Sustainable Management Session 3 Product and Services – critical relationship with BRAND Ansoff matrix for development decisions Colin Love Director MSc.

Sustainable Management

Session 3Product and Services – critical relationship with BRANDAnsoff matrix for development decisions

Colin Love

Director MSc Strategic [email protected]

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What its all about !!!!!

BRANDThe critical relationship with product and services

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Its all about Brands!!

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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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• 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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• 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


Product life cycle stages:

• Development - NPD

• Introduction

• Growth

• Maturity

• Decline


Product life cycle stages: Development

• A company develops a new product concept

• Sales are zero and the activity is a company (marketing) cost


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


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


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


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


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

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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

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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


Develop an Ansoff Matrix strategic review:

Group 1• Louis Vuitton

Group 3• Microsoft

Group 2• eBay

Group 4• Toyota

Group 5 • EDF


Case study:

• ISS: developing a Breakthrough Service Strategy to Drive Profit and Growth

Sustainable Management Session 3 Product and Services – critical relationship with BRAND Ansoff matrix for development decisions Colin Love Director MSc.

Documents

brand equity brand equity

concept of brand brand

brand image brand image

brand awareness brand

consumer development

building brand equity

sources of brand equity

european brand spectrum