Geek Time: Cannabis Branding 101
Few business concepts in cannabis are more misunderstood and misapplied than branding. As recreational cannabis evolves into a CPG-like industry, understanding what a brand is and how to build one will be critical to delighting consumers, satisfying retailers and generating industry leading operating margins.
I know a bit about branding, having begun my career at P&G on category-leading brands like Tide and Cascade and then moving on to deliver projects for august brands like Pfizer, Maple Leaf Foods, and IBM.
Three fundamental brand questions regularly come up in cannabis growth discussions.
1) What is a brand?
Adult use cannabis is a consumer good which means that everything works back from the consumer & retailer. A brand is the promise of functional or emotional value to a consumer. It is much more than a name or logo. Every brand element (e.g., tag line, packaging, advertising) combines to reinforce the product's value proposition and brand identity. Key brand characteristics are: relevancy, consistency and authenticity.
Branding could be corporate focused (e.g., Nike) or product focused (e.g., Pampers), depending on your firm’s business strategy.
Effective brands will compete across 1-2 dimensions (e.g., quality, price, convenience) but no more.
2) Why do brands matter?
Strong brands deliver significant financial and strategic advantage. They allow a company or product to meaningfully differentiate from its competitors (including creating market barriers), more cost effectively secure shelf space and deliver above average selling margins.
Strong brands consistently score high on metrics such as awareness, loyalty, margin, image and trust.
3) How do powerful brands differ from their peers?
Astute branders make specific choices about which consumer segments they will target and with what functional and image benefit(s). Then, they will select their product features and marketing mix to satisfy the targeted consumer and channel needs, motivations and requirements. This thinking is driven off deep consumer insights gained through quant & qual research and codified through a brand strategy & plan.
Strong brands consistently differ from the competition in terms of value proposition, creative elements and personality. They will use an omni-channel approach to reach consumers through their physical and digital journeys.
Savvy cannabis companies will build a portfolio of product brands, with each brand addressing a different need state for the target segment.
Ultimately, winning brands repeatedly give the consumer benefits they want, at a price they feel is fair, wrapped in an image they can relate to.
Brand building is hard work, but well worth it. Send me a DM if you need help creating world class brands.
#branding #marketing