DOES THE BRAND REALLY MATTER?
by Joseph Burns
The world of marketing is always creating and evaluating new concepts and ideas that will boost sales or profitability in the marketplace. As theories come and go, the concept of brand management still remains a constant for growth of market share and long-term profitability.
Despite its success, there are doubters to the value of brand management. In fact, some consider it mere marketing hype - a "$2" buzzword used to justify higher rates or as a substitute for real strategies. These marketers have limited the concept of brand management to the policing of logo graphics or to ensuring that a campaign has a singular message.
"True brand management takes into consideration every contact point with the market. It may include advertising, it usually includes the channel, and in all cases it includes the product and service," says Mark Vogel, executive vice president/brand management for Osborn & Barr Communications Inc., St. Louis.
To analyze the effectiveness of brand management, Osborn & Barr and Marketing Horizons, a St. Louis-based market research firm, have conducted a brand image study called the "Super Brand" since 1998. Conducted with growers in Midwest farm states, this study not only determines which brand attributes are most valuable to growers but also scores brands on how well they deliver upon those attributes.
LEADING BRANDS AND ATTRIBUTES
As in the previous waves of the Super Brand study, there have been four key brand attributes that have been consistently rated high by growers: Stands behind their product; Most dependable; Highest quality; and Best overall value.
"These attributes are no surprise," says Vogel. "Growers and producers are already dealing with tremendous risk. The grower cannot control conditions, including weather and commodity prices. They reduce their risk by selecting dependable quality brands that also offer good value."
Vogel also notes that most growers don't expect brands to be perfect, but that the companies behind the brands should be there to correct problems if they arise.
In both the 1998 and 2001 studies, John Deere dominated the product categories with the highest brand index score. In 2003, John Deere continues to show its strong brand management acumen in the agricultural market, enjoying a significant lead in the category of farm tractors.
Since the initial wave of the Super Brand study, the most notable brand emergence is the development of Roundup/Roundup Ultra in the soybean herbicide category. In the 1998 study, the brand index for Roundup was 15.6. Five years later, the brand index for Roundup is 40.5.
Within its category, Roundup/Roundup Ultra has always been a leader. In the 1998 Super Brand study, producers stated that the brands were "all about the same" on each of the 10 brand attributes. However, in 2003, producers perceived a clear market leadership position for the Roundup/Roundup Ultra brand, marking it as the leader in eight of the 10 brand attributes. Through proper brand communications, the Super Brand study clearly shows that Monsanto has increased its base of primary brand-users - from 53 percent in 1998 to 71 percent in 2003 - who proclaim Roundup/Round Ultra as the best overall brand.
In the category of farm trucks, Chevrolet/GMC enjoys a slight lead over Ford. However, both trump Dodge for the third year in a row. Although the two leaders scored similarly on the 10 brand attributes, Chevrolet/GMC was perceived more favorably as the best overall brand and best overall value.
In farm tractors, John Deere continues its significant category lead by more than a three-to-one margin over other brands. As the primary brand of more than half the producers surveyed, John Deere was rated as the best overall brand by almost all. Not the case with its competitors; only a little more than half of the competitors' owners rated their primary brand as the best overall. The only attribute where John Deere rated similarly to its competitors was that of lowest price.
Bob Jasper, president of Marketing Horizons, says John Deere is a perfect example of the importance of solid branding. "Although not rated as having the lowest price, John Deere continues to dominate the market by delivering a high-quality product through a well-qualified dealer network," states Jasper, who points to the research showing producers rated John Deere highly on the attributes of high quality, leader in technology and most qualified dealer/sales rep.
In some of the lower ticket items such as corn and soybean seed, the dominant brand for the third year is Pioneer, which was rated as the best overall brand of seed corn and soybean seed by 42 percent and 26 percent of producers, respectively.
Also making a showing in the cross category brand index, Pioneer seed corn excelled on the brand attributes of leader in technology and highest quality. Both DEKALB and Golden Harvest made inroads with primary brand-users who increased their perception that their primary brand was the best overall brand by 22 percent and 27 percent, respectively.
New to this year's Super Brand study were the categories of tractor tires and operational/seasonal crop loans. In tractor tires, although many producers perceive all brands to be "about the same," there are two brands vying closely for category lead. Firestone/Bridgestone, with a slight lead, and Goodyear both rated similarly on brand attributes with Michelin third. Michelin users were less than half as likely to view all brands as being the same on the attribute of best overall brand.
In the market for operational/seasonal crop loans the Super Brand study found that a disjointed brand rules the category. Four in 10 producers associate their local bank with the attribute of best overall brand, and 69 percent list it as their primary source for operational/seasonal crop loans. Local banks enjoyed the highest rating on eight of the 10 brand attributes in the study.
DEALERS STILL IMPORTANT
Although it does not replace the value of a strong dealer network, the Internet is one of many tools for building your brand. Added to the survey in 2001, Internet usage by producers has remained fairly consistent for information gathering and has increased in terms of online purchasing. The recent Super Brand study reveals that the number of producers purchasing online has doubled in the past two years. But Vogel warns, "Companies shouldn't make the Internet their primary sales strategy." He notes that although online purchasing has increased, the percentage of producers this represents is still quite small. "The Internet is a useful tool for communicating your brand but not for sales. As the Super Brand study results demonstrate, there is intent by producers to purchase online; however, much of this intent is not translating into actual online sales."
What can marketers learn from this research? "Good brands deliver what they are intended to deliver," says Steve Barr, chief executive officer at Osborn & Barr. "Properly managed brands reflect dependable performance on the expectations of the market. This leads to a brand relationship based on trust."
"As with most industries, agriculture also enjoys the benefits of proper brand management," says Barr. "Having a strong brand not only makes the challenge of marketing easier, but there is a direct correlation between the strength of the brand and sustainable market share and profit."
To learn more about the Super Brand study and how to strengthen your brand, contact Mark Vogel of Osborn & Barr Communications at (888) BELIEF-2. You can read more about the study in the June issue of Agri Marketing. AM
Joseph Burns is a market planning manager for Osborn & Barr Communications Inc., St. Louis.