Core strength: does your brand need to train harder?

Core strength ensures that a brand is poised for efficient growth. But how can we know how strong – or weak – a brand really is?
04 May 2020
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Nigel Hollis
Nigel
Hollis

Chief Global Analyst, Kantar

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Core strength facilitates efficient movement in humans, but when it comes to brands, core strength helps ensure that the brand is poised for efficient growth. So how do you know if your brand’s core is strong or weak?

When it comes to one’s own core strength it is relatively easy to sense when things are not quite what they should be. But what about brands? How can we tell that a brand’s core is not as strong as it should be? Unfortunately, it is not so easy to tell. That is because the most easily accessible data is superficial and does not really give a good idea of whether a brand is poised for growth or not. Sales, search and social data can change rapidly from day to day and week to week and tend to focus attention on the here and now, not the longer-term strength of a brand.

Analytics offer us a couple of ways to figure out whether a brand is strong or weak, by decomposing changes in sales into short and long-term trends. The simplest way is to strip out short-term variation from the data and examine the underlying trend. Kantar’s TrendAI solution (part of our Brand Guidance System) can be used to do just that, automatically decomposing trend data and highlighting not just the response to media and events but the underlying trend. A downward trend may well signify the need to put a new marketing regimen in place to tone up the brand.

However, even if you identify that not all is well with your brand it can be difficult to figure out what needs to be done to rectify the situation. In that case, a more rigorous assessment might be called for. Kantar’s Total Marketing ROI combines multiple trend metrics in order to examine what is driving both short and long-term sales. By explicitly including brand equity and brand experience data alongside more traditional marketing variables like media and trade promotional spend, this approach identifies how strong a brand’s core sales are compared to the incremental short-term sales.

Looking across a variety of categories we find that brand equity has a much bigger role in driving long-term sales than might otherwise be expected. Depending on the category, brand equity can account for a substantial proportion of sales variation, distinct from short-term variation due to seasonality, pricing and distribution, media and promotional spend or competitive activity. For one telecom brand we identified that brand equity and customer experience had over 50% more impact than the direct influence of short-term variables alone.

So how can you improve your brand’s core strength? Knowing which specific brand associations drive predisposition to buy, and tailoring your offer and marketing activity to improve those associations, will be key. Apart from innovation and better customer service, investing in compelling content and effective media spend are essential to longer-term growth. On average, the direct contribution of a brand’s media spend to incremental sales is 13% of the total. However, the contribution of media spend to sales indirectly through brand equity accounts for a further 28% of total sales. Not everyone will be in the market to buy your brand today, or even in the next quarter, so marketing that creates lasting and motivating memories can have a big effect on future sales.

A brand’s core strength is not built over a matter of weeks. Like any good workout routine, an effective marketing program takes the time and repetition to build strength. However, knowing what drives your brand’s core strength now and what might help improve it can help it achieve faster, more efficient, growth over the longer-term. But to identify what is most likely to drive growth requires a more holistic view of what drives overall sales in the first place, and the right data and analysis to identify growth opportunities.

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Brands with strong equity are destined to grow. Knowing your equity and how to build it is the foundation for success.