One of the American Marketing Association’s seven big marketing problems is “effectively targeting high-value sources of growth.” This is a real top-of-mind issue, as it was precisely the topic of conversation I had with two C-level executives last week.
So exactly what does this mean? You have to ensure there is sufficient market size, profit potential and growth opportunity to build a brand. Without a solid financial foundation, there is no way to create and maintain a relationship dialog with the customer. Without building relationships, your brand will slip into commodity status.
Targeting high-value sources of growth becomes especially challenging when there are a portfolio of brands, multiple markets and competitors to be considered. After mergers and acquisitions, evaluation of future market and brand performance are as important, if not more important, than operating synergies.
It’s like solving a Rubik’s Cube. There are three dimensions to consider:
- Most likely the easiest dimension is primary demand. Estimated market size and growth are just a click away, by examining industry studies, government reports and trade association research.
- The next dimension is assessment of the relative internal economic value of each brand opportunity. This requires objectively taking into consideration gross margins and whether or not future cost-of-goods and competitor pricing tactics will negatively impact estimates.
- Often the most difficult dimension is evaluating the cost of acquiring and retaining customers. What will be the cost of creative production, media, direct sales, etc. over time? Proper analysis requires investing the time to construct multiple go-to-market scenarios and competitor media spending estimates, as well as demonstrating the probability of achieving projected share gains.
With today’s staffing concerns, most managers do not have sufficient time or resources to effectively gather information and analyze each dimension to make a well-informed decision. That’s where an outsourced team of brand strategists may offer the most accurate and objective assessment for your company. If you are facing this challenge, The Bloodhound Group is here to help. Visit our Services page for details and reach out to us today.