Changing markets and the importance of brand relevance (page 1 of 3)

But business and consumer marketers in 2004 don't seem to have even that much luxury. Consumers and corporate buyers, more mobile and better informed than ever before, are increasingly able to get precisely what they want when they want it, at the price they're willing to pay. To meet these exacting desires, new and different products and services appear unceasingly. Entirely new categories and subcategories come into existence almost overnight, as existing ones change or fade.

To succeed in this fast-moving environment, management must pay attention to a new — and, for most, unfamiliar — attribute of the company's products, services, and brands: their relevance.

Relevance is fundamentally different from the characteristics conventionally associated with a brand's potency. Brand management in the past focused on achieving preference on the basis of differentiation, benefits, and customer satisfaction within a set of brands under consideration for a given application. But in today's environment, unless a brand can maintain its relevance as categories emerge, change, and fade, narrow application preference may not be sufficient. Brand managers are often blindsided by changing product categories because they focus too closely on the traditional attributes of brands within their old categories. Their ultimate tragedy is to achieve brilliance in creating preference and differentiation, only to have that effort wasted because of a relevance problem.

According to Karim Sabbagh, Vice President, Booz Allen Hamilton in the Middle East, "The issue of relevance is particularly applicable in the dynamic, fast-changing markets of the Middle East. Whether it is the ambitions of regional governments to leapfrog technologies with all the change that this implies or the almost immediate regional adoption of marketing and category innovations as they happen in Europe, Asia, and North America, businesses operating in the Middle East have little insulation from the threat of brand irrelevance."

In fact, he noted, "The topic of brand management and relevance has moved up on the strategic agenda of senior management and boards of directors in the region. It has become a key catalyst for expressing and presenting an institution's value in a way that is relevant to end users." Beyond consumer categories where brand management is an accepted and critical enabler, "the value of brands has become ubiquitous in the Middle East and is spreading to new categories as evidenced by the real estate sector where the likes of Emaar and Nakheel in Dubai are seeking to develop pioneering and uncompromising quality positioning," he added.

Defining Relevance

Relevance for a brand occurs when three conditions are met:

• A product or service category or subcategory — defined by some combination of attributes, applications, user groups, or other distinguishing characteristics — exists or emerges.

• There is a perceived need or desire on the part of a customer segment for the category or subcategory.

• The brand is in the set that segment considers being material to the product category or subcategory.

To better understand relevance and the concept of product categories and subcategories, consider a simple model of customer-brand interaction. Customer choice takes place in five stages. First, the customer is motivated by a problem, need, or opportunity — in this example, the need for personal transportation. Second, the customer selects a product category or subcategory perceived to be relevant to the problem or opportunity; he or she may decide to buy a luxury sports sedan rather than a compact or an SUV.