Posted on : 2024-03-01 03:18:18
Article : Good evening Friday management TASK 283- Your brand's future success begins with the decisions you make today. Do you look for-short term revenue growth or long-term brand building?
It’s the catch-22 situation for almost every business: If your objective is to make your products fly off the proverbial shelves and in cases where traffic is slow to arrive, it could be because you haven’t invested enough in your brand-building initiatives. To tackle this, you slash your pricing — and the traffic trickles in. However, those that purchase your product may come to value your product differently. “Why pay $100 now when I got this for $50 last time?” such is the constant conundrum of short- term versus long- term strategies.
When times are tight and the future is uncertain, especially amid lingering fears about recession and a sluggish ad market, it’s tempting for marketers to focus on quick wins to get some points on the board and live to fight another day. Those quick wins, however, aren’t what sustain businesses. While helpful for the next quarterly read-out, short-term sales can easily distract teams from thinking about what really drives success on long-term growth.
Those distractions can be costly. While targeted and direct marketing makes sense when consumers are feeling the pinch or a business needs to meet a sales target, these approaches aren’t as lucrative as you might think. For example, we’ve found that promotions deliver only about half of the long-term returns that media spending does. That’s because incentives typically offset natural purchase cycles. And when consumers buy earlier at a lower price or buy more at a lower price, they’re removed from the market for that product later on which is unfavourable to the brand promoter. Incentives can also train consumers to buy on incentives or to look for depth of incentive which lowers long-term profitability.
The pressure to achieve short-term results often overshadows the importance of long-term brand building. Consider this that companies with strong brands tend to outperform their competitors in terms of revenue growth, market share, and customer loyalty. An exclusive focus on short-term growth can come at a price. It may compromise brand quality, damage customer relationships, and hinder long-term profitability. The name TATA itself reminds us how gigantic the organisation is. But, even such a massive and powerful company failed when it tried to launch Nano into the automobile market. Initially, Nano grabbed a lot of attention for its shape, size and cost-effective factors. However, the same reason for the shape and size turned out to be the downfall of the TATA Nano. TATAs wanted to offer a low-cost car viewing large middle-class Indian population to have a car against present mid cost segment vehicles but failed. Neglecting your brand's long-term health can lead to a vulnerable market position and instability.
Long-term brand building is the process of cultivating and strengthening your brand's identity and reputation over an extended period. It involves developing a strong brand identity and communicating your brand values consistently, creating a brand that customers can easily recognise and connect with. Investing in long-term brand building yields substantial rewards. By consistently delivering on your brand promise, you can increase customer loyalty, elevate brand awareness, and secure a more substantial share of the market. For example - Intel with their marketing strategies enjoys massive customer loyalty. They began by strategically leveraging co-op advertisement campaigns targeted toward OEMs (Original Equipment Manufacturers). It helped them put their products into mass-produced PCs, ultimately meant for the public. The arrangement was simple: Intel agreed to pay for their OEM partners’ advertising as long as they got to stick their logo on OEM products. This “Intel Inside” campaign was a stellar success, not just figuratively. There are numbers to prove it. In 1991, before the campaign began, Intel stood at a market capitalization value of about $1 billion. After implementing this strategy, their market cap rose to $5 billion by 2003.
Finding a balance between short-term and long-term goals is paramount. By maintaining a harmonious equilibrium between immediate gains and long-term sustainability, one can secure brand’s lasting success in the market. High-quality content is the cornerstone of effective marketing. It not only attracts immediate attention but also establishes your brand as an authority in your industry. Content that educates, informs, and entertains can help you connect with your audience on a deeper level.
It's essential to measure the success of your marketing campaigns against both short-term and long-term metrics. While short-term metrics such as website traffic, lead generation, and sales are crucial, don't overlook long-term indicators like brand awareness, customer loyalty, and market share.
With this preamble on brands short term goals versus long term goals we will discuss a case study on how Diegeo the leading liquor brands dealt with the short term versus long term goals, in our Good morning Monday management TASK solution on 4th March 2024.
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