FOLLOW the MONEY: bgym book post 4
This is the third post with tasters from the new brandgym book, out April 26. This one is about the most important principle of the book, and in fact all the work we do: "Follow the money".
Following the money is about identifying where the brand really has the competitive edge needed to gain or retain leadership. It means spending less time on branding theory, and more time on business issues. Rather than asking questions such as 'Could Dove stretch into baby products?', we should be asking 'Can Dove make any money out of babycare?'
Brand equity issues are of course important, and extensions do better with a clear link back to the 'mother brand'. However, the emphasis is on harder-edged commercial issues and 'following the money', by looking at two main things:
– Size of prize: how big the business opportunity is, based on the size of the market, and how strong a value proposition we have. Most companies are pretty good at this bit.
– Ability to win = can we make any money out of it? Its one thing to launch a new product, but another thing altogether to compete over the long term. For that we need a business model that generates sustainable, profitable growth.
To illustrate the idea of following the money, here are some examples
Following the money: good examples
– Special K stretching from cereal into cereal bars, fully using the dominance of Kellogg's in the market
– Ford's decision to drastically cut its brand portfolio, selling
off Volvo, Aston Martin and Land Rover to focus on the Ford brand
– Unilever focusing efforts on its Persil brand on the core laundry cleaning category, and cutting Persil Washing up Liquid
Not following the money?
– Heinz launching into chilled soups against a dominant leader, Covent Garden. They had a decent concept called Farmer's Market, but lacked the business model to make it work
– Mobile network brand O2 trying to stretch into insurance. Do they really have a business model that allows them to create profitable growth?
– Gatorade trying to take on the dominant leader brand in the UK sports drink market, Lucozade.
In conclusion, the next time you are locked in a debate about a marketing issue, such as whether to launch a not a new product, try following the money. Cut through the theory, and look at the size of the prize and especially your ability to win.