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

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Presentation on theme: "Sustainable Management Session 3 Product and Services – critical relationship with BRAND Ansoff matrix for development decisions Colin Love Director MSc."— Presentation transcript:

1 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

2 What its all about !!!!! BRAND The critical relationship with product and services 2

3 Its all about Brands!! 3

4 European brand spectrum: Consumers largely unaware of ownership of companies and brands: DKNY – Hellmans Mayo – Libbys – Jaguar – First Boston – LOreal – Rimmel - Rolls Royce – Calsberg – Harrods - 4

5 European brand spectrum: Consumers largely unaware of ownership of companies and brands: DKNY – LMVH / France Hellmans Mayo – Unilever / UK & Netherlands Libbys – Nestle - Switzerland Jaguar – TATA / India Santander – Santander / Spain LOreal – L Oreal / France Rimmel – Coty / USA Rolls Royce – BMW / Germany Calsberg – Calsberg / Denmark Harrods - was Mohammed Al Fayed sold to Qatar Holdings 5

6 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

7 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 7

8 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

9 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

10 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

11 Apple the most valuable brand in the world!!!!! Worth a staggerin +$182 Billion 11

12 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 12

13 Sources of Brand Equity: Brand Image Brand image is based on : Strength of associations Favourability of associations Uniqueness of associations Heritage 13

14 Johnnie Walkers heritage 14

15 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

16 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 16

17 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

18 Classic Product life cycle S curve Origin in engineering / innovation diffusion

19 Product life cycle stages: Development - NPD Introduction Growth Maturity Decline © Imperial College Business School

20 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

21 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

22 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

23 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

24 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

25 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

26 Boston Matrix STARQuestion Mark ? Relative Market Share – cash generation H L Market Growth Rate – Cash Usage L H CASH COW DOG

27 Overlaying BCG on the PLC ? ?

28 Ansoff Matrix – extensions and development of PLC © Imperial College Business School 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

29 Develop an Ansoff Matrix strategic review: Group 1 Louis Vuitton Group 3 Microsoft Group 2 eBay Group 4 Toyota Group 5 EDF © Imperial College Business School

30 Case study: ISS: developing a Breakthrough Service Strategy to Drive Profit and Growth © Imperial College Business School


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