6. The brand owners

6.

The brand owners

Brand owners own the brand behind a product and the big ones invest millions of dollars to secure, protect, and add value to their brand. The brand value reflects what we as consumers are prepared to pay for the product. In between the brand owners and us as consumers, we normally have the retailer as the last link in the chain before the products reach the consumer as the end user.

The brand owner plays the role of a mirror to us consumers, eager to fulfill all of the expectations with the best illusions. If there is tough competition within the market, the reasons for how a consumer decides boils down to what attracts them the most: the brand illusion. If it’s a market with less competition, there is also less need for marketing the brand. For instance, in the past there was only one supplier of milk and really no need for branding. Products like cosmetics find themselves on the other end of the scale. The product inside the package, like perfume, is the “same” (if you’re harsh). So how to differentiate all of the fragrances from each other? This indicates more value to invest in branding and containers, wrapping, and packaging. The brand owners play all these parameters very sensitively and there is a lot of money involved. In my previous book, I call this the ICDT model (Information, Communication, Distribution and Transaction), if you want to read more about how this game works. Today, branding influences and has an impact on all types of products and the consolidation among brand owners is brutal.

If we look at the polarization of today, we find globalization on one end and localization at the other end. Yet they are two trends that work simultaneously. In localization, we find new and small brands that act and attract fast, much faster than the big ones, which drives off customers’ new demands and needs. In Sweden, small beer breweries are a perfect example, as we today are the leader in the number of breweries per capita. Over 400 new small beer brands have been registered at the Swedish government-controlled “Systembolaget”. These small beer brands gain premium market shares rapidly and win against the big brands. This is really painful for the big brands and shows that they offer low value and don’t attract the consumers in that market anymore. Why? Well, big brands are just big which also makes them slow to change. This is bad news when they have the same demand as any brand to follow the consumer’s change of values. With new needs come new demands. The polarization drags the big ones away and opens up a market space for the small high value brands: the new, fast, and brave ones.

“It is not the strongest of the species that survives, not the most intelligent that survives. It is the one that is most adaptable to change.”

- Charles Darwin.

Gen Z

Born 1995-2012

Gen X

Born 1966-1976

Gen Y Born 1977-1994

MARKET DEMANDS CHANGE

Boomer Born 1946-1965

Today, consumer patterns are driven more by illusions and expectations that develop rapidly every day, month, and year. Added value will always compete well when the price and cost are involved. We must understand how, and in which order, the consumers value this, depending on the type of product and time. In the grocery store, most decisions are unplanned, over 70% happens within a blink of an eye, in 0.3 seconds. The execution will then come in the next 3 seconds. Brand owners must have attractive products that stand out on the store shelf.

Therefore, market demands and needs change and develop over time. Let’s summarize and add the knowledge and progress of generations on top of this. Their specific characters also drive transformations to happen. ■ Generation Boomers (born 1946-1965) are living longer and longer. We (I am one of them) in the Western world live 4 extra years per generation. Boomers also in many respects have a healthier economy compared to previous war-generations. Even if the market changes toward the younger generations X, Y, and Z, there is a lot of business to be done here if the brand owners can convince and please us Boomers – if they can make life easier by adding value, creating illusions, and satisfying the high expectations of this generation. ■ Generation X (born 1966-1976), sometimes referred to as the lost generation, was the first generation of “latchkey kids” exposed to lots of day-care and divorce. Gen X is often characterized by high levels of skepticism, “what’s in it for me” attitudes, and a reputation for making some of the worst music to ever gain popularity. Now, moving into adulthood William Morrow (Generations) cited the childhood divorce of many Gen Xers as “one of the most decisive experiences influencing how Gen Xers will shape their own families”. Xers are arguably the best-educated generation

■ with 29% obtaining a bachelor’s degree or higher (6% higher than the previous cohort). And, with that education and a growing maturity they are starting to form families with a higher level of caution and pragmatism than their parents demonstrated. Concerns run high over avoiding broken homes, kids growing up without a parent around, and financial planning. Generation Y (born 1977-1994) is the largest cohort since the Baby Boomers. Gen Y kids are known as incredibly sophisticated, tech wise, immune to most traditional marketing and sales pitches. Why? Well, they not only grew up with it all, they’ve seen it all and been exposed to it all since early childhood. Gen Y members are much more racially and ethnically diverse and they are much more segmented as an audience aided by the rapid expansion in cable TV channels, satellite radio, the Internet, e-zines, etc. Gen Y are less brand loyal and the speed of the Internet has led this cohort to be similarly flexible and changing in its fashion, style consciousness and where and how they are communicated with. Gen Y kids are often raised in dual income or single parent families, have been more involved in family purchases, everything from groceries to new cars. One in nine Gen Yers has a credit card co-signed by a parent. Generation Z (born 1995-2012). If you see “what’s in it for me” in generation X, here we have the true “ME and more ME” generation. Higher levels of technology will make a significant inroad in academics allowing for customized instruction, data mining of student histories to enable pinpoint diagnostics and remediation or accelerated achievement opportunities. In addition, here, most of the general market trends change and moves forward into the next and new paradigm shift. More about the paradigm shift later in this book.

TIME-TO-MARKET

Going from analog to digital, T2M is one of the big differences that will add value. Everything goes faster and faster, today and tomorrow, and delivering on time is crucial – including product launches, new variations (SKU:s) and regionals (language), events (timing), private labels (co-branding), personal looks and attractions (personalized). Production according to demand from consumers, the real need of the market, instead of warehousing in case of a coming need. This transformation is also a disruption; cutting out links in a chain, making a new shorter and more powerful chain that will supply more for less. Many other segments in the industry have already gone through transformations with technology disruptions, like the car industry, TV, computer, mobile phone, and banking. We’ll see more segments going down this road also in the future, like sustainable energy harvesting, clean water everywhere and the next level of banking (blockchain), etc. YES – packaging is happening now, it’s lining up to become digital and on demand instead of producing to stock.