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Staying On Course In The Crisis
2009-11-17

Staying on Course in the Economic Crisis

 

Even the manufacturers of powerhouse brands need to be proactive in difficult economic times. What solution is best for brand management? Does standstill mean the death of a brand? How great is the risk of losing loyal customers by relaxing proven principles? For many this proves a tight-rope walk between tradition and reform.

 


“Brand belief – brand treason”: this was the motto of this year’s Packaging Dialogue held at the German Packaging Museum late October. After all, the economic crisis has not even stopped short of strong companies and even tradition-rich enterprises have suddenly come under pressure to act.

Brands Destroy Themselves

“Brands are always destroyed from within”. This is at least the thesis put forward by Prof. Dr. Klaus Brandmeyer, General Manager of Brandmeyer Markenberatung GmbH & Co. KG in Hamburg. Brandmeyer is a leading expert in brand strategy who believes that the decay of brands is predominantly self-inflicted. Because those undertaking arbitrary marketing measures just in order to push efficiency may do irreparable damage to their brands. This is why he recommends laying down internal rules that protect the brand core. Dr. Oetker is a case in point: its managers are prohibited to commission market research and studies on the firm’s signature design in order to protect it against the arbitrariness of individuals.

“Three Way Harmony”


Also attending the dialogue as a representative of an international B2B brand was Ryuichi Ishida, President of Ishida Co. Ltd, Kyoto. The founder and President of this global market leader explained how his mechanical engineering company built its strong image and managed to retain its brand strength even in difficult economic times. His lecture did not focus on his company’s technologies and sales success but rather elaborated on the basic principles of the enterprise, which has been in existence for over 100 years now thriving on traditional family values.


A major crisis in 1960 caused Ishida’s father to make new demands: everything done from that point in time was to be beneficial to the company, its partners and to society at large. So right up until today this concept is still referred to as “Three Way Harmony” at the company. Back then Ishida said he had already learnt that self-commitments such as these were instrumental to overcoming crises. To him the basis of a strong brand is for it to be needed, recognised and loved by society. To him crises are unavoidable but there are lessons to be learnt. With committed staff who are treated with respect, who share and fight for values and are involved in decision-making processes, it is possible to survive tough times like these – he is convinced.

Understanding Brands

Since 1888 “Gerolsteiner” has developed into one of Germany’s most popular mineral waters. Another strong brand faced with the decision time and again – to innovate or do things the traditional way? Axel Dahm, recently appointed CEO at Gerolsteiner, thinks it essential for brands to be understood by consumers again. As an initial step he decided to consistently downsize the portfolio and to focus communication on Gerolsteiner mineral water and its properties.


Emil Underberg, Managing Partner at Underberg AG, used the “Asbach Uralt” brand re-launch as an example in his lecture; remaining true to the brand without looking old-fashioned; acting with a sense of tradition that is not mistaken for standstill. Even the minutest changes to such a traditional brand can make consumers turn away from it. And yet – new trends must be embraced without “running” after the zeitgeist. Minor changes have strengthened his brand and generated rising sales even in times of crisis.

Service as a Brand

Such minor changes are a challenge that designers, in particular, have to rise to. Christian Schwamkrug, Design Director of the Porsche Design Studio, explained the contribution of brand design to brand loyalty. His branded product is a service rather than a product. Everything developed under the Porsche Design brand – ball pens, desk-top luminaires or refrigerators – must fit the design philosophy of the company. The studio’s claim is “engineers of passion”, i.e. emotions and passion for long-term customer loyalty must be created. As an example of this Schwamkrug mentioned the new Veltins beer crates.

 

Taking the right decisions for brand management at the right time will often remain a tight-rope walk. But it can be done: examples being reliable entrepreneurship and sustainably successful brand management. And this allows you to stay on course – even in slow-moving economic times.

 

Source: interpack

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