Corporate Brand Strategy; Positive Examples (+Loyalty)

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There have been a few threads on CapLab forum about loyalty loss, especially under the Corporate brand strategy. Rather than continuing to focus on the negatives, it is time for a new thread that gives tips on how to use Corporate brand favorably while working through the loyalty issues. This thread should go beyond the obvious of cost savings from promoting all your products with the same advertisement budget.

My current case study is the Food and Beverage scenario. In other games with this scenario I had gone Ranged brand as a cost effective way to promote the three classes needed for dominance; Beverage, Food, and Snacks. Product quality is low at the beginning of the game, and attempts to go Corporate will usually get hammered by high quality imported goods. And many of the products in the mega class, especially in the Frozen Agricultural products class, gain practically no benefit from brand. The quick response is to just not bother branding these and go about the business of the other three classes.

Going back to question why and when to use the other brand strategies, it makes sense to say that Unique brand is great for the early game, when you are trying to get a quick advantage on the competition. Range brand serves well in mid-game, when competition gets fierce and you have launched most if not all your products in all the cities. Corporate brand feels like it has more strength in endgame, when the cumulative advertisement spending has a chance to reflect in large awareness ratings, and when you are looking for every edge against the AIs. Also in endgame your quality has a chance to rise to the point where seaport products and your own lagging tech will not affect your loyalty.

The twist of this case study is pursuing an aggressive corporate brand campaign in mid-game, not endgame. It is now 10 years into the scenario, and I still do not have dominance in all 15 products from the three classes, which is the first sub-goal. However, my market capitalization is several times higher than required for this subgoal, as I have taken the 10 years to build up my manufacturing and distribution base. In about years 6 - 8 my annual earnings were about $50 million, but now it just pushed up to $250 million. Here is how I did it with Corporate brand.

Food products are a land hungry business. Most of my start up capital went into land, meaning firms with the smallest footprint possible (2 medium farms for the eight crops, 2 medium farms for the cattle/chicken products, and a string of convenience stores). Product margins are thin, freight is high, so there is little extra free cash flow for marketing. Which is why I went with spending absolutely none at first. The two marketing strategies to begin with were 1) paying the real estate premium for 40+ traffic areas in Downtown, and 2) keeping my prices very very low at the beginning. Once there was enough traffic and sales such that my Selling units were the bottleneck, prices went up until I was still competitive with the locals and any AIs in my market. Convenience stores have a fraction of the traffic possible of grocery stores and mega discount stores, but I can fit all 15 products required for dominance in 16 land grids using 4 stores. All my factories were also small, using a 2x2 land footprint. I started one R&D research 9 out of 15 of the products, 1 tile each, for 5 years.

4+ million Seoul was my base of operations for its low cost, 4+ million Paris was to be the premium value market, and the ~1.5 million markets of Miami and Warsaw were targets for the first expansion. Paris I put in a 3x(Selling-Purchasing-Selling) convenience store, a 3xprivate label warehouse, and just sold 3 high quality food products out of the local seaport. This generated profit for operations, trained my first store there, but did almost nothing for brand (you do get a few points of awareness over time even without spending on marketing). In retrospect it was probably a waste to relabel and better just to have a storage unit in the re-labeling warehouse. Because Seoul was going to experience many mistakes, it's loyalty would be negative for a long time.

So the first five to six years was used to bring all 15 products into production. No need to worry about dominance yet, just start new local manufacturing firms to keep up with demand. The next couple of years brought in new farms for the eight plant products and higher technologies, as well as starting all 16 retail firms needed to carry every product into every city. In the ninth year, my third round of research carried the salable product techs into the range of 50 - 75. And this is when my business started taking off.

The AIs had been heavily suppressing my sales with brand ratings between 20 - 80, seaport products with average 65 quality rating, and their own research carrying quality ratings of 40 - 60, but only in select products. By this time most of the seaport products had been played out on availability, and their sales were something of a house of cards. I had started putting a lot of advertising dollars into Miami in all three media, and did not realize because of the small population, my awareness had started to skyrocket. So an fascinating thing happened when I introduced a new product in Miami for the first time. Within seconds, the AIs pulled out of the market with any seaport products! I would see cases of going from 3 - 5 competitors down to none. But it made sense, because to get into a price war with seaport products is a waste of scarce product. My only competition was from other AIs who had entrenched in the same product with a high tech or brand rating.

Now that Miami has a 70+ awareness rating, that is going to be my high profit market as I solidify Paris and Seoul. We'll see how it goes. But I think Corporate brand will be the means to crush my competition once production completely catches up.

P.S. Looking forward to trying this strategy in the Fashion Venture scenario!

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Really wish that there are screen caps or save files

Personally I like corporation brand for its effectiveness, but only if I choose not to merger any weak opponents (since brand inherent can only happen with unique brand, thus it's borrowing AI's time and resources parallel to your own expansion, and you could effectively buy out everyone very quickly and dominate everything). And sometimes it takes quite high concentration to watch out your corporation brand in late game when clashes with AIs all over the place (and you can not rely on COO or CMO to help you manage it, so this is quite difficult for players who are not familiar with brand mechanics).

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Really wish that there are screen caps or save files

Personally I like corporation brand for its effectiveness, but only if I choose not to merger any weak opponents (since brand inherent can only happen with unique brand, thus it's borrowing AI's time and resources parallel to your own expansion, and you could effectively buy out everyone very quickly and dominate everything). And sometimes it takes quite high concentration to watch out your corporation brand in late game when clashes with AIs all over the place (and you can not rely on COO or CMO to help you manage it, so this is quite difficult for players who are not familiar with brand mechanics).

Here is a save file. I was writing the forum post from memory, away from my game computer, so a few details were in error. I'm in the 12th year, and base of operations were Warsaw. Seoul is where I need to finish my third and fourth stores. I didn't pretty it up, so there are a lot of inefficiencies due to rapid expansion. Yogurt and Ice Cream lost market share when I didn't switch the strawberry farm over fast enough.

However, I didn't notice that all my loyalties were positive, even in my "bad brand" city. And it looks like only two cities had advertising, so organic growth in awareness was greater than I thought.

Enjoy!

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Okay, after a couple of years the Food and Beverage/Corporate Brand game is turning into a stalemate. The AI company Super Force is also using Corporate Brand, has better financials, and better technology in key products I need for market dominance. The CEO has expertise in Beverage, while I have it in Snacks. But there are some fascinating key points in this game that I plan to carry over to the Fashion Maven scenario.

1) Super Force lets other AIs sell his products, while I was trying to do it all with vertical integration. In many markets I was competing with third party sellers representing his products, which made it really tough to unseat them all. With so many agents I couldn't get into a price war and drive them all out. Because Super Force is trying to maximize profits while I'm trying to maximize market share, he has a huge financial advantage. He must have had an excess supply capacity to avoid shortages that would affect his loyalty. I imagine his retailers were beating each other up on retail margin

2) Super Force beat me to maximum brand rating in the key high volume markets. Both Super Force and his third party resellers enjoyed a much better profit margin because his product rating was so high. It appears that at some point in the marketplace (at least with Corporate brand at the right economy of scale), the amount spent on marketing is less than the additional net profit made in selling the product. The contribution of rating caps at 100 even though awareness + loyalty can go higher than 100.

3) Super Force also got a technology lead on products that I was second and third place in. Sometimes the market share slip was my fault, like the strawberry shortage, but sometimes it was the combination of his technology lead and brand rating lead that was pushing down my market share. I certainly had enough free cash flow to finance many more R&D centers and close the tech gap, while at the same time I maxed out advertising and public relations spending. I was closing the brand gap when I decided to end.

To conclude, the way to win the end game with Corporate brand is to max out tech in your core product lines, get a clear brand rating lead, and then decide which retail to keep and which to give away. Make sure you have enough manufacturing capacity that nobody has shortages.

Out of this scenario I would also like to describe a new Corporate brand strategy that contributed to my profit propelling upwards.

1984 Branding: (Named after the famous Super Bowl ad Apple Computer aired in 1984 to launch the Macintosh computer line.) Adopt Corporate brand strategy but do not immediately use it. Wait until you can maintain a technology lead and enough production capacity to satisfy a large market demand. Then launch a massive advertising campaign to quickly gain awareness, and use your quality rating to further gain loyalty. Use the extra profit margin gained from a rapidly rising product rating to grab market share and/or expand profits. Use your technology superiority to cause your competitors customers to become less loyal.

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It's always better to remember not to monopoly a product and go to price war with competitors unless you have to. Don't open up shooting war, when you can win with other tactics. It's especially important when going against multiple AIs, you are fighting hand on with 3 or 4 AIs' combining strength, it doesn't get any harder than that.

However AIs are not very good with corporate or ranged brand when they are diversified, you could easily screw their brand loyalty if they don't already screw up themselves. But if they are focused and also used corporate brand with high quality high tech, it's going to be very tough to challenge without some heavy sacrifice and uphill battle. The best way usually is to kill the threat early on at its infancy, squeeze them out, bought them out quickly in early game. This is why surveying every competitors at the start of the game, assess their potential, and predict their movement are extremely important. Know not only yourself, but your enemy well is key to winning battles, whether in war or in business.

BTW, I like the 1984 reference here, and Apple keep using it til this day. Although not the only company to do so. And Apple usually keep low profit in most of the time, than suddenly with a shock tactic. And notice how in real world, Apple also sell its product more expensive than its competitors? And slowly gaining product loyalty and maintain its brand very carefully, even at the cost not able to gain morality product share. Think about its plan to go into smart car market with a brand not usually associated with "heavy industry product".

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In the [Tue Mar 24, 2015 8:29 pm] post, I mentioned having a "bad brand" city. This was a city that had products in two or three different mega-classes, which caused the loyalty to go near zero. IIRC it recovered somewhat, but still erased about 80%+ of the brand rating. This has got me thinking about intentionally targeting different cities with different mega-classes under a Corporate Brand strategy.

A couple of events are taking me in this direction. In the first event, one scenario put me into the Automobile expertise, and the seaports graciously offered to sell me steel, wheel & tire, engines, and car bodies! Seemed a simple matter of assembling the parts into motorcycles and automobiles, pump out a lot of advertisement, and get the R&D going. I was using cigarettes and perfume from the seaports in the same city, all being advertised heavily. I thought I was being clever using a Range brand strategy. However, I wasn't getting much of any brand awareness let alone brand loyalty in any of the product classes. While selling automobile products at a loss for a couple of years, I eventually went bankrupt. The second event was finally being granted Household Products expertise, and then realizing they belong in their own mega-class, and do not share with Body Care or Cosmetic (other than common ingredients). It seemed that there should be a strategy to share many of the upstream inputs but keep the product lines segregated.

So my thinking is to run a game, probably under the Legacy Brand scenario, and intentionally offer different cities with products from different mega classes exclusive to that city. So I might theoretically designate a Food/Beverage/Snack city, a Shoes/Apparel/Leather Goods city, a Photography/Camera city, and a Tobacco city. The upside is each city can develop its own loyalty. Apart from the different inputs needed, the downside will be the R&D requirements. But with a strong brand, one could probably get away with buying secondary technologies and just be careful not to get into a price war with an AI trying to establish dominance. Likely the best global strategy, like with other high brand product strategies, is to favor highest profit margin over highest market share. It's a variation of the Diversified strategy but with a little more product focus.

If I get a good outcome trying this strategy, there will be a saved game posted to this thread.

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As offered, a saved game with different product classes in different cities. I started with Body Care Products, my expertise, and sold those through four cities. The fifth city I set up for Food and Beverage, since it was also growing crops for Citric Acid, Coconut Oil, Corn Syrup (later for Cough Syrup), and Wheat Germ Oil. I chose that city over the others because it already had two of the aggy imports at the seaport.

For the Body Products, it was a straight forward exercise in market penetration and logistics. I only suffered brand loyalty problems from the seaport goods with a higher quality rating. But although some of those cities lost loyalty, they regained then once I had superior tech. One player got a mid-game tech lead on me in Body Products, although rather slight, which was made up with a bit more aggressive research.

For the Food&Bev city, I lost about 2/3 of my loyalty from the beginning due to seaport quality goods. But the food business is mostly on price and availability anyway, so I didn't need a brand advantage to develop that market. I didn't have as much money to spend on Food&Bev tech, so it grew rather slowly. Towards the end game, I was able to pick up that pace, and once the AIs dropped the last of the imports, my loyalty recovered and sales skyrocketed. I finished the game with a positive 7 loyalty and over 70 brand rating in that city, and the other 4 cities had brand ratings well over 100. It definitely helped that no AI tried to get a food or beverage market dominance.

I was prepared to branch out into drugs and cosmetics, but I had already won the game before any of those techs were ready to put into production.

My company had several firsts, including market cap. Naturally with the huge brand advantage given by the scenario I should have been in the lead over most of the techs by some metrics. But had I wasted those ratings by killing off loyalty, it would have been as competitive as any other game.

The lesson here affirmed is one can have different cities selling different mega classes under Corporate Brand, so long as you limit each city to products from a single mega-class. You will need to have a tech leadership in each product for that city if you want to maintain a high loyalty and a superior brand rating.

The saved game is attached.

P.S. On a side note, I used apartment and commercial building development tactically. Where I had retail locations with < 50 foot traffic, I used mostly apartment buildings to boost traffic. Since most of these were firms with a chain store bonus, I was able to get very high average foot traffic ratings, including a few over 100. Also when I had debt paid off and too much free cash flow, I sunk the excess cash into real estate.

Later in the game when I had way too much cash, I bought Real Estate focused stocks that were trading between .80 and .90 Price to Book. This was mostly to hedge cash against inverse inflation. Later when I was borrowing to expand, and the those stocks were trading at a P/B premium, I sold off shares to pay down debt and reduce interest expense. The RE stocks were being used like a commercial paper investment. At the very end of the game I had more than enough cash and borrowing power to speculate in natural resources the AI was using and I was not, like Timber. This investment has a far better cash flow profile than RE stocks.

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Selling just 1 mega-class per city is a specialized tactic, kinda limit the expansion options toward specific directions and areas. Not sure it works better or worse compare to all classes in all cities using other brand type. I would imagine without having media firms of your own, it would grant a much higher profit margin over-all, but the total revenue and total net profit might be less, compare to diversities. It's also kinda increasing the risk too, by having just some eggs in one city. You can not recover the lost or just retreat to other cities to sell easily.

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An experiment in mostly Retail; how it relates to Corporate Branding. I tried running the RE Mogul scenario limiting myself to anything except Factories. The goal was to be the "anti-B2B", figure out what it would take as a retailer to support manufacturing AIs to provide me the goods I needed to sell. Because early and mid-game are so competitive with retail focused AIs, there had to be a way to not use branding as an advantage but use warehousing, R&D, and raw materials to help develop the supply chain. On a technicality I started with Range Brand, but mid-game switched to Corporate brand in order to benefit from the natural brand growth that occurs just from selling unadvertised product under my own brand.

Because there was no proactive branding, there was also no private labeling. Either I sold generic products, like seaport goods, and had no brand contribution, or I sold products from diversified AIs that already had strong brands. Because diversified AIs usually also sell retail, selling their goods put me into a price agreement. But for the most part if the AI was good at resetting his price, then the profit margin was good. Having his goods go through my warehouse first meant I had fewer supply disruptions and better feed into my retail firms. This was especially important when three or more AIs were buying from the same supplier.

Where the difficulty came in was with the business cycles. At peak I was $100 million a year in profits. During the depression, it dropped down to $10 million. The real estate investment was too insubstantial to support me during the lows. I'm sure had I kept the game going it would have been higher than my previous peak, but in all the model was not really self sustaining without a lot of micromanaging.

Some other observations leading to the branding conclusion. R&D is hard to sell proactively. I targeted projects that looked like would be tech leaders and needed at the 3, 5, and 10 year marks. But only one AI offered to buy any of my R&D. I'm still trying to resell raw materials too early. An AI with jewelry expertise would not buy gold from my mine, even when I offered him better rates than the seaport. However he may have had too much competition from gold ring imports.

Corporate brand...when I switched to Corporate from Ranged, I realized that selling too many products from too many classes was really not a problem. The trick was in selling from other classes under the AI's brand, not my own! Real world example: McDonalds does not sell its own cola with Quarter Pounder hamburgers, it sells Coca-Cola products along side its fast food. It may sell ice tea also, but that is not a product where consumers have brand concern. So under the Corporate brand strategy, it actually makes good sense to stock retail firms with a mixture of your branded products and the AI's high value branded products.

You could even mix in high quality seaport goods if the product mix made sense. At one time I had convenience stores stocked with my one AI's wine, another AI's cola, and cigars from the seaport. Had I not limited myself from factories, I could have been making and selling drug products in the fourth slot. In this example only the experience with the drug products would have affected my loyalty. Had the first AI run out of grapes, his brand would suffer, not mine when I ran out of wine.

So now my thinking is that Corporate Brand may not be the best for a pure vertical integration business model. The alternative would be a diversified model where core corporate products are branded and vertical. I would go horizontal with business partners on many other retail products, just as it works now with raw materials and semi products.

If I can get a good game going with this player Diversified model, I'll post a save file.

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So now my thinking is that Corporate Brand may not be the best for a pure vertical integration business model. The alternative would be a diversified model where core corporate products are branded and vertical. I would go horizontal with business partners on many other retail products, just as it works now with raw materials and semi products.

If I can get a good game going with this player Diversified model, I'll post a save file.

Will be waiting

Anyway, this is what normally a corporate brand strategy should work previously, focused on one mega-class and utilized the extra retail space with products from other corporations, or a very tiresome massive micromanaging re-branding with private label where you need to constantly look out for competitors product quality using warehouse mixture to neutralize quality shifting to minimum. The thing with multiple cities and one mega-class with corporate brand, may not be ideal, but kinda interesting. I've done my own testing in the past, and it's theoretically possible to cross 3 mega classes using corporate brand, if you are on constant look-out for any rating not fall below average rating, and no quality below 60 and below local quality. The loyalty would somewhat hover around 0, with enough ads to push brand awareness at 100. This is tiresome micro-management though, and not quite as good using just ranged brand for the most part, and certainly can't beat unique brand with all controlling media firms.

About the tech request from AIs, it's extremely hard to predict, and usually can not cover the research cost, unless you already have lv 6 and above to make it economical by sharing R&D centers. 1 R&D center will cost 3.2m without training, and 3.6m with training a year (at wage 50 city), so any selling more than 10m has to be a tech that can be researched under 2 or 3 years. That's something difficult to do if you don't have that expertise and other AIs do. And tech focused AI normally just switched to manufacturing mid-way, or simple go bankrupt if it doesn't have enough starting capital.