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

Documents

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