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Transcript of Sustainable Management Session 3 Product and Services – critical relationship with BRAND Ansoff...
Sustainable Management
Session 3Product and Services – critical relationship with BRANDAnsoff matrix for development decisions
Colin Love
Director MSc Strategic [email protected]
2
What its all about !!!!!
BRANDThe critical relationship with product and services
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Its all about Brands!!
4
European brand spectrum:
• Consumers largely unaware of ownership of companies and brands:• DKNY – • Hellman’s Mayo – • Libby’s – • Jaguar – • First Boston – • L’Oreal – • Rimmel -• Rolls Royce – • Calsberg – • Harrods -
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European brand spectrum:
• Consumers largely unaware of ownership of companies and brands:• DKNY – LMVH / France• Hellman’s Mayo – Unilever / UK & Netherlands• Libby’s – Nestle - Switzerland• Jaguar – TATA / India• Santander – Santander / Spain• L‘Oreal – L Oreal / France• Rimmel – Coty / USA• Rolls Royce – BMW / Germany• Calsberg – Calsberg / Denmark• Harrods - was Mohammed Al Fayed sold to Qatar Holdings
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European brand spectrum:
• Now Global in nature
• Heritage from UK / USA / Europe
• English / American / roman names
• Diffusion of tastes and cultures
The brand connects consumer behavior and reaction to products and services
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The concept of Brand:
A brand is a name, term, sign, symbol or design which identifies goods and services between sellers and
consumers and differentiate them from those of the competition - Kotler
• Brand has value as an intangible asset• Intellectual property• Balance sheet goodwill• Trade mark registration
A major company asset – refers to the expected future earnings generated by the companies products and services
Brand Valuation central to marketing
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Brand versus Products:
• Brands are not products• But products / services are branded
• We can (and do) brand just about anything• Products / services• People• Ideas• Corporations / organisations• Industries• Countries / regions
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Brands have specific characteristics:
• Attributes – fast / smooth / sexy / aspirational
• Benefits – healing / satisfying / performance
• Values – corporate symbolism / customer service
• Personality – consumer grouping / segmentation / stereotyping – Owner Malcolm Glazer /Tampa Bay Buccaneers
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The concept of Brand
Brand Equity:
• Consumer brand preference – high / low• Consumer brand loyalty – high / low• High ratings relate to high brand equity• Goodwill value on balance sheets• Brand degradation / damage
The most valuable brands in the world?
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Apple the most valuable brand in the world!!!!!
Worth a staggerin +$182 Billion
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Strong Brands – Brand Equity:
• Strong brands may be described as having brand equity
• Brand equity is based on:• Brand awareness• Brand image• We attempt to measure
Brand Asset valuator Model – Y&R
• Differentiation – POD• Relevance – to you • Esteem - how well is the brand regarded• Knowledge – understanding of the brand
PLUS• Brand strength – growth potential• Brand stature – current power
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Sources of Brand Equity: Brand Image
Brand image is based on :
• Strength of associations
• Favourability of associations
• Uniqueness of associations
• Heritage
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Johnnie Walkers heritage
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Building Brand Equity:Opportunities and issues in the marketing mix
• Product – essentially common - Global products
• Price – essentially common, PPP, full transparency in Eurozone
• Place – channel commonality
• Key issue with PROMOTION• Language variations of all materials and formats
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Building Brand Equity: Key promotional balance
Advertising – brand strategic, Euro centric with language overlays / strap
lines
Sales Promotion – brand/sales tactical, locally produced material with local
messages / prices / focus
European big brand advertising is:
Sophisticated Culturally Stereotypical
Humorous Story telling Mysterious
Uses ‘hot buttons’ Has heritage
Can shock
© Imperial College Business School
NPD – decision making
• Product life cycle – where are we?
• Assessing our current products and services
• Making strategic decisions about NPD for future corporate growth
Classic Product life cycle ‘S’ curve
Origin in engineering / innovation diffusion
© Imperial College Business School
Product life cycle stages:
• Development - NPD
• Introduction
• Growth
• Maturity
• Decline
© Imperial College Business School
Product life cycle stages: Development
• A company develops a new product concept
• Sales are zero and the activity is a company (marketing) cost
© Imperial College Business School
Product life cycle stages: Introduction
• A period of slow sales growth and profit investment
• Key focus of the marketing mix will be promotion to ‘educate / inform’ the consumer
• Development of brand and product awareness
© Imperial College Business School
Product life cycle stages: Growth
• Rapid market penetration and acceptance
• Critical to address channels to the consumer – focus on place within marketing mix
• International market expansion
• Likely to be the phase where concept moves into profit and passes breakeven
• Competitors likely to enter the market space
© Imperial College Business School
Product life cycle stages: Maturity
• Reaching market potential or saturation
• Profits peak and may be under threat by marketing mix activity required to defend product against competition
• Focus of marketing mix on product and services to develop variants / extensions to maintain product differentiation
© Imperial College Business School
Product life cycle stages: Decline
• Concept may be ‘dated’, with competition fierce
• Sales and margins decline, last opportunity to extract value possibly through price discount action in marketing mix
• Danger of brand / company reputation
© Imperial College Business School
Integrating PLC into corporate strategy
The Boston Consulting Group analysis • classifies Strategic Business Units according to growth /
share of markets – directly attributable to product and services
Ansoff Matrix• Focus on product and services and market expansion
opportunities• Taking existing available p&s to new markets• Developing new p&s directions
Boston Matrix
STAR Question Mark
?
Relative Market Share – cash generation
H L
Mark
et
Gro
wth
Rate
– C
ash
Usa
ge
L H
CASH COW DOG
Overlaying BCG on the PLC
?
?
© Imperial College Business School
Ansoff Matrix – extensions and development of PLC
• Market penetration – using marketing mix to expand existing product sales - price and promotion
• Market development – growth by identifying new market segments for existing products – can include international expansion
• Product development – developing modified or new products to current market segments – product focus
• Diversification – developments outside current companies products or markets – very high risk
© Imperial College Business School
Develop an Ansoff Matrix strategic review:
Group 1• Louis Vuitton
Group 3• Microsoft
Group 2• eBay
Group 4• Toyota
Group 5 • EDF
© Imperial College Business School
Case study:
• ISS: developing a Breakthrough Service Strategy to Drive Profit and Growth