Marketing

To optimize a portfolio of brands, companies can use a five-step approach. First, managers decide on the brands to review. Second, they analyze all of the brands on the resulting short list with respect to each one's contribution to the company. Third, they assess the brands according to current market performance (traction) and future prospects (momentum). Fourth, the brands are classified along those three dimensions (contribution, traction and momentum), allowing managers to identify both challenges and opportunities. The process enables companies to sort their brands into different categories: power (a brand that needs to be defended ferociously and deployed judiciously), sleeper (a brand that with a little fast tracking can build into a power brand), slider (a valuable brand that has lost momentum, is slipping backwards and needs immediate intervention to prevent meltdown), soldier (a solid brand that contributes quietly without the need for much management attention), black hole (a brand that sucks up resources and may or may not ever pay out), rocket (a brand that is on its way to power-brand status), wallflower (a small, underappreciated brand with very loyal customers, often underpriced and undermarketed) and discard (a brand that should have been mothballed years ago). Lastly, the objectives for each individual brand are tied together into an overall plan, which will include any changes to the roster, brand architecture and resource allocation.

The good word from devoted customers may not always be the most effective promotional tool.

Strategies for mitigating the negative effects of nasty on-the-job encounters.

The marketing function has been under increasing pressure to deliver. Its challenge is to see new business opportunities before they become obvious, to lead the market and not be led, to have a proactive vision rather than a copycat mentality. To accomplish that, a ""facts-based"" analysis -- using quantitative data from customer surveys, market studies and other sources -- can help tremendously, but such approaches can sometimes be dysfunctional, leading to endless statistical analyses that obfuscate key points. Companies thus need a broadened approach to marketing research that takes into account conversations with customers, observations from the field and insights from executives, among other alternative sources of valuable information. The author enumerates seven key tasks that marketing must perform within an organization to enable -- not stifle -- innovation.

Brands are an indispensable part of modern business. That is true in large measure because of a brand's remarkable efficiency in "aggregating" consumers -- reaching large numbers of people with a promise to deliver a clearly stated benefit that sets it apart from competitors. But the information revolution is undermining the logic of aggregation, the very source of brand power. In fact, it is becoming evident that in an information-rich environment, consumer disaggregation is vastly more efficient and profitable than aggregation. Using customized publications, e-mail, direct mail, Web sites and call centers that are based on a common platform of consumer information, companies are demonstrating that they can effectively and efficiently drive consumer behavior through two-way communications. Common underlying databases ensure that each interaction is personalized, regardless of the channel through which it occurs. And each interaction with the consumer builds the consumer database further, making future interactions even richer. The implications of the information revolution for the role of brands in business are far-reaching. Many of the strategic and tactical tasks entrusted to brands can now be performed better, less expensively and more profitably at the level of consumer segments. And companies' brand-centric structures are not suited to marketing initiatives that are based on reaching segments or individuals. Given this changed environment, the author calls on companies to rethink three core areas of brand management: the consumer relationship, the channel relationship and the organization of brand management. To support his case, he draws on detailed examples involving Kraft, Procter & ; Gamble and Tesco.

Deep discounting strategies provide decidedly mixed long-term benefits.

A review of recent and seminal work linking pricing decisions with operational insights.

For decades, companies relied on push marketing to sell their products and services. Then, in the 1990s, the emphasis shifted to relationship marketing, as slogans such as "delight your customers" became the mantra of many marketers. But those tactics have been losing their effectiveness, particularly as the power of customers continues to grow. Thanks to digital technologies like the Internet, today's increasingly educated consumers expect companies to do more than just delight them. In response, innovative companies are now trying a different approach: They are providing customers with open, honest and complete information, and then finding the best products for them -- even if those offerings are from competitors. In short, they are truly representing their customers' best interests, essentially becoming advocates for them. The strategy is this: If a company advocates for its customers, they will reciprocate with their trust, loyalty and purchases -- either now or in the future. The firm might then command higher prices for its products and services, as many customers will be willing to pay for the extra value. And when people trust a company, they will often tell others about it, helping to reduce the organization's costs for acquiring new customers.

Sellers know things about their customers' businesses that the customers don't know and can't find out on their own yet value immensely. Because they come into contact with many and varied buyers, sellers have a bird's-eye view of the forest -- the industry's competitive landscape -- in contrast to customers, who often see only the trees. And they can use their wide range of experience to teach customers about their own businesses. This isn't a matter of divulging confidential aspects of clients' businesses to their competitors. The challenge is to translate an industrywide perspective into knowledge that customers can use. Companies that can do that successfully reduce their customers' costs or operating risks and are rewarded in turn with customer loyalty, pricing flexibility or both. The authors lay out three strategies that companies can adopt to turn a view of the forest into value for customers and competitive advantage for the business. They also explain the steps companies should take to collect, aggregate, adapt and share customer experiences.

Brands may be less vulnerable to the vagaries of extension than is commonly feared.