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5c's Analysis of a Brand

Essay by   •  August 17, 2011  •  Case Study  •  1,330 Words (6 Pages)  •  1,431 Views

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5C's(forces) analysis of a brand.

Strategic Brand Management (5 C Model) :

The strategic planning for a brand starts with an understanding of an organization's business strategy. The business strategy is usually aimed at achieving particular consumer behavior. Only if consumers actually purchase, use goods (more often), pay a higher price or donate (more) will the objectives of a business strategy be met. These objectives may include a larger market share, increased returns, higher margins and increased shareholder value. Brands are designed to persuade consumers to exhibit the behavior that will make these objectives come true for the organization. Thus, the influence of business strategy upon brand strategy is direct and compelling. In order to formulate an effective strategy we propose the use of the 'five forces analysis of the brand'. These are the five forces which are constantly acting upon the brand and shrinking its value. The success or failure of a brand will depend on the organization's response to each of these potential threats.

5 C's analysis of a brand

Competition

Company

Consumers

Complements/Collaborators

Culture/Context

First Force - COMPETITION:

Brands face the threat of competition on a continuous basis. New products are being launched more frequently, each luring consumers away from the brand. In order to counter this threat, companies have to be innovating and evolving the underlying product represented by the brand and at the same time be boringly consistent about the value or promise that the brand is supposed to deliver.

The bottomline is to deliver the promise or value represented by the brand better than anybody else. For example, a soap brand that promises freshness, should at all times communicate and deliver freshness. But the means by which that freshness is delivered can be changed over time through new formulations, new ingredients, new fragrance, new packaging etc. But the core value that the brand promises should never be changed or diluted.

Substitutes are brands or products that do not provide the same value or promise that the concerned brand offers but something substantially different. Yet, these can act as substitutes that can erode the brand's value. These disruptive brands have the potential to make any brand irrelevant.

The first step in countering this threat is to identify them. The following signals can help companies identify these substitutes. First and foremost, the company has to find out through standard techniques whether the brand value or market share for its own brand/product is dwindling or whether internal growth targets are not met. If yes, then the second question is whether this is in fact due to a competitor. A simple check on the competitor brands' will provide that information. The next step is to look at what the potential/existing consumer is doing without the brand to solve his problem. This can be done through a market research survey. This step usually reveals the details of the substitute. The question of why we do not recommend the third step directly is irrelevant because of increasing costs involved with each step.

Once the substitute is known, the decision of whether to dilute, extend or launch a new brand to counter this threat has to be considered by the company. This requires careful analysis and is beyond the scope of this paper, but to start with the following questions should be answered by the company.

Does the substitute solve the consumer's problem in a better way?

Does it provide better value?

Does its value proposition make mine irrelevant?

What will happen if I position my brand to emulate his model? What will happen if I don't?

What is the consumer's perception of the substitute? What is the best strategy for me to create a similar perception?

Second Force - COMPANY:

One of the main threats for brands especially successful ones does not come from outside but from inside i.e. from

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