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Go Long

25th January 2018

As we all know, short-term pressures and market volatility impact on businesses of every type and variety in this day and age, with food and drink businesses no exception. However, has there ever been a time when food and drink brand owners focus on achieving immediate results has ever been more pronounced?


Despite knowledge of this phenomenon, the trend towards short-term thinking appears only to be growing, driven primarily by a desire to reduce costs and opt for tactical rather than strategic thinking. Or short term activity versus long term planning, to put it another way.


Brand owners obviously understand the intrinsic value of brands. If nothing else they allow businesses to set out a compelling point of difference and charge a premium for their goods. But all too often an over enthusiastic obsession on making immediate returns undermines the ability to achieve sustainable brand positioning with an enduring legacy of profit growth.


Cost-efficient reach for a brand, does not necessarily equate with effectiveness. A desire to over-embrace new technological platforms rather than what what actually gets SKUs flying off the shelf is something to be very wary of. So too, is the preoccupation with achieving immediate ROI rather than a longer term strategy of patiently investing in and building a brand over months, years and even decades.


The easiest way to increase ROI is always to cut costs and this usually starts with the marketing budget. But such action directly lead to the trickle down effect of reducing the amount of prospective customers a brand engages with or, in the case of an obsessive reliance on Social Media, which is simply a weaker and less immersive type of engagement.


Veteran ad man, Rory Sutherland of Ogilvy & Mather puts this rather well; ‘As seen on TV’ conveys something that ‘As seen on Facebook does not’


Enduring brands are a symbol of an investment of time and the equity they have built. Strong brands extend what their parent company offers and provide shareholder value for those who have put their hard earned cash and often personal lives on the line.


As well as consistently outperforming the market by up to 20%, strong brands enable a business to maintain a price premium by creating intangible differences between products, often when there is little tangible evidence on offer.


Although this is widely understood, we live in a time where many CEOs and Sales Directors, feel the pressures they are under from retailers and in particular, Own Label, that they are compelled to resort to short term solutions such as driving up sales volume, competing on price and the aforementioned reduction of marketing costs. All perfectly understandable, but hardly evidence of long-termism.


Rational messages such as price and availability may deliver a sales uplift by providing practical information, but they are unlikely to hold much residual sway and create a positive future memory of the brand in question.


Emotions create much stronger engagement and a positive impression of a brand across a far broader audience that can subtly influence later behavior. By building and strengthening these impressions, the likelihood to purchase is increased as the brand comes to mind during future buying occasions. This not only helps the brand to to sell more, more often, it makes it more resilient to competitive threat and subsequently generates future cash flow at a higher margin that a weaker and less self confident brand can command.


Like any other business, food and drink companies strive for long-term sustainable growth. The role that an investment in brand has in delivering future profitability to a business is clearly proven, but sadly this isn’t always reflected in a tangible investment in brand communications.


It is up to us, as believers in the power of marketing, to continue to fight for the worth of brands and for longer-term and more cohesive strategic planning in promoting them. As the well known phase says: You can’t build a long term future, on short term thinking.

David Reid


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