The Longman business dictionary defines potential as the possible future success of a brand in a market. Nigel Hollis a brand and marketing strategist at Kantar once  wrote a post about the spurious dichotomy between the short and long-term effects of marketing. In it he argued that the separation between the two-time frames was a spurious one, but how do you predict whether your marketing will have a positive effect in the longer-term? Every marketer is interested in the potential of their brand because it determines how the brand reacts to its marketing environment.

“Long-term effects are generally measured through increased brand awareness, brand equity, increased loyalty or higher price elasticity and I must add increased revenue, better bottom line. Chief Executive Officers would always ask their marketing team what would be the potential and return on investment for the millions of naira you are asking for?

The marketer’s interest in any business is therefore fueled in the short and long run by the potentials and opportunity the business holds. Where the potentials are not glaring interest in the business is dampened.

One output of the Meaningfully Different Framework by Kantar is an equity summary we call Potential, which is designed to anticipate how likely it is that a brand will grow. We report Potential as a probability of growth because there is no guarantee that today’s potential will be realized in future.

Potential is exactly what the name implies; it is a latent strength. To realize a brand’s potential the marketer must extend the reach of the brand to new customers and do so in a way that is more compelling than the competition’s marketing efforts.

According to Kantar a brand that intends to achieve its full potential must always act quickly to gain competitive advantage , ensure it’s the first to come to mind at the point of truth in the front of shelves , understand what drive sales now and in the future and must understand where to and how to invest in the near future.

The only other way to anticipate whether a brand is likely to grow is to look at trends over time and assume that they will continue (which is a risky assumption if the brand does something different or the context changes). But what trends should we look at? Overall sales may increase simply because of price discounting which could undermine the future strength of the brand. Far better to look at the trend in base sales – the proportion of sales not dependent on short-term marketing activities – and see whether that is increasing or decreasing.

To my mind a brand that is growing base sales faster than total (provided the total is growing) is one that is becoming stronger over time. And a brand that was lowering price elasticity over time at the same time it was growing sales would be even stronger. But what do you think? Please share your thoughts.

Michael Umogun (michael.umogun@kantar.com) + 234 802 311 7969