Management
Date: 18.06.2014
Page 28­29
Article size: 731 cm2
ColumnCM: 162.44
AVE: 200618.88
fits in the 4P puzzle
Strategy requires broad thinking
and assessment of the environ­
ment to give a wholesome picture
and allow for decision making
By THRITY ENGINEER
Strategy is a complex sounding word that
tends to evoke some trepidation and fear
within managers. Many definitions of
strategy put together by experts seem to have the
general consensus that a strategy is a plan of how
to get from one point to another. It encompasses
the 'what' of what is required and the 'how' it will
be done. The term strategy is taken from a military
context and more commonly applied to a business
context. It involves deployment of resources in
order to achieve a particular set of goals. Usually
long term in nature, it requires broad thinking and
assessment of the environment to give a whole­
some picture and allow for decision making,
In organizations, strategy can be deployed at
many levels. It could be focused at the corporate
level where the organisation plans on how to move
forward and achieve its set objectives and distribu­
tion of products or pricing for all brands. Strategic
focus could also be at the brand level where em­
phasis is placed on the brand and the goals set out
for it. It is also possible to have different strategies
for different brands under an overall corporate
strategy.
Making money and making profit
Generally, organisations are in business to make
profit. It is important to distinguish between
making money and making profit as it is possible
to make sales with very little profit or none at all.
Profit is what remains after all expenses have been
taken care of and management of this process is
what the finance experts keep a keen eye on. The
they would most definitely require a plan of how
to go about this. Organisations have brands in form
of either products or services that generate income
for it, A brand strategy therefore is defined as a long
term plan that leads to the development and growth
of a brand resulting in increasing sales, increasing
market share and by implication increasing profit­
ability.
The famous 4Ps that are synonymous with
brands are on product, promotion, pricing and place
sheet. Therefore the bottom line number is the
(distribution). They are intertwined and form the
most important number that is watched keenly by­
basis of the strategic direction of a brand. Brand
managers and shareholders alike.
strategy decisions cannot be made without deep
If businesses exist in order to make profits, then
analysis of these Ps.
value of sales is referred to as the top line and the
profit number is referred to as the bottom line,
based on the technical profit and loss accounts
Product
The telecommunications sector is a good example of customer needs, First it was voice and text messag­
where the product keeps changing in order to meet
Ipsos Kenya ­ Acorn House,97 James Gichuru Road ­ Lavington ­ Nairobi ­ Kenya
Management
Date: 18.06.2014
Page 28­29
Article size: 731 cm2
ColumnCM: 162.44
AVE: 200618.88
ing, now the focus is on data. The strategic focus of
increasing offerings is for more products to be avail­
able to increase revenue streams. For purposes of
our discussion, we shall make the assumption that
increase in sales mean increase in profit. Finance
experts will be quick to point out that this is not
always true.
Pricing
Interestingly the P of pricing has a lot to do with
impact on the bottom line. When brands are priced
higher than the average competitors', there is a spe­
cific market segment that may or may not purchase
the brand. When the price is much lower than the
average in the market, customers question the qual­
ity of the product. Higher prices mean value can be
achieved by selling lower number of units whereas
the converse is true of low prices, which require
sale of more items. The organization also has to set
prices that cover its costs and turn in profits.
How does strategy play a role? As part of strat­
egy, the brand has to be positioned for a particular
segment. This way, one could either go for a low
priced product within the mass market or a high
priced product for niche markets. Pricing for a
brand can also be impacted by strategic decisions
made by the overall organization. The choice to
penetrate the mass market requires a completely
different approach and skill set compared to niche
marketing.
An organization could also decide to have dif­
ferent brands with different pricing strategies to
capture different market segments, A good example
is the pharmaceutical industry which has high end
original brands and cost effective generics available
for different market segments. The strategy here
is to capture maximum market share in order to
increase the bottom line.
Promotion
Brand promotion also depends on brand strategy.
In this case, strategy is dependent on the identified
market segment, life cycle position of the brand and
the competitive environment. For instance, a mature
product already known by its target audience
requires a reminder approach to bring about repeat
use as opposed to a new product where focus is on
first creating awareness and needs before roping in
customers.
Media that reach the masses of population
would be used for communication messages on
brands for milk but channels that target high end
customers who can afford luxury handbags, like
exclusive magazines, would be more appropriate.
Ipsos Kenya ­ Acorn House,97 James Gichuru Road ­ Lavington ­ Nairobi ­ Kenya
Management
Date: 18.06.2014
Page 28­29
Article size: 731 cm2
ColumnCM: 162.44
AVE: 200618.88
Promotional budget also differs depending on chan­ today's world, use of social media also plays a role
nels or media chosen. The expenditure on the bud­ in executing brand strategy. Depending on how this
get directly impacts the bottom line since it becomes is used, and for what segment, it can be more cost
an expense. Billboard advertising is more expensive effective and attractive to the bottom line position.
than handing out fliers at the local car park. In
Distribution
Ipsos Kenya ­ Acorn House,97 James Gichuru Road ­ Lavington ­ Nairobi ­ Kenya
Management
Date: 18.06.2014
Page 28­29
Article size: 731 cm2
ColumnCM: 162.44
AVE: 200618.88
The P of place or distribution has not been given the
right attention. What of the brand strategy for avail­
ing product and making the product accessible?
A brand of milk which is a commodity item needs
to be available at every small kiosk but a brand of
luxury handbag would be more appropriate in a
high end shopping mall perhaps in the capital city
of a country. This is where correlation with pricing
and promotion comes in.
One of the biggest mistakes that managers make
is expecting instant results from brand strategies
without identifying factors that need to be care­
fully assessed. Brand strategies can be changed if
the plan does not seem to deliver expected results.
However, constant change can result in a brand
losing direction and focus. It is better to have a poor
strategy with strong tactics than a fantastic strategy
with poor execution .Strategic focus and direction
is set right from the top of the organization while
corporate strategy sets direction for brand strate­
gics. Occasionally, there may be more than one
strategy that has the potential to succeed. Careful
assessment of both external and internal factors can
provide clues as to which might succeed more rap­
idly. There are many paths one can take in coming
up with bTand strategy and all may lead to the same
end goal. Some however take long bumpy paths
whereas others take shorter smoother ones.
In order to generate sales and increase revenues,
the product or service needs to meet customer
needs and expectations, Without this, no strategy in
the world, whether at corporate or brand level will
succeed. Delight your customer and you will see the
impact on your bottom line! ¦
fa^The famous 4Ps that are synonymous
with brands are on product, promotion,
pricing and place (distribution). They
are intertwined and form the basis of the
strategic direction of a brand."
Ipsos Kenya ­ Acorn House,97 James Gichuru Road ­ Lavington ­ Nairobi ­ Kenya