48-hour case exam
COMPETING WITH
A GOLIATH
Assignment 1
Tela is a 5-year-old Peruvian apparel company trying to compete on the international stage. To
understand what customers, think of its products and overall mission, Tela applies the method of
focus groups. Focus groups show how customers perceive a product and allows the company to
recognize why certain consumers accept or reject concepts, ideas, or any specific notion (Kotler et
al., 2019, p. 172). However, the opinion of 10 participants will presumably not help Tela move
forward, also considering the risk of focus groups' loudmouth or know-it-all problems, validity
issues, and is hard to generalize to a broader population (Kotler et al., 2019, p. 172).
Therefore, it is appropriate to discuss other methods of data collection. The survey method could
have been used to learn about consumers’ preferences, satisfaction, and position toward a certain
product on a large scale (Kotler et al., 2019, p. 172). This would collect far more customer
responses and Tela could identify a pattern in these responses, instead of having 10 subjective
opinions. With surveys, however, it is hard to control the behavior of the respondents (Kotler et
al., 2019, p. 173). Big data could have been used to provide knowledge about consumer behavior
in large quantities of data through cookies, algorithms, and other online settings (Sönnichsen,
2022a, p. 2). This could have identified consumer preferences based on sales and clicks on
websites, revealing what brand position the consumers find the most appealing. Furthermore, it
allows worldwide behavioral data, instead of data from a non-diverse group of British participants.
When conducting focus group research, it is important to eliminate own biases (Kotler et al., 2019,
p. 172). It is clear that Alejandra and her colleagues are frustrated about the participants not
understanding Tela’s product and mission. “Tela didn’t offer just authentic ponchos made in Peru,
or ones that helped women and families, or ones people could afford. It offered all those things”
(Avery, 2016, p. 118). Alejandra wanted the consumers to understand a complex message,
however, she realized that what is easy for her to understand, is not simple for others. A simplified
interpretation of very complex phenomena can lead to failed research projects (Mørup-Petersen,
2022, p. 5). Following the tagline of what Tela had to offer, the participants were confused and
unable to identify the positioning of the brand.
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The marketing research process consists of six steps. Defining the problem, developing a research
plan, collecting data, analyzing data, presenting data, and finally deciding (Kotler et al., 2019, p.
167). When designing a focus group study, it is important to follow these steps carefully (MørupPetersen, 2022, p. 5). Tela has a clear problem with the positioning of the brand, however, it is too
broad. The focus group participants like the product, nonetheless they fail to understand how the
product is unique. Tela and Alejandra need to step back and define what the purpose of the firm
really is. Furthermore, the research plan is not efficient enough to gather the needed information.
The team is lacking internal research, and using 10 British participants is not a good data source.
Tela needs to collect far more data, as described earlier before they can analyze and present the
data. This should lead them closer to making the right decision on the brand position.
Assignment 2
It is difficult to map the exact brand positioning of Tela. It wants to be affordable, show
authenticity, and convey a social mission. However, Tela finds itself stuck without a brand identity.
The marketed business model Tela currently uses does not let it get its message across outside its
home market, which stagnates continued growth. This illustrates how the current brand
positioning, of trying to be everything at once, is not working very well.
An integral part of brand management is that strong brands can differentiate themselves from
competitors through brand positioning. For this to happen, key strategic brand management
decisions must be made and Tela must adjust its message. It is important to recognize that a
strong brand is driven by an internal perspective, and should focus on identity, what it wants to be
in the future, and what its purpose is (Gyrd-Jones, 2022, p. 2). Even though Alejandra believes the
most complex message is the most accurate, she will need to modify it. Otherwise, she will have to
settle with the fact that the brand positioning will not make Tela competitive.
The brand positions that Tela is considering are being affordable, offering authenticity, or
conveying a social mission. The social mission is part of Tela’s identity as the weaving of the
ponchos is performed by Peruvian women, creating employment and developing their economy. It
is a great cause and is received well by the focus group, however, it is a complicated message to
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convey, while being overshadowed by the mission of Saira. A way for Tela to distinguish itself from
its competitors is through authenticity. The ponchos are labeled as Peruvian ponchos because
they are made in Peru by Peruvians. For people concerned about where their product is made and
by whom, this would be a strong position to brand. Lastly, Tela can compete on price. Tela is
cheaper than its competitors and able to deliver its customers the best deal. Although there is a
risk of people questioning the quality and fair pay for the Peruvian workers, for such a low price.
Assignment 3
A competitive analysis using PoP and PoD determines the competitive frame of reference, as well
as highlights who the marketer needs to compete with, which is important for developing a
successful position strategy (Suurmets, 2022, p. 2). Tela and Saira share many PoP. They sell
similar products and both brand their ponchos in Peruvian style. This means they share category
PoP. When looking at competitive PoP, both have a strong social mission and by conveying this to
the customers, Tela could negate Saira’s advantage (Suurmets, 2022, p. 3). Saira was established a
few years before Tela and quickly gained a large market share. If a sufficient number of consumers
believe that Tela is satisfactory in terms of the PoP with Saira, then Tela will be accepted in the
same category of Peruvian ponchos. For then to determine why a consumer should pick Tela, it is
essential to look at the PoD.
To differentiate themselves from competitors, a marketer needs to establish PoD. These are
attributes or benefits that consumers positively associate with one brand, and believe they could
not find to the same extent with a competitor (Kotler et al., 2019, p. 321). By looking at the
attributes and benefits in which Tela and Saira differ, it is noteworthy to point out the price.
According to the case, Tela is on average 20 dollars cheaper than Saira and Tela even uses local
and sustainable materials of better quality than what Saira uses. However, price and quality are
negatively correlated. It is difficult to position a brand as affordable and assert that it is of the
highest quality (Kotler et al., 2019, p. 325). In addition, also values are worth mentioning and both
companies have strong social missions. Tela’s mission of keeping Peruvian women in business can
be differentiated from Saira’s business model of “buy one, give one”.
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Based on the brief analysis above, it is clear that Tela and Saira compete in the same market of
Peruvian ponchos. They share some PoP, yet the number of differences is enough for Tela not to
compete directly against Saira, as Tela should be able to brand itself in other areas, targeting
slightly different customers. According to the case Saira has 60% of the market and is therefore a
market leader, which also makes it hard for Tela to directly compete. As of now, Tela will have to
settle as a market challenger or market follower. This will further be expanded upon in the next
question.
Assignment 4
To be able to compete internationally, Tela will need to adopt a specific brand positioning. On the
market for Peruvian ponchos, there is fierce competition and Tela will need to differentiate to be
successful. Tela has the option for multiple branding positions, as well as combining it with
different competitive strategies. As mentioned earlier Tela can brand itself through its mission, its
authenticity, or being affordable. From here Tela can decide to act as a market follower or a
market challenger.
To decide, a brief SWOT analysis will be performed, as well as the most applicable steps of the
PESTEL model. SWOT analyzes the internal and external marketing environment (Kotler et al.,
2019, p. 88). The internal consists of strengths and weaknesses, whereas the external focus on
opportunities and threats. Tela’s products of high quality with sustainable production is a clear
strength and Tela has many ways it can brand itself, it just needs to decide on a position. A
weakness is how Tela after 5 years still has not settled on a brand position and conveys a too
complex message, forcing its strengths against each other.
Zooming out, it is evident that Tela has the opportunity for growth, as Saira has shown there is a
global market for the product. An opportunity is to exploit the current trend of sustainable
production or to brand itself at a low price. However, Tela is exposed to the threat of being
misunderstood due to its complex message, and the focus group study illustrated how the price
and quality are negatively correlated, confusing consumers to think of low quality. Then there is
the threat of being labeled a ‘copycat’ with its similar product to Saira.
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The PESTEL model can further analyze the external environment (Sönnichsen, 2022b, p. 1). Only
the economic, socio-cultural, and environmental aspects will be considered as it is most applicable
for this case. Economically Tela’s product makes sense, as it is cheaper than that of its
competitors. Next is the socio-cultural aspect. Here, the overall social norms of society and
illustrating good behavior is important (Sönnichsen, 2022b, p. 4). Tela captures this through its
social mission by keeping Peruvian women in business. Finally, the environmental aspect is
relevant to recognize. Through its sustainable production of local materials, Tela does not face any
environmental factors influencing it negatively.
On the basis of this, Tela should adopt an authenticity brand position, while pursuing a market
follower strategy riding in Saira’s “marketing tailwind”, until it gains more market share (Avery,
2016, p. 118). In the focus group study, the authenticity position was quickly shut down, however,
this was due to the loudmouth problem of the redhead, as other participants cared about where it
is made. Being authentic is where Tela has the biggest advantage over Saira. Tela truly is Peruvianmade ponchos, whereas Saira uses cheaper materials. Customers might also be quick to realize
that Saira’s ponchos only cost more, as you essentially pay for two, which also is a reason for why
customers buy from Saira. Therefore, Tela should not brand itself as being affordable, as this is far
from the social mission and soul of the company. Tela is an authentic brand made from local
materials, supporting Peruvian women, which fits perfectly with current trends and environmental
aspects.
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Literature
Avery, J. (2016). Case Study Competing with a Goliath. Harvard Business Review, 117-121
Gyrd-Jones, R. (2022). Lecture Video Script: Key Strategic Brand Management Decisions (V2)
Session 7: Brand Management
Mørup-Petersen, S. G. (2022). Lecture Video Script: The Marketing Research Process (V2) Session
3: Marketing Intelligence
Kotler, P., Keller, K. L., Goodman, M., Brady, M., & Hansen, T. (2019). Marketing management. 4th
European ed. Harlow: Pearson Education Limited.
Suurmets, S. (2022). Lecture Video Script: Positioning and Differentiation Strategies (V3)
Session 6: Targeting, Segmenting, and Value Creation
Sönnichsen, S. D. (2022a). Lecture Video Script: Big Data and Consumer Insights (V3) Session 3:
Marketing Intelligence
Sönnichsen, S. D. (2022b) Lecture Video Script: The PESTEL Model (V1) Session 3: Marketing
Intelligence
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