Michael Holt, Managing Director, gardyneHOLT design
Our country and our industry is based on a practical sense of getting things done, usually with little fuss or fanfare. However, times are changing and in particular we’re less reliant upon our domestic markets to offer sufficient demand, especially with our own markets wide open to competition from overseas. The message from government, now more than ever, is to develop our export markets and international revenue base. But have we properly developed the knack for self-promotion that we really need in order to compete vigorously.
The essence of commodification is where two or more seemingly similar things are only really differentiated on price. Price competition is a common and often painful element in contract negotiations, leading to ongoing cost control. But it’s a tough way to make fair profits. Furthermore, why would anyone want to sell their product or service based primarily on price? There’ll always be others striving to be even cheaper, so price really is a fickle way of winning and maintaining sales. Competitive advantage must be woven into the products, service and ongoing relationship in order to maintain demand, differentiation and where possible, premium.
For example, Hi-Q Components, a smart and reliable Kiwi business with a great reputation for supplying thousands of different small components to manufacturers (electrical components, bushes and bearings, caps, covers etc) realised that their brand is the first and best way to express their value. They started with the idea of supplying anything that can fit within a shoebox, and that’s still true today. Their brand should say that for them but the problem was that their brand didn’t say anything much at all. Our task was to add all the right qualities while keeping a connection to the original brand.
In the process, we’ve created a brand with a personality that customers can recognise in the company itself.
We can all see the global dynamics of manufacturing shifting dramatically as we face increasingly stiff competition based on a wide range of factors, such as cheaper labour and better access to capital.In addition, we face remote logistics, unhelpful exchange rates and various forms of protection in foreign markets.
In an environment that is difficult, any advantage that manufacturers can take is a good thing. One of the most powerful tools available to any business today is brand. However, so many manufacturers consider brand to be a tedious expense, done irregularly, cheaply and to whatever minimum can be gotten away with. Oddly, many firms considered branding and marketing expenses to be the most easily removable as the recession started to take hold.
A brand is not a logo or a package or a website.Ê A firm’s brand is the regard in which they, their products and service relationship is held. We’re surrounded by them of course and good brands influence buying behaviour. Any modern consumer can’t help but be aware of their own brand preferences, and of course we all spend too much of our leisure time trying to avoid interruptive brand messages. Every modern firm looking to the future cannot ignore the power and benefit that a good brand strategy will bring. Smart brands are well targeted to their audience, whether this is a buying or influencing community. The brand and its associated visuals will be distinctive, memorable, relevant (to the audience) and accurate. The brand will say to that audience: “these are our values and this is why we’d like you to come back to see us again, and please bring a friend.”
Brand work that we did with Kiwi Steel, for example, was aimed not only at their present and future customers, but also at their preferred logistical agencies, international financiers and suppliers, to ensure that all external relationships see them as a fully professional, stable business partner.
Developing a brand strategy is about defining a business in a fairly fundamental manner. Who are the clients and why do they buy? What is their decision-making process and who competes for their attention? What is the nature of the business from the client perspective (i.e., what do they get out of it?) and how can this be protected, maintained and improved?
By better understanding client behaviour, a supplier can build on it, enhance it and add premium to it. Brand work then can extend into ensuring the right visual materials are in place; colours, images, well-written words and so on, but it’s also about quality and service standards and how these conform to the expectations of the market.
Consistency of performance is a critical element in maintaining a reputation. Just ask Telecom. Brand allows clients to recall and recommend a preferred supplier. It also allows firms to talk directly to clients and to make a promise.
For large companies like Downer EDI, we put a great deal of work into brand guidelines that detail every aspect of branding from signage, vehicles and clothing through to presentation templates and email footers. When a company becomes large enough that no single person can oversee every use of the brand, it is vital that everyone in the company has a clear standard to match to.
In today’s highly competitive world, a well managed brand is a no longer a nice-to-have business tool. A good brand is a key component in business success, and often survival. Brand is an investment no less important than new plant and equipment. Good manufacturing standards are no longer enough in business. In a globally competitive environment, manufacturers have to talk a good game and the right one. This means being heard by enough of the right people, enough of the time, for the right reasons. A well crafted brand is based on a good, simple definition, and then applied coherently through the right channels.
Examples of good channels are trade shows, printed collateral and websites, packaging and paperwork. It should also work effectively through advertising, signage, publicity and sponsorship. An effective strategy will allow for feedback, monitoring, routines checks and tweaks. Getting smart, business-oriented people in to assist is as necessary as having a good accountant.
No business should rest on its laurels. Continuous innovation is not just something for the workshop, but also for the business itself. A strong brand is now a critical requirement for a modern firm if it’s to achieve its potential and provide a strong return on investment.