Join 'em, fight 'em, or move away from 'em: Three approaches to beating low-price competitors at their own game

That's the snappy title of an article now published on Landor.com. (My suggestion: "Ugh, low prices are killing me. What the hell should I do?"was rejected by our editors. Can't think why.)

Anyway, the article lays out different options for companies that are being challenged, in these days of economic downturn, by low-priced competitors. It was inspired by a question that came from one of our clients about how it should manage a request from one of its markets to launch a fighter brand to protect its business against a new and aggressive low-priced entrant.

Enjoy.

Brand portfolio management

The January issue of The Hub magazine features an article by me on "Brand Sliders." (The pdf of the article is here.)

The article is about a tool we've been using to help companies decide where they fit on the brand architecture spectrum between many brands (like P&G) and a single brand (like GE). There are many factors that need to be weighed in making this decision and too often a single factor (like cost efficiency) gets more than its fair share of attention.

This new tool is a visual aid that encourages a systematic approach to the evaluation of a series of questions in four categories:

1) Brand equity and stretch: How much equity do the brands in your portfolio have? What's the potential of any one brand being able to stretch to cover the portfolio of products and services? The stronger the equity of each brand and the weaker their stretchability, the more need for more brands.

2) Company culture: How centralized or decentralized are your company's operations? Although we focus on external, market conditions, internal factors are important as well. If a company has decentralized operating units (and where there is no plan to reorganize), imposing a rigid single brand solution is unlikely to work. On the other hand, building a portfolio of brands without a commitment to supporting them with adequate marketing resources may be worse.

3) Stakeholder issues: How similar or different are your customers, their needs and attitudes? Trying to address distinct customer segments with one brand can be challenging and make your brand promise weak and undifferentiated.

4) Marketplace conditions: What's the competitive environment? Are you trying to compete against the stature of global brands or are you fighting specialized players? Will presenting your products and services under one brand umbrella give you more of a competitive edge than building a portfolio of brands?

Brand sliders is a great tool to use in executive team work sessions. It doesn't provide a definitive answer to brand architecture questions but it clearly shows the trade-offs between different approaches. This allows executives to evaluate these trade-offs and make decisions about brand strategy informed by this knowledge.