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Which way do the panel go?

25 March 2010 955 views No Comment

2010 - A year for tough decisions in the public sector

Richard Mabbott was acting as facilitator for the meeting and laid out cases for both brand and demand. But first he explained the catalyst for the whole event: throughout 2009, he stated he had attended numerous planning meetings with clients where creative work was presented and generally well received. However, he had noticed that in a large percentage of cases, the client was asking for the brand line to be reduced or omitted altogether.

GyroHSR decided to look into the reasons behind this mini-trend in a little more detail and carried out research with 37 different clients both in Europe and the USA. The findings were detailed in a printed report supplied to all attendees (if you werent there, visit www.brandordemand.com to download your copy) and the results clearly pointed to a split between brand and demand. Mabbott admitted that this may be a false dichotomy because of the many variables that can influence such a major decision and making reference to the host city, he used football as a reference point saying that it was not a United versus City situation and that you could have both together. However, current market perceptions and positions would make for a stimulating and thought-provoking debate.

Mabbott firstly proposed the arguments in favour of Brand. Obviously, a strong brand enables a company to charge more for its products and services. He recounted how during the course of his research that old chestnut No one ever got fired for buying IBM raised its head in nearly every survey response. He also pointed out the importance of brand when it came to defending against new competitors, quoting a case when one of his clients chose a Cisco systems product over a competitors identical product purely because of Ciscos brand status and its effect on staff morale and motivation. Mabbott also highlighted the effectiveness of brand when it came to spend on demand generation, stating that if you have a strong brand, the ratio of ROI would be greater than for a lesser known brand.

When making the case for Demand, Mabbott conceded that the recession was a major factor with marketers prepared to hunker down and drive leads rather than make a brave move and fight for a budget that might have a two, three or even five year horizon. Another point that emerged was the belief that B-to-B marketing is about personal relationships between people and sales teams, creating a focus on spend on that area. There also appears to be a school of thought that B-to-B purchase are made on a purely rational basis and that money invested on branding is money wasted. Obviously this is a point of view strongly opposed by marketers. Another factor is that a lot of demand generation spend was going into the digital arena where it was perceived that it was easier to discern how much you were getting for your budget. The culture of the B-to-B space, where it has always been difficult to talk about brand was another factor. And it was summed up by one of the respondents as ultimately B-to-B marketing is like religion, you either believe in it or you dont.

Turning to the panel, Mabbott asked if they agreed that Brand v Demand was in fact, a false dichotomy? The first to respond was Joel Harrison. He was bullish in defending the strength of the proposition and stated that right now as we come out of recession its a question that should be front of mind for every marketer. Joel argued that the real issue is what should be leading, obviously there is an overlap but its up to individual marketers to decide on his or her priorities.

Fiona Perrin added that she thought that Brand and Demand go hand in hand. But that demand generation can only be achieved with strong brand building. Fiona added that if you inherit a brand with some equity (as she has) you need to invest to make the demand generation exercise happen in the right segments in the right way to make the right leads.

Richard Robinson agreed that brand still has a vital role to play, he used the example of a big branding exercise that creates demand, where do those potential customers go? You need to have exactly the right strategy in place. He admitted that today it is all about sales and demanding targets increase the pressure on marketers. With CEOs and Shareholders looking for instant results, this pressure looks set to increase.

Richard Mabbott then posed the panel a question on how a strong brand affected price premium. Fiona responded that in her experience, investment in brand building is a real help at the negotiating table and in getting on the right tender list. She spoke from personal experience of how clients wish to be associated with a well-known brand that stands for service and when it comes to the crunch, customers will pay a price differential for working with a brand as well known as HSS.

A question from Richard Mabbott about digitals evolving ability to capture demand led to a very insightful response from Googles Richard Robinson. He stated that in excess of 80% of B-to-B buyers are now looking for researching products and services online. Whilst the element of search can have an even more dramatic impact on how a brand is perceived, Robinson said that research had shown that one third of people who do an online search automatically assume that the brand that sits at the top of the page is the market leader. He told the audience how General Electric are one of the companies quick to grasp the brand impact of search. Their research has shown a rise in the number of people who have brand recall, increased affinity and more willingness to purchase from them depending on where they appear on a search results page.

Several other related topics were raised by people on the floor and the debate ebbed and flowed. But like two prize fighters that had fought to a standstill and given all they had got, ultimately Brand and Demand could not be separated. The result? An honourable draw.

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