How understanding latent customer needs can help develop better brand positioning strategies (page 2 of 2)

Within the tooling sector, the market is saturated with many different competitor brands, large and small. Generally brands in the market lack differentiation and customers use several different brands regularly.

A couple of the "Acme Corp" brands are co-branded with "Acme Corp" while the others are branded separately. Each "Acme Corp" brand competes with the other brands in the portfolio and cannibalization is rife. "Acme Corp" does not have a strong Portfolio Ambition. Each brand in the portfolio should serve separate groups, but "Acme Corp" brands actually serve the same customer groups and so cannibalization rife. "Acme Corp" therefore needed guidance with managing its large portfolio of brands. How should "Acme Corp" manage its Brand Portfolio to maximise growth and minimise cannibalization?

The main objectives of the study were to: define the Brand Positionings of the different brands in the "Acme Corp" portfolio: align the Brand Positionings with the latent needs of the different groups in the market to create Relevance: decide which brand(s) within the "Acme Corp" stable should represent "Acme Corp" for each customer group (using Conversion Model™); and finally align these brands to strengthen the Portfolio Ambition, rebranding and merging if necessary.

In Step One we used Latent Class Analysis (a form of cluster analysis) to explore the latent needs in the market. The market was divided into four groups based on people for whom (1) Technical Support, (2) Value/Cost, (3) Business Support, and (4) Leading Brand/Value were the most important drivers.

Step Two was to define the Brand Positionings of each "Acme Corp" brand. The Brand Positioning is often best seen in the brand's advertising. In the absence of other information, the Brand Positioning of each brand in the "Acme Corp" portfolio was determined by investigating the messages on each brand's website. We then attempted to align the Brand Positionings with the latent clusters we found in Step One.

In Step Three we used Conversion Model™ to determine which brands were healthy and attractive, and based on this analysis of how closely each brand was aligned with the latent needs in the market, we were able to make recommendations as to which brands should be rebranded or merged into the strongest and best aligned "Acme Brands".

We recommended that Brand A should be rebranded as "Acme Corp" to create a synergistic "leading and technical expertise" offering. That brands B, C and D should be merged and relaunched in an effort to change customer perceptions and improve customer equity, leveraging the "business support" offering. That brand E be positioned as the "cost option" brand in the market. And we also suggested that a brand offer of "Innovation" could be made attractive to customers in the market and Brand W could be positioned in this space.