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Archive for the ‘Strategy’ Category

Until recently I thought that brand promise is just a function of what you want to do with your product. But I am sure I don’t think so anymore. Consider the case of Domino’s (about my travails with them ). They position themselves as the Pizza delivery experts. That means their clear focus is on delivering pizzas lightning fast. They have been pretty good at that, except that their call handlers are a little short on training.

What really drove me to this post is a comment from my friend who said – in certain parts of a city in India Domino’s refuse to serve/deliver pizzas in 30 minutes to customers citing that the traffic in the approach roads hinders prompt delivery. Think about this (this is largely India specific) –

  1. As a city in which Domino’s operates adds more and more vehicles to its roads which don’t expand to match the gap between the demand of better road spaces and the actual physical supply of roads, what happens to Domino’s brand promise. Such a brand promise becomes highly dependent upon the city’s infrastructure.
  2. If the city’s infrastructure fails / is under great pressure, then due to this dependency your brand promise is in jeopardy.
  3. If you were in Domino’s what would you do – the only feasible solution seems to be open more stores serving smaller areas in order to combat this dependency.

To me, Domino’s brand promise consists of two elements, internal and external. Internal – Process for making pizzas, External – Delivery mechanism. Now we can see the issue in their positioning. The external element is the real pain point (and going forward in India it could become a real problem, with denial of service already happening).

Isn’t it better to architect your brand promise on elements internal – like a Pizza Hut (Taste) or a Volvo (Safety)?

Therefore it’s not just about your product but also the overall environment which also affects what you set out to do with your brand. It’s upto the company to decide the extent of dependency on the external environment.

Let me conclude with a question – Are brand promise and positioning the same? What do you think?

Let us know in the comments.

-Egghead

Adage points to a good piece on how package-goods company Reckitt outperformed heavyweights like Unilever, P&G. Some snippets –

Globally, Reckitt has posted 10% organic sales growth so far this year,
besting all peers. And in the past five years, it has beaten all
competitors with average organic sales growth of 8% and net profit
growth of 17%, according to data from the company based on Credit
Suisse analysis.

Surprising if that is, then consider this –

The company spent nearly 90% of its media dollars on TV last year.

Half of improvements in gross margin get invested in increased
marketing spending, said Mr. de Groot, and the other half drops to the
bottom line.

Even as some competitors cut or slowed marketing spending amid a
turbulent economy, rising private label and high commodity costs in
recent quarters, Reckitt didn’t. Its spending in July and August
(excluding outdoor) was up 10.8% from a year ago, according to TNS
Media Intelligence, and spending through August puts it on pace to
increase its 2007 outlay of $402 million by about 10% for the year.

And the results say –

Since January 2007, Reckitt’s all-outlet share of household categories has risen five points, to 29%, Mr. de Groot said.

The company culture –

The nine people on the company’s global executive committee come from
seven countries, as do the top 10 U.S. managers. The top 400 managers
(those getting options and restricted shares) come from 50 countries.
And of the top 50 global managers, 79% work outside their countries of
origin, and 95% have had at least one global transfer.

Instructive piece – do read.