from brand managers and directors, marketing executives and marketing support function team members working with brands marketed in the United States, Europe and worldwide. The following recommendations and conclusions were top study findings: Support niche brand launches with stronger promotional infrastructures. Niche brand development is a catch-22; companies hesitate to invest heavily in a drug targeted for less than $500 million in peak annual sales and niche brands cannot exceed $500 million because they are not properly supported. The highest global spending for any niche brand profiled in this study is…Invest more funds in thought leader development than advertising for European launches.

Companies & Therapeutic Areas Included in Report

Companies

Alfacell

AnorMED

Biovail

Bristol-Myers Squibb

Genzyme

Therapeutic Areas

Anti-viral

Cardiovascular

Central Nervous System

Dermatology

Endocrinology

Table of Contents :

RESOURCE ALLOCATION AND STRATEGIC PROFILES

Figure E.1: Study Context: Therapeutic Areas

Figure E.2: Niche Brand Commercialization Spending Breakdown

Figure E.3: Percent of Marketing Budget by Phase

GLOBAL RESOURCE ALLOCATION

Figure 1.1: Niche Brand Global Expenditures and Sales

Table 1.1: Global Launch Context

Figure 1.2: Global Spending

Figure 1.3: Global Staffing

Figure 1.4: Global Activities Spending

Figure 1.5: Global Activities Staffing

EUROPEAN MARKETING

Figure 2.1: European Marketing Mix

Table 2.1: European Launch Context

Figure 2.2: European Total Spending

Figure 2.3: European Total Staffing

Figure 2.4: European Brand Activities Spending

Figure 2.5: European Brand Activities Staffing

US COMMERCIALIZATION

Figure 3.1: US Marketing Mix

Table 3.1: US Launch Context

Figure 3.2: US Total Spending

Figure 3.3: US Total Staffing

Figure 3.4: US Brand Activities Spending

Figure 3.5: US Brand Activities Staffing

for more information, please visit our web site :

http://www.bharatbook.com/detail.asp?id=52019

What do you think? Please comment below to tell me.

Edited highlights of a presentation given at the Sandbox Suites by Debra Russell on June 30, 2009. ‘Niche Marketing’ discusses why many business owners are afraid to define their niche on the mistaken premise that they will lose business as a result. The truth is just the opposite. Designing your marketing around a Niche can enable you to have a major impact on a small budget. Since most business owners are working with a limited to non-existent marketing budget Niche Marketing can give you a tremendous advantage over your competition. In this video Debra discusses what is a niche and how does it apply to your business. Specifically: – The 8 steps of business income – Finding a niche – What apsects of a niche to research – How to use Google and Yahoo Groups – Best ways to use LinkedIn – How to combine Niche marketing with Social Networking to create high impact with a very low investment Debra Russell, founder of Artists EDGE, Certified Master Results Coach and Master NLP and Hypnosis Practitioner uses her business knowledge and ability to facilitate change and growth to help small business owners create a prosperous and sustainable living doing what you love. Debra specializes in small business and the Arts and Entertainment Industry and has presented several innovative programs for industry trade conferences across the country. Debra’s presentation is based on the book “Multiple Streams of Coaching Income” by Andrea Lee. ************************ Debra Russell Artist’s …

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Developing a marketing plan budget requires mapping things out on a calendar, considering what types of advertising is most effective and setting aside the proper funds to finance the chosen methods. Build a marketing plan to bring in more customers with advice from a businessman in this free video on marketing. Expert: Mike Mitchell Contact: www.CCUSA.com Bio: Mike Mitchell has a masters degree in education from the University of California, Los Angeles and bachelor’s degree in political science from University of California, Irvine. Filmmaker: Paul Volniansky

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How much should I spend on marketing?

This is a common question that marketing consultants gets asked on a regular basis.

The simple answer is that there is no hard a fast rule – it depends on the competitive environment, the stage of business development, the product or service category and the balance of advertising designed to promote the brand vs advertising designed to generate a specific response.

As a result of these factors, marketing budgets are best set based on careful analysis of a number of factors as part of a Marketing Strategy not via the often used % of sales method.

If you are looking to develop a deeper understanding of your marketing budget then there are two good places to start.

Brand Awareness- Analysing the level of advertising that is appropriate to reach your target markets with appropriate levels of frequency and credibility

Specific Response – Analysing the response and conversion rates you are achieving from various forms of advertising

Brand awareness is a direct product of the  Marketing Strategy – by identifying the key target markets and having an understanding of the competitive environment it is possible to establish a picture of the level and types of “brand” advertising required to generate awareness of the brand for new customers and reinforce the message with existing consumers.

Planning the elements of the campaign designed to generate a specific response is more closely aligned with the sales budgets and requires analysis of the response and conversion rates you are achieving from various forms of advertising.

Using response and conversion rates as a starting point allows MJH Group to determine the expected result for a particular level of spend in a particular area and plan the marketing strategy accordingly. This is correlated to the sales budget to help plan the necessary mix of advertising required to drive the response to deliver the sales result.

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CEO’s involvement in Brand Strategy

CEO of the company should lead the brand strategy and must be passionate about the brand. He should buy the idea of branding and live it despite the daily and stressful routine with many duties at the same time. There should be continuous development and integration of the new strategies for which CEO must be backed by a strong board management team of senior contributors.

Customize your Branding Model

You can not use “one size – fit all” rule to your branding model. Brand success lies in its authenticity and uniqueness. You can research other similar brands from the same industry and tailor them to meet your needs and requirements.

Involve Stakeholders as well as Customers

A fair amount of marketing budget can be saved by obtaining valuable information for the brand strategy from your customers, employees and stakeholders. They are easily accessible and probably the best source of information to get a picture of current business landscape including the current brand image and brand positioning.

Advance the Corporate Vision

Internal efforts play a key role in making a corporate branding strategy successful. Corporate vision should be advanced throughout the company. Management should involve, educate and align everyone around the corporate objectives, values and future pathway.

Use Technology as a Tool

Technology helps spread the word in a fast and more effective way. Every corporate working environment must have a well designed and fully updated intranet. The company must have a website to make all information available to customers and clients round the clock. The looks of the website should reflect the professionalism of the company. A company website should be as comprehensive as possible with wealth of information about the brand.

Involve People in your Brand

Every person connected to the company interacts with significant number of people totally disconnected to the corporation. They serve as company’s most important brand ambassadors. The word of mouth is extremely valuable and has a great impact on the overall corporate image. The most effective way to turn employees into brand ambassadors is to train everyone adequately in the corporate brand strategy (vision, values and personality etc.) and making sure they fully understand and believe what exactly the corporation aims at being in the minds of its customers and stakeholders.

Offer what is Promised

The corporate brand is the face of the business strategy and basically it promises what all stakeholders should expect from the corporation. Every customer should be handled with outstanding care according to internal specifications and outside expectations.

Communicate to Audience

Bring the corporate brand to life through a range of well-planned, well-executed marketing activities, and make sure the overall messages are consistent, clear and relevant to the target audiences. Make sure the various messages are concise and easy to comprehend. Do not try to communicate every single point from the corporate branding strategy. Instead, a selective approach will make much more impact using the same resources.

Analyze the Brand Performance

Analyze the value that brand provides and how instrumental it is the brand in securing competitiveness? These are some of the questions that need to be answered and that the CEO should automatically seek as part of a commitment to run the strategy successfully. The brand equity consists of various individually tailor-made key performance indicators (including the financial brand value) and needs to be tracked regularly. A brand score card can help facilitating an overview of the brand equity and the progression as the strategy is implemented.

Evaluate and Evolve

The business landscape is changing almost every day in every industry. Hence the corporation needs to evaluate and possibly adjust the corporate branding strategy on a regular basis. Obviously, a corporate brand should stay relevant, differentiated and consistent throughout time, so it is a crucial balance. The basic parts of the corporate branding strategy like vision, identity, personality and values are not to be changed often as they are the fundamental components. Instead changes should be small and involve the thousands of daily actions and interpersonal behaviors, which the corporation employs as part of the brand marketing efforts. But make sure complacency does not take root in the organization and affect the goal setting.

Strong brands are those driven forward by owners who never get tired of raising their own bars. They become their own change agents – and brand champions for great brands.

What are your thoughts on the subject?