Focusing on the Long term Health of Brands
Some Companies are not weighting enough value on the long term health of brands. Instead they tend to focus on short-term profitability and data from recent business. Generally brands are being mismanaged when managers invest too much time and money into short-term price promotions, which takes away from advertising that would have created better long-term brand equity. This trend has weakened brands overall and brand performance is a skewed measurement.
The speed at which brand managers collect consumer data has changed from two months, to instant streaming data with the addition of store scanners and other tools that allow data to be collected and sorted seamlessly. Promotion spending increased from 33% to 61% from 1978 to 2001 because of the addition of this technology. Advertising fell from 40% to 24% which had an overall effect of weakening brands.
Short term mindset of brand health
Adopting this “short-term mindset” is detrimental to the healthy maturity and maintained of a brand. In the short term sales will increase which make sales managers look like they are doing there job at a high level, but in reality valuable capital has been expended in the least efficient way for long term growth. A diminished advertising budget has been created which is not sustainable in the long run.
Pay attention to the long term health of your brand!
Companies need to pay closer attention to long term data about their brands. This is a harder task to measure because there are a variety of factors that play into the equation and brand managers sometimes feel overwhelmed, or not up to the task at benchmarking the attributes of the brand for the long run. They also may be feeling pressure from management to create profit now and loose sight of the long-term goals and how the brand will be competitive in the future. Brand managers are concerned with a short time frame because they may only see recognition and bonuses for short, measurable performance. They may be relocated to another brand and only been seen as successful if they can produce timely results.
Brand managers and upper level management need to adjust their mindset when assessing the value and strategies they use when making decision about their brands. Today, there is so much data about consumers and how they are interacting with products which makes it tempting to formulate strategies based on this short-term quantifiable data. Sustainable brands must be concerned with the long term and figure out metrics that apply to the future.