Sustainable Management
Session 3
Product and Services – critical relationship
with BRAND
Ansoff matrix for development decisions
Colin Love
Director MSc Strategic Marketing
c.love@imperial.ac.uk
What its all about !!!!!
BRAND
The critical relationship with product and services
2
Its all about Brands!!
3
European brand spectrum:
4
• 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 -
European brand spectrum:
5
• 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
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
6
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
Brand
Valuation
central to
marketing
A major company asset – refers to the expected future
earnings generated by the companies products and services
7
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
8
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
9
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?
10
Apple the most valuable brand in the world!!!!!
Worth a staggerin +$182 Billion
11
Strong Brands – Brand Equity:
• Strong brands may be described as having brand equity
Brand Asset valuator Model – Y&R
• Brand equity is based on:
• Brand awareness
• Brand image
• We attempt to measure
12
• 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
Sources of Brand Equity: Brand Image
Brand image is based on :
• Strength of associations
• Favourability of associations
• Uniqueness of associations
• Heritage
13
Johnnie Walkers heritage
14
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
15
Building Brand Equity: Key promotional balance
European big brand advertising is:
Advertising – brand
strategic, Euro centric with
language overlays / strap
lines
Sales Promotion – brand/sales tactical,
locally produced material with local
messages / prices / focus
16
Sophisticated
Culturally Stereotypical
Humorous
Story telling
Mysterious
Uses ‘hot buttons’
Has heritage
Can shock
NPD – decision making
• Product life cycle – where are we?
• Assessing our current products and services
• Making strategic decisions about NPD for future corporate
growth
© Imperial College Business School
Origin in engineering / innovation diffusion
Classic Product life cycle ‘S’ curve
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
© Imperial College Business School
Boston Matrix
L
H
STAR
Question Mark
?
CASH COW
L
Market Growth Rate – Cash Usage
H
Relative Market Share – cash generation
DOG
Overlaying BCG on the PLC
?
?
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 2
• eBay
Group 3
• Microsoft
Group 4
• Toyota
Group 5
• EDF
© Imperial College Business School
Case study:
• ISS: developing a Breakthrough Service Strategy to Drive
Profit and Growth
© Imperial College Business School