The more loved the brand, the more powerful the brand and in turn the higher growth and profit it can generate.

A beloved brand can use the connection with their consumers as a source of power. The tighter the connection to consumers, the more loved the brand. As a brand becomes more loved, it becomes more powerful, and is able to wield that power onto all aspects of the market. A Beloved Brand can entice consumers to keep coming back, it can fight off competitors to win with key targets, it can generate earned media easier, it can challenge suppliers to come back with lower costs and it leverage its positional power to gain preferential treatment with real estate owners, government or tour operators. Even employees would rather work for a powerful beloved brand than an indifferent brand.

Brands move along a “LOVE CURVE” going from Indifferent to Like It to Love It, and then they’ll make it their Brand For Life. The farther along the curve, the more connected to the brand.

The “Brand Love Curve” can be linked to the Brand Funnel which becomes the underlying scoreboard. You can use the funnel to map out the buying process for the consumer, identifying both strategy and tactics to move them along the funnel towards being more loved. Used properly, the Power of the Brand can help drive the P&L with four important levers: driving increased price, lowering costs, increasing share, creating new markets. As a result, a powerful connected brand is much more efficient. And that efficiency can leverage the P&L to invest back in the brand’s connectivity and drive Profit and over the long run create value for the Brand.

As a Brand Leader looks to how to drive their Brand through the P&L, here are the four ways the Brand Leader can drive profits:

1. Using price as a weapon to drive Brand Value. It can be a price change, up or down, or it could be trying to get consumers to trade up or down.

• Price Increase: You can do a price increase if the market or brand allows you. It likely has to be based on passing along cost increases. Factors that help are whether you are a healthy brand or it’s a healthy market as well as the power of your brand vs competition and channel.
• Price Decrease: Used when fighting off competitor, if you need to react to a sluggish economy or channel pressure. Another reason to decrease price is if you have a competitive advantage around cost, whether that’s manufacturing, materials or distribution.

There are watch outs for price changes. It’s difficult to execute especially if it has to go through retailers. You need to understand power relationships–how powerful are the retailers. Many times, price changes are scrutinized so badly by retailers that you must have proof of why you are doing it. It’s likely your Competitors will (over) react. So your assumptions you used to go with the price increase will change right after. And finally, it’s not easy to change back.

• Trading Up: If you have In a range of products, sometimes it can be beneficial to get consumers to trade up. Can you carve out a meaningful difference to create a second tier that goes beyond your current brand? Does your brand image/ratings allow it?
• Trading Down: Risky, but you see unserved market, with minimal damage to image/reputation of the brand. In a tough economy, it might be better to create a value set of products rather than lower the price on your main products.

Beloved Brands seem more capable at driving profits through pricing, but they also are careful to ensure the premium does not become excessive to create backlash. There are a few watch outs around trying to trade up or down: Premium skus, can feel orphaned at retail world—on the shelf or missing ads or displays. Managing multiple price levels can be difficult—what to support, price differences etc. For all the effort you go to, make sure your margins stay consistently strong through the trading up or down. Be careful that you don’t lose focus on your core business. Can’t be all things to everyone. The final concern is what does it do your Brand’s image, especially risky when trading downward.

2. Managing cost as a weapon to enhance the Brand’s Value. It can be either your cost of goods or the potential selling costs.