How does brand investment in chemical manufacturer provide competitive advantage

The chemical industry is undergoing unprecedented changes, and M & A, integration and globalization are disrupting the industry. These factors also make the role of brand and digital transformation more attractive.

Last year’s acquisition spending exceeded $100billion, most notably the merger of Dow and DuPont. The whole industry is rapidly globalizing, and the dominant position of old-fashioned enterprises is being offset by the increasingly mature enterprises in emerging markets. In a market open to large-scale foreign competition, chemical manufacturer must think and act globally to maintain competitiveness. With the change of demand, enterprises must relocate their assets and product portfolio.

To address these changes, many chemical manufacturers are investing in brands to better reflect their organizational objectives and corporate vision. In addition to an unforgettable logo, good brand and brand implementation can increase the value of the company and make it easier for customers to obtain.

However, the role of brand marketing in this field is not simple. Strict regulation and product diversity complicate the problem, and businesses must balance between regional and global markets. It is clear that many chemical manufacturers lag behind other industries in terms of knowledge and expertise when they invest in brands.

When working with customers in the chemical, industrial and manufacturing industries, I was asked several key questions: what is the future of the brand in the chemical industry and how does brand investment provide competitive advantage?

Maximize brand value

The research of vim group shows that when brand is the strategic starting point, the performance of enterprises will be improved. However, only a small number of organizations adopt brand first strategies.

Moreover, PwC reported that 75 per cent of chemical executives see cost reduction as their main measure of improving profitability, while only 9 per cent want to strengthen digital technology – despite its huge potential for profitability.

BASF, the most valuable chemical brand in the world, is a model of the coordination between brand and business strategy. BASF’s annual sales rose 11 percent from $7.4 billion to $8.3 billion. This is due to BASF’s launch of a new brand strategy, focusing on organic growth, emphasis on Asian markets, strong corporate action to deal with climate change, and the introduction of innovative, climate friendly production methods.

Digital conversion

Digital technology has great sales and marketing potential in the chemical industry, because the tools such as connecting equipment, machine learning and artificial intelligence all bring new methods to meet customer needs, obtain data and realize value-added sales. But many companies in the chemical industry are slow to respond or fail to combine investment in digital technology with appropriate brand strategies.

We can already see how marketing moves from an outdated role of sales support to a center of transformation and strategic change. As the promoter of digital transformation, marketing team has the opportunity to obtain the ownership of customer relationship, the management of intangible brand assets and greater influence on enterprise strategy.

However, there are also some challenges in navigation in digital transformation. First, enterprises must make full use of leverage

In order to better understand their operations and customers, they need a lot of data, but the current workforce is aging and digital expertise is in short supply. Companies must find ways to attract new talent and embrace digital workplaces to take advantage of the commercial value of the technology.

Brand structure

In such a market, if customers can buy products with the same chemical composition at a lower price, they are ready to change their brands at any time, and enterprises must strive to develop brand assets. Consistently delivering high-quality products, providing customer support and tailored advice are just one of the factors that affect fairness and reputation. But strategists should realize that these are long-term commitments that require a lot of investment.

Brand structure is also changing with the change of market power. We find that chemical manufacturers are increasingly turning to the “brand company” model – from a good, product first “brand company” model. This is because companies are realizing how critical the synergy is in fact in terms of marketing and communication. The way brand companies can share brand building activities between business units and individual products is particularly useful when the industry is increasingly commoditized and price sensitive.

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