July 11, 2013
Building from Porter’s 5 Forces, up to 13 Sources of Brand Power
I remember 20 years ago when I was in business school and I learned Michael Porter’s 5 forces model as a way to understand the industry attractiveness and competitive intensity. It’s a great starting point for thinking strategically. But, by any means, I’m not an economist, academic or even analytics junkie. I’m just a simple brand guy, who sees Porter’s Model as a great starting point to assess the power of your brand. I’m not here to debate the model, just use it.
Using Porter’s Model for Brands
First of all, Brands can be anywhere from Indifferent to Like It to Love It all the way to being a Beloved Brand. They sit somewhere on a made up mythical Brand Love curve. At Indifferent, you’re basically a commodity and you are only picked when your “product” is in front of the consumer. Margins are low, price goes with the market and all off your marketing effort is around distribution and price. As you move to Like It, you become competitive but the consumer only usually picks you if they see something logical in your offering that makes you appear to fit their needs. At this point, brands should be trying to figure out: are you better, different or cheaper? Because while you might be playing in the mix of the other brands, if you’re not one of those three, then you might not be around for very long. As you get more into the Loved and Beloved stages, the consumer starts to feel more and possibly think less. You have a connection and bond with your consumer. They are a fan, your brand is becoming a favourite part of their life and they build you into their normal routines. They defend you, sell you and crave you at times.
The challenge for Brand Leaders is to start seeing that love as a source of power. And that source of power as a means to making more money than if you had no love. Marketers that “get it” see the connection between Love and Power and Profits.
Looking at Porter’s Model of the 5 Forces, we can see that a Beloved Brand can leverage all 5 forces as a competitive strategy to beat down on the less loved brands. McDonald’s beats down on Burger King, Wendy’s and Hardee’s with such a force those brands now find themselves confused and suffering.
A Beloved Brand starts with a certain power over the buyer–whether that’s consumers or the channel. In terms of CONSUMERS, they feel more and think less. It’s a part of them. They are fans, craving the brand and build it into their life. They can’t live without the brand. And the CHANNEL needs the brand, caters to them, cannot stand up to them. People would switch customers before switching brands. The channel finds themselves Powerless in negotiations. They need the brand.
Once the Beloved Brand has a power over the two main buyers–consumers and channel, they can use it over the other forces. No real SUBSTITUTES can match the Beloved Brand. It becomes less about product and more about connection and how consumer feels though the brand. You end up with a Monopoly on feelings which then takes away ability to substitute. Unless it is “better” what really can the substitute do. It is Hard for NEW BRANDS to break through. New brand starts in the rational position difficult to break the emotional bond. And SUPPLIERS are at the mercy of the brand. High volumes drive down costs and margins. Suppliers build completely around brand. Can’t get out.
The Beloved Brand commands a power over their competitors in relative terms to their competitors whether it is Buyers, Substitutes Suppliers or New Entrants. If you look at the love consumers have for a brand like Apple, you can start to see how it becomes a power. Apple uses the love to replicate the power of a monopoly.
Going Beyond Porter
Porter is a great starting point for assessing brand power. But Brands are in the midst of a huge change on a few fronts. The obvious one people can see and touch is Media. But don’t forget to look beneath the surface and you’ll start to see a bigger change in brands than media and that’s the Brand Culture and the Conversations.
There are now 5 types of media: paid, earned, social, search and home media. Back in the 1970s, it was all about advertising through PAID MEDIA, with 30 second TV, print and out of home ads. Even with Paid media, the Beloved Brand can get Better slots, lower rates and more integrations. The first social media I would argue is PR, capturing EARNED MEDIA and becoming part of the conversation at home or at the lunch table at work. A Beloved Brand is more newsworthy and their New Products are lead story. Look at the amount of positive press Apple gets from the news media. HOME MEDIA would be how you use your home page–whether to influence or sell. For a Beloved Brand, the website can engage inform, design and sell. As part of the SEARCH process it can be the destination. For a Beloved Brand, search is a winner, because Being a famous brand beats paid SEO. For SOCIAL MEDIA, a Beloved Brand has an easier time generating social spins, where advocates follow, share and spread the news.
As we take all that influence of media, we can start to see the influence of others can have on brand choices. KEY INFLUENCERS are more likely to actively recommend a Beloved Brand they feel emotionally connected. Look how Apple uses key influencers. And what is a growing area for Brand is CONVERSATIONS and the influence of popularity on our decisions. Beloved Brands know that a line up attracts a line.
Brand = Culture. Brand and Culture are one. Advocates want to work there. Fully Engaged on Day 1. The area many brand leaders are missing is the influence of CULTURE as a source of brand power. Brand Leaders should look to Culture as an Asset to make your Brand Experience more powerful. Brand Values should come from the DNA, and act as guideposts to ensure that the behavior of everyone in the organization is set to deliver upon the Brand’s promise. Having values is one thing, but the other component of Culture is the right people leadership. Use the values to help people deliver upon the right behaviors, skills and experiences. Leaders must embody the Brand’s DNA and live by the values. Employees will be watching the Leaders to ensure they are living up to the words on the wall. Leaders need to believe that by investing in their people, the business results will come. Better people produce better work and that drives better results. Talent management means hiring the right people and providing the right training. Too many companies are skimping on training and development, which is equivalent to cutting back on your R&D.
So with these 13 sources of Power, the Beloved Brand can leverage this power to drive higher growth and deeper profits. The Beloved Brand commands a premium price, lower costs, better shares and the ability to move into new categories. Each of these drives profit for the brand.
The more LOVED the brand, the more POWERFUL the brand.
To read more on this subject, read the following presentation:
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- How to Write a Creative Brief. The creative brief really comes out of two sources, the brand positioning statement and the advertising strategy that should come from the brand plan. To read how to write a Creative Brief, click on this hyperlink: How to Write a Creative Brief
- How to Write a Brand Plan: The positioning statement helps frame what the brand is all about. However, the brand plan starts to make choices on how you’re going to make the most of that promise. Follow this hyperlink to read more on writing a Brand Plan: How to Write a Brand Plan
- Turning Brand Love into Power and Profits: The positioning statement sets up the promise that kick starts the connection between the brand and consumer. There are four other factors that connect: brand strategy, communication, innovation and experience. The connectivity is a source of power that can be leveraged into deeper profitability. To read more click on the hyper link: Love = Power = Profits
I run the Brand Leader Learning Center, with programs on a variety of topics that are all designed to make better Brand Leaders. To read more on how the Learning Center can help you as a Brand Leader click here: Brand Leadership Learning Center
To reach out directly, email me at firstname.lastname@example.org
About Graham Robertson: The reason why I started Beloved Brands Inc. is to help brands realize their full potential value by generating more love for the brand. I only do two things: 1) Make Brands Better or 2) Make Brand Leaders Better. I have a reputation as someone who can find growth where others can’t, whether that’s on a turnaround, re-positioning, new launch or a sustaining high growth. And I love to make Brand Leaders better by sharing my knowledge. I’m a marketer at heart, who loves everything about brands. My background includes 20 years of CPG marketing at companies such as Johnson and Johnson, Pfizer Consumer, General Mills and Coke. My promise to you is that I will get your brand and your team in a better position for future growth. Add me on LinkedIn at http://www.linkedin.com/in/grahamrobertson1 so we can stay connected.
This entry was posted in Beloved Brands Explained and tagged in 5 forces, ad age, beloved brands, Brand, brand manager, busienss advertising, explained, leaders, Marketing, Porter's Model, power, strategy.
Graham Robertson is one of the voices of the modern brand leader. He started Beloved Brands, knowing he could make brands better and brand leaders better. Graham believes passion matters in marketing, because the more loved a brand is by consumers, the more powerful and profitable that brand will be. Graham spent 20 years in brand management leading some of the world’s most beloved brands at Johnson and Johnson, Pfizer, General Mills and Coke, rising through the ranks up to VP Marketing. Graham played a major role in helping Pfizer win Marketing Magazine’s Marketer of the Year award. He has an MBA from the Ivey Business School, ranked the #1 International business school by Business Week. As a Brand Coach, he can help you create a winning positioning statement for your brand, write a brand plan everyone can follow, find advertising that drives growth and train your team of Brand Leaders on everything marketing. The client roster for Beloved Brands includes the NFL Players Association, Reebok, Pfizer Capital One, 3M, Sun Products and Earls. Graham’s weekly blog (beloved-brands.com) has a vast following with over 3 million views, and his public speaking appearances inspire brand leaders to love what they do.View more posts from this author