Session 17 Managing the Brands

8/9/2019 Session 17 Managing the Brands

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How to manage brands and product line portfolios?

On which brand to invest?Which brand to wind up?


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Company operates in various businesses or markets.

Each of its businesses operate in different conditions.

Each of businesses will earn different amount of profits.

Each of businesses require different amount of investments.

Corporate should learn to expect different amounts of profit

from its different businesses.


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6/23

Question Marks Divisions in the quadrant-I

(High growth market/low market share)

Cause a drain on cash flow as they incur huge marketing

expenditure in reaching out to growing no. of customers.

Incur costs in setting up new manufacturing units to be able to

serve the growing markets.

Low share products.

These products are cash users.


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Stars Divisions in Quadrant-II

(High growth/ High market share)

Market leaders and earn high revenues

Substantial investments to meet competitive challenges.

Cash flow is roughly unbalance.


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Cash Cows Divisions in Quadrant-III

(Low Market growth/High Market Share)

Investment in new production facilities.

Marketing is minimized.

High market share leads to positive cash flow.


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Dogs Divisions in Quadrant IV

(Low Market growth/Low Market Share)

Earn low revenues or negative cash flow.


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Question Marks:(High growth market/low market share)

Market Development

Market PenetrationProduct Penetration

Forward Integration (Availability of Huge resources)

Backward Integration (Availability of Huge resources)

Horizontal Integration (Availability of Huge resources)Concentric diversification (To reduce narrow product line)


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Stars Divisions inQ

uadrant-II

(High growth/ High market share)

Market Development

Market Penetration

Horizontal Integration

Divesture

Liquidation


12/23

Cash

Cows Divisions in

Quadrant

-III

(Low Market growth/High Market Share)

Retrenchment

Concentric diversification

Horizontal diversification

Conglomerate diversification

DivestureLiquidation


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Dogs Divisions inQ

uadrant-IV

(Low Market growth/Low Market Share)

Concentric diversification

Horizontal diversification

Conglomerate diversification

Joint venture


14/23

General Electric 9-Cell Matrix

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15/23

GE 9 cell market attractiveness competitive position matrix:

Businesses of the corporate operate in different markets and

are at different stages of evolution. The effort is to classify the

businesses in a way that the corporate is able to identifyappropriate investment policies and strategies for each of its

businesses.


16/23

Business Strength (X-Axis):

Current Market Share

Size

Profitability

Technology Position

Image and People

Market Attractiveness (Y-axis):

Market size

Market Growth rate

Profit potential

Competitive Structure

Economies of Scale

Environmental and Social Impacts


17/23

Product Strategies for growth:

Marketers always lookout for the new ways to grow their businesses.

Marketers have four variables:

Existing Market

New Market

Existing Products

New Markets

Growth Strategies

Market Penetration

Product Development

Market Development

Diversification


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Market Penetration :

Penetration in the existing market with the existing products.

Brand Building

Existing customers become brand loyal.

Product Development :

Develop new products for current markets.

Gain high sales among its present market.

Market Development :

Existing products sold in new markets.

Diversification

New products for new markets.

This strategy is better if synergy exists between existing products and new products.


19/23

Ansoffs matrix growth strategies

Market

Penetration

Market

Development

Product

DevelopmentDiversification


20/23

PRODUCT RECALLS

Employees should understand the link between recalls and

customer satisfaction and safety, and the effect of the recall on

company success.

Company should check if the company is suffering from kill themessenger.

Kill the Messenger culture that prevents news of product

problems from reaching the right people.

Responsibility should be assigned to one senior executive.


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Recall should be seen as a task to use marketing skills to retrieve

the products from the customer.

The recall manager should appoint a response team to manage

the recall on a daily basis.

The team evaluates the situation, it should determine the scale ofresponse and the type of recall to be adopted.

Crisis management team of the company should handle the

communication efforts on all the fronts.


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If the response team concludes that a recall action is warranted,

it should get into the act fast.

It should decide who will make the announcement, when and

what he will say.

It has to decide as to who will accept the faulty products, how

the returned products will be monitored and who will provide therepairs or replacements.

During the recall, the response team should keep customers

properly informed and persuade them to complete the necessary

exchanges.


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They can also plan a especially recall advertisement.

Logistics and information system should have the ability to

accept notification of product defects.

Provide toll free customer service line operated by people who

understand how to react and who know whom to report to if acustomer calls.

System should be able to isolate the product defect by batch,

plant, process or shift though use of identifiers such as serial

numbers.

Documents

Session 17 Managing the Brands