The brand value chain

The majority of companies that still follow the main principles of the
industrial economy will face great difficulties in the value economy
of the future. When the company defines itself by its products, far
too many resources will be tied up in the product system.
Alarm bells should ring when investment in products, services,
divisions and departments are inflated when compared to a
companys actual market access. Fortunes are spent on
developing new products without taking a critical view on their
relevance in the market.
At the same time companies will find it increasingly difficult to
push their new products through the value chain to the people
who are epected to buy them. !t is becoming still more difficult
to penetrate the communication flow and the more products
that are fighting for the same resources, the less these
resources will suffice.
"rand #alue $hain is a model that illustrates the fact that the
company must change its focus to win the optimal value position.
!n contrast to the traditionally thinking company that optimises itself
according to its products, the mantra in "rand #alue $hain is the
concept that in the future, the company must optimise itself
according to its value position.
!nternally, the employees must be made to understand the value
position and its importance for the companys eistence. The value
position must be made relevant and present so that the employees
understand how they, through their daily work, can contribute to
the company achieving the desired value position.
%ternally, the company must send a clear signal through its
collective behaviour about which value it offers to the market. This
can be effectuated through the product programme, its customer
relations and through all its marketing and communication.
To win a strong market position the company must pull in the same
direction in everything that it does. The companys strategy and
actions must be optimised according to how the company can
achieve the desired value position.
The "rand #alue $hain way of thinking works with & focus
points'
To successfully enter the value economy, the core of corporate
strategy must be the optimi(ation of the brand value chain. )nly
then can it win the best value position in the market. The entire
company must be built and shaped according to the brand. The
brand value chain mindset'
*. +efining the value position you want in the market, depicted
as a circle to the very right of the figure, is key.
,. At the far left link in the brand value chain it is important to
appear as one company. )nly a single, centrali(ed company is in a
position to be uni-ue. !t has a soul and is a living organism.
.. The company must be built into a brand because the brand
mindset is good at gathering and communicating a set of values
and attitudes eternally and internally.
/. 0ou must develop a brand culture that can hold the brand
together globally.
1. !t is important to define the product programme on which you
focus when building a brand position in the market.
2. 0ou must define the most important target groups for the
brand, both those who buy the brand directly and any indirect
decisionmakers, who are often the most important carriers of
value. +irect connection to these decision makers must be made
via a brand relation management system.
3. 0ou need to build a consistent and value4accumulating brand
communication that focuses on the brand and not on a lot of
different product launches.
&. The brand communication must deliver the brand position in the
market, which should e-ual the value position you wish to
capture.
The "rand #alue $hain way of thinking leads to a strategy in which
the company must focus on becoming brand oriented instead of
product oriented. 5se the model as a checklist when preparing a
status of the companys branding strategy.
!n addition to this the company can use the model to take a critical
look at the way resources are being spent.
!t would be utterly incorrect to think that branding is all about
spending more money on marketing. !t is about reallocating the
companys resources so that more is spent in the customer
system and less in the product and distribution system. !t is about
organisational changes, creating an efficient marketing system etc.
To illustrate this you could look in your warehouse and note how
many brochures for the last products you introduced are still there.
!f you epand your survey to include subsidiaries and distribution
system, you are guaranteed to become depressed.
)r you could check out the companys investments in new
machinery and product development costs. What would it mean to
the strength of the companys brand and market position if these
were cut down by *64,678 $ould this money be better spent
somewhere else8