The thin red line

The brands’ capacity of expansion

Have you ever wondered why some brands stand the test of time in a better way than others? Or… why do some brands constitute the base for a wide product diversification while others can only bear only one reference? Finally, why do some brands constitute the entrance to a wide user’s experience and retail model while others have remained as an old relic? One may think that the answers to these questions are behind the companies that carry the brand, the number of resources they are allocated or simply, the amount of money they assign to advertising; this is probably true for those brands which develop within very trivialized spaces or support products or services with scarce added value; nowadays this is no longer valid for the remaining ones. Brands support themselves thanks to a series of tangible and intangible assets that make up their real value: Tangible value is that which defines the position of real value in the market; intangible asset is that which shapes the position of the brand on the consumer’s mind. The relation between tangible and intangible assets gives growth and expansion possibilities to the brand. The brand’s capacity of commercial expansion is closely related to the capacity of providing the consumer with real and perceived value permanently; that is, the capacity of making progress along with him/her.

The brand’s capacity of commercial expansion is closely related to the capacity of providing the consumer with real and perceived value permanently; that is, the capacity of making progress along with him/her.

One of the most sensitive aspects for success consists of defining the brand’s ‘opportunity territory’ appropriately; that is, that area of performance where every type of product and service that is registered inside it generates the brand’s value and offers its feedback. The opportunity territory or area is shaped by two axes: The brand’s umbrella of value or the definition of its strategic position (the extension of its route) and the area of performance defined by ‘the red line’, its opportunity territory (the depth of its route). The ‘red line’ of a brand constitutes a very subtle and sensitive frontier between success and failure, which defines its credibility; as we have already mentioned everything we may build inside it offers feedback of the value of all the supply; those proposals outside its area destroy the value of what has been built globally. The area defined or the ‘opportunity territory’ is in constant evolution and movement, it is determined by the evolution of the target at which the brand aims. The evolution of the target is defined by three axes: 1-Biological evolution, age growth of the target. 2- Cultural evolution, increase or decrease in the cultural level of the target and finally; 3-Economic evolution of the target, the increase or decrease in its purchasing power. A brand must be elastic enough to stand these evolution types; when we are faced with a global business model of brands, they must be focused in order to meet the target in its different evolution stages. This is the existing difference between, for example, brands like Benetton which meets a specific target at a given time of its biological line, taste and purchasing power level and the Grupo Inditex (mega brand) which meets its target’s evolution stages with different brands. Developing and diversifying a brand does not result from coincidence or improvisation on the basis of managing events. A brand that stands the test of time is one which has been planned with this purpose, whose opportunity territory has been well defined and where the evolution of the red line is well monitored and the opportunities inside it have been classified in their exploitation tempo. Short-, medium- and long-term. Short-term opportunities will refer to those opportunities that naturalize the brand and the opportunity; the organization has all its assets to develop them and the focus will be on increasing the perceived value of products and services: on increasing the margin. E.g. Turning a toy supply into childcare products. Raising the perceived value and the margin of products. Medium-term opportunities will refer to those opportunities whose main assets are comprised within the organization, but it is necessary to develop part of them as a form of new knowledge, development with other brands, the conquest of the channel, etc. E.g. Gaining access to a cosmetics line for children by means of co branding actions with a cosmetic laboratory. Exploiting the assets of the brand. Long-term opportunities will refer to those opportunities that require, for its complete comprehension, the settlement of some short-term or long-term opportunities in order to be understood by the target public without a break in their mental positioning. E.g. Structuring a spin-off of our toy company to exploit experiential trips with our family. From product to service. Consequently, to exploit the possibilities of a brand fully it is necessary to have its opportunity territory always updated; it is like the physical ‘cartography’ of the brand. Drawing an analogy, we turn our brand into a valley we want to exploit, before going deeper into it and being able to go wholly through it, we must have a global understanding of its orography (opportunity territory), then we shall plot the roads we want to cover (opportunities) and over them, we shall draw up the means of access, the rhythm and the order (prioritization of the opportunity). How many companies with a brand have their cartography drawn? How many of them revise it periodically? And, finally, how many of them consider it as an opportunity undergoing constant evolution?

Antoni Flores- CEO Loop-CN

 

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Mª Luisa Vives – Jaime Gross

Welcome! from Loop want to share our projects, our vision, our way of doing things, the success of our customers, our news and those who might be of your interest. In this blog you will find notes on methodology, step by step procedures, tools, techniques, news, case studies, lessons learned, thoughts on creating new business models and above all our enthusiasm for contributing to the success of our customers, which is our success.

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