To be honest I was a left a bit baffled by a recent article in the AMA blog by Nigel Hollis the executive vice president and chief global analyst at New York-based global market research firm Millward Brown.
It was written in that ‘revelatory’ style you sometimes get when someone shares some pearls of wisdom from years of practice and they want to promote a methodology for success.
To be fair at the heart of the post there are some important points but they aren’t exactly revelations.
Marketing thinkers for decades have said that competitive advantage is achieved when:
1. Particular solutions and the enduring brands they sit within satisfy customer needs and expectations and constantly stay relevant to what the customer wants.
2. Cutting your price implies there is no meaningful difference between your offer of value and your competitors.
Why was I baffled?
Well one claim being made in Pricing Power: A brands most valued yet under valued asset seemed to confuse cause and effect.
Brands decline for reasons other than losing market share we are told. Really?
Isn’t market share the indicator of something amiss rather than its cause? It’s a bit like saying people are dead because they have stopped breathing. Factually correct but not a very helpful explanation.
Then we are told (as the rabbit is pulled out of the hat) that losing market share isn’t really the cause of brand demise it’s lack of pricing power.
Really? Isn’t a cheap price point just another indicator of the lack of inherent customer value in the offer rather than its cause? Price is an indicator of quality. Therefore isn’t it a lack of customer value that is the root cause of brand decline?
Then we are treated to the revelation of revelations.
The post observes that in reality Brands fail because of the inaction of the people that create and manage them and or competitive action. You don’t say! You mean brands aren’t stand alone entities that were created without the involvement of human mind and action? Shock!
This is actually where I totally agree with Nigel. Competitive advantage is generated from the resources, competences and capabilities of the firm not your position in the market . Your market position is an outcome of your commercial imagination.
Brands lose market share simply when some marketeers make duff decisions and become complacent. They mis-manage solutions and brands that eventually drift into customer irrelevance.
Brands don’t decline because of the mystical intervention of ‘loss of market share’ or a pricing goof. These are symptoms of poor marketing management and a lack of market orientation.
The positive customer attitude measures that Nigel refers to as key to his suite of factors for ensuring Brand success surely isn’t rocket science either it simply means you are selling something the customer finds desirable and your customers agree.
As for Nigel telling us that what really matters is delivery of ‘meaningful difference’ isn’t this an unattributed repeat of what Ted Levitt was saying back in 1980s? Why has anything changed?
The danger really lurks when brands try to, as Nigel suggests, ‘boost perceptions of positive differentiation’. Do this without grounding the differentation in things that are really matter to the customer and all you do is slap lipstick on a pig and it never works long term if at all (cf Simon Kelly – Sheffield Business School).
I’m not sure there is much mystery in any of this.