Stages of forming enterprise strategy based on the Lovemark concept
Research of the application of the Lovemark concept in modern business. Analysis of the impact of a marketing strategy on customer loyalty and emotional engagement. Shaping the tastes and behaviors of target customers, increasing their brand confidence.
| Рубрика | Маркетинг, реклама и торговля |
| Вид | статья |
| Язык | английский |
| Дата добавления | 20.07.2024 |
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National University of "Kyiv-Mohyla Academy"
Stages of forming enterprise strategy based on the Lovemark concept
Havrylenko Tetiana Candidate of Economic Sciences,
Associate Professor of the Department of Marketing
and Business Management,
Banzar Monika Master's Degree
Abstract
The article explores the formation of a company's strategy based on the Lovemark concept. It analyses the origin of the Lovemark concept, presents three key elements, and elucidates how Lovemark as an idea relates to consumers' sense of belonging, affection, and shared values. The implications of applying the Lovemark concept in modern business are examined, outlining the key stages of developing such a strategy and providing examples of its effectiveness. Special attention is given to analysing the impact of the strategy on consumer loyalty and enhancing their love, trust, and engagement with the brand and its activities. It is demonstrated that the research findings can be valuable for companies aiming to solidify their position in the market, increase brand recognition, and earn the trust and affection of their consumers.
Key words: Lovemark, strategy, development, enterprise, concept, brand, analysis, client, market, product, loyalty.
Анотація
Етапи формування стратегії підприємства на основі концепції lovemark
У статті розглянуто етапи формування стратегії підприємства на основі концепції Lovemark. Проаналізовано походження концепції Lovemark, наведено три її ключові елементи та з'ясовано, яким чином Lovemark, як ідея, має відношення до відчуття приналежності, прихильності й сповідування спільних цінностей у споживачів. Досліджено імплікації застосування концепції Lovemark в сучасному бізнесі, визначено ключові етапи розробки такої стратегії та наведено приклади результативності її впровадження.
Особливу увагу приділено аналізу впливу стратегії на лояльність споживачів та підвищення рівня їх любові, довіри та залученості до бренду і його діяльності.
Доведено, що результати дослідження можуть бути корисними для підприємств, що прагнуть закріпитися на своєму ринку, збільшити впізнава- ність свого бренду та завоювати довіру і любов своїх споживачів.
Визначено, що Lovemarks, концепція яких була запропонована Кевіном Робертсом у 2004 році, є брендами, які формують у споживачів таку лояльність, що виходить за межі раціонального, створюючи глибокі емоційні зв'язки із брендом. Доведено, що для розвитку у напрямку Lovemark компанії мають акцентувати увагу на створенні неповторних вражень та викликанні потужних емоційних реакцій.
Lovemarks виходять за рамки традиційних стратегій брендингу, адже побудова Lovemark передбачає розуміння та адаптацію до цінностей, амбіцій та бажань споживачів. Обґрунтовано, що успішні Lovemarks здатні залучати споживачів на емоційному рівні, поступово будуючи довіру та лояльність із часом, і часто стають ключовою складовою ідентичності споживачів, формуючи їхні уявлення та поведінку. Досліджено, що компанії-Lovemarks процвітають завдяки творчості, інноваціям та щирим зобов'язанням збагачувати життя своїх клієнтів. Визначено, що компанії можуть оцінювати успішність стратегії Lovemark за допомогою таких показників як лояльність бренду, рекомендації та емоційна залученість. Доведено, що впровадження стратегії Lovemark передбачає глибоке розуміння психології та поведінки споживачів, внаслідок чого такі компанії мають здатність витримувати коливання на ринку та конкурентний тиск. Отже, зроблено висновки, що компанії, які впроваджують концепцію Lovemark, надають перевагу побудові довгострокових відносин з клієнтами на основі довіри, любові та взаємної' поваги.
Ключові слова: Lovemark, стратегія, розвиток, підприємство, концепція, бренд, аналіз, клієнт, ринок, продукт, лояльність.
Introduction
Problem statement. In modern conditions of intense market competition and an unstable environment, entrepreneurs are increasingly focusing on the issues of attracting and retaining customers. Given this, they actively explore opportunities to attract consumers' attention to their products and services, as well as take measures to ensure their loyalty and attachment to the brand.
Over the past decades, from the 1980s to the present day, there has been a trend towards increasing interest of enterprises in considering consumers' needs and establishing strong relationships with them during the products and services development [11].
This trend calls into question former approaches when manufacturers ignored audience preferences and produced goods solely based on their preferences or justifications. Understanding how to develop a strategy and action plan for one's business or enterprise using the Lovemark concept is becoming increasingly relevant. This is because by shifting the focus from their own needs to the needs and problems of their audience, as well as the factors underlying the Lovemark concept, companies can differentiate themselves in the market and become understandable and noticeable to consumers, avoiding the status of a "mere" brand that quickly emerges and disappears.
Recent research and publications analysis. Researchers, both Ukrainian and foreign, are increasingly focusing on the topic of emotional marketing, as well as the connection between consumer behaviour and brand success. They emphasize strategic planning based on problemsolving and meeting needs rather than financial indicators such as profit and sales volume. Among Ukrainian researchers, it is worth mentioning Dodonov B. [3], the author of the work "Emotion as a Value", Petrunia Yu.Ie. and other [1] consumer behaviour researchers as well as Kovtun O.I. [4], who devoted his research to strategic management. Ihnatieva I.A. [5] and Gerasymchuk V.G. [2] also contributed to the study of strategic management issues.
Regarding the Lovemark concept, it is worth mentioning that it is not yet that popular among Ukrainian researchers. Therefore, to understand this concept and the principles of building a business strategy based on it, we must rely on the research of foreign scholars. K. Roberts [11], the author of the Lovemark idea, as well as M. Rodriguez [12], H. Mintzberg [8; 9; 10], M. Gobe [7], O. Aaker [6], and other researchers who have studied emotional branding and the relationship between brands and consumers must be mentioned. Although this topic is widely researched in the marketing and business fields, the question of approaching business strategy development based on Lovemark ideas remains open for further research and innovative approaches.
Task statement. The purpose of this article is to highlight the approach to phased formation of a company or business strategy based on the principles of the Lovemark concept. The main idea of this concept is to focus on the consumers, and their needs, desires, and values.
Presentation of the main research material
Before delving into the stages of forming a strategy based on the Lovemark concept, it is worth understanding what this term means and how it contributes to the viability and development of a company or business in the modern business world by attracting a dedicated audience.
The Lovemark marketing concept is based on the theory of the emotional connection between the consumer and the producer, which emerged from marketing research and examines the interaction between consumers and companies in the context of purchasing and using goods [11]. Its essence lies in the fact that consumers perceive their relationships with the producer as personal emotional connections built on shared values [6]. The Lovemark approach is based on an emotional-value approach, where the audience often makes their choice based on emotional associations related to specific brands and products [7]. These emotions can influence various aspects of consumer behaviour, including loyalty, preferences, purchase decisions, and perceptions of quality and price.
Bogdan Dodonov, in his book "In the World of Emotions," extensively examines the role of emotions in forming relationships between consumers and brands [3]. He emphasizes that the emotional connection between people and brands plays a key role in forming brand loyalty and trust. According to him, the emotional perception of a brand can be a crucial factor in making purchase decisions, as well as in shaping the consumer's perception of the quality and value of the product. lovemark business brand marketing strategy
Dodonov also emphasizes that brands capable of evoking strong emotions in consumers have great potential for successful development in the market. He points out the necessity of creating emotionally significant impressions of the brand, which can be achieved through the effective use of marketing strategies aimed at creating and maintaining an emotional connection with customers.
Therefore, it can be said that according to the concept developed by Bogdan Dodonov, emotional interaction between brands and consumers becomes a key aspect of a successful marketing strategy, contributing to building strong relationships and increasing brand competitiveness.
The Lovemark concept is viewed as a strategic approach to attracting consumers, focused on eliciting an emotional response, satisfying their values, and increasing loyalty. Kevin Roberts, CEO of the advertising agency Saatchi & Saatchi and author of the Lovemark idea, conducted extensive research in the field of emotional marketing and branding. In 2004, he formulated the Lovemark concept, proposing a new strategic approach to the marketing development of companies [11]. According to his concept, a "Lovemark" is a brand that evokes feelings of love and belonging in consumers, creating deep emotional connections with its audience. Roberts believes that the strongest brands create their mythology and contribute to the formation of the mythology of their admirers. Such brands cease to be just a product or service; they become an integral part of people's lives and evoke an emotional connection.
Roberts highlights the key aspects of the Lovemark concept, which he considers important for attracting and retaining consumers. These aspects - mystery, sensuality, and intimacy - are not just individual elements but symbolize the essence of love as a value [11]. Let's consider each of them in more detail.
Mystery: This is the stage preceding direct contact between the consumer and the product. In the context of brand strategy development, this means creating a mysterious brand image that arouses curiosity and fascination in consumers. This mystery reflects the process of falling in love, which unfolds gradually. The Lovemark approach involves allowing the consumer to uncover the mysteries of the brand independently, arousing emotional interest and "infatuation." This stage is of great importance for shaping the development strategy, as it encourages consumers to discover the uniqueness of the brand on their own.
Sensuality: This is the direct experience that arises when the consumer encounters the product. The product or service should appeal to the senses, engaging sensory organs. How the consumer perceives the product determines how successfully the stages of advertising, mystery, and initial interest are passed.
Intimacy: This is the experience that the consumer undergoes with prolonged use of the brand when they are already familiar with it and do not require additional attraction. This stage is not intended to attract attention but rather to strategically retain the consumer and build long-term relationships. Intimacy reflects a sense of deep connection with the brand, creating feelings of personal interaction, mutual understanding, and trust. The brand needs to create a special experience of interaction with consumers that maximally addresses their needs and desires [12]. The Lovemark concept aims to achieve a stronger competitive position and increase audience size through marketing tools that focus on establishing a personal connection with the customer. This is accomplished through theimplementation of principles such as mystery, sensuality, and intimacy, upon which the overall company management strategy and brand and audience management strategy are based. The principles underlying the Lovemark idea are geared towards creating and cementing loyal relationships between the consumer and the brand based on emotional-value connection, continuous communication, and the use of various tools that influence brand and product perception [12].
In addition to having the principles underlying the Lovemark philosophy already formulated and ready for implementation into the business management strategy as values, it is necessary to understand what specific questions should be posed to the entrepreneur for a better understanding of their own business and what steps need to be taken to delineate the field of existing and alternative strategies, after which to select and adapt the chosen one for implementation in their enterprise.
Thus, how can an entrepreneur create conditions where the brand's product or service will be in demand among customers, and the company's strategy will be effective and successful not only in the short term but also capable of gaining trust, love, and loyalty? Utilizing the Lovemark concept for developing a growth strategy will help the company understand how brands already evoke love among consumers, what specifically attracts their attention to these brands, and how the company itself can become a Lovemark for its audience.
To apply the Lovemark concept to growth strategy formulation, let's turn to a tool like the 5W1H, or Kipling method. Its idea is to answer six questions: "Who?", "What?", "When?", "Where?", "How?" and "Why?". Using this method may not directly solve the problem at hand, but it can provide answers to open questions, helping to correctly identify both the problem itself and delve deeper into its various aspects. Understanding more about our own business will make it easier to formulate the best growth strategy for it. So, let's delve into these questions further (Table 1).
Table 1
List of main questions for creating a successful brand according to the Lovemark concept:
|
Who? |
This question concerns the identification of the brand's target audience with whom it builds an emotional connection. Who comprises the brand's target audience? This could be buyers within a specific age range, geographic region, interests, cultural groups, and social classes. |
|
|
What? |
This question pertains to the products or services offered by the brand to its consumers. What exactly does the brand do or what products/services does it offer? |
|
|
When? |
This question relates to when and under what conditions consumers will use the brand's products/services. |
|
|
Where? |
This question concerns the context in which consumers interact with the brand. Where do consumers encounter the brand and its products? What are the touchpoints between the brand and the consumer? This could include stores, online platforms, advertising campaigns, social media, etc., which not only allows the company to be present in the market through various channels but also enhances brand recognition. |
|
|
How? |
This question addresses how consumers use and perceive the brand's products. How does the brand influence consumers' feelings? How does the brand evoke positive emotions and establish a personal connection with consumers? What experience do consumers gain from interacting with the brand? How do consumers purchase the company's products? |
|
|
Why? |
This question relates to the values, beliefs, and ideology that the brand supports and that make it special for consumers. Why do consumers feel a special affinity with the brand? These could be values and beliefs such as a conscious choice to promote sustainable development, a desire to change the world for the better or make people's lives easier, innovation in everyday life, and more. |
Source: Compiled based on the 5W1H method (Kipling method)
To get answers to the questions posed, the following steps are necessary:
Who?:
- Identifying competitors, clients, and other market participants to analyse their needs and expectations and identify their strengths and weaknesses.
- Analysing the characteristics of competitors, their products, and services to ascertain advantages and disadvantages.
- Researching the needs and expectations of clients to formulate a strategy that aligns with their requirements.
What?:
- Analysing the products and services offered by your business, as well as competitors.
- Identifying the strengths and weaknesses of your product and developing strategies for its improvement.
When?:
- Creating a customer journey map to determine the moments when a need arises that your product can satisfy.
- Identifying the conditions under which clients will turn to your brand to meet their needs.
Where?:
- Reviewing the market in which you operate and analysing competitors' markets to understand trends and potential changes.
- Identifying customer touchpoints and opportunities for improvement.
How?:
- Analysing product promotion strategies and communication with clients used by your business and competitors.
- Studying ways to collaborate with partners and suppliers to optimize business processes.
Why?:
- Formulating the values and beliefs of your brand that differentiate it from competitors.
- Determining what makes your brand unique and what ideas it communicates to its clients to attract and retain them.
After answering these questions and thoroughly studying your own business, it is necessary to proceed to the development of the enterprise development strategy process, considering it step by step:
This process allows for the structured development and implementation of enterprise development strategy, considering all important aspects. Let's take a closer look at each stage:
Stage № 1: The first stage involves defining the mission, vision, and goals of the enterprise. In the context of the Lovemark concept, this means prioritizing the building of emotional connections with consumers over simply selling a product or service. It's important to address a wide range of business motivations, including profitability, revenue growth, and contributions to the environment. Honesty, both with oneself and with customers, is paramount.
Stage № 2: The next important step is analysing alternative strategies. This stage involves assessing the potential effectiveness of each alternative strategy and identifying their advantages and disadvantages. Evaluation criteria include potential profitability, opportunities for sales growth, expansion into new markets, increased competitiveness, and enhanced customer loyalty. Analytical tools such as SWOT analysis, BCG matrix, GE matrix, and other strategic analysis tools are often used to analyse alternative strategies.
To conduct a strategic analysis, the following steps are recommended:
1. Describe each alternative strategy, including their advantages and disadvantages. This stage involves thoroughly familiarizing yourself with potential strategy options, specifying their features, and identifying potential pros and cons.
2. Determine key success criteria for each alternative strategy. It's important to establish metrics and indicators by which the effectiveness of each strategy will be evaluated.
3. Evaluate the potential effectiveness of each alternative strategy using matrices and other analytical tools. This step includes systematically analysing each strategy based on specific criteria and using specialized tools for assessment.
4. Compare and analyse the results obtained to determine the most effective strategy. This stage involves objectively comparing all alternatives and selecting the optimal strategy based on the analysis of evaluation results.
After completing the strategic analysis, it is recommended to identify the most effective strategy and develop a detailed action plan for its implementation. The obtained results can also be used to make necessary adjustments to the strategy and address potential issues.
Stage № 3: Modelling alternative development scenarios. To conduct modelling of alternative development scenarios based on the Lovemark concept, it is necessary to first identify the main stages of business development and identify key parameters that influence its success. The application of analysis and forecasting methods helps evaluate each of the alternative scenarios. An optimistic scenario involves the development of events in the best-case scenario with a positive impact on key business parameters. Conversely, a pessimistic scenario predicts a negative impact on these parameters. The most likely scenario is based on current trends and predicts an average impact on key parameters.
Table 2
Stages of enterprise strategy development
|
Stage № 1 |
Defining the mission, vision, and goals of the enterprise. |
|
|
Stage № 2 |
Conducting strategic analysis, including analysis of the enterprise's internal and external environment. |
|
|
Stage № 3 |
Modelling alternative development scenarios, involving analysis of possible paths of enterprise development and their consequences. |
|
|
Stage № 4 |
Selecting the strategic model that best aligns with the enterprise's mission, vision, and goals. |
|
|
Stage № 5 |
Refining the chosen strategy, including developing specific actions and measures for its implementation. |
Source: compiled by the author based on [2; 4; 5; 8; 9; 10]
After analysing these three scenarios, the impact of each on alternative strategies based on the Lovemark concept can be studied. These alternative strategies may focus on changing the way of interacting with consumers, increasing emotional attractiveness and loyalty to the product, as well as enhancing consumer satisfaction. Based on the study of alternative scenarios, the optimal strategy can be chosen, which will lead to success regardless of the scenario chosen at the beginning of the analysis.
Stage № 4: Choosing the company's strategic plan involves analysing the strengths and weaknesses of each strategy option and considering the target audience. The main goal at this stage is to identify a strategy that reflects the company's key values and principles and to create a unique brand that meets the needs and desires of consumers. After identifying several presentation options, the optimal option for the company's development strategy is selected.
Stage № 5: At this stage, the final strategic plan of the enterprise is formed, aimed at developing and increasing consumer loyalty to the brand, leading to increased sales and profits. After completing the previous stages, tactical plans for the medium and short term are developed.
In the short term, the focus is on improving the quality of customer service, expanding sales in the existing market through advertising, discounts, and promotions, as well as active presence on social media.
In the medium term, the strategy is oriented towards development in new markets, increasing investments in product quality, and technology implementation, shaping corporate culture, analysing the effectiveness of marketing campaigns, and responding to consumer feedback.
Long-term implementation of the enterprise development strategy includes the development and implementation of operational plans aimed at maintaining and increasing consumer loyalty to the brand. This process may involve conducting marketing campaigns, developing new products and services, implementing partnership programs, as well as monitoring the company's performance and strategy execution.
A separate aspect is the systematic and regular monitoring of the implementation of the enterprise development strategy. This process is necessary to ensure timely adjustment of the strategy and achievement of set goals. Typically, methods such as market monitoring, customer satisfaction analysis, and competitor audits are used for monitoring, allowing for the identification of new trends and responses to emerging opportunities.
In the final stage, a practical evaluation of the results is conducted through feedback, which promotes effective interaction with customers and ensures a satisfactory level of satisfaction. This process may include monitoring social media activity, conducting surveys, and analysing sales and repeat purchase statistics. It may also involve the development and implementation of special loyalty programs, as well as testing new products to assess their alignment with consumer needs and expectations.
Conclusions from the conducted research
This article thoroughly examines the process of developing a business development strategy based on the Lovemark concept, providing companies with a deep understanding of how to identify and maximize the emotional potential of their brand to build strong relationships with consumers. For example, by analysing the competitive environment and identifying the needs of the company's target audience, companies can develop strategies aimed at increasing customer loyalty.
Furthermore, modelling different development scenarios allows for predicting potential outcomes and choosing the optimal strategy that considers risks and advantages.
The result of such an approach is not only an increase in the competitiveness of the enterprise but also the creation of a strong brand that attracts and retains customer loyalty regardless of market changes. This strategic approach enables companies to adapt to changes in consumer behaviour and effectively respond to challenges in the competitive environment.
Future research on the formation of enterprise strategy based on the Lovemark concept aims to expand understanding of the impact of this concept on various aspects of business. It is important to analyse optimal methods for implementing Lovemark strategies in the practical activities of enterprises of different scales and industries, considering their impact on financial indicators, competitiveness, and long-term stability. Research is needed to examine how the Lovemark concept helps enterprises increase customer loyalty and to study methods for integrating it into strategic planning and marketing strategy. Additionally, the research should explore the adaptation of the Lovemark concept to specific market conditions and cultural peculiarities of different regions and countries. Such an approach will help identify potential opportunities and challenges associated with the application of the Lovemark concept in different business sectors and market contexts.
Moreover, the research could consider the impact of Lovemark strategies on the internal corporate culture of the enterprise and its relationship with external branding and marketing strategies. This comprehensive approach will provide insights into how an emotional approach to branding influences all aspects of enterprise activity and will enable the development of strategies aimed at achieving longterm success.
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