Of the “4Ss” driving Ipsos’ new “Game Changers” strategy (Security, Substance, Speed, and Simplicity), I have a particular passion for Simplicity.  And if there’s one area of consumer research that can really benefit from being simpler, it’s the one I head up for Ipsos in the US:  MarketQuest, which focuses on foundational market understanding and brand strategy.

So how many books on brand strategy have you read?  Have you noticed that most of them profess to be simple, but then rattle on for over 200 single-spaced pages?  How often have you browsed HBR’s, McKinsey’s and other sites to read about the latest thinking on brand strategy?   Have you ever wondered why there are so many ways to think and talk about something that’s so simple?

Let me practice what I preach by keeping this article as simple as possible.

Every company with a brand should have a brand strategy.  After working with hundreds of companies around the world for many years, we know there are four fundamental questions every company must answer to set their strategy.  Together, the answers to these four questions ARE your brand strategy.

Here are …

The 4 Strategic Questions

  1. How are we going to grow?
  2. Who is going to drive our growth?
  3. What must we do for them?
  4. What must we say to them?

Pretty simple, right?

And, there are some very simple conceptual models that can be used to help you answer each question, including a few “Alphabet” models like the “3Cs,” “5Ws”, and “7Ps.”

Let’s talk about each of the 4 strategic questions …

1st Strategic Question:  How are we going to grow?

At Ipsos MarketQuest, we leverage survey data as well as sales data from IRI’s household panel to help companies prioritize which of the key levers of revenue growth they should pull.  For example, for beverage brands, the key revenue levers can be expressed in this “Levers of Growth” equation:

            Revenue = Volume * Price per Volume

                              = [Buyers * Frequency] * [Price per Volume]     

                              = [Population * Penetration * Transactions * Units per Transaction] * [Price per Unit]

If we’re focused on beverage consumption in terms of ounces, we use a slightly different equation:

                Ounces = Consumers * Ounces per Consumer

                                = [Population * Penetration * Occasions per User * Ounces per Occasion]

To keep this simple, I won’t discuss the variety of marketing tactics typically employed to improve each lever, but here’s the point:  we help companies decide which levers are most important and how they should be prioritized.  How much growth can they achieve from getting more buyers/users, more transactions/occasions and more units/ounces per transaction/occasion?

How much a company invests in each lever is often, but now always, the first strategic decision they make, and it has huge strategic implications for their short and long term business growth.

2nd Strategic Question:  Who is going to drive our growth?

I bet when you read this question, you immediately thought about consumers (or buyers).CA_Hammering at the ceiling_LG

That’s right, but we also think about channels and competitors.

Together, consumers, channels and competitors are what we refer to as the “3Cs” of every marketplace.  As in:  Consumers go to the marketplace through different Channels to choose different Competitors.

A good brand strategy thinks about all “3Cs” iteratively.  Most companies start with Consumers, as in:  We now know we want to target these consumers; therefore we need to be strong in these channels and steal share from those competitors.  Other “solve the 3Cs” by starting with Channels, as in:  Walmart just agreed to give us half the shelf space; therefore these are the consumers we need to target and competitors we have to compete against.  Regardless of which “C” you start with, every company has to know who – consumers, channels, and competitors – are going to drive their growth.

3rd Strategic Question:  What must we DO for them?

Once you know 1) which revenue lever(s) you’re going to pull (the “Levers of Growth”), and 2) which consumers, channels and competitors are going to drive that growth (the “3Cs”), then you have to decide what you’re going to 3) do for your key consumers and channels, and 4) what you’re going to say to them.

To answer the 3rd and 4th questions, there are two “alphabet” models that are very helpful:

The “5Ws”:  Who’s doing What, When, Where and Why? and

The 7Ps”:  Product, Package, Price | Place, Placement, Presentation | Promotions/Communications

You’ll notice these two models are aligned.  For example, “What” lines up with “Product, Package and Price,” and “Where” lines up with “Place and Placement.”  But, the models are also different and complimentary.  The “5Ws” views the world through the lens of consumers – what are they doing, when, where and why?  The “7Ps” views the world through the lens of the brand – what does it have to deliver to consumers?  To grow, companies must successfully view the world through both lenses.

There are many things companies can DO to grow among their key consumers and channels based on their strategic understanding of the “5Ws” and “7Ps.”

For example, based on what their consumers (or buyers) are doing (and when and where they are doing it), companies choose to focus on improving existing products, developing new packaging innovations, raising or lowering prices and/or updating POS and other in-store displays.

4th Strategic Question:  What must we SAY to them?

Companies must also SAY the right things to their key consumers and channels in order to grow.CA_Tabloid-LG

As above, based on (the “5Ws”) what their consumers (or buyers) are doing (and when, where, and why), companies must decide how to (the “7Ps”) promote their brands – through all channels of communication including traditional and digital.  Advertising and media decisions are critical as are in-store and retailer promotions, but the messaging and content of all brand communications including on packaging as well as displays are all critical determinants of future growth.

OK, that’s it.

It really is pretty simple.

Just do a good job answering the 4 strategic questions using some of the helpful conceptual models, and you’ll have a solid brand strategy.

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