Today’s topic is “how organization age and size affect brand management issues.” I recently had a conversation with a group of peers whose companies provide brand management and marketing services to a wide spectrum of organizations. During the course of our conversation, it became clear that brand management issues differ significantly based on the age and size of the organization.
A key role of brand management is to create and reinforce an identity that promises relevant points of difference to consumers. Smaller, younger organizations have an advantage in this area for a number of reasons:
Leadership
Smaller|Younger Organization: An entrepreneur with a vision and passion
Larger|Older Organization: A seasoned executive with experience in running large, complex enterprises
Size
Smaller|Younger Organization: A small number of people who work closely together and often share the entrepreneur’s vision and passion
Larger|Older Organization: A large number of people in different divisions and departments with different functional backgrounds and allegiances, often very much decentralized
Business Scope
Smaller|Younger Organization: Usually focused on one core product or product category
Larger|Older Organization: Usually offering a wide variety of products and product lines, many times in multiple business categories and even in different industries
Brand Structure
Smaller|Younger Organization: Usually one brand
Larger|Older Organization: Often very complex including multiple brands, sub-brands, endorsed brands, etc.
Organization Infrastructure
Smaller|Younger Organization: Rapidly being built to support the entrepreneur’s vision
Larger|Older Organization: Many assets, systems, processes, organizational levels, etc. Very difficult to change.
Corporate Culture
Smaller|Younger Organization: Usually strong based upon the entrepreneur’s personality.
Larger|Older Organization: May evolve as new top managers are added. May be very strong based upon the legacy of a strong founder or a current strong leader. Companies that have long and rich histories often have entrenched cultures.
Marketplace
Smaller|Younger Organization: The business category is often in its infancy with many positioning possibilities for a new company.
Larger|Older Organization: Industry is often mature or maturing. Sometimes declining. Competitors are much more entrenched with few, if any, viable marketplace positions not taken. (Recently deregulated industries provide notable exceptions.)
Decision Making
Smaller|Younger Organization: Usually very quick with fewer decision-makers.
Larger|Older Organization: Depending on the organization design, the decision making process can be very cumbersome.
Financial Resources
Smaller|Younger Organization: Often scarce as the organization is growing rapidly and reinvesting all available cash flow. May be less scarce after an IPO.
Larger|Older Organization: Usually substantial including cash flow and borrowing capacity.
Primary Marketing Method
Smaller|Younger Organization: Publicity
Larger|Older Organization: Advertising
Brand Identity
Smaller|Younger Organization: Often evolving, but easier to encode in standards and systems (because the organization is starting with “a clean slate”).
Larger|Older Organization: Often strong and entrenched, but more difficult to codify due to the scope and complexity of the enterprise and the inconsistencies that have arisen over time.
Brand Awareness and Esteem
Smaller|Younger Organization: Usually low or non-existent
Larger|Older Organization: Often high
Brand Differentiation
Smaller|Younger Organization: Usually very high
Larger|Older Organization: Usually declines over time as more and more competitors enter the market
The first two laws of branding in Al Reis and Laura Reis’ book, The 22 Immutable Laws of BRANDING are as follows:
* “The Law of Expansion: The power of a brand is inversely proportional to its scope”
* “The Law of Contradiction: A brand becomes stronger when you narrow its focus”
Clearly these first two laws favor smaller, younger organizations.
Brand identity firms will tell you that often they can create much stronger brand identities for smaller, younger companies because those companies have fewer constraints (existing logos, store décor and signing), more focused businesses and stronger business visions. They also have a more coordinated marketing function (often a department of just a few people). Conversely, large organizations usually have separate product development, advertising, promotion, public relations, sales and marketing research departments (to name a few).
Please stay tuned, tomorrow we’ll continue with a look at the most likely brand problems of small and large organizations.
The Blake Project Can Help: Please email us for more about our purpose, mission, vision and values and brand culture workshops.
Branding Strategy Insider is a service of The Blake Project: A strategic brand consultancy specializing in Brand Research, Brand Strategy, Brand Licensing and Brand Education
One comment
Ted Grigg
August 20, 2007 at 8:53 pm
Lack of clear vision in large organizations runs rampant in corporate America. As companies grow bulk, they become inward focused and loose the vision that comes from serving its customers.
Peter Drucker said that corporations of the late 90’s began to dedicate their energies trying to please shareholders rather than focusing on their customers needs.
How can you re-enforce your vision when you’ve lost your reason for being? Without vision, the brand looses its power.
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