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BRANDING REFLECTS THE MARKET STATUS!

Jun 27, 2018

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BRANDING REFLECTS THE MARKET STATUS!

During my 15 years as head of marketing for Eckerd Drugs, we constantly monitored what our competition was doing to gain market share.  Not just other drug stores, but discount stores, food chains, and direct mail

sources needed to be watched to be sure we could keep our market share growing and our top-of-mind awareness at its peak.  Of course, there is always one direct competitor a store watches more closely than others and for us, it was Walgreens.  While they were in more states and markets than Eckerd, and (at that time) we had the top share in almost all markets, they were the most like us and often were right across the street vying for the same customers.

 

During the ‘80’s, I never was that concerned that Walgreen’s would beat us in advertising.  While they were aggressive with weekly promotions and multi-media budgets, their ads were pretty mundane and repetitive, and they never scored highly in the ad research that we conducted.  However, where they excelled was in their expenditure to develop the digital systems that would provide them with more timely sales and inventory data than we could only hope to imagine.   This insured that they would have the right items in the right stores in the right quantities.  As we learned in our own strategic research, this would be a dramatic competitive advantage as they matched Eckerd store for store and their market share reflected it was working.  As Walgreen’s grew and Eckerd dissolved, this capability also enabled them to communicate more effectively and more directly with their customers on an ongoing basis and that has paid great dividends in building loyalty and increased sales per store and per customer.

Add to this technology an aggressive growth plan with new stores and acquisitions, and it’s not surprising that Walgreen’s is a major factor in the total US economy.  So much so, that las week the company replaced General Electric as one of the benchmark Dow Jones

Industrials companies.  However, it is more than just significant revenue growth.  Walgreen’s has built its brand on an understanding of what has happened to the US economy and to the country’s consumer buying habits.We are becoming a service-oriented country and with the increased demand for health care products, it has served as a perfect storm for Walgreen’s to grow its market share despite even more competition than ever before.

General Electric is no slouch, but the company that Jack Welch built, I believe has been more focused on organizational systems and structure than it has on understanding where the customer growth is really coming from.   Yes, they are still a factor in consumer appliances and related products, but their major focus on everything from jet engines to media networks to railroad locomotives has made it less representative of what is impacting our economy and the American consumer.

It’s critical to anticipate customer trends well in advance—as Walgreen’s did in the early ‘80s by committing to technology—in order to be ready to respond not only in marketing but in having the infrastructure and logistics to be able to meet the changing needs.  Only then, can a company improve and build its relationships with its customers and remain relevant with it marketing messages and its offerings.  The successful companies today (and tomorrow) are the ones who realize that their brand is not just a marketing slogan or new name, but rather it is the relationship with a customer who sees value in doing business with them now and in the future.