Branding in a pseudomature market3 min read . Updated: 28 Jul 2015, 12:54 AM IST
That brands create business value is now widely accepted, even though in some cases, it lies outside the balance sheet
In 1992, I coined the term pseudomature to describe a market characterized by high levels of competition in a category with low levels of penetration.
Here’s an illustration. What’s the number of major car brands in India today?
And how many car brands in the UK?
At first glance, the markets seem equally mature in terms of competing brands.
Look closer: India has approximately 20 cars per thousand people; the UK, more than 500. The penetration figures are not comparable, but the competing brand figures are.
This gives rise to an illusion about the size of the marketplace: for example, post-1991, when the Indian economy was liberalized, the number of automotive lubricant brands that rushed in was… 32!
Where were the buyers?
The reality of a pseudomature market is this: all levels of evolution of consumers and customers coexist.
As I studied this phenomenon more, I tried to define the part of the process of branding most affected by it, and reached a startling conclusion.
That brands create business value is now widely accepted, even though in some cases, it lies outside the balance sheet.
“Our brand is worth close to $50 billion. That’s real money. Every decision I make must support the long-term health of our brand…," said General Electric chief executive Jeff Immelt.
What then is the aspect of branding most hurt by pseudomaturity?
Your partner in creating a brand maybe an experienced brand consultant or a young designer masquerading as a brand consultant, yet, more than the ideas they bring you to judge, the greater damage is done by the decision-making system within your own organization.
Here are three levels of evolution of decision-making we encounter.
The Upturned Funnel Model
The junior-most executives in the hierarchy brief the branding partner; after their approval, the next level judges and approves the output and this carries on until we reach the narrowest end of the funnel, the chairman, who till now is blissfully unaware of the brief and/or has had his own ideas in the first place.
This is the least efficient model, created for evaluation of tangible assets rather than intangible ideas.
In one of the most startling such encounters, after months of deep immersion and consumer research, after his approval, one chairman directed Chlorophyll to an even higher authority: his Vaastu consultant, who had calculated the brand’s destiny using planetary alignments and insisted that success would come if the brand identity included a rhino and/or a tortoise and/or an eagle.
I am not questioning the Vaastu consultant’s credentials, just the criminal waste of time. Why not get him in on the first meeting?
Just-the-Broad-End of the Funnel Model
Unlike in the Upturned Funnel, here the decision-maker is never defined. Everyone in the marketing/sales/human resources departments sit together with the CEO—each one carries their own frame of reference of what a brand is, suggests changes and sets impossible-to-answer questions to the brand partner.
Some brand managers claim that Chlorophyll’s tried-and-tested-on-200-brands model is useless unless it is converted to the Unilever Brand Key (the CEO has no clue what that is); one recently asked us to change everything to fit Kapferer’s Prism!
The final output of this painfully democratic process is often disjointed and non-aligned; a sure-shot recipe to a confused brand.
The model that works is one where the CEO is the brand manager. This is the 21st-century model. This is the model relevant for post-Internet marketing (more on that later!). Like Jeff Immelt, these CEOs understand the value of brands as business assets.
That is why they start by briefing the brand partner themselves, clarify the judging criteria themselves (most critical!), listen to the opinions of their team members based on those commonly accepted judging criteria and then make their own decision.
Which is your model?
Kiran Khalap co-founded Chlorophyll brand and communications consultancy in 1999 (www.chlorophyll.in). He claims his night job is writing fiction (his two published books are Halfway Up the Mountain and Two Pronouns and a Verb) and his weekend job is rock climbing.
In this monthly column he will share his insights on all things related to brands and branding that brand owners can act upon, rather than create a forum for intellectual entertainment.