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Marketing Brand Strategy

Decide if you would like to brand your product or service. Then identify three products or services in your industry that have a logo or slogan. After which, either develop a logo or slogan that will identify your product or service or explain why branding is not the best marketing plan. Then write a marketing memo to the advertising division of your company rationalizing your choice.

Evaluation Criteria:
Have you included all the required elements?
Have you identified the environmental factors and described their influence appropriately
in the given situation?

Please use the textbook – Marketing Management 12E by Kotler & Keller and other sources. If you are using sources other than the text, you must provide
complete citations.

Is the paper professionally presented? Remember your audience – senior management at your company. It is important to present your information as clearly and succinctly as
possible.

Please read the instructions carefully. Please make sure that 1 of the 3 references that you are using is my text book – Marketing

My product brand : “Smiley ulcer-guard toothpaste”,

Company: Teethal

Slogan : Guardian in disguise –  forever with a smile [ which implies that this above mentioned toothpaste prevents from the oral infection of ulcers which shadows a face with grin and no smile for a long period. ]

Logo: A smile embedded in a circle

Three products in the industry having logo or slogan are as follows –

1. HLL’s Close-Up

2. Proctor and Gamble’s Pepsodent

3. Colgate Palmolive’s Colgate

Why banding is not the best marketing plan?

Strategic planning is a process which gives a detailed understanding of the growth and provides a futuristic view of a business enterprise. Careful study of the strategic planning helps in scrutinizing and developing a steady marketing plan for a product line or a brand. Every marketing plan should involve a thorough analysis of the external and internal environment. If the environment is stable, most of the activities will be predictable and convenient for the organization.

But in today’s scenario, the environment is changing faster and faster which leads to discontinuity with the past. The environmental survey is the cornerstone to every marketing plan. The various macro environmental factors like political, social, economical, technological, natural and legal environment imbibe a sense of competitive advantage over other competitors. In the course of studying and analyzing the marketing plan, marketers also identify the brand power of the product lines existing in that firm, which speaks about the positioning and differentiation of the products.

Branding is a process of developing a differentiated product which is positioned in the minds of the consumers as a brand by way of its logo and slogan. Branding is just one strategy in the whole of the marketing strategy of the marketing plan.

If Branding is studied without looking over the marketing plan, then the outcome would be disastrous as branding is a subset of the marketing strategy which in turn is a subset of the marketing plan which is a subset of strategic planning. Hence it is said that branding need not be the best marketing plan. If a marketing plan is properly carried out, it satisfies the process of branding too (Batra et al 1999, Kotler, 2001, & Ramaswamy et al;, 2004).

Marketing Memo to the Advertising firm: Lintas

My organization “Teethal” deals with the manufacture of varied products of toothpaste. Recently a new product is been manufactured named – Smiley ulcer-guard toothpaste, which has a unique differentiating factor of overcoming the worst oral infection caused by ulcers. I have carried out a detailed learning of this product which is branded by taking into consideration the environmental factors like consumer and demand for the product, industry competition, technology and social environment which plays a major role. The following specification needs attention while carrying out the advertising plan (Batra et al, 1999 & Gilbert, 2003).

Product Specifications:

Attributes of the brand: long lasting fresh breath, ulcer protection, economical

Personality of the brand– always charming and vibrant

Benefits of the brand – All the attributes provide a functional benefit “I won’t have to worry about my oral protection”. The attribute economical translates into an emotional benefit which makes the user feel important for maintaining value-for-money.

Values of the brand – The brand also says something about the manufacturers’ values – hygienic and effective and powerful.

User of the product: all age group.  Strongly advisable for teenagers who have bad eating habits and executives working under stress.

Pricing:  Although the product is very much effective for every user, the price is economical to encourage the masses to buy the product and avail the benefit of its healing touch. 200 gm toothpaste is priced at US Dollars 3.

Promotion: The product could be initially advertised in the urban cities on Television, in metros on FM radios and in the rural places on TV cables [just a suggestion]

Distribution: The product is a convenience product and hence will be sold at every local convenient store. Intensive distribution mode will be adopted to enhance its usage and improve its beneficial value.

Based on the above requirements, kindly prepare the advertising budget to bring out the clarity of this advertising campaign so as to provide the necessary resources. Also provide us with your study carried out with regards to the internal differences between the advertising plans which arise from the differences in the external factors and the environmental situations which the advertisers face (Batra et al 1999, Kotler, 2001, & Ramaswamy et al;, 2004).

References –

Batra, R., Myers, J. G., and Aaker, D. A. (1999), Advertising Management, 5th ed, New Delhi: Prentice.

Gilbert, D. (2003), Retail Marketing Management, New Delhi: Pearson.

Kotler, P. (2001), Marketing Management, Millenium ed, New Delhi: Prentice.

Ramaswamy, V. S. and Namakumari, S. (2004), Marketing Management: Planning, Implementation and Control, 3rd ed, Delhi: Macmillan.

 

 

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Marketing Brand Strategy The Proctor and Gamble Company

The Proctor and Gamble Company have its long held concern and a wide range of products in the market and the level of competitive advantages by the company will depend on the scale with which the marketing system of its products is ensured.  However, though branding important in the market system, it wages various inefficiencies in providing a good support for the company’s marketing plan.

Though the product component of the company is broad, this memo will be limited to three products; where their brand slogans. “Silvikrin” is the slogan for hair care, “Vortex” is slogan for bleach, and “Born Blonde” is the slogan for hair dye.  Though these are slogans of product compounds, various inefficiencies are allied to their slogans and the broad product in general at the market.  Though the sales of the products are booming at the market, branding is allied to various inefficiencies as a tool for use in marketing of products.

As a basic intend of a marketing, it helps in the creation, communication as well as delivering the value of an organizations product. This is the map which guides to the success of operations in a business.  It’s a force which will help to think about the basic strategies as well as the tactics to use in creating a high competition at the market.  Every choice of marketing plan should therefore provide standards with which the competitive advantage of the organization’s activity can be claimed in the highly competitive market. (Kitchen, Pelsmacker, 51)

The process of branding in marketing plan is broad and perhaps cost inefficient if not well monitored.  Since the goal of the firm is to optimize its revenue through optimal costing, the success in this goal can only be through methods that ensure standard of high revenue at the most minimal cost activity.  However, the process of branding can rationally be uneconomical if not well monitored.

Every adequate branding should involve a thorough activity of analyzing the SWOT analysis of its activity. Elsewhere, the organizations should adequately evaluate the comparative state between its activity within the market and the level of competition by its competitive rivals.  Generally, the success in the market should involve opportunities. This helps to evaluate the strengths within the market portfolio to be able to formulate the most admissible standards of activity. (Varey, Lewis, 96)

However, every branding slogan or logo should be aimed at portraying and giving a certain message to the consumers within the market.  The basic problem in message delivery is the cost of competition state within the highly perfect competitive market.  In such a market, competitors ought to use methods of creating competitive advantages for the highest benefits and success in the market.  However, advertising is used as basic tool which helps to sell the state of organization’s product in the market with many product substitutes and complimentary goods.

However, product branding is a basic inhibitor in the creation of an authentic message which helps to portray a good image and favorability of the product in the market.  The opportunity cost in the message inefficiency portrayed by a brand slogan or a logo is the success of the substitute or complementary products of the competitors within market. The message delivery by a brand logo or a slogan should be explicitly simple and entitled to portray a direct message about the product.

However, the message held is such slogans or logos may be fundamentally ambiguous and chooses to provide difficulties in understanding the exactly scope, type, purpose and use of the product.  Other brand logos and slogans are synonymous to inadequate images that are portrayed by them.  Either, brand development posits a big problem in fighting for the product success in the market. This will cost an identification process of a brand slogan which would provide the greatest incentive to the customers. (Kotler, Keller, 52)

Unlike other methods of marketing, branding will only be limited to scope and number of customer at every one moment. Every marketing activity should provide the most adequate and cost efficient method of attracting a huge customers’ population.  At the implementation process of a brand slogan or a logo, inadequacy in the nature of the product may be the basic resultant feature which would even threaten the relationship of attraction to customers use.

Either, branding may be highly costly in its development which may imply un-optimal costing parameters.  Generally, brand slogans and logos are chief inhibitor of a products competitive advantage within the market which is endowed by high standards of competition.  One slogan may create a negative perspective of the product to the consumers which may necessary not be the case.  The opportunity cost of slogan/logo inefficiency by one organization’s product/service is the success of the close substitutes provided by the competitors.

Summarily therefore, branding may be a basic inhibitor in the marketing plan which is aimed at creating standards of competitive advantages of one product in the market.  They may be inefficient in providing an authentic message that can portray the accurate sense of product in the market.  Hence therefore, rationality should always be provided in defining the status of slogans and logos to use for product in order to increase their competition.

Work Cited

Kitchen, P & Pelsmacker, P. Integrated marketing Communications:  A Primer, London,            Routledge, 2004

Kotler, P & Keller, K. Marketing Management, Amazon .Com, 2006

Varey, R & Lewis, B. Internal Marketing: Directions of Management. London, Routledge, 2000

 

 

 

 

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Mattel’s China Experience

In 1945, the Mattel brand was born. Ruth and Elliot Handler and Harold “Matt” Matson launched Mattel out of a garage workshop in Southern California. The first Mattel products were actually picture frames, but Elliot soon started using those picture frames to create dollhouse furniture. Harold Matson eventually sold out to his partner, Ruth and Elliot Handler. The Handler’s, encouraged by the success of the doll furniture and turned the emphasis of the company to toys. By 1955 Mattel was advertising toys through the popular show “Mickey Mouse Club”; this revolutionized the way toys were marketed.

By 1959 Mattel had introduced Barbie, named after their daughter Barbara’s nickname. Barbie would soon lead Mattel to the forefront of the toy industry and fascinate girls all over the world for decades. In 1960, Mattel became a publicly owned company, stock was listed was listed on the New York and Pacific Coast Stock Exchanges in 1963. By 1965, sales topped $100 million and the company joined the Fortune 500. In the years to come Mattel would enter the ever growing electronics industry, they would also enter several joint ventures and licensing agreements that would earn them more profit (Mattel History, www.

Mattel. com). In 2010, Mattel posted profit of $24. 8 million, or 7 cents a share, compared with a loss of $51 million, or 14 cents a share in the previous period. Sales totaled $880. 1 million, an increase of 12% compared with $785. 6 million a year earlier (Chang, 2010). A host of external factors can influence a firm’s decision of direction and action. Influencing Mattel’s decisions are economic factors, social factors, political factors, technological factors and ecological factors.

Mattel must lso understand the globalization strategy as it will allow them to pursue opportunities anywhere in the world and enable them to optimize business functions in the countries in which it operates (Pearce & Robinson, 2011). Companies such as Mattel, seeking lower prices have benefited from the “China price” which was 30 to 50 percent cheaper than the cost to make the equivalent product in the U. S. Companies choose China for a variety of reasons including lower business costs, cheaper labor, facilities, plant and equipment and raw materials.

There were also differences in regulatory oversight between China and many other countries, including the U. S. The U. S. banned lead toys in 1978; China only signed an agreement to do so in September of 2007 (Pearce & Robinson, 2011). Being a global company, Mattel faces multiple political, economic, legal, social and cultural environments as well as various changes within each of them. Other issues arise in geographic separation, cultural and national differences and variations of business practices which all tend to make control and communication efforts between headquarters and the overseas affiliates difficult.

Global companies like Mattel also face intense competition due to the differences in industry structures within countries. External factors such as technological change force Mattel to promote innovation to remain competitive. Mattel must be aware of technological changes that might influence its industry. Political factors are also considered external and are designed to benefit and protect firms like Mattel. Political constraints are placed on firms through actions like fair trade decisions, antitrust laws, tax programs, minimum wage legislation, pricing and polluting, many of these aimed at protecting employee’s (Pearce & Robinson, 2011).

Outsourcing to China also creates concerns in quality control as in the case of the 2007 recall for Mattel. In July of 2007, Mattel announced it would be voluntarily recalling some of its products from a contract manufacturer in China that was utilizing non-approved paint containing lead. Mattel requires that their manufacturing partners use paint from approved and certified suppliers and have procedures in place that test and verify but in this particular instance, procedures were not followed. Of the 19 million plus Mattel toys recalled, 2. 2 million were because of lead paint.

Toys were pulled from the shelves of retailers, media frenzy ensued and public pressure was mounting. By the time the dust had settled from the recall, Mattel had recalled over 19 million toys that were produced in China. Their stock price had declined as they took a $40 million charge for the recalls and their cost increased. Customers were threatening to boycott Mattel and all toys that were made in China. When it appeared nothing could get worse for Mattel, congress sent a letter in 2008 charging that Robert was not honoring the commitment he made to the public during the initial recall incident (Pearce & Robinson, 2011).

Mattel had to determine what next steps they would take to recover from such a crisis and move quickly in order to protect their brand. Mattel had to identify an approach to the recalls that would enable them to protect the Mattel brand and their reputation while not undermining their intent to be the “World’s Premiere Toy Brand – Today and Tomorrow” (Pearce & Robinson, 2011). Moving forward a solution this type of dilemma should include increased quality control efforts in all areas, increased audits and inspections to retain compliance with industry standards.

Chinese policy makers would also need to review their policies and change the countries practices to reduce such problems. In the months after the recall China announced high profile inspections and clampdowns on quality. Another solution would be for producers could subject individual shipments of toys to the same box-by-box inspection that is now applied to pet food additives. China could also force exporters to conform to foreign food and product safety standards, even if they exceed China’s own laws (Oneal, Callahan, & Osnos, N. D. ).

Current safety checks in place, including independent audits would need to be reviewed as they did not prevent the chain of events leading to the recall (Story, 2007). There are many different solutions mentioned above that could work together to minimize the likelihood of such massive recalls in the future. Mattel should increase its quality controls for the toy industry, especially for product produced in China. The company and its subsidiaries should comply with the suggested standards of the CPSC Toy Safety Standards which can inspect, monitor, prosecute and even fine for defects.

Mattel should report a defect or recall within 24 hours of discovery which did not happen in this case and lead to many distraught consumers that had lost faith in the Mattel brand. Instead of shifting blame to producers in China, Mattel needs to realize that it was their choice to produce in China and therefore the producers are not completely at fault. Mattel also needs to determine the root cause of the problem in order to perform corrective action and prevent it from happening again. Increased quality control and testing should be implemented immediately after a recall of this magnitude.

Investigations should take place immediately and continue ongoing until it is deemed that all quality control issues have been addressed. Mattel should take appropriate actions with its producers if it finds that their safety procedures were knowingly ignored. In this case Mattel worked to intercept incoming shipments to keep potentially hazardous problems from being placed on store shelves. Mattel should continue to focus on protecting children from lead-tainted imports (Pearce & Robinson, 2011).

In conclusion, in preparation for another scenario similar to the toy recall, Mattel could incorporate the following objectives into their action plan. Objective 1: Get all pertinent information about the recall to the public accurately, efficiently and quickly. Objective 2: Reassure consumers, parents especially, that Mattel is committed to making the safest toys, fixing the problem and being honest and open. Objective 3: Take responsibility for the recall, Mattel should solve the problem while maintaining a stable relationship with producers in China (Mattel Toy Recall, 2007).

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Cadbury: the Study of Consumer Behaviour

”There’s one product that sells in good times and bad – a bar of chocolate”. It has been an axiom of Cadbury Company for generation. Today, the company which was opened in 1842 by John Cadbury, Is the global leader in the chocolate confectionery manufacturer. The beginning of Cadbury journey is when John Cadbury opened up a shop in Birmingham and sold coffee, tea, drinking chocolate and cocoa. In the later stage, John’s brother Benjamin joined the company in 1842 and opened an office in London and received Royal Warrant as manufacturer of chocolate and cocoa to Queen Victoria in 1854.

After six years, John got problem about his health and his wife was death so they left their business and company to their sons George and Richard. The brothers was also dissolved their partnership at the same time. George and Richard continued to develop the product line, and by 1864, they were getting an early profit. By this time, Cadbury’s Cocoa Essence which was an all nature product with pure cocoa butter and no starchy was introduced to people. After which, the brothers soon moved their manufacturing operations to a larger facility four miles south of Birmingham and the factory and area was known as Bourneville.

With a success in chocolate, George and Richard stopped selling tea in 1873 and master confectioner Frederic Kinchelman was appointed to share his recipe and production secrets with Cadbury workers. Moreover in two years time, the factory employed more than 2,600 people and was incorporated as a limited company. In 1969 Cadbury merged with Schweppes which was a large British brand that supply mineral water and soft drink and the company was know at Cadbury Schweppes. The merged companies would go on to acquire Sunkist, Canada Dry, Typhoo Tea and more.

Schweppes Beverages was created, and the manufacture of Cadbury confectionery brands was licensed to Hershey. Today Cadbury Schweppes is the largest confectionery company in the world, employing more than 70,000 employees. In 2006 the company had over $15 billion in overall sales. In March of 2007, Cadbury Schweppes announced that it intends to separate its confectionery and beverage businesses. With almost 200 years in the business, Cadbury Schweppes will continue to prosper in the coming decades. Theories Used

The whole paper will discuss about the model of motivation, arousal of motives , hierarchy needs of Maslow’s, ELM (elaboration likelihood model ) and how these theory and model apply to the improvement and expansion of Cadbury company to better understanding about their consumer behavior. First of all, motivation is basically defined as the driving force within individual that impels them to action. According to the model of motivation process (Schiffman et al, 2008), when people need, want and desire are unfulfilled, they tend to feel tension.

After that it will drive people to the direct behavior through their thinking process and previous learning until their need is fulfilled (Schiffman et al, 2008). On the other hand, most of people specific needs are dormant much of the time. The arousal of any particular set of needs at a specific point in time may be caused by internal stimuli found in our physiological condition or our emotional or our cognitive process or by external stimuli in environment (Schiffman et al, 2008).

One of the well know theory of human motivation was developed by Abraham Maslow which interpret how customer perceive satisfaction about goods and service at different level of needs. According to Maslow, there are five basic level of needs which are physiological needs; safety and security needs; social needs; ego needs; self-actualization. The theory is showed that human seek for the satisfaction from lowest level first (physiological) such as food, water, air, clothing, sex. After the first level of needs is satisfied, people will seek to higher level of needs which is safety and security needs.

After they get these needs, they will look for the social needs such as love, affection, belonging and acceptance and then is ego needs and self- actualization. (Schiffman et al, 2008) The elaboration likelihood model proposes the more global view that consumer attitude changed by two distinctly different routes to persuasion: a central route and a peripheral route. When consumer‘s motivation or ability to assess the attitude is high, their learning and attitude change tend to occur via central route with available information about the attitude object.

In contrast, when people’ s motivation or assessment skills are low, learning and attitude change tend to occur via the peripheral route without the consumer focusing on information relevant to the attitude object itself. (Schiffman et al, 2008) Maslow’s Hierarchy of Needs According to Hassan (2005), Maslow’s hierarchy of needs includes physiological needs, safety and security needs, social needs, ego needs and self-actualization which can help us to understand human behavior and have a right point to motivate customers power purchasing, especially for what Cadbury has been applied for their segmentation strategies and positioning strategies.

First of all, as we know that chocolate is belonged physiological needs which means this kind of product is low price and more competitive so that there need have a successful key to become the second largest confectionary market after Marks-Wrigley (Conor Carroll 2009). This is the brand of itself because when customers try whatever product they always concerned about the brand name which not only help the customers identify their needs and satisfy product but also help the marketers to become different from their competitors.

For this company which already have a strong brand and strong history from 1824 (Conor Carroll 2009) which is more powerful to get customers trust and remained loyal customers as well. For example, when a person go to the super market and he wants to buy a soft drink immediately he will think about Coke or Pepsi, as like as in this case when he go to the supermarket and he wants to buy a bar chocolate he may think about Cadbury although the price may higher than others brands but because of the high reputation and quality brand so that consumers will pay a higher price for branded product which they believe it provides a higher value.

Secondly, although Cadbury is a second largest confectionery company it still made a mistake when they did not concerned a lot about safety and security needs of consumers in 2006. According to Conor Carroll (2009), Cadbury be in scandal of salmonella scare in 2006 and Easter chocolate products scandal in 2007. Because of it, Cadbury reputation and benefits at this time was dropped significantly. However, they had fined by the Food Safety Authorities and need to recall the entire products problem.

As a result, Cadbury get over the big two trouble and got it meaning lessons for safety and security products. However, it not only stops by there, they already have an action to get back their reputation from consumers by support more laboratory facilities and scientists to test the product quality and more involve in the social responsibilities. (http://www. cadbury. com/ourresponsibilities/Pages/ourresponsibilities. aspx) Thirdly, for social needs which are more concerned about the environment and social responsibilities than the quality of this product.

Cadbury is not only use the campaigns to encourage their customer’s social consideration but also has a special strategy to stimuli their farmers and workers such as give more bonus and benefits to the workers in Ghana and support the people living around. This is meaningful that when consumer try Cadbury chocolate they may think that they already pay a right price which bring the benefits to the workers and also contribute a small part to support the society.

As a result, this is the best idea for the marketers because when you want to have a strong brand name inside consumers mind you need to concerned more about the social and environment which are the strong strategy to maintain the product brand name and Cadbury did it. Next, some of the Cadbury products and advertisements emphasis the ego needs which is more specific on self-acceptance and self-esteem such as Cadbury already have targeted this concept to teenagers like Cadbury Perk. For this strategy, Cadbury Perk was targeted to the casual snacking which includes chips and wafers.

Moreover, Cadbury Perk contains a message that whenever and wherever teenagers need it always available for their convenient it becomes a new mini snack in this market. Furthermore, for the confectionery market teenagers and children are the majority consumption and the most important of segmenting and positioning. When the teenagers try Cadbury Perk they may feel like this product was born for them and stands for them like young, active and creative life. (Cadbury PLC 2010) Lastly, there is need for self-actualization which is concentrated more on inner thinking such as psychological integration or demand higher level of personal potential.

Hassan (2005) states that generatively, social justice and transformative thinking should be cooperate with this orientation. Thinking towards to Cadbury, we can see that they try to satisfy the customer’s needs as much as they can or even though more than what consumers expected like Cadbury celebrations which was aimed to replace the traditional gift options during festival seasons with a pretty box and nice packaging it really suit for gifting. It is different from others category because it is more formal and luxury which extend consumers needs.

Moreover, Cadbury also have introduced a product for after dinner sweet which main targeting in India. Because in India people have a habit to have a sweet dessert after their dinner and this product can replace traditional sweet which inconvenient and take more time to repair. For this part, the advertisement more focuses on the adults rather than children. From this point, we can see that Cadbury not only segmenting and positioning their product on children but also expand their segmentation to the adults which called as potential customers.

Certainly, in this point their advertisement and packaging are also be different from the product that they target to the children. Model of Motivation Motivation is a theoretical construction from which we can determine the driving force behind human behavior. (Kroeber-Riel and Weinberg 2003, cited in Wohlfeil and Whelan 2006) This, according to Weinberg (1995 cited in Wohlfeil and Whelan 2006), is a combination of both emotional and basic urges to direct behavior and cognitive process to direct the goals and drive to accomplish those goals.

These goals differs also as the customer moves along the decision making process, as the needs and motivations changes will affect how the customer perceives any given information. (Mallalleu and Nakamoto 2008) In the case of Cadbury, the motivations of their customers who purchase their brand off the shelves in departmental stores will be different from those who purchase other brands of chocolate, depending on the segmentation, targeting and positioning of the brands, as they focus to fulfilling different groups of customer’s needs, wants and desire.

Cadbury fulfills many market segments, ranging from milk chocolate, dark chocolate, chocolate flakes, chocolate powder, chocolate drinks and many more. By targeting many market segments, Cadbury aims to provide a sense of convenience, and variety within the same brand, lending the strength of their overall brand equity to all the brands under Cadbury. This benefits the customers as now they could purchase different products under the same brand, which they can be assured of the quality, packaging and taste, without having to take the risk of try other brands to purchase different chocolate products.

Gale 1992; Smith and Park 1992, cited in Morgan and Rego 2009) Higher brand equity allows Cadbury to price their products at a slight premium, despite them competing within the low price segment of the chocolate industry. (Sivakumar and Raj 1997, cited in Morgan and Rego 2009) Cadbury also uses celebrity endorsements, such as Mr. Amitabh Bachchan in India, in order to regain brand equity after worms were discovered in Cadbury chocolates in India. (The Financial Express 2003) Although ultimately, it was later proven that the worms were caused by their retailers bad storage practices in India, their reputation was already tarnished.

However with celebrity endorsement, the celebrity acting as a source lends credibility and attractiveness to the product, giving it familiarity in the process. (Sternthal and Craig 1973, cited in Biswas, Biswas and Das 2006) this motivates the customers by giving them the drive to purchase it when their favorite celebrity endorses the product, and through their cognitive process, any perceived notion of risk is significantly reduced. According to Rao and Monroe (1988), consumers are likely to process more information other than price if they are motivated, to determine the quality of a given product.

This is important as Cadbury often creates contests and advertisements to build involvement in their products in order to motivate consumers to choose their brand. This involvement however only targets the people with specific personal relevance from which the product has on the person involved. (Coulter et al 2003, cited in Wohlfeil and Whelan 2006) Such event marketing allows marketers to provide interactivity, personal sharing of experience with others, and learning more about the brand in an informal and relax way, while in the meantime, circumventing the natural tendency for consumers to ignore corporate messages that appears elsewhere.

Whelan and Wohlfeil 2005; Mc Alexander et al. 2002, cited in Wohlfeil and Whelan 2006) As such, from the motivation perspective, we are able to see how and why Cadbury segmented and targeted multiple segments of the market, used their brand equity to price at a slight premium, and used celebrity endorsement to rebuild brand equity in India, and used contests and advertisements to generate involvement in their brand in an informal and exciting way. Elaboration Likelihood Model (ELM)

Customers can be motivated in many ways, but based on the elaboration likelihood model (ELM), two routes of persuasion are identified – central route and peripheral route (schiffman et al 2009). The concept of this model is to explain the motivation behind consumers purchases and they way to persuade them, as two major type of customers can be found – one with high assessment skills (high involvement) and low assessment skills (Low involvement). However, the success of a company does not come solely through the tampering of marketing elements; it also includes the fostering of a long term relationship between buyer and seller (Ford et al. ited in Zineldin & Philipson 2007). Thus, the next few sections, will describe how Cadbury successfully maneuver its marketing mix, while retaining their customers. But, how does Cadbury appeal to both types of customers mentioned above? Cadbury dairy milk is basically famous among children and teenager, as it is not only affordable, but delicious. Children and teenagers are considered to fall under the category of low assessment skills, as the motivation behind buying Cadbury for them is the craving for sweets (schiffman et al 2009)..

These target group do not concerns on the information of the product , instead, it is the tangible aspect that is the motivation behind, which is to say, this particular group can be persuade through peripheral route. For instance, Celebrity endorsement, Event and advertisement promoted. In addition, variety of assortments in “Dairy Milk’ are introduced in the market to meet changing consumer trends and drive further growth of the UK’s favorite chocolate brand.

For instance, Cadbury Milk Double Choc, Cadbury Milk Fruit and nut, Cadbury Caramel and 10 other types of Dairy Milk are introduced in UK alone in the time span of 100 years (Times Online 2010). The customers’ preferences for Cadbury ‘Dairy Milk’ are the taste, quality and convenience to get a hand of it. That is why the distribution of the chocolate bars and confectionery are important because of the fact that ‘Dairy Milk’ is becoming more of staple and impulse types of good. In France, the chocolate consumption is one of the highest in the world with average of 5. kg per head in 1995 and with the highly competitive market and wide spread price-cutting, retail prices and margins vary widely according to product and outlet company must be efficient in distributing their goods, as the cost of distribution makes up 40-60% of the product cost (Vrontis & Vignali 2001). The other type of persuasion route is central route, which is used to explain on how to persuade customers that have high assessment skill (high involvement), which fall under the target group of adults (Schiffman et al 2009)..

As one grow, they are becoming more conscious of their health and have the perspective that everything that is sweet mean fat and calories. However, the way Cadbury dairy milk appeal to this group is by using the advertisement campaign of 1 ? glass of milk that give a message that one Cadbury bar is contains nutrition and proteins, which is healthy and not healthy deteriorating. In addition, the packaging, design and sizes are being emphasized by the company to accommodate consumers’ demands.

For instance the packaging of Cadbury is being refined in terms of image and resolution to create brand identity and also increase in size variety for Cadbury in 140 g and 230g package. Kate Harding, the trade communication manager for Cadbury commented, “Stores come in all shapes & sizes and we have changed the sizes to suit the needs of our different retailers who can choose a range which will best suit their shopper. ” (Talking Retail 2008) Conclusion Cadbury is a well known chocolate brand dealing with a wide array of chocolate products.

This with their low pricing allows them to extensively penetrate many chocolate market segments. Through the use of Maslow’s hierarchy of needs, model of motivation, and elaboration likelihood model, we are able to see how they are applied to the company in terms of segmentation, targeting and positioning, allowing the company to gain considerable market share, regain lost brand equity through celebrity endorsement, and generate consumer involvement to create better trust and brand familiarity, through informal and exciting approach in teaching the corporate values to their consumers.

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Brand Awareness

BRAND AWARENESS OF INDUSTRIAL PAINTS OF GOA PAINTS & ALLIED PRODUCTS SUBMITTED BY:- Jayalekshmi S. P. PGDM: – TPS 20th BATCH Roll No: – 20024 Corporate Guide Faculty Guide Mr. Ajith Vasudevan Prof. Dr. Madhavi Pandya Deputy General Manager Marketing & Communication

Goa Paints & Allied Products SSIM SIVA SIVANI INSTITUTE OF MANAGEMENT KOMPALLY, SECUNDERABAD ACKNOWLEDGEMENT It gives me immense gratification to place on records my profound gratitude and sincere appreciation to each and every one of those who have helped me in this endeavor. I extend my sincere thanks to Mr. Anirudh Dempo (Director) and my corporate guide Mr. Ajith Vasudevan (Deputy General Manager) of Goa Paints & Allied Products for giving me an opportunity to work on this project under his able guidance.

I am also grateful for the cooperation and valuable support given to me by the employees of the organization throughout my training. I am ineffably indebted to Prof. Dr. Madhavi Pandya, Professor SSIM and my faculty guide for this Summer Internship Program, for her most valuable regular guidance without which my project would not have been completed. I would also like to express my deep sense of gratitude and reverence for my parents and my dear friends for their endless guidance, moral support, encouragement and untiring cooperation throughout my study and work, without which this work would never have been completed.

DECLARATION I Jayalekshmi S. P. , student of Siva Sivani Institute of Management, Kompally hereby declare that the project entitled “Brand Awareness of Industrial Paints OF Goa Paints & Allied Products” is the original work done by me under the guidance of Mr. Ajith Vasudevan, (Deputy General Manager) and Dr. Madhavi Pandya, Professor, Siva Sivani Institute of Management. I further declare that this is my original work as part of my academic course. PLACE: SIGNATURE

DATE: (Jayalekshmi S. P. ) CERTIFICATE CONTENTS ACKNOWLEDGEMENT……………………………………………………………………. 04 DECLARATION………………………………………………………………………………05 CERTIFICATE ……………………………………………………………………………….. 06 TABLE OF CONTENTS PAGE NO Chapter – 1………………………………………………………………………………….. 07 Introduction Introduction Scope of the study Significance of the Study Objectives of the study Literature Review Scheme of Dissertation Chapter – 2…………………………………………………………………………………….. 2 Industry Profile Company Profile Departmental Details Chapter-3…………………………………………………………………………………………. 25 Research Methodology Introduction Research Design Sample Profile Tools and Methods Data Collection Limitations Chapter 4…………………………………………………………………………………….. 29 Data Analysis and Interpretation Chapter-5…………………………………………………………………………………….. 43 Findings Chapter-6……………………………………………………………………………………. 45 Recommendations and Conclusion List of Tables Bibliography……………………………………………………………………………………49 Questionnaire………………………………………………………………………………….. 50 CHAPTER- I * Introduction * Scope of the study * Significance of the Study Objectives of the study * Literature Review * Scheme of Dissertation INTRODUCTION In the last few years the Indian paint sector has significantly developed and quite a lot of global players have shown interest in this market. The country continues to show a strong growth rate, which is sustained by the rising level of disposable income and increasing demand from automotive, industrial and infrastructure sectors. Due to these factors, the industry is expected to achieve a CAGR of around approximately15% from 2012 to 2015. Similar to other fields, there are some challenges which affect the growth of the paint sector.

For example, the industry largely depends on raw materials and hence, any variation in the availability of raw material results in considerable fluctuation in paint manufacturing costs. The market size is around 24,000 crores. Organized sector claims that it is growing at the rate of 18 to 20 per cent. Overall the industry is growing at the rate of 10 to 12 per cent. Infrastructure is a major growth driver. Lot of projects (government & private) is coming up in the infrastructure sector like road construction, building construction, metro rail projects etc.

Secondly, automobile industry is also witnessing good growth. Because of infrastructure and automobile industry there is good growth in industrial finishes and (decorative) architectural finishes. Value wise, around 68 to 70 per cent of the share is held by the organized sector and around 32 to 30 per cent are with the small scale industry. My Industrial Internship Project took place in “Goa Paints & Allied Products” a daughter concern of “Dempo Group of Companies” for a period of 45 days. Goa Paints & Allied Products is mainly into manufacturing and selling of Marine, Industrial and Decorative Paints.

The reason for choosing Paint Industry was out of sheer curiosity to know the different categories and varieties paints available in the market. Besides this I also wanted have brief idea about the steps involved in manufacturing of paints. Thirdly working on this project has given an opportunity to interact with different industrialist and paint dealers and most importantly helped to provide genuine recommendations to improve the sale and of Industrial Paints of Goa Paints & Allied Products. SCOPE OF STUDY To know the criteria in buying Industrial paints. * To make the customers aware of the different Industrial paints of Goa Paints & Allied Products available. * To understand the factors leading to the selection of Industrial paints. SIGNIFICANCE OF THE STUDY * The company can deploy sales resources to build or leverage brand awareness. * The company can know how to adjust brand- building investment according to the sectors. * The company will know the preference of the consumer & retailers towards the paint sector. OBJECTIVES OF THE STUDY Brand Awareness of Industrial Paints of Goa Paints & Allied Products” * To identify the consumer awareness about Goa Paints & Allied Products * To know the leading brand of Industrial Paints in Indian Paint sector * To know the criteria’s used by consumers, retailers and dealers in selecting/ buying paints * To identify the factors leading to the selection of Industrial Paints ON THE JOB TITLE To understand the product knowledge and purchase behavior of industrial Paint users OJT DESCRIPTION * To create and maintain an effective awareness and sales of company products and servives among end- users and distributors. Visiting potential customers for new business * To gather market and customer information and providing feedback on future buying trends. * To identify new market and business opportunities * To initiate market research studies and analyzes their findings to understand the preferences of the customer * Maintain appropriate interaction with sales and other supporting teams to meet the customer needs ON THE JOB TITLE OBJECTIVE To make the customers aware about the Industrial Paints of Goa Paints & Allied Products LEARNING FROM OJT This study helped to identify the most widely used Industrial Paints.

To understand the criteria used by the customers to select Industrial Paints. To know the factors influencing the selection of Industrial Paints by the customers. Interacting with the employees in the organization has helped me to understand the corporate communication system and improve my interpersonal skills. LITERATURE REVIEW Brand A name, term, design, symbol, or any other feature that identifies one seller’s good or service as distinct from those of other sellers. The legal term for brand is trademark. Why Brand? A brand name helps an organization differentiate itself from its competitors.

In today’s competitive world no product can go without a brand. Customers often build up a relationship with a brand that they trust and will often go back to time and time again. For example, some people may only purchase Asian Paints although there are acceptable alternatives on the market, because of a past positive history with this brand. Brand Awareness Brand awareness refers to customers’ ability to recall and recognize the brand under different conditions and link to the brand name, logo, and jingles and so on to certain associations in memory. It consists of both brand recognition and brand recall.

It helps the customers to understand to which product or service category the particular brand belongs and what products and services are sold under the brand name. It also ensures that customers know which of their needs are satisfied by the brand through its products (Keller). Brand awareness is of critical importance since customers will not consider your brand if they are not aware of it. There are various levels of brand awareness that require different levels and combinations of brand recognition and recall. Top-of-Mind is the goal of most companies.

Top-of-Mind Awareness occurs when your brand is what pops into a consumers mind when asked to name brands in a product category. For example, when someone is asked to name a paint company, the common answer is “Asian Paints or Berger Paints” which is a top-of-mind brand. Aided Awareness occurs when a consumer is shown or reads a list of brands, and expresses familiarity with your brand only after they hear or see it as a type of memory aide. Strategic Awareness occurs when your brand is not only top-of-mind to consumers, but also has distinctive qualities that stick out to consumers as making it better than the other brands in your market.

The distinctions that set your product apart from the competition are also known as the Unique Selling Point or USP. SCHEME OF DISSERTATION This research has been carried out on “Brand Awareness of Industrial Pints of Goa Paints & Allied Products. For this market research, different Industrial Estates were visited. The scheme comprises of finding the awareness of Industrial paints by its users. This study is carried out to find most widely used Industrial Paints and Brand by taking sample size of 50.

The layout of the dissertation is as follows; Introduction: Introduction gives a brief idea about paint industry, scope of study, significance of study, objectives of study and literature review part. Organization Profile: This part comprises of industry profile and company profile. Research methodology: This part give an idea about research design, sample size/design, tools & method of data collection as well as limitations of the study. Analysis and Interpretations: This part tells about data analysis, method carried out for data analysis and interpretations from the analysis part.

Discussions and Recommendations: This part gives an idea about some inputs to explore some other parts of research for further studies and tells about which part is necessary for more focused research. Bibliography and Annexure: This part comprises of references taken for this study and questionnaire which was framed for this study. CHAPTER-II * Industry Profile * Company Profile * Departmental Details INDUSTRY PROFILE History of Paints Throughout history colour has captivated culture, every age as well as region has produced dyes and pigment subjected to the obtainable resources.

For more than 20,000 years color has remained with us. Early cave paintings and the primeval Chinese are considered to have brought its manufacture and use to a state of perfection 10,000 of years ago. In 1500 BC colour was extensively used by the primeval Egyptians and was considered to have mystic and medicinal properties. With the Egyptians fleeting their talents to the Romans, paint manufacturing as an art became moderately and extensively established in Crete and Greece. Varnishes were introduced by the Greeks and Romans between 600 BC-AD 400.

Indians as well as Chinese practiced Colour Healing. Development of paints and varnishes grounded on the gum of the acacia tree (better known today as gum Arabic) was done by 1000 B. C. Prior to the 16th century; pigment colour was mostly reliant on dyestuffs which could be grown Europe and similar clement areas. Natural dyestuffs were available between 1550 and 1850 however the assortment was prominently comprehensive with tropical dyestuffs from Central America and India and elsewhere. The first real synthetic dye, ‘Mauveine’, was discovered by Henry Perkins in1856.

It was thus comprehended that a lot of dyes could be made synthetically and cheaply. In the 1870’s industrialists produced the first washable paint using cast-iron paint mills and zinc-based pigments known as ‘Charlton White’. The Sherwin-Williams company expended 10 years trying to perfect the formula where fine paint particles would stay suspended in Linseed oil. In 1880 they thrived in emerging a formula that surpassed the quality of all paints available at the time. Thus emulsions based on analogous formulae, were manufactured and sold as ‘oil bound distempers’.

Finally by 1880 the new paints were readily available in tins, in a wide array of colours, and came to be exported all over the World. Paint ; Its Components Paint is any liquid or resin composition which, after application to a substrate in a thin layer, is transformed to a solid film. It is most commonly used to protect color or provide texture to objects. The 3 major components of paints are: * Binder/ Resins: The binder, also called the resin, is the film-forming component of paint. It is the only component that must be present.

It imparts adhesion and provides properties such as gloss, durability, flexibility, and toughness. Binders comprises of synthetic or natural resins like alkyds, acrylics, vinyl-acrylics, vinyl acetate/ethylene, polyurethanes, polyesters, melamine resins, epoxy, or oils. * Solvent/ Diluent: The key purposes of the solvents are to dissolve the polymer and adjust the viscosity of the paint. It is volatile and does not become part of the paint film. It also controls flow and application properties, and in some cases can affect the stability of the paint while in liquid state.

Its main function is as the carrier for the non-volatile components. These volatile substances impart their properties temporarily—once the solvent has evaporated, the remaining paint is fixed to the surface. This component is optional. * Pigment/ Filler: They are coarse solids amalgamated in the paint to impart color. Fillers are granular solids incorporate to impart toughness, texture, give the paint special properties, or to reduce the cost of the paint. Alternatively, some paints contain dyes instead of or in combination with pigments.

In addition to the above components, paint can have an extensive range of various additives, which are generally added in small amounts. It provides substantial effects like modify surface tension, improve flow properties, improve the finished appearance, increase wet edge, improve pigment stability, impart antifreeze properties, control foaming, control skinning, etc. Types of Paints * Distemper: Its water based paint that comprises of chalk, lime, water and some coloring agents, if required. It’s also known as whitewashing. * Emulsions: They are also water based paints.

The distinctive aspect about emulsion is that it offers a rich and matt finish to the interior walls. It also provides durability to the painted surface. * Functional Paints: These paints have specific functions like eliminating insects, bacteria, and fungus or dust mites. They come with an in-built safe and non-toxic mechanism which though harmless to humans, is fatal for insects, fungus and bacteria. * Oil Based Paints: They are extremely durable and prove to be an excellent choice for inner walls. However, oil-based paints have a strong odor that might act as a disadvantage to their popularity. Latex Paints: They do not fade away easily and contains light odor or smell as compared to oil-based paints. These paints are fast drying, do not peel off or crack and require just water for thinning also cleans up purpose. * Enamels: It is one of the oil based paint, with better adhesion qualities. It is much durable and stain resistant and provides a smooth and cheerful effect to the surface. The main advantage of enamels is that they dry without leaving any brush marks. * Vinyl-Acrylic Latex Paints: These are the least expensive paints available in the market and are suitable for most of the interior walls.

Vinyl-Acrylic latex paints are durable and come with better adhesion quality. * Cement Based Paints: Cement based paints are a kind of water paints that is applied on the peripheral surface of the house. These paints are highly water resistant and give a fine outcome on new concrete surface. * Varnish: They resemble oil paints, but do not contain color pigments like oil paints. It provides a transparent film when dry, unlike oil paints. The paint flows out after it has been applied, removing any brush marks. Made out of linseed oil and a fossil gum, it is ideal for furniture, floors and for exterior and interior woodwork. Lacquer: It is a paint made from nitrocellulose and gives a very quick-drying finish. This should not be applied over oil paints and varnishes, as it acts as a remover and softens the undercoat. It gives an ideal finish for metal work like brass, which would otherwise tarnish, if left alone. Indian Paint Industry The Indian Paint industry has been mounting at a rate of above 15% for the past few years and estimated to be an Rs. 21, 000 Cr. industry. The organized players of the industry cater to about 65% of the overall demand, whereas the unorganized caters to 35%, in value terms.

The latter primarily dominate the distemper segment. The industry consists of two segments * Decorative segment – caters to the housing sector and * Industrial segment – consists of powder coatings, floor coatings and other protective coatings catering to the automobile, marine and other industries. In the domestic market, Decorative segment accounts for 70% of the total demand for paints whereas the industrial segment accounts for the remaining 30%. Globally, the demand for paints is almost equally distributed, where both the segments account for close to 50% of demand.

The working of the Paint industry The top 5 companies make up more than 80% sales of the organized market. The market share of the organized sector is continuously improving as consumer preference is shifting towards better products offered by the leading brands. Established Foreign companies have entered the Indian market by acquiring existing Indian companies. Kansai Paints, Japan entered the Indian Market by acquiring Nerolac, Akzo Nobel, the world’s largest Paint Company, entered the Indian market by acquiring ICI Paints (now Akzo Nobel India. ) Growth Drivers * Increasing level of income and education Increasing Urbanization: * Increasing share of organized sector: * Development of the Realty, Automobile and Infrastructure sector: * Availability of financing options: * Increasing Penetration in the Rural Markets Problems Faced * Soaring Cost of raw materials * MNC’s entering the Indian Paint Market Future Outlook The Indian paint Industry has a wide potential for growth which is demonstrated by the fact that the per capita consumption of paint in India is merely around 1 kg as compared to about 20 kg in the developed countries or a global average of about 15 kg.

So, the absolute consumption of paint in India is definitely expected to rise. The market share of the organized sector is on an increasing trend. Also, the contribution of industrial segment will increase with the continuing economic development of the country. With India moving towards becoming a developed economy, the decorative to industrial paint ratio of 70:50 is expected to move towards the global average of 50:50. Thus the Indian paint industry is in its growth phase and is expected to grow at a rate faster than that of GDP. The future prospects of the industry are strong.

COMPANY PROFILE Date of Incorporation: 31st March 2005 Commencement of Business:1st June 2005 Industry Type: Manufacturing Headquarters: Patto Plaza, Panaji Goa Factory: Kundaim Industrial Estate Key People: Mr. Jaiprakash Dempo (Managing Director) Mr. Anirudh Dempo (Director) Products: Epoxy, Polyurethane, Alkyd and CR paints Brand: Galaxy ; Galaxite Total no of Employees: 100 C;FA: Kochi, Ettumanoor, Port Blair, Pune, Hyderabad, Vishakhapatnam. Branches: Mumbai, Ahmedabad, Hubli Export: In 2011 to South Africa, Kenya, Afghanistan, Nigeria, Mozambique Parent: Dempo

Website: http://www. goapaints. net/ Mission: To supply highest standard of specialized paints and coatings as per the customers specific needs while maintain quality, consistency and on time delivery. Vision: Goa Paints is dedicated to building a world where industry, humanity and environment co-exist in harmony, ensuring rust free, and weather-proof, scratch-proof and long lasting surfaces. Goa Paints and Allied Products is a leading manufacturer and supplier of Marine and Industrial coatings, an ISO 9001:2008 certified firm. It was established in 1969, through collaboration with M/s.

Hempel Marine Paints, Holland, by supplying marine paints to barges operating in Goa. The success in marine paints lead to development and production of many more products in different categories and for different uses. GOA PAINTS AND ALLIED PRODUCTS expanded its operations by adding more machinery. Further formulations were added to the range through collaboration with M/s. Chugoku Marine Paints, Japan. The company operates from its state-of-the-art plant at Kundaim, Goa having a capacity in excess of 200,000 litres per Month.

It ensures the highest quality and standards through a team of highly qualified and experienced paint technologists and a well-equipped laboratory consisting of latest analysis instruments. The company has a prestigious list of loyal customers like * Indian Defence, * Mazgoan Dock Limited, * Goa Shipyard Limited, * Sesa Goa, * Grasim India, * Larsen ; Toubro, Etc. Range of surface coatings are widely used for the following applications: * Marine * Pipelines * Defence * Infrastructure * Automotive * Power Range of surface coatings include * Industrial * Marine High performance / heavy duty coatings and * Pipeline coatings Products I. Specialty Paints: Paints for special requirements such as fire retardants, heavy duty– nonskid coatings ; antifouling paints. * Galaxy Intumescent Fire Retardant * Galaxy Heavy Duty Non Skid Epoxy * Galaxsil 1045 * Galaxy Heat Resisting Aluminium Paints * Shipguard Premium (Antifouling) * Solventless Epoxy Coatings * Silicone Acrylic Coatings II. Epoxy Coatings: Epoxy coatings are two pack thermosetting coating with excellent corrosion protection in chemical and saline environment.

It is suitable for high build application and has strong solvent resistance. * Galaxy Epoxy Red Oxide Primer * Galaxy Epoxy Zinc Rich Primer * Galaxy Epoxy Universal Primer * Galaxy Epoxy HB Finish 6690 * Galaxy Epoxy Coal Tar Black * Galaxy Epoxy Mastic 6606 * Galaxy Unikote Black III. Polyurethane Paints: PU is a popular choice for finish coats as it has excellent colour retention, durability and abrasion resistance. * Galaxy PU finish 7601 (All colours) * Galaxy PU Clear coat (Glossy/Matt) * Galaxite HP Auto Finish 7605 * * IV.

Chlorinated Rubber Coatings: CR coatings are used for immersion services and in places of temperature fluctuation. They demonstrate excellent chemical resistance and have fast drying times. * CR Primer and Finish * CR Tar Sealer Coat * CR High Build Al Primer * CR MIO Paint * CR Antifouling * V. Alkyd based Enamels and Primers: Made from Oil modified polyester resins,  alkyd based paints provide an excellent durable coating with good colour retention providing an economical painting solution in moderately corrosive environment. * GALAXITE Super Synthetic Enamel * GALAXY Marine Gloss Enamel GALAXY Steel Furniture Enamel * GALAXY Synthetic Enamel * Red Oxide Zinc Chrome Primer (IS 2074) * Zinc Phosphate Primer Grey * Cement/Wood Primer DEPARTMENT DETAILS Managing Director Managing Director DGM- Operations DGM- Operations Director Director RDD RDD QC QC Finance Finance Purchase Purchase Plant Mgr. Plant Mgr. Admin HR Admin HR Sales Admin. Sales Admin. Jr. Sales Officer Jr. Sales Officer Sr. Sales Officer Sr. Sales Officer Resin I/C Resin I/C Stores I/C I/C Stores I/C I/C Despatch I/C Despatch I/C Maintenance I/C Maintenance I/C Production I/C Production I/C

Functioning of Sales Department * Sales Administration (On the Job) Mr. Suryaji Chari ( Marketing Officer) and Mr. Kishore Vaingankher (Sales Coordination Officer) are responsible for quoting tenders, follow up on enquiries send by customers, send quotations, generate indent and follow up on payments. * Sales ; Marketing (On the Field) Mr. Nagesh Joshi (Sr. Sales Officer) and Mr. Manjunath B. (Jr. Sales Officer) are responsible for meeting clients on both Industrial and Marine Segment, follow up on payments and provide technical assistance to the customers. CHAPTER-III Introduction * Research Design * Sample Profile * Tools and Methods Data Collection * Limitations INTRODUCTION According Webster (1985), to research is to search or investigate exhaustively. It is a careful or diligent search, studious inquiry or examination especially investigation or experimentation aimed at the discovery and interpretation of facts, revision of accepted theories or laws in the light of new facts or practical application of such new or revised theories or laws, it can also be the collection of information about a particular subject. Research Methodology:

The research methodology is a frame work that is used to collect data from various industries, to know the opinion of the consumer regarding the study that is being done . This frame work makes it easy for the collection of data from an inference can be drawn. SAMPLE PROFILE Sampling refers to the method of selecting a sample from a given universe with a view to draw conclusions about that universe. A sample is a representative of the universe selected for study. Sampling Unit: The survey was targeted to Industrial paint users. Sample Size: The total sample size taken for the research is 50 different Industrial estates.

Sampling Technique: Random sampling technique was used in the survey conducted. Random Sample: This may be the most important type of sample. A random sample allows a known probability that each elementary unit will be chosen. For this reason, it is sometimes referred to as a probability sample. This is the type of sampling that is used in lotteries and raffles. For example, if any customers want to select 10 players randomly from a population of 100, customers can write their names, fold them up, mix them thoroughly then pick ten. In this case, every name had any equal chance of being picked

TOOLS ; METHODS OF DATA COLLECTION There are mainly two types of data Primary Data: It is collected by conducting survey in 50 Industrial estates with the help of close ended questionnaire. Secondary Data: The data that is acquired from books and different articles from the net. Primary method: The main source of collection data for this project is primary method. The survey was completed with the help of questionnaires and direct interaction with the customers. Secondary method: The sources of collection of secondary data are: * Books * Articles LIMITATIONS

Though there was a sincere attempt to conduct the survey in the most efficient and scientific possible manner, but every research has its own limitations. Limitations are the extent to which a project should not exceed. The limitations of the survey are as follows: * Customers ; retailers have only partial knowledge about Industrial Paints * The respondent of the questionnaire could not spare much time to answer. * Industrial estates are located quite far, so it was difficult to cover all the customers ; retailers. * The Sample Size being taken for drawing a conclusion was too small to get an accurate result. The data was of primary nature. So the degree of biases was relatively high. * The project has to be completed in 6-7 weeks, which is not enough time to cover the market. So time was the major constraints in conducting the study. CHAPTER-IV * Data Analysis and Interpretations DATA ANALYSIS Data are collected from the following Industrial Estates of Goa: * Bethora Industrial Estate * Bicholim Industrial Estate * Kundaim Industrial Estate * Margao Industrial Estate * Sancoale Industrial Estate * Tivim Industrial Estate * Verna Industrial Estate * Zuari Industrial Estate

Survey Analysis: The sample size is 50 which includes the survey of Industrial Paint consumers from the above mentioned estates as well retailers. Research Objective I: To identify the source of awareness about Goa Paints ; Allied Products for the customers Table-I | Type of organization| Source of awareness| Total| | Salesman| Other| | | Furniture ; steel| | 0| 2| 2| | | | . 0%| 100. 0%| 100. 0%| | Plumbing ; mechanical| | 0| 5| 5| | | | . 0%| 100. 0%| 100. 0%| | Electrical| | 2| 2| 4| | | | 50. 0%| 50. 0%| 100. 0%| | Logistic| | 1| 1| 2| | | | 50. 0%| 50. 0%| 100. 0%| | Hardware| | 2| 5| 7| | | | 28. %| 71. 4%| 100. 0%| | Construction| | 2| 7| 9| | | | 22. 2%| 77. 8%| 100. 0%| | Leather ; chemical| | 0| 2| 2| | | | . 0%| 100. 0%| 100. 0%| Total| | 7| 24| 31| | | 22. 6%| 77. 4%| 100. 0%| INFERENCE: It can be concluded from the above table that in Furniture ; steel, Plumbing ; mechanical and Leather ; chemical industry other source of awareness contributes 100% whereas in Electrical and Logistic both salesman and other source of awareness contributes 50% each. In Hardware sector 28. 6% of the awareness is through salesman and the rest 71. 4% through other whereas for construction sector 22. % and 77. 8% by salesman and other source of awareness respectively. It is also clearly evident from the above table that altogether 22. 6% of the awareness about Goa Paints is done by salesman and the rest 77. 4% by other source. Research Objective II: To identify the sectors willing to have contract with Goa Paints ; Allied Products Table- II Type of organization| Contract| Total| | Yes| No| | | Furniture ; steel| | 1| 3| 4| | | | 25. 0%| 75. 0%| 100. 0%| | Plumbing ; mechanical| | 2| 7| 9| | | | 22. 2%| 77. 8%| 100. 0%| | Electrical| | 3| 5| 8| | | | 37. 5%| 62. 5%| 100. 0%| | Logistic| | 0| 3| 3| | | . 0%| 100. 0%| 100. 0%| | Hardware| | 2| 6| 8| | | | 25. 0%| 75. 0%| 100. 0%| | Construction| | 3| 11| 14| | | | 21. 4%| 78. 6%| 100. 0%| | Leather ; chemical| | 2| 2| 4| | | | 50. 0%| 50. 0%| 100. 0%| Total| | 13| 37| 50| | | 26. 0%| 74. 0%| 100. 0%| INFERENCE: It can be interpreted from the above table that in the case of both Furniture ; steel and Hardware industries 25% of the unit would like to have a contract with Goa Paints whereas 75% of the units are not willing. Out of 100%o only 22. 2% of the Plumbing ; mechanical unit are willing to have contract. In case of Electrical industry only 37. % are interested for the contract. Logistic industry is unwilling to have contract. 21. 4% of the Construction Company and 50% of the Leather ; chemical industry are also willing to have contract with the company. Thus as a whole 26. 0% of the companies want to have a contract with Goa Paints and 74. 0% of the companies are unwilling to have a contract with the company. Research Objective III: To know the leading brands of Industrial Paints in Indian Paint sector Table- III | | N| Minimum| Maximum| Mean| Std. Deviation| Asian Paints| 50| 1. 00| 2. 00| 1. 1000| . 30305| Berger Paints| 50| 1. 00| 3. 0| 1. 9800| . 51468| Nerolac Paints| 50| 2. 00| 4. 00| 3. 2400| . 51745| Goa Paints| 50| 2. 00| 4. 00| 3. 6400| . 63116| | | | | | | INFERENCE: In the above table the major players in the paint sector are being compared with Goa Paints to know its market share. It is seen that Asian Paint has the mean of 1. 1000. Berger Paints, Nerolac Paints and Goa Paints have a mean of 1. 9800, 3. 2400 and 3. 6400 respectively. Here the lower means implies that it’s given the highest preference buy the consumer, therefore Asian Paints is given the 1st ranking and Goa Paints the 4th as it has the highest mean.

Research Objective IV: To know the criteria’s used by consumers, retailers and dealers in selecting/ buying paints Table- IV | N| Minimum| Maximum| Mean| Std. Deviation| Recommendation by expert| 50| 1. 00| 4. 00| 2. 4600| 1. 28110| Past performance of the paint| 49| 1. 00| 4. 00| 2. 1837| . 88208| Self-monitoring of the product| 50| 1. 00| 4. 00| 2. 3000| 1. 09265| Brand name of the paint company| 50| 1. 00| 4. 00| 3. 0600| 1. 01840| Friends advice| 50| 5. 00| 5. 00| 5. 0000| . 00000| | | | | | | INFERENCE: It is quite evident from the above table that past performance of the paint has the lowest mean that is 2. 837 followed by self-monitoring of the product with a mean of 2. 3000, recommendation by expert has a mean of 2. 4600, brand name of the paint company3. 0600 and friends advice has the highest mean i. e. 5. 0000. This clearly indicates the parameter with the lowest mean i. e. past performance has been given the highest ranking in selecting the paint subsequently self-monitoring of the product and the least preference is given to friends advice while selecting/ buying paints. Research Objective V: To identify the factors leading to the selection of Industrial Paints Table- V (Paint Related) N| Minimum| Maximum| Mean| Std. Deviation| Performance of the paint| 50| 1. 00| 1. 00| 1. 0000| . 00000| Price of the paint| 50| 1. 00| 4. 00| 1. 6400| . 87505| Quality of the paint| 50| 1. 00| 2. 00| 1. 0200| . 14142| Shades of the paint| 50| 1. 00| 12. 00| 2. 1000| 1. 71726| Safety of the paint| 50| 1. 00| 3. 00| 1. 6000| . 57143| Packaging of the paint| 50| 1. 00| 4. 00| 1. 4400| . 76024| Range of the product| 50| 1. 00| 5. 00| 1. 8400| . 81716| | | | | | | INFERENCE: For selecting/ buying paints seven different parameters as shown in the table has been ranked by the consumer.

Performance of the paint has given the mean of 1. 0000, Price of the paint 1. 6400, Quality of the paint 1. 0200, Shades of the paint 2. 1000, Safety of the paint 1. 6000, Packaging of the paint 1. 4400 and Range of the product with a mean of 1. 8400. Here the consumer has given the highest priority to Performance of the paint secondly Quality of the paint and thirdly Packaging of the paint while selecting/ buying the paints. Consumers give the least preference to the Shades of the paint and the Range of the product. Table- VI (Service Related) | N| Minimum| Maximum| Mean| Std. Deviation|

Customer friendly attitude of the salesmen/ dealers| 50| 1. 00| 4. 00| 2. 3600| . 66271| Product knowledge of the salesmen/ Dealers| 50| 1. 00| 3. 00| 1. 8200| . 62890| Proper communication and follow up| 50| 1. 00| 3. 00| 1. 8800| . 52060| Complaint handling/ Assistance| 50| 1. 00| 3. 00| 1. 7400| . 52722| Delivery time| 50| 1. 00| 2. 00| 1. 2000| . 40406| Availability of the product| 50| 1. 00| 2. 00| 1. 2000| . 40406| | | | | | | INFERENCE: As depicted in the above table six different parameters are being evaluated to find the factor that contributes most to the service.

The least mean i. e. 1. 2000 is scored by Delivery time and Availability of the product which indicates that they are the highest preference in the service category followed by Complaint handling/ Assistance and Product knowledge of the salesmen/ Dealers with a mean of 1. 7400 ; 1. 8200 respectively. The lowest ranking is given to Proper communication and follow up and Customer friendly attitude of the salesmen/ dealers. Table- VII (Company Related) | N| Minimum| Maximum| Mean| Std. Deviation| Reputation of the company| 50| 1. 00| 3. 00| 2. 0400| . 3299| Brand name of the company| 50| 1. 00| 4. 00| 1. 9800| . 55291| company has well developed agency and network| 50| 1. 00| 4. 00| 2. 1600| . 79179| Past performance of the product| 50| 1. 00| 4. 00| 2. 1200| . 65900| | | | | | | INFERENCE: The above table indicates the parameter that contributes to the Company. Here the factor with the mean of 1. 9800 i. e. Brand name of the company is given the 1st ranking by the paint consumer. Reputation of the company and Past performance of the product takes the second and third ranking with the mean of 2. 0400 and 2. 1200 respectively.

The last preference is given to company has well developed agency and network with the highest mean of 2. 1600. Thus the factor with the lowest mean of 1. 9800 is given the highest priority. CHAPTER-V * Findings ss FINDINGS * It is found that only 22. 6% of the consumer are aware about Goa Paints are through salesman and the rest 77. 4% by other source. * Only 26. 0% of the companies are willing to have contract with Goa Paints whereas the rest 74. 0% of the companies are unwilling. * Goa paints ; allied Products is rated only as an average paint company with Asian Paint being rate as excellent. While buying or selecting paints consumers gives the highest priority for performance of the paint followed by self-monitoring of the product and the least preference is given to friend’s advice. * In paint related segment highest importance is given to the performance and quality of the paint * In service related segment the highest priority is given to the timely delivery of the product and it availability. * As far as the company is concerned the consumers gives high preference to brand name, reputation and its developed agency. CHAPTER- VI * Recommendations * Bibliography Annexure * Questionnaire RECOMMENDATIONS * Sales promotion department should be formed to formulate and implement new market strategies to compete with competitors and extend market share. * For increasing the brand awreness, the company should have to effectively pay more attention on advertisement * In order to strengthen its networking the company should conduct seminars for paint users, as most of the consumers are unaware about its usage. Company should also initiate to make the consumer know about the latest development in the paint industry as well as their products. The company should mandatorily make its product manual available for all the users. * The company should concentrate on developing new agents to reach out to the prospective consumers. * Ensure that both the sales representative and dealer maintain perpetual relationship with consumers. Maintain long term relation with key dealers to promote our products * The company should collect feedback from the customers using their products so as to know their valuable opinion and suggestions. * The company should take proper care of the satisfied customers so that they do not shift to other companies. The company should make its product available in smaller cans and improve upon the packaging of its product. * To maximize recognition and positive impression the company should use logo and taglines. * Hiring display windows in the existing retail shops should be more effective to let consumer about the brand. * The company must improve on the training of the personnel’s as the customers are skeptical about the new product offerings. * The details provided about the company in its website must be updated. CONCLUSION

Working on this project was an enriching experience for me. The research has helped me to understand and know the operations of Paint Industry, the major players in the industry, various factors that lead to selection of paints and the different types of paint used. This project has given me the opportunity to implement the suggestions, so as to improve the sales of Industrial Paints and reach out to its potential customers. In this highly competitive industry it is very difficult to maintain leading position but there is definitely a scope for improvement.

Though Goa Paints & allied Products is one of the leading brands in Marine Paint segment in Goa but it needs to develop its network to capture the market demanding Industrial Paints. The research has helped to find out that advertising of the products is not effective, so there is a constant hammering needed for the ultimate customers to recognize the brand. It is imperative that Goa paints & Allied Products. fill this little chinks in its armor so that it can maintain its leadership in the coming years when the competition is set to hot up with many new private players set to enter the market.

BIBLIOGRAPHY BOOKS REFFERED:- Philip Kotler, Kevin Lane Keller, Abraham Koshy, Mithileshwar Jha (2009), Marketing Management, 13th edition, Pearson education, New Delhi G C Beri (2005), Business Statistics, 2nd Edition, Tata McGraw- Hill, New Delhi. WEBSITES REFFERED :- http://www. brendasemanick. com/art/historyofpaint. htm http://en. wikipedia. org/wiki/Paint http://lifestyle. iloveindia. com/lounge/types-of-paint-8761. html http://stockshastra. moneyworks4me. com/paints-indian-paint-industry-analysis-and-research-report-2011/ http://www. goapaints. net/ QUESTIONNAIRE Dear Sir/Madam,

I am currently engaged in a study of Brand Awareness of Goa Paints & Allied Products. In this connection I request you to read the following questionnaire carefully and answer them. The answers given by you will be held confidential and used purely for academic purpose. Please put a tick mark in the square ? corresponding your choice. I thank you for your time. PART 1: Personal Details 1. 1) Name: 1. 2) Designation: 1. 3) Organization: 1. 4) Address: 1. 5) Contact No: PART 2: Paint Related 2. 1 and 2. 3 2. 1) How often do you buy paints? ? Daily ? Weekly Monthly ? Quarterly ? Annually ? Semi- Annually ? Occasionally 2. 2) What is the first company that comes to your mind when you think of Industrial and Marine Paints? ———— 2. 3) Which Industrial Paint/s are you using? ? Epoxy ? Polyurethane ?Chlorinated Rubber ? Synthetic enamel/ Convention paint ?Any other 2. 4) How familiar are you with Goa Paints and Allied Products? ? I buy their products on a regular basis ? I buy their product occasionally ? I’ve heard of them, but never brought their product I’ve never heard of them If the answer is from 1st 3 options then 2. 5) How did you come to know about Goa Paints and Allied Products? ?Souvenir ? Dealers ? Salesmen ? Web-site ? Others 2. 6) Are you satisfied with the existing range of products available in Goa Paints and Allied Products? ?Highly satisfied ?Satisfied ?Not sure ?Dissatisfied ?Highly dissatisfied 2. 7) If satisfied, You prefer to buy Goa paints and allied products due to (Rank from 1 to 5) ? Superior Quality ? Diversified Products ? Reasonable Price ? Value added Service ?

Timely delivery (1-1st, 2-2nd rank so on…. ) 2. 8) If the Goa Paints conducts a seminar about and its methods to aplly would you like to attend it? ?Yes ? No 2. 9) Would you like to have a contract with the company? ?Yes ? No PART 3: Selection Criteria Related 3. 1) Rank the brand as per the rating scale ? Asian Paints ? Berger Paints ? Nerolac Paints ? Goa paints and Allied Products (1-Excellent, 2- Very Good, 3- Good, 4- Average) 3. 2) How do you select/ buy paints? (Rank from 1 to 5) ?Recommendation by experts’ ? Self-monitoring of the products ?Past performance of the product ? Friends advice Brand name of the paint company (1-1st, 2-2nd rank so on…. ) 3. 3) There are many factors that could affect your selection of Paints and Specific Company . Please indicate importance of the following in your decision | Highly Important| Important| Somewhat Important| Not very Important| Not at all Important| I. Paint Related | | | | | | a) Performance of paint| ? | ? | ? | ? | ? | b) Price of the paint| ? | ? | ? | ? | ? | c) Quality of the paint| ? | ? | ? | ? | ? | d) Shades of the paint| ? | ? | ? | ? | ? | e)Safety of using the paint| ? | ? | ? | ? | ? | f)Packaging of the product| ? | ? | ? | ? | ? | g) Range of products| ? ? | ? | ? | ? | II. Service related| | | | | | a) Customer friendly Attitude of the salesmen/ dealers| ? | ? | ? | ? | ? | b) Product knowledge of the salesmen/dealers| ? | ? | ? | ? | ? | c) Proper communication and follow up| ? | ? | ? | ? | ? | d)Complaint Handling/Assistance| ? | ? | ? | ? | ? | e)Delivery time| ? | ? | ? | ? | ? | f) Availability of the product| ? | ? | ? | ? | ? | III. Company Related| | | | | | Reputation of the company| ? | ? | ? | ? | ? | Brand name of the company| ? | ? | ? | ? | ? | Company has well developed agency and network| ? | ? | ? | ? | ? | Past performance of the company| ? | ? | ? | ? | ? |

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Free Essays

How to Make Kool-Aid

There are five simple steps on how to create this candy tasting drink. Choosing the proper packet of flavoring is the first step in making Kool-Aid. Check your local grocery store’s shelf for a variety of flavors, from Mountain Berry Punch to Tropical Blue Hawaiian. They are very cheap, usually under 65 cents. After choosing the flavor that suits you, the second step is making sure you have the correct and necessary equipment for making Kool-Aid. You will need a two-quart pitcher.

Next, find a long spoon, a one-cup measuring cup, a water faucet with drinkable water, white sugar, and an ice tray full of ice. Then, you are ready to mix the Kool-Aid. Third, grab the left edge of the kool-Aid packet between your thumb and index finger. With your other hand, begin peeling the upper left corner until the entire top of the envelope is removed. Next, dump the mix powder of the envelope into the two quart pitcher. The powder will float before settling on the bottom of the pitcher. Then, take the measuring cup and scoop two cups of white sugar into the pitcher.

At this point you will be adding the water next. Place the pitcher under the water faucet and slowly turn on the cold water. After the pitcher is filled within two inches of the top, turn the water off and prepare to stir. With the long spoon inside the pitcher, stir in a clockwise motion until all of the powder is dissolved. Taste it. If the Kool- Aid is not sweet enough for you, feel free to add as much sugar as you please. Fourth, when you are finishing the Kool-Aid to your liking, rinse off the spoon and the measuring cup.

Take a eight to 32-ounce cup and add ice. Then fill the glass with Kool-Aid. Go to your favorite lazy-boy chair, put your feet up, turn on the Football game that’s going on and drink away. After all, Kool-Aid makes the world go round. There are many other ways and methods of making different types of Kool-Aid. You can go ahead and try it my way or you could always go online and check out all the other different ways to make this delicious drink. Whether it is just for the family, work, or for parties.

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Free Essays

Culture Jamming

Since the 1980s, large corporations released their success lies in generating brands, rather than manufacturing products. Large corporations use global markets to move manufacturing from rich countries to poor countries, where labour is low and there are no regulations. Large corporations use globalization to build their own brands, but failed to release that globalisation can be used to harm the brand. A brand is away of life, an attitude, set of values, and ideas. Corporations use branding as marketing strategy to sell products and services.

The Nike brand is one of the most successful brands in the world, and it depicts the power of large corporations. Some of the practices done by Nike encouraged people to launch anti-Nike campaign: working condition, using child labour, and moving manufacturing to low wage countries. Culture jamming is the practice of using the media to alter the meaning of one message into another. The aim of culture jamming is to uncover the deeper truth behind the techniques that are used by corporations to dominate people’s way of life.

Many jammers believe that corporations’ dominance of the media has devalued the right to free speech. Rodriguse de Gerada argues that the ability of corporations to dominate the media has allowed corporations to occupy all public spaces and spread their messages. De Gerada argues that culture jamming is the only way people can use to counter these messages. Culture jamming techniques and practices can be understood within three aspects: semiotic terrorism; branding; and recuperation. Semiotic terrorism refers to individual culture jamming such as pictures on billboards.

Branding refers to the ability to attack a brand in order to undermine corporations’ influence in the public sphere. Recuperation is the ability of corporations to utilize culture jamming practices for their benefits. From the mid 1980s, a war “brand war” emerged between large corporations and culture jammers. Large corporations see brands as key to their success; in contrast, culture jammers see brands as a symbol of subjection. Naomi Klein described the brand war as a war about the loss of public space, corporate censorship, and unethical labour practices.

One of the best examples that depicts the brand war is the anti Nike campaign, that has been running since the 1990s. Activists campaigned against different issues such as using child labour, work conditions in overseas factories, investment in inner cities, and low wages. At the beginning of the campaign, activists started to demonstrate outside shops that sell Nike’s products in the USA. The campaign succeeded in persuading local and international media to send correspondents to investigate the issues raised.

In 1997, some activists released that the only way to undermine Nike’s influence is by attacking the source of Nike’s brand power. They found that Nike’s image is made in inner cities and intertwined with black American heroes such as Michael Jordan, Michael Jackson, and Tiger Woods. The activists decided to engage black American and Latino; who live in inner cities, and made connection between what happens in overseas factories and conditions at home. Also, activists started to convince kids that Nike’s products are not worth buying, and Nike causes poverty in inner cities.

As a result of the campaign, in 1998 Nike was forced to withdraw its offer to build swoosh gymnasium in Ottawa city: after the issues of child lab our was raised. In the same year, Nike accepted to improve working conditions in Indonesian factories, allow independent monitors to visit overseas factories, and not to hire children. In September 1998, the San Francisco human right group global demanded Nike to increase the wages of Indonesian workers. After three weeks, Nike increased the wages by twenty five percent. However, some argue that the increase is due to the devalue of local currency.

In addition to that, the campaign succeeded in forcing Nike to allow health and safety monitors to inspect working condition in Vietnamese factories. However, there is a limit to what culture hammers can achieve. In 2000, a series of billboard advertisement appeared in Australia for a new football boot made by Nike. What Nike did is to cut the work of culture hammers by jamming it’s own advert through the use of slogans that read “I am not/A target market/ I am an athlete”. In the same year, Nike launched anti Nike web site.

Kate Coyer argues that the jamming of adverts by Nike shows there is no anti commercial gesture which cannot be commercialized. Also, Coyer argues that advertising agencies see anti corporate activities no more than a street trend, and there always be an ad that will persuade even sincere consumers. According to Tim Jordan, protesting against working conditions and the use of child labour in overseas factories have limited effect on corporations: corporations like Nike have the ability to uitilise culture jamming techniques, which undermine the work of culture jammers.

There is no arena of life that corporations do not touch, therefore, culture jamming should be abandoned. Corporations may be the real author of culture jamming work. Therefore, Jordan argues activists should protest against bombarding people with imageries, instead of raising emotional feelings. Despite the limitation of culture jamming, the anti Nike campaign has shown that activists can force corporations to re-consider some of their practices. For example, the anti Nike campaign has succeeded in highlighting some issues and forced Nike to consider its practices.

First issue, the use of child labour has damaged the reputation of Nike. As a result, some schools in the USA refused to accept donations from Nike. Second issue, the working conditions and low wages in overseas factories. The persistent campaign has forced Nike to improve working condition, increase wages, allow independent monitors, and appoint vice president for corporate responsibilities. The campaign has generated bad publicity for Nike; as a result, Nike lost some of its supporters in inner cities. In addition to that, Nike’s competitors like Reebok used the scandal to gain some of Nike’s market share.

The success of the anti Nike campaign in highlighting some issues; clearly, cannot be used to study the impact of the brand war on Nike’s power. Naomi Klein argues that culture jamming will not change people’s behavior: public space is safe for commercial advertising and commercial messages are unable to awake us. In addition to that, most of the literature did not address how many people are welling to adopt culture jamming argument, if they are offered alternative. In brief, culture jamming techniques do have an impact upon corporations such as reputation, but it is difficult to measure the impact on other areas.

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Andok’s Litson

Andoks Litson is a major brand of specially roasted chicken in Philippines. The major products they sell are the Litson Manok which is a roasted variety of chicken and also the Dokito Frito which is a fried variety of chicken. The chicken is prepared adding a lot of other ingredients which are not the typical ones used in the common preparation. Some of the ingredients that are used include sugar, spice, rice, various beverages etc.

They also sell a variety of pork dishes like the litson liempo, lechon kawali, pork sisig, pork barbeque etc. Beef dishes like beef steak rice and corned beef egg rice, fish dishes like bangus and bangus rice, exclusive egg dishes and desserts are also available at the Andoks Litson outlet.

Andoks Litson started picking up its name from 1985 from when a small shop was opened in Baler Street. Now, the outlets are more than 300 in number and are located across the nation. In a couple of years from 1985 when it all began, the company opened around 11 of its outlets around the area and in less than 20 years, they opened more than a few hundreds of its outlets and many of them are located in the top malls of the country. Now the company is looking forward to open new outlets across the world.

The targets of the company in years to come itself are appreciable. Their prior aim is to be known as the best native food company that gets an international recognition at the same time. They want to be innovative with the way they go about cooking and also wants to provide the best customer care. They also want to make the world aware of the delicious cooking style of Philippino that can even attract the tourists.

They also allow individuals to start a Franchise by which they mean they get access to use the standard logo and other trademark symbols. They always get updated about the working and also they get all the help in order to open the new store. The advertising and others are all managed by the company and they also give training to the employee. They also give a subsidy on the raw materials that they use for the preparation.

There are 2 different options available for being a franchise. One is for an outlet which takes around 500,000 pesos and the other is for an outlet with a dine-in facility. This one may cost around 300,000 pesos. This does not include furnishings, devices to cook and others. The tenure of each agreement is for about 3-5 years and then it can be renewed. Andoks Litson guarantees its customers satisfaction to the best of their abilities.

Andoks Litson is a major brand of specially roasted chicken in Philippines. The major products they sell are the Litson Manok which is a roasted variety of chicken and also the Dokito Frito which is a fried variety of chicken. The chicken is prepared adding a lot of other ingredients which are not the typical ones used in the common preparation. Some of the ingredients that are used include sugar, spice, rice, various beverages etc.

They also sell a variety of pork dishes like the litson liempo, lechon kawali, pork sisig, pork barbeque etc. Beef dishes like beef steak rice and corned beef egg rice, fish dishes like bangus and bangus rice, exclusive egg dishes and desserts are also available at the Andoks Litson outlet.

Andoks Litson started picking up its name from 1985 from when a small shop was opened in Baler Street. Now, the outlets are more than 300 in number and are located across the nation. In a couple of years from 1985 when it all began, the company opened around 11 of its outlets around the area and in less than 20 years, they opened more than a few hundreds of its outlets and many of them are located in the top malls of the country. Now the company is looking forward to open new outlets across the world.

The targets of the company in years to come itself are appreciable. Their prior aim is to be known as the best native food company that gets an international recognition at the same time. They want to be innovative with the way they go about cooking and also wants to provide the best customer care. They also want to make the world aware of the delicious cooking style of Philippino that can even attract the tourists.

They also allow individuals to start a Franchise by which they mean they get access to use the standard logo and other trademark symbols. They always get updated about the working and also they get all the help in order to open the new store. The advertising and others are all managed by the company and they also give training to the employee. They also give a subsidy on the raw materials that they use for the preparation.

There are 2 different options available for being a franchise. One is for an outlet which takes around 500,000 pesos and the other is for an outlet with a dine-in facility. This one may cost around 300,000 pesos. This does not include furnishings, devices to cook and others. The tenure of each agreement is for about 3-5 years and then it can be renewed. Andoks Litson guarantees its customers satisfaction to the best of their abilities.

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Free Essays

The Communication of Window Displays

‘Windows reveal the soul of the store’ (Portas, 1999: 41). Every store has its own concept that characterizes each display, varying from theatre, drama or in the case of Armani Exchange minimalism. Well-dressed windows are undoubtedly, a dynamic form of advertising for products reflecting the stores’ brand image. This essay seeks to evaluate how A|X Armani Exchange’s window displays communicate to spectators with the use of various resources. Armani Exchange is one of the sub-brands under the parental brand of Giorgio Armani. The use of colour, lighting, props and graphics can capture interest, indicating the foundation of any decent display whose aim is to get people off the street. Windows are used as a selling device promoting products. They also mirror what the store is about, bringing pleasure to the eye. A stores’ window is effectual if it tempts customers who will want and be able to purchase the products offered, conveying quality, style and pricing (Portas, 2007).

Moreover, windows can lure someone in a shop due to psychological factors. Brand founders such as Armani and Dior, give their own unique identity on their products and are therefore based on persona. As an online source says ‘Armani Exchange has become one of the most dynamic collections with its own unique identity, as well as an ever-growing base of young customers’ (www.ameinfo.com/192218.html). City life is emitted through its concept of sexy, chic and stalwart garments. Hence, it can be said that quality along with brand loyalty comes before the cost. Windows work on the principle “first impression is the best impression”, implying that only a few seconds are needed for a display to “speak” to a passer-by and get him/her inside a store. Portas asserts that ‘visual merchandising is the art and science of silent selling, bringing product, environment and space into one stimulating and engaging display to encourage sale’ (Drapers, October 29: 34). This is shown by the power of Armani Exchange’s logo -with grey background and white letters signifying practicality, neutrality but also timelessness- which is becoming more and more recognisable.

Furthermore, Armani Exchange’s target customers are both independent male and female who have their own style, belonging in the age group of 16-35. It is more accessible to the bourgeoisie, who want a taste of the luxurious brand. Given that prices are lower than the rest of the Armani sub-brands, the apparel is more inclusive to the public. This stores’ clientele may work as managers, interns or may even be students living in East London. Additionally, they may go out for a drink, coffee or shopping at least once a week, or read magazines like Vogue. Other stores they visit include Zara and Benetton. What is more CPI is escalating; competition is astonishingly high while consumer spending started to fall as September figures show because of pessimism (www.guardian.co.uk, 2010). As a result, retail sales are expected to fall in the following months, along with a rise in VAT.

Armani Exchange windows’ are open-back; implying there is ‘no back wall’ (Morgan: 44). The striptease effect is clear as we can see the internal displays emphasizing the focal point through the space between the mannequins, creating a more intense visual impact, which is representative of the merchandise of the store. A|X shows the garment’s prices at the bottom of the windowpane. Lighting from the ceiling and floor is ambient acting as a catalyst for the area (www.infostore.gr. 2010), as Figure 1 shows:

Figure 1: The window shows A|X Armani Exchange’s front window in Regent Str. London, October 19, 2010

Source: Kaisidi, 2010

For autumn/winter 2010, Armani Exchange trails a repetition of dark shades evoking a monochromatic colour scheme exerting sophistication and a clean look, which are pleasing to the eye. Materials like leather and fur with metallic details indicate luxury mixed with a touch of mystery, illustrating an intellectual and confident appearance. However silver and gold details on the garments complement the black shades, making the pieces more youthful. A downside of open windows is that high-priced items showcased can be tampered if somebody wishes to feel the fabric, so they are trickier to dress. Besides that another negative aspect is that windows are not as creative since there are fewer props. Hence there is no story to tell. Silhouettes are simple yet authoritative and influential.

Effective windows can ‘seduce’ (Portas, 2007: 54) you to purchase something you did not intend to. Buying even a small item, one satisfies a need, a want to feel more contented and self-confident. Also, what you wear is what defines you, reflecting your personality- as implied by Berger (1972). Windows can sway someone into investing in a garment that will make them enviable and glamorous at the same time. ‘The power to spent money is the power to live’ (Berger, 1972: 143), implying that each person interprets the world differently- the same applies in window displays.

Armani Exchange has a very clean approach of “less is more” by not overloading its windows together with being “strong and simple” emphasizing the brand’s power (http://ezinearticles.com, 2010). Furthermore, by following the “fresh is best” principle in accordance with Berger (1972), they renew their displays every week thus regular customers find new stock in every visit. Still though, A|X receives deliveries every 3-4 days so that monotony is avoided. For that reason, if a jacket is received in the middle of the week, it will be put on display on that day.

Visual merchandising makes ideas come alive whose purpose is to sell commodities through visualization, as induced by Clements (2010). Armani Exchange wants its customers to experience the brand with the aid of visuals. Particularly the three-dimensional sightline placed parallel with the double doors in the Regent Street shop ‘gives energy’ (Portas, 1999: 102), as shown by the image below.

Figure 2: The window portrays a 3D advert for A|X sunglasses in London, October 21, 2010

Source: Kaisidi, 2010

Christmas windows however, ought to be more interesting and intriguing. Armani Exchange Christmas decoration is ruled by special effects lighting and radiation. Oval rings are beaming light that changes colour every few seconds; a different look tried by A|X. The rings are symmetrically placed next to each other, as it is clearly illustrated in the following picture:

Figure 3: The window illustrates A|X Christmas décor in London, November 20, 2010

Source: Kaisidi, 2010

Despite having a sale, windows were not unattained (Portas, 1999), since signage advertising the offers are placed. What is more, it urges spectators to celebrate style with the vinyl on the windows’ glass, exploiting psychological factors to lure in onlookers. After questioning 40 citizens, calculations show that 46% found the displays of A|X attractive, although 8% felt that it did not stand out.

The effect of these circles illustrates gravity, communicating with the pavement (Portas, Mary Queen of shops-Blinkz DVD). They work as pause points as they can be seen from afar, making the passers stop and browse the new collection. The aesthetic balance of the store emphasizes how the power of light can visually transform a space. One could argue that the density of the garments in Armani Exchange’s windows is just enough to fill the space available given add-ons such as bags and wallets. This is shown with Figure 4:

Figure 4: The window shows A|X latest collection 3 weeks before Christmas in London, December 3, 2010

Source: Kaisidi, 2010

Mannequins are said to be a mighty tool, forming the scene of a display. In A|X, mannequins are golden and headless in order to appeal to a wider audience (Pegler, 2008). The mannequins’ outfits offer a possible wearable suggestion in which one could walk out of the store with having a feeling of fulfilment. Mannequins are front facing, but the passers can observe all the angles, as suggested by Morgan.

To conclude, window displays need to clearly define the identity of a store. A|X ‘serves as the ultimate testimony to the power of the brand’ (Roll, 2010). The visual placement of the store is rather simplistic so people may think it is too plain. Equally, others who are fond of minimalism obtain a positive vibe for the specific windows, which are a compelling representation of the brand ethos. A|X has an identifiable and cohesive commercial image, which triggers the clients’ interest in conjunction with facilitating communication. All in all, Armani Exchange window displays are effective for their target customers, as they communicate their minimalistic message emitting an aesthetic purity of warmth and luxury. According to G.U Journal of Science there has not been significant empirical evidence regarding the effect of window displays on consumers’ shopping attitudes’ (2007: 33).

Bibliography

http://ezinearticles.com/?Window-Displays-That-Work!&id=4390505

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Close Up Brand Analysis

BA 170 Midterm Paper Never settle for second best. And yet, since its inception in the Philippine market, second place has been Close Up’s niche. Though the brand has indeed been successful in differentiating its use and targets from the irreplaceable number one, the dream to finally land the gold continues to linger. Overview of the Brand Close Up was launched by Unilever in 1967 as the first gel toothpaste in the world. The product’s unique structure made it easy to market it as a new and diverse product, all other brands having manufactured the same opaque white consistency toothpaste normally has.

Furthermore, the brand made sure to put the blue ocean strategy to their advantage. While competitors were going the more medical approach, Close Up branded itself as the more relatable brand to the youth. Currently, Close Up has eight variants out in the market. All their lines are made to function as the ‘fresh breath maker’, promising consumers long-lasting fresh breath. The variants mostly just differ in flavor apart from the Close Up Milk Calcium, which adds the teeth strengthening function to their product. Company Vision Close Up envisions itself as the number one toothpaste brand for the youth.

Their goal is to get young adults to feel how much the brand can help them achieve fresh breath, which, in turn, can boost their confidence to face their everyday challenges. Close Up’s goal is to be the youth’s first choice when it comes to toothpaste brands. The Close Up Mission In line with the company vision is their mission to give the youth that confidence to make ‘the moment’ happen. Much of Close Up’s brand identity revolves around the concept of ‘the moment’, which they define as that special instant of interaction between two or more individuals.

It may be as simple as asking someone to be their date to the high school prom or as big as saying I love you to their special someone for the first time. Close Up makes sure to be the factor that pushes the consumer’s insecurities aside in order for them to be confident enough to pursue that perfect moment. Target Market The brand associates itself with Filipinos aged 18-24 who are both sociable and optimistic. These young adults need that confidence to get up close and personal with others and believe that white teeth and fresh breath are important for social confidence and intimacy.

Market Analysis The Toothpaste Market Based on Datamonitor, the toothpaste market in the Philippines has increased at a compound annual growth rate of 3. 3% between 2004 and 2009, with Colgate leading the pack with a share of 51. 7%. But after two decades of continuous growth, the toothpaste industry saw a decline in market usage causing most companies to cut prices. Currently, Close Up stands as the industry’s number two with a market share of approximately 20%. What are the factors that affect toothpaste choice in the market?

A journal published by Ben Paul Gutierrez shows that there are thirteen attributes consumers look for when selecting their toothpaste. These include variables such as the ability to clean teeth properly, ability to give smooth and white teeth, ability to prevent cavities and the approval of dentists. (insert table of complete list here). Furthermore, the research shows the characteristics of the decision maker (ultimately, the one who chooses and purchases the product) and connects them to two behaviors, namely switching and involvement.

Switching refers to the consumer’s brand loyalty whereas involvement refers to the buying behavior. (show table of high involvement/low involvement) Close Up and Colgate are both able to achieve high switching and brand involvement, which are expected of brand which have high market shares. Close Up’s Position In terms of age, Close Up has been consistent in marketing itself to the young adults. Map A shows the relationship between price and age and proves that Close Up is unique in its choice of age segment. This is particularly evident in their advertising, which will be discussed further in this text. insert perceptual map a) Looking at functional benefit (Map B), however, we see that Close Up lags behind Colgate, who has, over the years, developed more and more products to address different oral needs. This is also because Close Up has continuously focused on producing toothpaste with the same functional benefits, a few outliers aside. Though this is good for brand reinforcement, meaning that consumers quickly associate the same need to the brand, this may be a factor as to why the brand has stayed a challenger. insert perceptual map b) On the other hand, Map C illustrates the relationship of price and size. Here, Close Up is generally positioned in between two markets, with Colgate at Sensodyne being the higher priced brand (MORE ANALYSIS HERE) Lastly, Map D shows the relationship between price and functional benefits, which may also be interpreted as the consumer’s value for money. (insert perceptual map c) (insert more analysis) generally -toothpaste market, positioning, pricing, market behavior, segmentation breakthrough Consumer Insight -target market, trends, insight Current strategies Recommendations

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Business Model Yum Brands

YUM! Inc Internal Analysis| The Strategic Management Process| REPORT NUMBER| 2| WEEK| 2| CBL GROUP AND SUB-GROUP| I3SHM Group A| DECLARATION 1. This work is composed by me / by us. 2. This work has not been accepted in any previous application for a degree or diploma, by me / by us or anyone else. 3. The work of which this is a record is done wholly by me / by us. 4. All verbatim extracts have been distinguished by quotation marks and the sources of my information have been specifically acknowledged. Signatures: Date:………………………….. Submitted in Partial Fulfilment for the Requirements of the degree Programme Bachelor of Business Administration

November, 2012 Table of Contents Introduction3 Chapter 1: Business Model, Vision, Mission, Goals and Strategies3 Concept Definitions3 Yum! Inc Evaluation3 Yum! Inc Correlation Business Strategies and Current Business Model4 Chapter 2: Yum! Inc Financial Analysis6 Chapter 3: Weaknesses and/or Competitive Liabilities8 Chapter 4: Internal Factor Analysis8 Reference List12 Introduction An internal organizational analysis aims to investigate a company`s business model, its mission, vision, goals, resources, competencies and undertaken strategies to compete on the market.

It gives an overview of the organizations strengths, weaknesses, opportunities and consequently threats. By conducting a proper internal analysis a company can identify its competitive advantage over its competitors and use the outcomes to derive new scope of strategies and possibly effectively direct the organization on the long run. There are several major and crucial areas companies audit internally, that is to say organizations value chain, cultural web, business model, capabilities assessment.

After conducting such analysis companies identify possible areas where immediate action is needed for improvement, its threshold capabilities, core competencies by which they gain competitive advantage. Essentially, organizations can decide which resources and activities are of significant importance to the company and must be kept internally and which can be outsourced. Additionally, possible strategies for the future can be established. However, the internal analysis cannot solely be a ground for new strategies, an organization has to conduct an external analysis before forming its final strategies. (Johnson & Scoles, 2008).

Chapter 1: Business Model, Vision, Mission, Goals and Strategies Concept Definitions Before analyzing Yum! Inc, several concepts have to be defined. Firstly, Business Model refers to all products, services and information an organization owns and how they flow between participating parties. Vision refers to what an organization aspires to become in the future. A Mission statement captures the emblematic purpose of an organization to conduct business in line with the values of it`s stakeholders. Organizational goals are general statements for aims and purposes whereas objectives are narrowed down to quantifiable results.

Finally, organizational strategies are its long-term directions. (Johnson&Scoles,2008). Yum! Brands, Inc Evaluation Yum! Brands, Inc is a global operator of franchisees and licensees a chain restaurant brands like KFC, Pizza Hut, and Taco Bell. The business model of Yum! Brands, Inc will be analyzed by the use of Canvas Model further in this chapter. According to the Annual Report (AR) 2011, the company`s Mission Statement is implied under its future-back vision statement: “Be The Defining Global Company that Feeds the World”. Moreover, it`s Vision Statement is: “Be the Best in The World at Building Great Restaurant Brands”.

After a deeper analysis of the company, it has been identified that Yum! Brands, Inc has the following core business related long-term goals: ” 1. Build leading brands in China in every significant category; 2. Drive aggressive international expansion and build strong brands everywhere; 3. Dramatically improve U. S. brand positions, consistency in returns; 4. Drive industry leading, long-term shareholder and franchise value. (Yum, Annual Report, 2011). According to the Chief Sustainability Office ‘CSO’, Roger McClendon, Yum Brands want to establish and align global goals to improve the economy of restaurant.

Yum Brands global enterprise goals for sustainability are: 1. Reduce global energy consumption by 10% by 2015 2. Reduce global water consumption by 10% by 2015 3. Develop 5 LEED certifiable restaurant standards across China, India, United States of America and Yum Restaurants International (YRI) business divisions by 2012 4. Elevate Yum packaging vision into actionable brand goals leveraging Yum packaging guidelines. (Source: www. yum. com/csr/environment) Next to that Yum! Brands, Inc has formed it`s values which direct the companies strategic actions, namely: 1. Believe in People; 2. Be Restaurant and Customer Maniacs; 3.

Recognize; 3. Go for Breakthrough 4. Build Know How; 5. Take the Hill Teamwork Yum! Brands, Inc, further referred to as” the company” or “ Yum” within this report has taken different strategies to achieve its main long-term goals. The strategies will be outlined in correlation with the business model. Yum! Brands, Inc Correlation Business Strategies and Current Business Model The CEO and Chairman of Yum! Brands, Inc shares the fairly simple business model of Yum. The main focus of the company is reducing company ownership in highly penetrated markets meanwhile increasing exposure in emerging and under-penetrated markets.

Moreover, the largest fast food franchiser continues with its refranchising program in the States, aiming to retain 5% ownership of KFC and Pizza Hut. The business model of Yum! Brands, Inc is analyzed by the Canvas Business Model, (Oosterwalder, 2010) see fig. 1 Fig. 1 Canvass Business Model Yum! Brands, Inc has three main markets from which it generates revenues, namely the USA, China and Yum Internatianonal Restaurants. Within those markets, the company creates value for various sub markets by diversifying and customizing within the fast food market through different restaurant concepts.

Moreover, the channels through which it reaches those markets are via own channels-direct, namely in-house sales, mobile ordering system for Pizza Hut in the States. This is rather costly activity for the company, however it has a high profit margins. Moreover, in 2011, Yum participated in an Annual World Hunger Relief campaign with the use of Christina Aguilera voice for good in the cause against hunger (www. fromhungertohope. com). This is an example of the Awareness Channel Phase as explained by Osterwalder, 2011. Christina Aguilera`s personality world recognition and the Campaign`s awareness to create awareness for the Yum! Brands, Inc.

With regard to the customer relationship, the company serves its customers via personal service, self-service. The personal service is based on the fact that customers are being helped via the purchase process on the points of sales. In addition to that, in order to continue successful operations within the quick service restaurant sector, Yum has several key partners, subcontractors- franchisees and licensees through which the company exposes its products. Moreover, the company`s main supplier is Unified FoodService Co-op LLC, an American company which offers lowest store-delivered prices for restaurant products (Yum, Annual Report, 2011).

Another key partner of Yum is McLane Company, Inc. distributor for concept-owned restaurants and for many of the franchisee and licensee restaurants. Finally, there is a Syndicated creditor, consisting of 24 banks which offers a financias support for the company- 1. 15 bln USD. International partners such as in Russia with Rostik`s KFC are also of significant importance to the company. In order to effectively, deliver its value proposition to customers, namely high product quality, speed service, high quality ingredients, variety of unique products, competitive prices, consistent product quality, the company operates with few key resources.

The company operates an effective distribution system- Yum! Brands, Inc owns their local, regional and also global distribution system. Additionally, the company owns, franchises and licenses, as a consequence, there are financial resources coming in within the company in form of royalty fees and sales. Another, key resource for the company are it`s restaurant concept Patents and Trademarks etc. KFC, Pizza Hut, Taco Bell etc. Brand Power, standardized and formalized restaurant operations practices which give the company the ability to offer consistent service.

Finally, the research & development centers and the overall diversified product portfolio are other key company resources. The key activity in which the company engages is sales of food within the quick service restaurants sector by franchising, licensing and owning own properties. This is related to the production of fast food. Finally, the main revenue generating streams are the three main markets from which the company derives it`s financial resources, the USA, China and the Yum International Restaurants and the offer of dine-in, dine-out, drive through and home delivery food via franchise, license agreements and own properties.

The main strategy of Yum to succeed in the fast food market is by undertaking Cost Driven strategy. By delivering a customized service to the Chinese, American and International market the company targets at the average income market by offering relatively law priced products which fit into the budget of a wide market. Since, it does not necessarily focus on the value-proposition like exclusive products do but rather on cost-saving. Yum achieves this via economies of scale and economies of scope. To conclude, Yum operates with cost-driven cost structure.

This business model can clearly be linked to the undertaken strategies by Yum. One of the company aims to enter emerging under-penetrated markets like China and increase leadership position and strengthen operational model. This has been achieved by the strategy of buying the Chinese Hot Pot concept restaurant Little Sheep Company and developing a tailored local quick service restaurant chain East Dawning. This actions fit into the company`s value proposition- food diversity, variety of products, speed service, tailored products as they all belong to the quick service restaurant category.

Next to that, the strategy of East Dawning is to strategy is to offer tremendous variety and refresh menu 24% twice/year which also fits to company`s value proposition. In addition, the company owns their local, regional and global distribution system and this fits to their long term goal to expand internationally but also with their cost structures and cost-driven strategy. Moreover, the ownership of distribution system gives the company a strong competitive advantage. Finally, these strategies fit into the company`s business model by segregating the market and still offering products on competitive prices.

Internationally, the company took the strategy to enter Russian, Indian and African market. : In Russia acquisition of Rostiks- chicken company. Growth in Africa is represented by the opening of 656 stores in SA, entry in Zambia, Ghana, Kenya. In India the company entered the market with 101 restaurants in 2011. In total 900 restaurants were added in 2011 in the International Division. International Division`s Operating Profit grew with 12%. These strategies re in line with the business model for generating revenues via three main areas, the USA, China, and International Division.

Moreover, all those strategies to expand are connected to the company`s key activity and also value proposition. Next to that, the company aimed at improving brand position in the States. One of the strategies to achive this was transforming Pizza Hut to “Pizza, Pasta and wings”. Moreover, Pizz Hut improved it`s service by “ Heart of the Hut: program which also added value to the hospitality of the chain. Moreover, the KFC kicked off a nation-wide campaign with value menu – 3. 99 USD 2 peace meal, 2 side dishes and biscuit. This has been as a result of investment in operations, make it more contemporary.

Additionally, Taco Bell introduced it`s – “First Meal” Strategy- launched breakfast in 800 restaurant- opening earlier than before at 9am and introducing theu Launche Doritos Lotos Taco, which became a huge success- famous Nacho Cheese Doritos. The above mentioned strategies, go in line Yum`s business model: value proposition- speed service, product quality; key partners- continue operations with franchisees and licensees; key activities- continue playing on the Quick Service Restaurant Market by the use of company`s key resources- rely on own patented brands, use the standardized operations to offer consistent service.

Another, strategy Yum took in the USA was to increase operation audits in franchise field support which also was in accordance to their business model to offer quality products and consistent service. Another strategy to improve the USA brand position was to reduce company ownership of KFC, Pizza Hut, Taco Bell from 13% to 8% in the domestic market in order to increase franchise fees, reduce operating expenses and capital expenditures- cost-driven company.

Last but not least, the company has decided to reduce Taco Bell Ownership from 23% to 16% over the next 2 years and sold Long John Silver`s A&W All American Restaurants in order to meet it`s last long-term goal, namely Drive Industry Leading, long term Shareholder & Franchise Value and retain 5% ownership of Pizza Hut and KFC. To conclude, according to the Yum Brands annual report 2011 (annual report 2011), the success of Yum Brands in executing these strategies has driven the organizations return on invested capital over 22. 00% in top with the industry leaders. The organization generated over $2. 000. 000. 00,00 dollars cash from the operations in 2011. The company is lucky to have global opportunities to invest in for the future growth. Furthermore, the organization owns and operate the distribution system the restaurants in China. This strategy provides a significant competitive advantage. This way China will have an economy growth and achieve a population of 1. 300. 000. 000,00. Yum Brands will rapidly adding KFC and Pizza Hut restaurants, this way the organization will test the additional restaurants concepts. The concepts of KFC and Pizza Hut are (for example): ‘Pizza Hut – pizza delivery’ and East Dawning, which is Chinese food. Yum! Brands, Inc Annual Report, 2011). Chapter 2: Yum! Brands, Inc Financial Analysis In this chapter the financial performances of Yum are being analyzed. Within the first part of this chapter the balance sheet and the income statement are being analyzed. This analysis is being conducted with the help of horizontal and vertical analysis. Within the second part of this chapter the key performance indicators will be analyzed and compared with industry averages. 2. 1. 1 Income statement The total revenue of Yum increased from $10. 836 million in 2009 to $12. 626 million in 2011. This is an increase of 16%. 6% of the total revenue is the income from restaurant sales and 14% is the income of franchise fees. The distribution of the revenue is more or less the same as previous years. From this it can be concluded that, although Yum is expanding their franchises, the most important form of revenue still comes from restaurant sales. Although the revenue increased with 16% from 2009 till 2011, also the total costs increased with 16%. The total costs represented 85% of the total revenue. This figure is more or less the same in 2009 and 2010. The largest cost account is the use of food and paper. This account represents 29% of the total revenue.

The food costs in the hospitality industry is on average 33% of the total revenue (Cote, 2006) Yum is doing quite well with managing their food costs. The salaries represent 19% of the total revenue. Considered that on average within the hospitality industry employee wages represent 33% of the total revenue, Yum is managing their employee costs very well. (Yum, 2010) (Yum, 2011) 2. 1. 2 Balance sheet The most noticeable when looking at the horizontal analysis of the balance sheet is the huge increase in the cash and cash equivalent account. The cash increased from $353 million in 2009 to $1198 million in 2011.

This is an increase 239. 38% . In 2009 the cash account represented 4. 94% of the total assets, in 2011 this account represented 13. 56% of the total assets. The shareholder equity also increased significantly. The shareholder equity increased with 177%. This can be explained by the fact that Yum sold shares. Additionaly, the increase in cash of the company can be explained by the facts that they sold Long John Sylver A&W All American Food Restaurants. Furthermore the short-term borrowings increased significantly. From 2009 till 2010 this account increased with 1140,68%. However in 2011 this account is reduced slightly.

In 2011 the increase in comparison with 2009 is 542%. In 2009 the short-term borrowings represented 0,83% of the total liabilities, in 2010 this was 8. 09% and in 2011 3. 62%. This can be explained by their pursuit of growth strategy- taking over of the Little Sheep Company, opening East Dawning Restaurant in China. The inventory has also increased with 223%. This can be explained by the fact that expansion results in more inventory. The cash and cash equivalents account do not only represent hard cash but it also represents funds which are temporary invested in short-term, high liquidity debt securities.

The cash account increased because of the increase of the shareholders’ equity. The shareholder equity increased with 177% because of the issuing new stock. Finally the retained earnings increased significantly. In 2009 this account was $996 million, in 2011 this was $2052 Million. That is an increase of 106%. In 2009 the retained earnings represented 13. 93% of the total liabilities, in 2010 it was 20. 65% and in 2011 the account represented 23. 23% of the total liabilities. Yum is saving money which originally was reserved as dividend payments.

Yum is saving their money probably for investments and expansions otherwise the shareholders would not agree by the fact that they are not getting paid all their dividends. (Yum, 2010) (Yum, 2011) 2. 2 Ratio analysis Within this part several ratios of the past 3 years will be calculated and analyzed. Current ratio The current ratio measures the relation between the current assets and the current liabilities. Year| Current ratio| 2009| 0. 73| 2010| 0. 94| 2011| 0. 95| Table 1: Current ratio From the above given figures one can conclude that Yum has a shortage of $0. 05 in 2011. However this does not means that Yum is financially unhealthy.

In general the current ratio should be around 1. According to Schmidgall, 2006 different parties are interested in different current ratios. Creditors normally prefer a high current ratio as this insures that they are getting paid. Owners and stockholders generally prefer a lower current ratio. Stockholders are mainly interested in profits and according to them investments in most current assets are less productive than investments in noncurrent assets. (Schmidgall, 2006) (Yum, 2010) (Yum, 2011) Solvency The solvency ratio measures the relation between total assets and the total liabilities. Year. Solvency ratio. | 2009| 1. 18| 2010| 1. 25| 2011| 1. 28| Table 2: Solvency In 2009 Yum had a solvency ratio of 1,18. This means that for every dollar of debt they had $1,18 of assets. In 2010 they increased their solvency to $1,25 and in 2011 it increased to $1,28. It can be concluded that Yum is solvent, their assets exceed their debts. (Yum, 2010) (Yum, 2011) Profitability ‘Hospitality enterprises are often evaluated in terms of their ability to generate profits on sales’ (Schmidgall, 2006, p. 225) Year| Profit Margin Yum| Profit Margin McDonalds| 2009| 9. 88%| 20%| 2010| 10. 21%| 20. 54%| 2011| 10. 4%| 20. 37%| Table 3: Profit margin In 2011 Yum had a profit margin of 10,44%. This means that for every dollar of revenue the gain 10,44 cents of profit. The average profit margin of the whole restaurant industry is around 5%. Compared with the whole restaurant industry yum has a strong profit margin. However when a comparison is being made with a top competitor, yum has a weak profit margin. As can be seen in table 3, McDonalds has almost the double profit margin of yum. Thus from these figures it can be concluded that yum has a weak profit margin compared with their top competitor McDonalds. Yum, 2010) (Yum, 2011) (Yahoo finance, 2012) (Stock analysis) Return on Assets The ROA ratio measures the profitability of a company’s assets. Year| ROA Yum| ROA McDonalds| 2009| 15. 62%| 15,06%| 2010| 15. 30%| 15,47%| 2011| 15. 58%| 16. 68%| Table 4: Return on Assets Within the restaurant industry the average ROA lays around 8%. The ROA of Yum is around 15,5%. Compared with the total industry yum has a strong ROA. When the ROA of Yum is being compared with the ROA of McDonalds, the conclusion remains the same, Yum has a strong return on assets. Yahoo finance, 2012) (Yum, 2010) (Yum, 2011) (Stock analysis) To conclude it can be said that yum is a financially healthy company. Although the world wide credit crunch Yum is still able to increase their revenues. Comparison of the ratios with industry averages shows that Yum is doing well. Their debts do not exceed their assets. There is still room for an improvement of their profit margin. Compared with the industry average they have a strong profit margin however in comparison with their top competitor their profit margin is quite weak. Chapter 3: Weaknesses and/or Competitive Liabilities 1.

Resources and Capabilities Evaluation 2. Evaluations of Factors Depriving Yum! Inc from Effective market Competition The evaluation of the resources and capabilities, and factors which might be preventing the corporation from competing effectively will be outlined with the help of a SWOT analysis. This technique will be used, because it gives the ability to present the resources and capabilities into strengths, and the factors which might be preventing the corporation from effective competence can be divided into weaknesses. However, since Threats and Opportunities part will be elaborated on in Weekly Report 3 Strengths| Weaknesses| Leading market position built on a portfolio of strong brands with high level of consumer acceptance * Different store concepts catering to a diverse customer base * Strong balance sheet and cash flows even in tough economic and macro environment * Leadership position in China and other emerging markets * Human Resource Policies- area coaches * Support by syndicated credit facility * Research & Development Centers * Ownership of distribution systems * | * Drop in performance within the domestic market * Lawsuits – Bad Publicity * Heavily dependent on Chinese geographic region * Internal brand competition * Higher loan interest rate than the LIBOR- London Interbank Offered Rate- 0. 25-1. 25% higher. * Brand Reputation dependent on Franchisees| Strengths With more than 37,000 outlets in 120 countries worldwide, Yum Brands, has earned the title of a leading global quick service restaurant corporation with high level of consumer acceptance and brand recognition. The corporation consist of three main brands, namely – KFC, Pizza Hut and Taco Bell. The big amount of units all over the world is a valuable resource, but this is not enough to guarantee a distinctive capability.

With the effective interception of the sales and marketing functional area, all those restaurants are promoted effectively and with heavy investments in brand promotion, the position of it, in the mind of the customers, has been changed to the point, that Yum Brands is recognized as one of the best global brands with a leading market position within the industry. The promotion effectiveness is present by the fact that KFC is the leader within US chicken QSR segment with 39% market share, which is 2 times higher than the results from its closest competitor on a national level. In addition to that Pizza Hut is also the leader in the US pizza QSR segment, with 15% market share. Last but not least Taco Bell is also the leader in the US Mexican QSR segment, with 50% market share.

The sales and marketing functional area is not the only one responsible for this results. In addition to it the operations management team and all international and regional managers, are contributing to the constant delivery of high quality, which will guarantee customer satisfaction and acceptance. From the fact that Yum Brands’ has a leading market position as a second main resource, two main capabilities can be derived as well – the ability of significant bargaining power and the capability to grow financially. Furthermore, the company’s strong brand value, facilitates customer recall and allows Yum Brands to penetrate new markets as well as consolidate its presence in the existing ones.

The second strength can be divided into one resource and one capability. The resource is that the brand has three different restaurant concepts and every one of them has a set of unique food products, which can be customized additionally on their own as well. For example KFC, offers fried and non-fried chicken-on-the-bone products, while international outlets offer menus, which include side items, which are in line with the local customer demands. Pizza Hut for example is specializing in the sale of ready-to-eat pizza products, but there are restaurants, which are also offering breadsticks, pasta, salads, sandwiches and pizza souses, which are also suited to the local markets.

Taco Bell is a small exception, since it specializes only in Mexican-style food products, but the diversification comes from the fact that all products like tacos, burritos, gorditas, chalupas, quesadillas, salads, nachos and other related items can be customized on their own. This resource leads to the capability of having the opportunity to provide products, which will attract a large number of diverse market segments. Not only by differentiation of the products but also by the differentiation of the locations the three different concepts within Yum Brands can develop, operate, franchise and license an international chain of both traditional and non-traditional QSR restaurants.

For example the traditional one’s offer dine-in, carryout and often, drive-thru or delivery services, while the non-traditional restaurants are typically licensed outlets that include express units and kiosks with a limited menus and most of the time operate in locations, which are not traditional like malls, airports, gas stations, convenience stores, stadiums, amusement parks and colleges. The diversification of the company products into three different brands, which outlets are also positioned in relation to the profile of the different consumers they serve, Yum Brands is transforming its existing resources into a distinctive capability. Even though there are economic and macro- environmental difficulties in the world, Yum Brands is continuously growing. It’s financial performance is outstanding, since the company’s outlets have recorded net income of $1. billion and over $2 billion in cash from its operations, which is 0. 3 billion more in comparison to 2011. In addition to that there is a 14% increase in the Earnings Per Share, and 7% system sales growth. The company maintains its position of industry leader in USA with Return on Invested Capital (ROIC) of more than 20%, and in addition to that the company has also increased its number of restaurants with more than 1,561. This increase with more than 1,000 new restaurants is also continuous happening already 11 years. The stable growth of units gives the corporation a title among the other US competitors as the “number one retail developer of units outside the US”.

The capability of delivering constant strong results, which contributes to the plans for growth, provide a significant competitive advantage and distinctive capability, despite the difficult economic situation. Building a leadership position in China and other developing markets, should be considered as a strength, since this will help the corporation to develop even stronger brand image around the world. In addition to that, if the food concepts continue to be popular within the market, this will generate constant profit and ability to grow even further. This strength is also in line with the already mentioned strategy of expansion of the business in emerging and low-penetrated markets. For example over half of the operating profit of the company is generated in China and 72 other emerging countries.

The actual aim of the company is to reach 85% global sales in comparison with only 15% in their local market until 2015. Within China all brands are growing with more than 656 new restaurants. Their policy to have leading brands in every significant category also has led to the acquisition of Little Sheep- a leading casual dining concept in China. Except this developing market, 3 more markets are strategically targeted. In India the managers are implementing all key elements, which drove the enormous success in China. The efforts in the moment are concentrated on building a strong base of restaurants, which will generate significant part of their future profits.

In the moment in India there are more than 220 KFCs and 170 Pizza Hut restaurants and Taco Bell also has just entered the market in to develop the brand into their third international known brand. Russia is also considered to be one of the growing market potentials for Yum Brand. Within this market there is a severe competition with McDonalds, but the company still expects high profits and return on investment. In order to do that the company started to expand by re-branding Rostiks-KFC to stand alone as KFC, which will lead to more brand recognition and customer retention. The last market, in which Yum, is aiming to become a leader is Africa. This already has started by the building of 656 stores in South Africa during 2011, and the building of outlets also in countries like Zambia, Ghana and Kenya.

The plan is also to enter 7 new countries by the end of 2012, which will cover in total 20 African countries. The resource of having so many outlets worldwide and creating a broad world coverage, will become a capability in future, because the company will be able to generate revenue from markets, which are not penetrated and posses customers with growing buying power. Finally, Yum! Brands, Inc slowly enters the African market by building of 656 stores in South Africa, also entering Zambia, Ghana and Kenya in 2011 and plan to enter 7 new countries in 2012, which sums the plan in total to have restaurants in about 20 African countries by the end of 2012.

Overall, this clearly shows that the company has the capability of successful penetrating new markets by adapting to the local customs, political, social, economic and legal systems. The last strength of Yum is the consolidation within its human resource policies. This policies start with the corporate value – How We Win Together principles including the motto “We love celebrating the achievement of others and have lots of fun doing it! “, is one of the main reasons for their culture to be full of positive energy, teamwork, and fun. This corporate value is also built around a “People Capability First” philosophy, which lays the groundwork for the way they work as a team, together, every day.

Yum invests in their Human Resources and provides training guides have been developed in 11 different languages for over 37,000 Restaurant General Managers around the globe. (Yum! Brands Inc. , Annual Report, 2011) Moreover, the company assigns area coaches, every six restaurant is operated under the supervision of one coach. This is an evidence for the company`s capability of successfully investing in people and promoting employee development and support. Being financed by Syndicated Credit Facility, which consist of 24 banks (Yum! Brands, Inc Annual Report, 2011) gives the company a strong financial security by not being reliable on single creditor.

Research& Development Centers, are resource which Yum can strategically utilize to develop new products. This is an explicit example of company`s capability to investigate markets and identify customer needs. Finally, the ownership of distribution channels, helps the company to effectively manage its costa by local, regional and global distribution centers, namely developing effective cost structures. Weaknesses In 2009 the restaurant industry in the US showed transaction declines in dinner occasions, because consumers chose to save money and eat at home. This had also a significant impact on both Pizza Hut and KFC concepts of Yum Brands. As a result, their U. S. usiness was clearly under-performing from 2009 till 2011, but the most significant numbers are present in 2011 with store sales decrease of 1% and profit decrease of 12% for all units within the US market. In order to cope with this problem the company is reducing its ownership in this highly-penetrated market and in December 2011, they have completed the sale of Long John Silver’s and A&W All American Restaurants. To sum it up the competitive liability, which is outlined by this weakness, consists of the fact that there is a deficiency of financial resources Moreover, lawsuits can cause a negative publicity for the company. For example, beef quality lawsuit on Taco Bell projected the restaurant concept-chain in negative limelight In January 2011.

The lawsuit claimed that Taco Bell food items are made with a substance known as ‘taco meat ‘filling’, rather than beef. The lawsuit also contended that Taco Bell products only contain 36% ground beef, below the prescribed USDA standard of 40% to qualify as meat. An estimated $3 million to $4 million were spent for nationwide advertising campaign to fight with the negative publicity from the lawsuit. Moreover, the company heavily relies on the Chinese market, as it is the main revenue generator. In the case, of nation-wide catastrophe- decrease in disposable income, change of food related legislations, the company business will be affected negatively.

The internal brand competition can lead to decrease of sales in some brands. Furthermore, compared to the average Yum loans relatively expensive financial resources form banks as the interest rates it pays for its loans are 0. 25%-1. 25% higher than LIBOR. (Annual Report, 2011) Finally, Yum! Brands, Inc company reputation is heavily reliant on its franchisees and licensees. The damaged brand name definitely should be considered as competitive liability, first because of the deficiency in quality of the products and second because of the lack of important organizational assets, which has led to this situation. Chapter 4: Internal Factor Analysis

Internal Factor Analysis organizes the strengths and weaknesses of a company into factors and analyses how a company is reacting on those factors (Jones, 2010). The weight is assigned to each factor from 1. 0 most significant to 0. 0 unimportant. Secondly, rating is assigned from 1 to 5, taking into account the management`s reaction to each factor. And finally, the weighted score is calculated by multiplying column 2 to column 3. INTERNAL FACTORS| WEIGHT| RATING| WEIGHTED SCORE| COMMENTS| STRENGTHS| | | | | Supported by Syndicated Credit Facility| 0. 02| 0. 5| 0. 01| Secure financing, less dependency on 1 bank| Strong balance Sheet and Cash Flows| 0. 02| 1| 0. 2| Healthy operations| | 0. 3| 0. 5| 0. 15| | Research and Development facilities in Shanghai (China division), Dallas (Pizza Hut, YRI), California( Taco Bell), Lousiville (KFC)| 0. 2| 0. 5| 0. 1| Advantage of examining markets, developing products| Distribution system ownership| 0. 02| 0. 5| 0. 01| Cost effectiveness| Membership in Unified FoodService Purchasing Co-Po| 0. 01| 0. 5| 0. 005| Cost effectiveness and purchase power| Effective Market Segmentation-| 0. 02| 0. 3| 0. 006| Reach more consumers, spread risks| Restaurant concepts, trademarks patents| 0. 01| 0. 2| 0. 002| Competitive advantage| Strong Global Brand Awareness| 0. 2| 0. 5| 0. | Strong recognized brands| Area Coaches work with 6-12 restaurants| 0. 2| 0. 5| 0. 1| | Part D: Finances 1. Cost Structures * Reduce large capital investments by franchising and licensing in more mature markets 2. Characteristics of Cost Structures 3. Revenue Streams * Royalty fees based on sales from franchisees and licensees * Company sales * 3 Major markets- the USA- , China and Yum Restaurants International Conclusion The report has been divided into four components in order to describe Yum! Brands Inc. , internal organizational analysis. Among others the first component identified the vision and mission. Yum! Brand, Inc. strives for Be the Best in The World at Building Great Restaurant Brands”. In addition, the vision of Yum! Brands, Inc. can be stated as: “Be The Defining Global Company that Feeds the World. ” Therefore, offering speed, variety, and convenience and budget prices products is of high value in order to satisfy their customers’ needs. They want to be a company ‘with a huge heart’, taking the environment into consideration and look for recognition with one system operational excellence as out foundation. Furthermore, this vision reflects to the fact Yum! Brands, Inc. is already a global operator of franchisees and possesses chain restaurants brands like KFC, Pizza Hut,Taco Bell, Little Sheep and East Dawning.

Principally main markets for the brand are in USA, China, Africa, Europe and Asia; here they segment different groups. Effective marketing which Yum! Brands, Inc. uses, contributes to this growth of business. As well as aggressive international expansion supports Yum! Brands Inc. entered the market in Russia and India. With China as focus, Yum! Brand Inc. strives for building strong and leading brands everywhere. The acquisition of Little Sheep, which offers casual dining restaurants to China, generates leading brands in every appropriate category. East Dawnings has been build up to be the first restaurant with a quick food service In China. Second strategy is to aim for international expansion.

In addition, the brand wants to expand the US brand position. Last, the goal to serve the long-term interests of shareholders will be supported b an executive compensation program. However, financially, looking at revenue streams of the brand, the total revenue of Yum! Brands Inc. showed an increase of revenue of 14% in 2011. 86% of the total revenue has been generated by restaurant sales, the remaining part was income of franchise fees. Though, the total costs increased equally with 16%. Notable is, the fact retained earnings showed quite an increase of 106%. There can be assumed here Yum! Brands Inc. lay aside a lot of cash in order to invest and expand in the future.

All in all, there can be concluded Yum! Brands Inc. is a financially healthy company. Debts do not exceed assets and the company is still capable to increase revenue. They have a strong profit margin, though looking at competition there still lays a challenge. Bibliography Cote, R. (2006). Basic hotel and restaurant accounting: exercises in accounting (6th ed. ). Lansing, Mich. : Educational Institute, American Hotel & Lodging Association. Jones, G. R. , & Hill, C. W. (2010). Theory of strategic management: with cases (9th ed. ). Mason, Ohio: South-Western Cengage Learning. Schmidgall, R. S. (2006). In Hospitality industry managerial accounting (pp. 201-242).

Lansing: Educational institute American hotel & lodging Association. Stock analysis. (n. d. ). McDonalds . Retrieved 11 24, 2012, from Stock analysis: http://www. stock-analysis-on. net/NYSE/Company/McDonalds-Corp/Ratios/Profitability#Net-Profit-Margin Osterwalder, A. , Pigneur, Y. , & Clark, T. (2010). Business model generation: a handbook for visionaries, game changers, and challengers. Hoboken, NJ: Wiley. Yahoo finance. (2012). McDonald’s Corp. Retrieved 11 24, 2012, from Yahoo finance: http://finance. yahoo. com/q/is? s=MCD&annual Yum. (2010). Annual report 2010. Yum. Retrieved from: www. yum. com/csr/environment) Retrieved from: www. fromhungertohope. com

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Brand Positioning of Asiatravel

Brand Positioning One of the aspects of brand equity is brand positioning. AsiaTravel has not distinguished itself from other competitor in terms of products and services. The company does not have clear view of which market segmentation they want to enter and has not built a good brand image. In order to create good brand position in the market, AsiaTravel should look into market segmentation, focuses in point-of-parity (POP) and point-of-difference (POD), and brand image. The current travel industry does not really tap into customers’ demand.

Most of the airlines and travel agents compete each other in terms of price, time slot and the number of accessed cities and towns. Therefore, AsiaTravel can differentiate itself by offering packages that suit customers’ preferences by simply asking. Package is no longer fixed. Instead of sticking on one tour, AsiaTravel should guide customers on vacation tour. Secondly, market segmentation can be done to ensure each individual has the best vacation experience. There are many ways to do market segmentation, from demography, lifestyle, and to geography. (CWL Publishing Entreprises, 2009)

For AsiaTravel to have a fraction of mind share in customers, it is important of AsiaTravel to know where it wants to stand, either as price leader, quality leader or specialist (CWL Publishing Entreprises, 2009). Brands that stand in the middle of the road get run over. Since many travel agents have not realized the paramount of specialization, AsiaTravel can tap this into opportunity by being quality and specialist leader. Being specialist means the tour guide has to offer besides providing information to customers, security and basic needs. AsiaTravel can sell the country culture that is not written in the book.

For instances, mingle and live with the locals. The emotional and experience they get are invaluable. Moreover, tour guide can try to develop a relationship between a group of tourists and among tourists and locals. The purpose is to eventually; each individual has expanded the networking. Travelling is no longer about sightseeing, shopping and et cetera, but also building a network among each other, learning and knowing others’ culture. Being different increases the POD and the risk of switching cost, and thus leads to stronger brand position while at the same time POD ust not be compromised, as similarity becomes the minimal requirement the travel industry must meet. When the company has evidently differentiated itself from its competitors and clearly conveyed the message to the customers, the brand image will come naturally. However, when it is not managed properly, the brand image cannot leverage the brand equity. To maintain the brand image and brand position, marketing communications programs must ensure customers are exposed to the all the brand elements and brand associations.

Brand has to be treated like human beings possess a variety trait of characteristics (Customer Manufacturing Group, 2006). By understanding the brand personality, marketers get the whole picture of brand identity and easier to conveying the message consistently. (Customer Manufacturing Group, 2006) From the marketing program and brand positioning strategy, it is clear that AsiaTravel aims to focus customers’ preferences, being unique, caring, warmth, fun, friendly and also ensures everybody has the best pleasant vacation experience.

Moreover, since AsiaTravel primarily focuses on young adults and only fly within Asia, it is an energetic, flexible, proud to be Asian and affordable brand. Therefore, it is a new brand image that AsiaTravel aims to build and maintain to be top leading organization in the travel industry. Bibliography Customer Manufacturing Group, 2006. Customer Focused Brand Positioning. CWL Publishing Entreprises, 2009. Positioning and Brand Personality.

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Brand and River Blindness

Stake for Vagelos as CEO and for Merck as a company in deciding whether to invest in Dr. Campbell’s idea Although Dr. Campbell’s idea of a drug (Ivermectin) that could cure River blindness was a path-breaking opportunity for Merck, the company was faced with a number of ethical, financial and moral issues that forced its CEO to undergo deep thought and contemplation before investing in this idea. * Feasibility: There were concerns about the use of this drug on humans and the potential adverse side effects, if any. High Costs: The high costs associated with research and development coupled with the fact that the drug was to be used by lower income groups meant that it showed little or no economic promise. * Cannibalization: From a pure business standpoint, Merck worried that this drug could cannibalize profits from the animal version of the drug through the creation of possible black markets in the affected countries. Percentage of research budget that Merck should invest in drugs that will produce a substandard return on investment

As a company that produces drugs to cure diseases in both humans and animals, Merck operates in a complex dynamic that requires it to take decisions that may not lead to profitability. Further, its corporate philosophy always revolved around the fact that the company’s first priority was the safety of people and only then did profits follow. I, therefore, believe that Merck should invest a large amount ( ~80%) of its research budget even on drugs that will produce a substandard ROI, provided the drugs promise to fully cure diseases without harmful side effects and they are the first in the market to do so.

This could help them build a strong brand equity, goodwill and reputation in the long run thereby creating a foundation for profitability in future. For instance, I believe that Merck has a social responsibility and a moral obligation to invest heavily in the cure for River blindness. Merck’s explanation to a shareholder who might complain about a decision to invest in research on River blindness

Merck could use the following points to strengthen its decision to invest: * Improves image of the company: The decision will lead to a positive impression about the management and its commitment leading to high brand equity and good reputation, resulting in future profits. * Improves employee productivity: Working towards a philosophy that the company consistently stands for will motivate employees and lead to higher job satisfaction thereby increasing employee productivity and hence profits. Attracts support from investors and society: The decision could be a significant differentiating factor. This coupled with superior brand image could generate investor interest and support from the community. It could also be used as a marketing tool. Merck’s selection of drugs to invest in As stated earlier, Merck must strive to achieve a balance between profitability and corporate social responsibility.

The following criteria could be used to make decisions: * Definite and safe treatment: The drugs have a strong potential to result in safe treatment to life-threatening diseases, without harmful side effects. * First mover advantage: Merck must invest in drugs that give it a strong advantage to develop patents and move into market spaces that are unexplored by other drug companies. * Profitability: While it must remain true to its corporate philosophy, it must also target profitability to sustain itself and maintain its position in the industry in the long run.

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Branding, Pricing, and Distribution Strategies

ASSIGNMENT 3 MARKETING PLAN FOR TEACH CHINA BRANDING, PRICING, AND DISTRIBUTION STRATEGIES This section of Teach China’s Marketing Plan will focus in on key factors related to branding, pricing, and distribution: creation and development of the domestic and global product branding strategy; determination of optimum pricing strategy; looking at how the pricing strategy supports Teach China’s branding strategy, preparation of a distribution channel analysis, justification of opting for a push or pull strategy; an overall look at how the distribution strategy fits the product/service target market.

It is very important that a start-up company, such as Teach China, build and develop a strong product brand. It is essential that such branding solidify the link between the values of Teach China and its customers. Because of the competiveness of the education market branding the commodities and services of Teach China must be unique. Additionally, branding education is considerably different than branding a commodity. [ (Gupta & Singh, 2010) ] According the Dr. ’s Gupta and Singh, the movement of a globalized world to a knowledge economy opens immense opportunities for building education brands. (Gupta & Singh, 2010) ] Gupta and Singh also warn against the tendency to confuse “branding in education as making enough noise to get people to enroll. ” (2010) In determining a brand for Teach China it is imperative that the numerous stakeholders in this market are taken into consideration. Gupta and Singh suggest that a “careful balancing of the stakeholders’ interest is a key requirement of the leadership of each education brand. They identify the stakeholders as, students, faculty, prospective employees, parents and society.

Research of current literature show that educational services earn their repeat business by word of mouth of well satisfied and well placed individuals. [ (Gupta & Singh, 2010) ] This idea is further supported by a feasibility study conducted by Bradley and Griswold who posit that “most Chinese are reliant on third-party endorsements from friends and colleagues. ” [ (Bradley III & Griswold, 2011) ] The branding of Teach China must also take into consideration the fact that consumers are savvier, demanding value for their money and have little brand loyalty. (Abhijit & Chattopadhyay, 2010) ] Like other service providers, Teach China will have a logo, but its main source of branding, based on current literature will be through the use of social media and word of mouth. Additionally, Teach China’s partnering with an established educational institute, as stated in an earlier section of the company’s marketing plan, will have a direct impact upon branding. For its international market, Teach China will rely heavily upon business to business publications and its Web presence to promote services offered.

Teach China will also target setting up a booth or kiosk at trade shows. Dr. Young-Han Kim, et al, writing for Managerial and Decision Economic, 2006 stated compelling reasons why optimal pricing is important: Of the four P’s of marketing (product, place, price, and promotion), pricing is the only T’ that generates revenue for a company. Although effective pricing can never compensate for poor execution of other P’s, ineffective pricing can certainly prevent careful execution of other P’s from bearing financial rewards for the company (Nagle and Holden, 1995).

The role of pricing becomes even more critical in the context of global market entry. [ (Kim, Aggarwal, Ha, & Cha, 2006) ] Pricing services offered by Teach China is drastically different from pricing a product. There are three different pricing strategy options available to Teach China: cost-plus pricing, competitor’s pricing, or value added pricing. Cost-plus pricing is the standard used by many businesses. Elizabeth Wasserman, editor of Inc. s technology website, quoting Jerome Osteryoung, a professor of Finance at Florida State University and outreach director of the Jim Moran Institute for Global Entrepreneurship, states that when determining the cost of a service using this method, one must be certain to include a portion of your rent, utilities, administrative costs, and other general overhead costs. [ (Wasserman, 2012) ] This approach could return the greatest profit margin but would cause a fluctuation in price when other costs increase.

According to Professor Osteryoung, one should be aware of what competitors are charging for the same service. Yet he cautions against competing on price. Instead, he suggests that service companies compete on service, ambiance, or other factors that set [them] apart,” [ (Wasserman, 2012) ] The other factor discussed by Professor Osteryoung is perceived value to customers. Osteryoung points out that setting a price for a service can be subjective.

He rightly posits that pricing (for a service) becomes an art form when one considers that “the important factor in determining how much (a customer is) willing to pay for a service may not be how much time was spent providing the service, but what the customer perceives as the value of the service and the level of expertise,” [ (Wasserman, 2012) ] One method available for setting a price for the services offered by Teach China would be to use what has been called in some literature the “service pricing formula”.

Simply put this method helps determine an hourly rate for services rendered. Desired annual salary + Annual fixed costs (overhead) + Desired annual profit ?Annual billable hour = Hourly rate The other method used by my most businesses offering a service is simply that of setting market-based rates. In the book, The Small Business Start-up Kit, the authors suggest that if your rate is too high it will result in not getting clients. (Pakroo & Repa, 2004) There is also danger in setting rates below the market value. A PDF document downloaded from www. edi. org, warns that “In a service business, people tend to think that something is wrong, if your prices are too low. They assume that the services are of inferior quality. ” (Anonymous, 2012) Taking into consideration available literature research, Teach China will use a market based flat fee rate for services (including a 5% profit margin), with an offer of a discount for businesses enrolling five (5) or more employees. An internet search of prices for language courses returned a range of prices from $645 to over $2000.

In order to be competitive in this market, Teach China will offer 20 courses for $1500 this will include study materials, for an additional fee students can spend two weeks in China practicing skills learned. Since these prices reflect doing business in one of China’s major cities, there will be a cost reduction of 10-20% for students from targeted cities. These projections will be adjusted as financial statements are prepared showing the cost of fixed assets, faculty and staff, and other operating expenses.

The chosen pricing strategy for Teach China is designed to enhance customers’ perceptions about the service offered by the company (its brand). Teach China is selling a value service, offering expertise in language training and instruction. The pricing strategy chosen for Teach China will insure that the company can continue to afford and offer the best language instructors in the business. The target market of Teach China usually shop for similar services by listening to recommendation, reputation and testimonials of satisfied customers.

The distribution channels most used by the industry include direct marketing via target mailing, the internet and broadcast media. Teach China will therefore follow the industry standard, specifically, the following strategies will be used to help accomplish the marketing objectives and business goals of Teach China: Direct Mail; Direct Sales; Television programs; with infomercials; Internet strategies; Participation in business trade shows. In its international market, Teach China will benefit from its partnership with its designated education partner already in operation in mainland China.

Chris Rimlinger wrote an article in 2011 in Franchising World in which he advocates a balance of both push and pull marketing strategies to “expand the brand’s reach and attract new consumers, maintain lasting relationships with existing consumers, and meet sales goals by creating demand and satisfying existing market needs. ” [ (Rimlinger, 2011) ] Teach China’s direct marketing tactics will be the push that gets the brand in front of the consumers. Teach China’s television, infomercials and internet strategies will be the pull that creates consumer demand for the service offered.

Using a balance of both push and pull marketing strategies will facilitate Teach China’s brand being disseminated at home and abroad. The combination strategy will allow for specific target marketing to students, businesses and governments. Additionally, according to research conducted by Mike Sands, this type of combination strategy is the most effective way of harnessing technology to develop and control electronic customer relationship management. [ (Sands, 2003) ] Bibliography Abhijit, R. , ; Chattopadhyay, S. P. (2010). Stealth Marketing as a Strategy.

Indiana University, Kelley School of Business. Retrieved May 07, 2012 Anonymous. (2012, May 9). PRICING METHODS. Retrieved from SEDI: www. sedi. org/DataRegV2-unified/capnet… /pricing%20methods. pdf Bradley III, D. B. , ; Griswold, R. J. (2011). A Feasability Study to Develop a Foreign Language Academy in China. Journal of International Business Research, 19. Retrieved May 08, 2012, from http://go. galegroup. com/ps/i. do? id=GALE%7CA275130691;v=2. 1;u=tall18692;it=r;p=AONE;sw=s Gupta, M. , ; Singh, P. B. (2010).

Marketing and Branding Higher Education: Issues and Challenges. M. J. P. Hikhand University, Invertis Institute of Management Studies. Uttar Pradesh, India: Review of Business Reasearch. Retrieved May 07, 2012 Kim, Y. -H. , Aggarwal, P. , Ha, Y. -M. , ; Cha, T. H. (2006). Optimal Pricing Strategy for Foreign Market Entry: A Game Theorectic Approach. Managerial and Decision Economics. Retrieved May 08, 2012, from http://www. jstor. org/page/info/about/policies/terms. jsp Pakroo, P. H. , ; Repa, B. (2004). The Small Business Start-Up Kit. Ipswich,, MA: NOLO.

Rimlinger, C. (2011, December). Push and Pull Marketing Strategies: Using Them to Your Advantage. Franchising World, 43(12), 15-16. Retrieved May 10, 2012, from http://search. proquest. com/docview/913283066? accountid=10913 Sands, M. (2003). Integrating the web and e-mail into a push-pull strategy. Qualitative Market Research, 6(1), 27-37. Retrieved May 09, 2012, from http://search. proquest. com/docview/213439175? accountid=10913 Wasserman, E. (2012, May 08). How to Price Business Services. Retrieved from Inc. Com: http://www. inc. com/guides/price-your-services. html .

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Apple – the Best Global Brand

I. Introduction Hello everyone, my name is Tu? n from group 4: Bad apple. Though all of you seem quite tired after hearing a lot of presentations, we highly appreciate your attendance today. Firstly, let me introduce 6 members of our group: …. Have you ever heard about Apple. inc? I’m sure you all know about this as it’s so famous of high-tech products. So today, we’re very pleased to be here to talk about a topic that we think very close to all of you : Apple- the best global brand. Which reason makes us talk about Apple it’s because Apple has a large market share and it is having lots of influence on technological revolution.

We hope that through this talk, everyone will have a sufficient overview about Apple. Now, to make it easy for you to approach the presentation, let’s look over 4 main ideas in our talk. First, we’ll tell you about Apple’s history. After that, We’ll give you some information about its human resources. Next We’ll mention development strategies. And the final thing is achievements. We will represent it briefly so it’s expected to take you about 30 minutes. We’d be glad to answer any questions at the end of our talk. Now let’s start with Nhung in section 1: Apple’s history. II. Body 1. history

All of you must have known Apple and their products, right? But are you sure that you know Apple’s history? That bring me to my part of our presentation As you know, Apple Inc, originally Apple computer Inc is well – known as one of the most successful multinational companies. I’m sure that everyone here know it is engaged in designing, manufacturing. Apple is also famous for selling mobile communication, media services, personal computers, portable digital music players, computer software and a wide range of applications. Now, let’s take a look at the screen, I will show you a brief overview of Apple company.

Dated back to April 1, 1976, Apple was established by three young men. Who are these geniuses? They are: Steve Jobs, Steve Wozniak and Ronald Wayne. With their great efforts and talent, they have built Apple into unbeatable empire in technology world. The world corporate headquarters are located in the middle of Silicon Valley in Cupertino California where hundreds of breakthroughs have been appeared. Now, I ‘d like to draw your attention to the next part of my talk. All of you may know the official logo of the company, an apple with a bite. So unique, right?

But what I want to tell you is its history. Apple‘s first logo, designed by Ron Wayne, depicts Sir Isaac Newton sitting under an apple tree. However, it was almost immediately replaced by Rob Janoff‘s “rainbow apple”. The logo was designed with a bite so that it would not be confused with another fruit. The colored stripes were conceived to make the logo more accessible and to represent the fact that second generation product, Apple II, could generate graphic in color. Since 2001 till now, a version of monochrome logo has been used. So, that’s enough for background information of Apple.

You must be surprised when know that Apple has 393 retail stores in fourteen countries as well as the online apple stores and iTunes stores today. It is the largest publicly – traded corporation in the world by market capitalization with an estimate value of $626 billion as of September 2012. The apple market cap is larger than that of Google and Microsoft combined. So, what are the factors contributing widespread success of Apple? What makes it become one of the most famous and valuable brand names? Please keep paying attention, find out the answer and welcome to the next part of our presentation!!! . human resource Yes, one reason for the success of Apple is human resource. That brings me to my presentation, human resource of Apple. It’s about Apple’s leaders and employees At first, I would like to give you some information about Apple’s leaders. Such a successful company like Apple certainly has many wonderful leaders. Board of directors now is: 1. Tim Cook- theCEO 2. Eddy Cue- Senior Vice President Internet Software and Services 3. Crag Federighi-Senior Vice President Software Engineering 4. Jonathan Ive- Senior Vice President Industrial Design 5.

Bob Mansfield- Senior Vice President Technologies 6. Peter Oppenheimer – Senior Vice President and Chief Financial Officer 7. Philip W. Schiller – Senior Vice President Worldwide Marketing 8. Bruce Sewell – Senior Vice and General Counsel 9. Jeff Williams – Senior Vice President Operations Now I will bring to you some information about amazing CEO, Steve Jobs – a visionary leader of Apple. Steven Paul “Steve” Jobs ( February 24, 1995 – October 5, 2011) was an American entrepreneur. As you know, he is best known as the co-founder, chairman and CEO of Apple.

Through Apple, he was widely recognized as a charismatic pioneer of the personal computer revolution and for his influential career in the computer and consumer electronics fields. Therefore, his death in 2011 is a big missing in the field high tech and entertainment, especially Apple. Now I will move to the next part, the employee. Since the formation in 1977, Apple Computer, Inc. has employed over 75,000 people worldwide. The majority of Apple’s employees have been located in the United States but Apple has substantial manufacturing, sales, marketing, and support organizations worldwide, and some engineering operations in Paris and Tokyo.

Let’s consider Apple jobs in US in more details. The number of Apple jobs based in the U. S. has more than quadrupled over the past decade, from less than 10,000 employees in 2002 to more than 50,250 today. That number is more than doubles again when we include vendors that employ more than 50,000 people who directly support Apple. These jobs require people with a wide variety of skills — including construction workers, component manufacturers, retail specialists, tech support representatives, salespeople, marketers, and the best hardware and software engineers in the world.

How can these geniuses make Apple as success as today? Let’s find out in the next part of our presentation. 3. development strategies As you know, Apple has so many cults following all around the world. So, why can they become such a fame, such a phenomenon? That brings me to my part of presentation, development strategies. Development strategies of Apple is divided into 2 parts: marketing and competitiveness. Let me bring to you some information about marketing first. The first subject of marketing is logo. Let me go back to the logo history of Apple. As you can see, the bitten logo is very unique.

It’s so remarkable that when people see it, they will think about Apple. The logo was designed with a bite so that it would not be confused as another fruit. Very interesting, right? The second thing I want to mention is Apple’s slogans. Apple’s first slogan, Byte into an Apple”, was coined in the late 1970s. From 1997–2002, the slogan “Think Different”used in advertising campaigns, and is still closely associated with Apple. Apple also has slogans for specific product lines — for example, “iThink, therefore iMac” was used to promote the iMac, and “Say hello to iPhone” has been used in iPhone advertisements.

The third but not less important subject is advertising. Let’s face it. Apple is a master at marketing. The advertising campaigns of Apple are amazing, diversified, and varied. They use mass media so effectively and perfectly such as: magazines, ads on TV, short films…. Apple is also well known for their genius ads, for the amazing ideals that memorize people so much. Here are some unforgettable advertising campaigns: think different, get a Mac, 1984, what’s on your PowerBook? , Switch, iPod. Now let me move on to the next part of my presentation, competitiveness of Apple.

In mobile technology, Apple is not the only company. How can Apple be so successful as present? I want to talk about the competitiveness of Apple with 4 aspects: The first one is the superior features of products. Besides the spectacular design, Apple products are all designed with the user first, they are such a simple products that have a minimal number of buttons and just do what they’re intended to. Apple tends to avoid overcomplicating devices it builds and tries to make things as simple for the user as possible. Not only Apple’s products are amazing, but Apple support is also unbelievable.

It’s wonderful that you generally get really good community support, and when that fails, Apple support is amazing. You are totally able to get support without any form of warranty and just walk into an Apple store and talk to a genius if you have a problem. The next aspect is Apple’s application. I want to talk about the iTunes. iTunes is a free application for Apple products. It lets you organize and play digital music and video on your computer. It can automatically download new music, apps, and book purchases across all your devices and computers. And it’s a store that has everything you need to be entertained.

Anywhere. Anytime. Have you ever once want to own an Apple product? I guess the answer is yes. In today’s Network World’s, there are more than 70% people asked want to purchase Apple products without knowing anything about the product. Amazing, right? That’s the power of Apple. They have lots of cult following all over the world. Whenever Apple releases a new product, billions of people pay attention to it. Apple is very successful in making belief in customers, and their products totally gain the loyalty from customers. So, you see, Apple has been a very successful company.

That brings us to the next part of our presentation, achievement. Please keep on listening. 4. achievement I’m Ngoc and I will bring to you the final information about Apple. inc. The final issue I’d like to focus on is Apple’s achievements. We’ll have a look at this section through 2 aspects: Apple’s products and its position. Firstly, Apple’s remarkable success lies in the company’s ability to create truly innovative products with vast customer appeal. Their products can call attention from all over the world. The reason is that Apple has opted for constant product innovation, resulting in fanatic consumer loyalty.

Let’s consider this in more details. The first product I want to mention is the Mac. It comes with the latest technology. From the outside in, a Mac is designed to be a better computer. The Mac is applied for education and business as it gives students and businessmen the power to create amazing projects, and even more. The second one is the Ipod. The Ipod has evolved to include various models targeting the wants of different users. It is the market leader in portable music players by a significant margin. And the Iphone – a convergence of an Internet-enabled smartphone and iPod.

It has a remarkably slim design and ultrafast wireless. Besides, it owns all-new headphones designed to sound great and fit comfortably. Finally, I’d like to bring you the Ipad, Apple’s much-anticipated media tablet. It offers multi-touch interaction with multimedia formats. In terms of education, iPad takes learning to a whole new level. For businessmen, it gives realtime information, and improves efficiency of common office activities. Now, let move on to another aspect: Apple’s global market position. With a market capitalization of more than $ 500bn, Apple is among the most valuable and profitable companies in the world.

Apple has been building up a very big reputation and a very strong brand, I suppose that Apple is within the most expensive brands on earth. Everybody associates automatically Apple with innovation, design, quality, difference, etc. Apple has positioned itself to a certain type of customer, wealthy people, innovators, people with good jobs, good lifestyle, etc. To make it clearer, let’s have a look at this chart. The chart illustrates Apple’s quarterly revenue by product category in a period of almost 6 years from 2006 to 2012. In general, Apple’s revenue increased with some slight decrease over the period.

The Iphone generates almost two-thirds of apple’s profit while IPads likely contributes about 10-15% of its profit. In addition, Macs and Others likely account for just under 30% of the company’s revenue. That’s some information about achievement of Apple. Inc. III. conclusion Unfortunately, we seem to have run out of time, so we will move on to the end of the presentation. But before we stop, let me go through our mains again. Our presentation can be divided into 4 parts. First, we talked about history of Apple Inc. Next, we showed you some information of human resources. then, development strategies was brought to you.

And finally, we talked about achievements of Apple. I think human resources is the key issue for the success of company. Apple had a great CEO. Yes, I think all of you know him – You-Know-Who. He is the genius with amazing strategies that promote Apple and their products so much. We’d therefore recommend that we should have some experience with Apple’s products. With them, we can study, work or entertain everytime, everywhere. To sum up, I believe Apple is the best global brand of the world in mobile technology. OK, I think that’s everything I wanted to say. Thank you all for listening . Now, we just have time for a few questions.

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Nike Brand Equity

Case 6 Nike Celess Valk MKTG 4082 10/29/12 To answer question one it’s important to not that Nike has created a very powerful image in the minds of consumers in America. Nike wanted consumers to see it as an innovative brand that produces top of the line performance gear that was associated with very powerful and important athletes (mostly males). Their profile users are represented as famous athletes such as Michael Jordan or Tiger Woods. The athletes reflected the brand personalities such as competitive, winners, strong, and better than the rest.

This also is a way for Nike to obtain credibility and quality. With the Air Jordan line, Nike sold over $100 million shoes in the first year (129). Nike’s sources of brand equity hit all the way to the top of the CBBE pyramid for American consumers. Within the first two years alone Nike had 50% of the market share for athletic shoes. Salience is huge with the Nike logo. About 97% of Americans were able to recognize the Nike logo in 2000 (139). Imagery and performance were the main points that Nike stressed with its brand when it advertised itself.

Nike stresses its performance as a main key point. Nike has been able to fulfill individual needs or judgments such as self-respect and self-confidence (which you obtain when wearing shoes that the athletes wear). It fulfills needs that are more difficult to articulate such as the social needs for power and belonging. Resonance is obtained through the athletic communities Nike has built such as the relationships that were built with the athletes on Nike’s behalf as well as the consumer’s behalf with the Air Jordan line.

It doesn’t surprise me that Europeans had a lack of respect for the Nike brand as stated in question two. To start off, Europe didn’t have the same view on certain sports as well as the fact that their athlete idols were different. Second, athletic shoe specialty stores didn’t even exist there. Third, their culture is different than the American culture so naturally there are going to be some ways in which Nike is unappealing to their cultural values. Nike was seen as an aggressive, arrogant, and intimidating brand due to its strong advertising and the message of power and performance.

This advertising technique and these values worked in America, but not so well in Europe. Europeans were more traditional and less competitive. Some TV channels even refused to air the Nike vs. Evil advertisements. To change these views Nike decided to create an image in the consumers minds to be seen as culturally, personally, and geographically relevant to the consumers while keeping their logo and brand name constant. Nike gained 90% control of the brand distribution in Europe to make sure that happened (133).

Nike became more involved as a sponsor of sports leagues such as soccer and emphasizes its “apparel” in general. In 1997, Nike decided to also adjust its global branding strategy to tune down violent advertising techniques and resonated with regional interests. They used the two best-known athletes to create a sense of awareness and attachment to the brand globally. They even toned down the use of the swoosh logo and created product lines that were more community building and less aggressive to consumers.

In Asia, more specifically, Nike used ads with athletes that were local to their culture and stayed away from the aggressive advertising they once used that gave them irreverence in Europe. They learned their lesson and knew they needed to start out with a soft advertising approach and increase their brand awareness. To answer Question three, I will emphasize a few main points. Nike is known for innovative products globally with their shoe lines, Shox or AirJordan, but their image tarnished slightly from the working situations they found in Asia.

The imagery and feelings surrounding Nike now for Americans may be weaker due to this. As Americans, we believe strongly in freedom, equality, and the privilege to have those. Nike basically took advantage of that and treated their employees in Asia with very little freedom and treated them unfairly. Even though the sweatshops scandal weakened the image of Nike in the minds of Americans, Nike is still are seen as a powerful brand that emphasizes performance, power, and gives its consumers a vision to be the best. The sweatshops weakened their image in the minds of Americans.

As I stated before, aggressive advertisements work for Americans because we are a society that is so strongly attached to our sports, individualism, performance, and are competitive in general. However, as we saw in question 2 that approach doesn’t work well globally. In order to appeal to the world, Nike needed to make some local adjustments as well as global changes for its brand. Europe’s brand equity sources stem mainly from its attachments to the soccer community and apparel line. In 1999 the company’s soccer orders from Europe grew over 100% from the previous year (140).

Nike has strong performance, salience, and even resonance in this respect. Although competition, Reebok, may have better imagery, Nike has worked hard to improve theirs in European minds and must be doing something right with numbers that impressive. In Asia, Nike has strong brand equity from its image, performance, and judgments. They didn’t create such strong advertising techniques since they learned their lesson in Europe. This gave Asians a chance to see Nike in a positive light from the start, which makes their brand equity source from judgments and feelings better off the bat as compared to Europe’s brand equity sources.

Asian sales led the stock price to more than $70/share for the first time ever. Even after the collapsed economy they were ordering Nike goods and Nike kept with them. From this one could infer they are loyal customers, which reaches the higher levels of the CBBE pyramid (feelings and resonance). References: Keller, Kevin Lane. “Nike: Building a Global Brand. ” Best Practice Cases in Branding: Lessons from the World’s Strongest Brands. 3rd ed. Upper Saddle River, NJ: Pearson Education/Prentice Hall, 2003. 125-47. Print.

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The Life of Louis D. Brandeis

APUSH, Period 5 Louis D. Brandeis Louis D. Brandeis was a lawyer widely known for his contribution to the progressive movement especially his involvement in the fight against big corporations, monopolies, big trusts etc. Brandies was born into a Jewish family to who resided in Louisville Kentucky. They raised him with relaxed Judaic principles, which did not affect his outlook on life too strongly. Brandeis enrolled to Harvard Law School graduating with the highest final average in the school’s history. His law career began in Boston as a law clerk to Horace Gray of the Massachusetts Supreme Court.

To which he did not have to take an examination mainly due to his high honors. President Woodrow Wilson ultimately appointed Brandeis an associate of justice. Louis D. Brandeis was known as the people’s lawyer because of his successful law career that supported the general idea of the average American. Brandeis’ law career was mostly based on his positive view towards the progressive era/ movement; he was a strong advocate on natural rights and freedom of speech, Brandeis supported the union movement, women’s rights, and the fight for a minimum wage.

Brandeis was in favor of small business and set out to bust the big companies from being monopolies. One of his biggest busts against monopolies was the fight against JP Morgan and his desire for a railroad monopoly in New England. His plan was to eliminate the opposing companies by buying them out. Brandeis would pursue this case for 6 years and the company would ultimately collapse on itself as he predicted. Brandeis did not agree with how life insurance was being treated so he set out to create a new plan for it. He said that the previous insurance plan was just “legalized robbery”.

He created the Savings Bank Life Insurance policy, which we can thank him for even today. This is insurance provided by savings banks presumably making it better for the applicant. He said “cheaper insurance may rob death of half of its terrors for the worthy poor”. Brandeis was in support of the idea of minimum wage on a national level rather than a state level. He believed that the worker should be guaranteed a minimum pay and hours just like the unions wanted. The case Muller v. Oregon involved the issue of state v. ederal law in regards to the issue of minimum wage and hours of women. Brandeis fought for the idea of it being on a national level to ensure that all workers were treated equally. He succeeded by presenting his idea with a shorter more traditional brief, but with large factual support in documents such as social worker reports, medical conclusions, factory inspector observations, and other expert testimonials to prove his ultimate point that a certain amount of time was harmful for the given worker and that if this were a possibility a higher wage must be presnted.

This tactic is called the Brandeis Brief and it is still used in court cases today; it completely changed the way lawyers display their edvidence. Brandeis was a big leader in supporting the progressive era and the reforms that went along with it. Some things we can thank him for are the legalization of unions or the right of labor to organize, and the Savings Bank Insurance League. He was overall a big supporter of small corporations rather than large as he set out to bust monopolies including JP Morgan and his quest for the New England railroads.

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Ingredient Branding of Industrial Goods

Ingredient Branding of Industrial Goods: A case study of two distinct different automotive suppliers Waldemar Pfoertsch[1] / Johannes Rid[2] / Christian Linder[3] Abstract This paper concerns ingredient branding; more specifically, ingredient branding for industrial goods. Although research in ingredient branding has been quite intensive in the area of fast moving consumer goods, considerably less research has been carried out for industrial goods. In this paper, the authors provide insight into whether successful ingredient branding can be transferred to industries where it has not been a common phenomenon: automotive suppliers.

Two major companies in the automotive industry are analyzed in this paper: Autoliv, a major player in car-safety supplies and equipment like seat belts and airbags, and Bosch, producers of a large variety of car components, like diesel and gasoline injection systems, braking components (e. g. ABS and ESP), and starting motors and alternators. The findings include enormous potential for B2B companies in the field of ingredient branding. Car suppliers, for instance, have rarely used the option of branding their ingredients at the finished product.

The authors give a historical perspective, show e. g. that ABS braking system, invented by German supplier Bosch would have been a perfect candidate for branding to the final customer. In the purchasing decision of potential car buyers, the ingredient ABS, provided by a strong ingredient manufacturer (e. g. Bosch) could have led to a preference of buying a specific car, and in the end, added to the supplier’s reputation and revenue. 1. Leveraging the brand We now live in a world where consumers receive thousands of impressions and messages every day.

Ever increasing competition makes it more difficult for a message to reach the audience and target group, with the consequence that it becomes harder for a consumer to differentiate between brands. Furthermore, as competitive advantages and innovations are copied at a higher speed, products and services become more alike. In this kind of environment, it is important for producers to find a position for their product or service in order to focus and clarify the attributes that make their product unique to the customer.

In response to this current business environment, research and best practice show that more and more firms have come to the realization that one of their most valuable assets is the brand name associated with their products or services. (Keller,2003, Pfoertsch/Mueller, 2006). Producers understand that powerful brands are beneficial to the company: “Brands, therefore, are genuine assets and, like other forms of asset, they can appreciate considerably as a result of careful management and development. ” (Blackett, in: Murphy, 1989).

Kotler/Pfoetsch (2006) have proved that B2B branding offers strong competitive advantages, “by implementing a holistic brand approach companies can accelerate and increase their overall success” compared to companies that do not go the path of B2B branding. Brands should be seen in a holistic manner where all activities of a company should be integrated to get the maximum advantage (Kotler/Pfoertsch, 2006). Strategic success might be achieved through leveraging the brand, because the brand is one of the most strategic and worthy assets a firm owns.

Possibilities to leverage the brand include line extensions, stretching the brand vertically, brand extensions, and co-branding (Pfoertsch/Schmid, 2005). Co-branding means that two brands form an alliance in one or several areas that lead to a new product branded with both brands. Ingredient branding, on the other hand, is a brand that is solely used as a component of a branded article (Riezebos, 2003). According to Norris (1992), there are two relevant criterias that must be fulfilled for ingredient branding. First, the component can only be bought and consumed by consumers as a part of the branded article.

Second, the brand name of the component is only used for such an ingredient (and not for ‘normal’ branded articles as well). 2. Can you ingredient brand where branding is not a common phenomenon? The reason companies start to co-operate is due to technological and psychological changes of the business environment. There are two reasons why this occurs (Uggla, 2000): First, technology and new distribution patterns open up new possibilities for cooperation where brand extension and brand alliances become more interesting from a strategic point of view.

Second, consumers look for risk reduction, and brand extension and brand alliances might be the right strategies to reduce consumer risk. Strategies to meet the demands of a changing world are co-branding and ingredient branding. There are some good examples of ingredient branding of durable goods on the market, such as Shimano as a component supplier of cycles, and Intel in the computer industry. Intel, for instance, “positioned itself to be the heart and soul of personal computers.

The strategy was to create a brand, and it worked – for PCs” (Karolefski, 2001). In other industries that produce industrial goods, like the car industry, ingredient branding has not been a common strategy. The primary question that guides us through this paper is: Is it possible for industrial goods industry like the automotive industry to adopt an ingredient brand when ingredient branding is not a common phenomenon? 3. Analyzing with real world data In this paper, real world data from two different companies were collected and compared.

A qualitative approach was chosen, which enables us to analyze, understand and interpret the situation rather than giving standardized results. The aim was to understand the strategy of ingredient branding as a whole. Research was mainly based on collecting data through interviews with decision makers (respondent interviews), which implies that the interviews are of a strategic nature. A case study approach gives the possibility of getting deeper insight into a certain problem or situation and to ascertain how interviewees perceive their situations.

The presented cases are Bosch and Autoliv, two companies representing the car SUPPLIER manufacturing industries. Since this study aims to help understand why and under what circumstances companies choose an ingredient brand strategy, the case study approach was seen as the most appropriate. The Robert Bosch GmbH, Stuttgart offers a wide range of products to the market, both as a supplier to different kinds of manufactures, as well as a producer of consumer goods. It had 2007 a turnover of €46,7 billion and employs over 271,000 people in about 50 countries.

Today, 70% of Bosch turnover is from the car industry – it is a pioneer in the automotive supplier industry, with products that include ABS and ESP, injection systems, brakes, starter motors and alternators. Another major car supplier, Autoliv Inc. is headquartered in Stockholm, Sweden, the result of a merger between Autoliv of Sweden, founded in 1953, and the American company Automotive Safety Production, started in 1997. Autoliv of Sweden was the inventor of seat belts, which first came onto the market in 1956, and developed the first airbag for cars in 1980.

Autoliv has about 30% market share in its segment on a worldwide basis, and employs about 6,000 people, with sales in 2004 of $ 5 billion. 4. Leveraging the brand for industrial goods If a company realizes that it cannot capitalize on its own brand alone, it might choose to capitalize on another brand. This implies that company A wants to “borrow” association of a brand from company B. It follows that company B in turn must also want to have something from A, since B must also benefit from its association with A.

Generally speaking, three prerequisites must be fulfilled before company A and B collaborate: 1) Both companies must have sufficient brand equity, otherwise they would not be able to “borrow out” any associations (Keller, 2003); 2) company A and B should have a common basis of associations, meaning that A and B’s identity should have a certain degree of fit (Riezebos, 2003); and 3) that company A should be able to “offer” associations which B does not have and vice versa (Park/Jun/Shocker, 1996). (1) Sufficient brand equity The first prerequisite in terms of brand identity is that both brands have ufficiently strong and unique associations; that both of the brands (ingredient and host brand) separately have enough brand equity (Keller, 2003, p. 362). In this study, the question is whether Autoliv and Bosch each offer enough brand equity so that they could be potentially interesting partners for a host brand seeking to leverage its brand identity. The brand equity of Bosch can be rated as high. Bosch has successfully leveraged its own brand with brand extensions and line extensions. Bosch, in its beginnings, was a producer of car parts like starting motors and alternators.

Over time, Bosch began to capitalize and leverage its own brand by extending their product range, including the development and production of power tools, mobile telephones, security systems, and industrial packing machines. The other company in this case study, the car safety producer Autoliv, is a well-known brand among B2B customers. Autoliv wants to work together with the best automotive companies in the field of car safety: “The identity of Autoliv is a company that always has the technical leadership in the area of car safety equipment like airbags and seat belts.

Autoliv strives to always be the first with technical development in their area. ” (Mats Odman, Autoliv). (2) Common basis of associations The second prerequisite is that the companies working together should have a certain degree of similarity in their brand identity (Riezebos, 2003). According to Keller (2003), the logical fit (image and product) between the two brands is the most important requirement for a successful collaboration between two brands.

That means a) that both companies’ brand identities (host and ingredient brand) should be in correspondence with each other, and b) that the ingredient offers complementary brand associations. Main associations connected with Bosch are: quality and innovation. Most car manufacturers have these associations as well, therefore, a common basis of associations does exist. Bosch representatives say that “products from Bosch contribute key values to the brand such as a promise from Bosch about product quality. Bosch products are also innovative in the car industry which is reflected in their slogan ‘We bring innovation’, e. . Bosch was first to introduce engine injection systems with 1600 bar pressure” (Stefan Seiberth, Bosch). On the negative side, Bosch has the problem of being a supplier to virtually every car manufacturer in the world, and these car manufacturers have widely different brand identities (e. g. the brand identity of BMW is totally different than that of Volkswagen). Autoliv can be more precise in common associations. Autoliv aims to develop projects with car manufacturers that are striving for the latest technology in car safety, most likely with car manufacturers in the premium segment.

A logical fit exists here because Autoliv has the same aim of technical leadership as the car manufacturers they choose to work together with. (3) Offering complementary associations Finally, cooperation between brands will only work if the partner brand offers complementary associations, which the host brand does not have, and vice versa (Park/Jun/Shocker, 1996). The concept of brand identity system is central here (Aaker, 1996), and includes the following definition: “Brand identity is a unique set of brand associations that the brand strategist desires to create or maintain.

These associations represent what the brand stands for” (Aaker, 1996). Brand identity consists of twelve dimensions organized around four perspectives – the brand-as-product (product scope, product attributes, quality/value, uses, users, country of origin), brand-as-organization (organizational attributes, local versus global), brand-as-person (brand personality, brand-customer relationships), and brand-as-symbol (visual imagery/metaphors and brand heritage). Though not all perspectives might be appropriate for every brand, it should help firms to consider different brand elements to be able to enrich and differentiate their brand identity.

The brand identity model is structured into core and extended identity. The core identity is the timeless and central essence of the brand. Therefore, it will most likely remain constant while the brand is stretched to new markets and products. The extended identity consists of brand identity elements, which complete the core identity, such as a slogan, sub-brands, and the brand personality (e. g. reliable, American, German engineering, friendly). [pic] Figure 1: Aaker’s model for brand identity modified with results from the case study

To be able to identify and analyze what the case companies Bosch and Autoliv have to offer to their partners (host brands) in terms of desirable attributes, the above figure based on Aaker’s (1996) model summarizes the most important advantages of the examined cases. The reader should note that this paper is based on a study from the supplier’s perspective (partner brand). Therefore, spill-over effects which the case companies might receive from the producer side are not examined. Bosch offers associations which the partner brand possibly does not have.

Attributes like ‘German engineering’, ‘reliable’ and ‘innovation’ could be easily used and benefited from by car manufacturer building middle and lower-class cars. Autoliv’s contribution to collaboration is technical leadership. One could say that Autoliv is a premium brand in their field of competence, thus offering strong associations in quality. To summarize, we can conclude that brand equity is one of the most, if not the most, valuable assets a company has. The company’s brand identity is the most important factor in creating or pushing the company’s brand equity.

Company’s management should continuously try to leverage the brand’s identity. Our case companies Bosch and Autoliv prove that leveraging is fully possible in the area of industrial goods 5. Fit between brands So far, the authors have analyzed whether the examined companies and the industrial goods sector could offer enough brand equity and possibilities to leverage. In other words, up until this part of the analysis, we have looked upon whether our case companies would be interesting partners for the producers in their industries, and if the case companies fulfill the prerequisites to make co-branding successful.

Now let’s look closer into the fit of brands and the field of brand association base. Image transfer What does theory say about the transferring process? Riezebos (2003) defines image transfer through the term deductive inference, which is the deduction of results/conclusions from brand images already in existence. Deductive inference is important when associations from one brand or entity is carried over to another brand/entity.

For the transfer process, a source, which consumers must have certain associations with in terms of where it comes from, and a target (inductive inference, meaning that the associations load the image of the target) is needed. In summary, image transfer is a positive transfer from source to target, and similarly a positive feedback from target to source (Riezebos, 2003). For transferring associations, it is both necessary that source and target have something in common (e. g. common brand name), and that the target evokes certain brand associations.

Ingredient branding and co-branding are brand-stretching strategies based on image transfer. Critical success factors for image transfer are 1) the sources’ level of brand-added value, 2) how the products are related to each other (target and source should only to a minor degree differ from each other), 3) the target group similarity (Park, 1991), and 4) family resemblance (different packages sharing the same facings). Brand association base Simonin and Ruth (1998) stress the fit between brands (and between the products), which significantly affects the attitudes towards the alliance.

Leading researchers agree that companies should integrate the brands they cooperate with within their overall brand architecture. The authors have used the brand association base described by Uggla (2003) to examine the question of fit. The result can be seen in the figure below where the association base model has been modified with the findings from the case studies. The association base is a relevant tool for this purpose – to organize brand alliances and the brand structure from a leader brand perspective and intention.

The association base describes how brands can be organized together. The model contains four different core components: leader brand associations, partner brand associations, institutional associations and the customer’s brand image. In a cooperation of brands, the advantage for the leading brand is that it adds values and positive associations to the product. The partner brand gets access to the distributions channels leading to the end-consumer market. The collaboration between the leader brand and the partner will determine an association base.

The customer will evaluate the perceived equity from the association base and shape a specific brand image (Uggla, 2001). Figure 2: Modified brand association base (Uggla, 2003) Bosch, as a car part producer with German quality and innovation as their base of associations, could definitely contribute to the car manufacturer’s base of associations as for Mercedes-Benz: Enduring Passion. Autoliv has valuable associations for a potential host brand in terms of car safety. On the other hand, Autoliv does not build brand value, Autoliv would be a weaker partner brand according to the collaboration theory.

The partner brand should help to expand the base of associations of the leader brand, and the partner brand’s core identity should lead into the direction the leader brand wants to go to, and the direction should be defined by the leader brand. The partner brand should also help to strengthen the base of associations while bringing in exclusivity and differentiation. Once more, Bosch has proven to be a valuable partner when tested against this theory. Autoliv stands weaker in this respect because the company is not actively building brand equity towards the final customer.

To summarize, Uggla (2003) suggests that a less familiar leader brand should be connected to a strong partner brand with high brand familiarity. A lesser-known and/or unfamiliar car manufacturer (e. g. Asian car manufacturers who want to enter new markets outside Asia) using Bosch in-car equipment, for example, would be a positive example of this guideline. Functional and emotional incentives for brand collaboration A way of defining the motives for collaboration is given by Uggla (2001). He suggests a model based on a matrix, which is divided into emotional and functional benefits, to be able to understand why brands engage in co-operation.

The model is based upon Aaker’s theory about the brand’s identity, but focuses on how the components of the value proposition are divided and shared among partners. The model divides the brands engaged in co-operation to a leader brand and (one or more) partner brand(s). The leader brand can choose to develop own associations or choose to capitalize on other brands’ associations. The partner brand’s contribution should be to expand to the leader brand’s base of associations and add critical physical and/or emotional attributes.

Two different incentives for collaboration are functional and emotional benefits (Uggla, 2001). An example for a functional alliance is Intel because Intel contributes with a product (the processor for a computer) for which they have core competence. With emotional incentives, the aim of the leader brand is to endorse reputation (Cooke, 2000), which is the aim to get a better image and/or quality association with the help of the partner brand. On the other hand, the partner brand can profit from the leader brand’s functional attributes. [pic] Figure 3: Applied incentive model from leader and partner brand perspective

The authors have modified this model in respect to the case analysis (see Fig. 3). As mentioned above, a brand that wants to lend associations to another brand strong must have strong incentives that can be either functional or emotional. For car producers, working together with Bosch could gain core competence and expand the value proposition (e. g. Bosch as a technology leader in ESP, ABS and diesel technology). This is according to the theory (Uggla, 2003), which says that collaboration based on functional incentives implies that the one brand contributes with core competence.

Bosch would also profit from brand collaboration through shared costs in R&D. Bosch might expand the legitimate territory for their products if the car manufactures allow Bosch to brand their ingredients. Accentuating emotional attributes are also a possibility for Bosch: “It is our strategy to position Bosch as an innovative, international, modern company” (Stefan Seiberth, Bosch). A car producer might also want to work together with Autoliv based on functional motives because Autoliv has core competency and is a leading manufacturer of car safety equipment (intelligent seat belts, irbags, etc. ). The focus for Autoliv is choosing partners who have a commitment to actively work with the development of safety in cars. As it is the case with Bosch, Autoliv would gain from collaborations by sharing costs for R&D. Emotional incentives are also important for the company and play a certain role in choosing partners for a new project, according to Autoliv. The image of the car manufacturer is important; therefore, the company strives to share development with car manufacturers in the premium segment” (Mats Odman, Autoliv).

To summarize, according to the incentive model, both Bosch and Autoliv offer sufficient incentives, both from partner brand as well as from the leader brand perspective. 6. Results: Transferring successful ingredient branding to the car industry The authors have taken into account the findings from the secondary sources of Moon (2002), Aaker (1996), and Keller (2003), all of which present a deeper analysis of ingredient branding strategies, and have compared these findings with the information from the car suppliers Bosch and Autoliv.

We first want to emphasize that successful companies invest in and put the brand first. Moreover, the most effective strategy for a company is to become a brand-driven organization (Kotler/Pfoertsch, 2006). These companies not only differentiate themselves through their technology, but also through their level of service and through all employees working effectively towards the success of the brand, and thus, the company. In addition, ingredient branding is a form of multi-stage branding (Baumgarth, 2001). Therefore, the whole value chain, from (ingredient) producer to the final customer, needs to be considered.

In the case of Bosch or Autoliv, the retailer, the producer of the final good, and the final customer need to be connected. This implies that all downstream markets need to be part of the strategy. Hillyer/Tikoo proved that consumers are cognitive misers (Hillyer/Tikoo, 1995). This means that consumers simply trust that a well-known manufacturer would not allow itself to collaborate with a low quality supplier. This has been proven with the success of Intel. Customers simply transferred the decision making to the computer manufacturers by trusting that the manufacturers have chosen the right microprocessor supplier, Intel.

In terms of transferring these findings to the car industry, Autoliv could step into the shoes of Intel. Autoliv could act as a retrieval cue (Hillyer/Tikoo, 1995) for potential car buyers, where the car buyer trusts the car manufacturer to have picked a trustworthy brand in the area of car safety. Also, for a successful ingredient branding strategy, it is crucial that the right opportunity in time be identified. If we look at the success of Intel, often regarded as one of the most successful ingredient branders, one aspect that is different between Intel and the automotive industry is the timing of the ingredient branding.

The computer industry matured during an era when computer sales were strongly on the rise accompanied by a period of increasing sensitivity to the value of branding (Cook, 2003). The car industry is already mature, therefore, the timing is not optimal for an ingredient brand strategy: “It would be great to replicate [Intel’s success in the automotive industry], but it’s 80 years too late to do it” (Klaus Deller, Bosch Group, in: Cook, 2003). The authors want to stress though, that even the car industry will offer windows of opportunities, especially when supplier come up with decisive inventions and innovations.

Another factor to consider is that In contrast to the situation like Intel, where producers were actively looking for co-operations, car manufacturers often want to control their brand image and are currently not actively seeking brand collaboration with supplier. This fact makes the ingredient branding strategy even more complicated to implement. A solution to this would be for suppliers like Autoliv and Bosch to adopt a pull strategy by creating consumer demand.

The pull principle is also the basic underlying concept that is best suited for ingredient branding, meaning that the ingredient manufacturer directly addresses the final customer (Pfoertsch/Schmid, 2005). Bosch is, through its automotive advertising campaigns in 2006 and 2007, on its way to utilizing such a strategy. Building strong association could even be implemented into the car industry. The OEM’s in the car industry could effectively promote their associations, which in the case of Bosch could be ‘braking safety’ (ABS, ESP), and ‘passenger safety’ (Airbags), in the case of Autoliv.

The authors conclude that it is entirely possible for auto suppliers to establish an ingredient branding strategy. Bosch and Autoliv proved to have substantial possibilities for ingredient branding. This conclusion can be drawn through congruence of findings of the empirical research with theory. It is vital to the success of the strategy, though, that the whole organization not only strives for the same objective, but also consistently delivers the brand promise. Only with this “quality thinking” in the organization, can an ingredient succeed in the final industrial good.

And – not to forget – it is time-consuming to create and establish a brand. Therefore, the overall strategy needs to be a long-term engagement in the marketing and branding investment. 7. Suggestions for future research This paper has examined the question of ingredient branding as a viable strategy for producers of industrial goods. In particular, we tested automotive suppliers Autoliv and Bosch (Norris, 1992; Keller, 2003; Riezebos, 2003). Since the scope of this paper could only cover the basics of this question, it would be interesting to go deeper into other aspects.

A question for further research would be to find out how a model of the appropriateness of ingredient branding could be derived. Further research could cover even more industry segments in B2B marketing, thereby giving deeper insights into why certain industries have seen companies with successful ingredient branding, while others have not. Additionally, to discuss questions about an implementation strategy for ingredient branding needs more insight and research, including a possible guideline for companies that have decided to brand its ingredient.

Examples from other industries could also be examined since the implementation process is very complex and many aspects need to be considered. Literature Aaker, D. A. , and Joachimsthaler, E. , “Brand Leadership”, The Fress Press, New York, 2000 Aaker, D. A. , and Keller, K. L. , “Consumer Evaluations of Brand Extensions”, Journal of Marketing, 54, January 1990, pp. 27-41 Aaker, D. A. , Building Strong Brands, The Free Press, New York, 1996 Baumgarth, C. , Ingredient Branding. Begriff und theoretische Begrundung, in : Esch, F. -R. : Moderne Markenfuhrung, Wiesbaden 2001, p. 17-343 Blackett, T and Boad, B: Co-branding, the Science Of Alliance, Macmillan Business, Interbrand, England, 1999 Blackett, T. , The Nature of Brands, in: Murphy, John, Brand Valuation, Hutchinson Business Books, 1989, pp. 1-11. Cook, B. , Can Bosch spark its OEM brand? , www. brandchannel. com, 2003 Cooke, S. , and Ryan, P. , “Brand Alliances: From Reputation Endorsement to Collaboration on Core Competencies”, Irish Marketing Review, Vol. 13, 2000, p. 36-41 Hillyer, C. , and Tikoo, S. , “Effect of Cobranding on Consumer Product Evaluations”, Advances in Consumer Research, Volume 22, 1995 Kapferer, J. -N. Reinventing the Brand, Kogan Page, London, 2001 Kapferer, J. -N. , “Strategic Brand Management”, Kogan Page, London, 1992 Karolefski, John, “Intel Outside”, www. brandchannel. com, 2001 Keller, K. L. , “Conceptualizing, Measuring, and Managing Customer-Based Brand Equity”, Journal of Marketing, January 1993, pp. 1-29 Keller, K. L. , Strategic Brand Management: building, measuring, and managing brand equity, Prentice-Hall International (UK) Limited, London, 1998 Keller, K. L. , Strategic Brand Management: building, measuring, and managing brand equity, Prentice-Hall International (UK) Limited, London, second edition, 2003 Kotler, P. et al. , Principles of Marketing, Prentice Hall Europe, 1996 Kotler, P. , and Pfoertsch, W. , „B2B Brand Management“, Springer, Berlin/Heidelberg 2006 McCarthy, M. S. , and Norris, D. G. , “Improving Competitive Position Using Branded Ingredients”, Journal of Product & Brand Management, Vol. 8, Nr. 4, 1999, pp. 267-285 Moon, Y. , “Inside Intel Inside”, Harvard Business Review, October 15, 2002 Norris, Donald G. , “Ingredient Branding: A Strategy Option with Multiple Beneficiaries”, The Journal of Consumer Marketing, Vol. 9, No. 3, 1992 Park, C. W. , Jun, S.

Y. , and Shocker, A. D. , “Composite Brand Alliances: An Investigation of Extension and Feedback Effects”, Journal of Marketing Research, Vol. 33, 4, 1996, pp. 453-466 Pfoertsch, W. , and Schmid, M. , „B2B-Markenmanagement: Konzepte – Methoden – Fallbeispiele“, Franz Vahlen, Munich, 2005 Pfoertsch, W. , and Mueller, J. Die Marke in der Marke Bedeutung und Macht des Ingredient Branding, Springer, Berlin/Heidelberg 2006 Riezebos, Rik, “Brand Management: A Theoretical and Practical Approach”, Pearson Education Limited, 2003 Simonin, B. L. , and Ruth, J. A. “Is the Company known by the Company it keeps? Assessing the Spillover Effects of Brand Alliances on Consumer Brand Attitudes”, Journal of Marketing Research, Vol. 35, February 1998, pp. 30-42 Uggla, H. , “The Brand Association Base: A Model for Strategically Leveraging Partner Brand Equity”, Unpublished Paper, 2003 Uggla, Henrik, ”Managing the Brand-Association Base”, Akademitryck AB, Edsbruk, 2000 Uggla, H. , ”Organisation av varumarken”, Liber Ekonomi, Malmo, 2001 Uggla, H. , ”Varumarkesarkitektur – strategi, teori och kritik”, Liber Ekonomi, Malmo. 001 ———————– [1] Waldemar Pfoertsch – Professor of Business Marketing – CEIBS China Europe International Business School Shanghai – Hongfeng Road Shanghai – 201206, China – Tel: +86(21) 28905662 – [email protected] edu and Professor of International Business – Pforzheim University – Tiefenbronnerstrasse 65 – 75175 Pforzheim, Germany [2] Johannes Rid, National Sales Manager, Pirelli Tyre Nordic AB, Gustavslundsvagen 141, P. O. Box 14147, 16714 Bromma, Stockholm, Sweden,Tel: +46. 8. 6220850, Fax: +46. 8. 7550941, johannes. [email protected] et [3] Christian Linder – Research Assistant – Pforzheim Business School – Pforzheim University – Tiefenbronnerstrasse 65 – 75175 Pforzheim, Germany – Tel: +49 7231 28-6466, christian. [email protected] de ———————– Bosch: Expand the legitimate territory Emotional incentives Functional incentives Bosch: Expand value proposition, modify brand personality Bosch: Engineering core com Autoliv: Core competence in car petence safety Partner brand perspective Leader brand perspective Bosch: Cost efficiency (R&D), Short cut to awareness and distribution. Autoliv: Cost efficiency (R&D)

Institutional Associations Image Transfer Identity Transfer Customers’ image of the brand Leader Brand Associations e. g. Mercedes-Benz: Enduring Passion [pic]*fgyz}‰S? z ©? iO? ©i? i~? i? hM8([email protected]>zhuT;CJOJ[4]QJ[5]^J[6][email protected]>zhuT;5? 6? CJOJ[7]QJ[8]? ]? ^J[9][email protected]>zhuT;5? CJ,OJ[10]QJ[11]^J[12]aJ,mHsH#[email protected]>zhuT;6? OJ[13]QJ[14]^J[15][email protected]>zhuT;0J6? OJ[16]QJ[17]U[pic]^J[18][email protected]>zhuT;5? CJ,OJ[19]QJ[20]^J[21]aJ,[email protected]>zhuT;CJ OJ[22]QJ[23]? ^J[24]aJ mHsH. [email protected]>zhuT;5? CJ OJ[25]QJ[26]? Partner Brand Associations Bosch: Innovation, quality Autoliv: Safety Association base fit

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Consumer Perception Towards Brand Choice

Changing Perception of Consumer towards Brand Choice and the role of culture in it: A Pakistan perspective An Argumentative Paper on the Bond between Brand Choice, Consumer’s Perception and Culture influence Ikra Nasir Bachelor of Business Administration, Comsats University of Science and Technology, Islamabad campus, Pakistan Haider Ahmed Qazi Bachelor of Business Administration, Comsats University of Science and Technology, Islamabad campus, Pakistan Abstract

The main purpose of this paper is to investigate and discuss the importance of analyzing the consumer perception towards local and foreign brands. An argumentative approach has been used to reveal the importance of Consumer perception. Local and foreign brand choice is affected by brand image, country of origin, brand awareness, brand quality, Materialism. With the increasing trend of globalization consumer have become much more aware and their perceptions are changing at rapid pace, it has been seen that price, quality are considered to be major determinants of making their brand choice.

Consumer’s value local brands because of low price but they prefer foreign brands because of better quality and durability and for status enhancement reasons. In order to understand consumer perception we need to understand culture so that necessities and behavior of consumers are well understood. The paper shows a link among three concepts and how they are interconnected. The discussion section views the concepts based on the findings of the research. A theoretical framework has been described which exhibit the antecedents on which the three concepts are being measured.

Lastly the paper conclude that a cross-culture study is essential to understand the changing perception of consumers when making a brand choice between local and foreign products Keywords: Brand Choice, Perception, Globalization, Culture, Local and Foreign Brands Contents 1. Introduction3 1. 1. Problem Statement5 1. 2. Objectives of the study5 1. 3. Significance of the research5 1. 4. Scope of the research6 1. 5. Limitation of research6 2. Literature Review6 2. 1 Local and Foreign Brands6 2. 2 Consumer Perception8 . 3 Role of Culture9 2. 4 Link between Local and Foreign brands, Consumer Perception, Culture. 10 3. Theoretical Framework and antecedents of variables11 4. Hypothesis12 5. Data Analysis12 5. 1Population13 5. 2Sample size13 5. 3Sampling Method14 5. 4Data Description14 6Discussion16 6. 1Consumer perception and culture18 7. Conclusion19 8. Recommendations19 References20 Appendix25 1. Introduction ‘People are pawns in the hands of giant companies with huge advertising budgets and global reach.

Brands bring something that people think is better than what they feel’ . – (The Economist, 2004) The study aims to understand the consumer perception towards local and foreign brands in the Pakistani market not only in fast moving consumer goods segment but also in other industries as retailing, clothing. Through consumer perception of price quality and value are considered pivotal determinants of shopping behavior and product choice (Bishop 1984; Doyle 1984; Jacoby and Olson 1985, Sawyer and Dickson, 1984) ( Valarie A. Zeithaml, 1988).

Pakistani market is taken into study because of increased globalness many international companies are now entering into the market on the strength of rising affluence level of the young Pakistani population along with the heightened awareness of foreign brands, international shopping experiences the demand for foreign products are increasing in Pakistan The increased global competition among foreign firms operating in different parts of the world are not only offering products but also offering increased standard for living and improved lifestyle of consumers around the world.

So now the markets need to understand the consumer perceptions and evaluations of foreign products more than ever before (Simriti Bajaj, 2007). We are also interested in understanding and considering the factors that affect the consumer evaluation and perception of foreign products against local products Consumers when come in a market are faced with a choice between local and foreign brands how they make this choice is obviously worth researching Studies already show that the consumer perception towards brand quality and acceptability is perceived directly from where the brand is from.

This shows that brand country of origin play an important role in determining the quality of brand which influences their attitude and purchase intentions. In developing country like Pakistan brand origin (that the brand is from which country) affects the perception of consumers for foreign products (Kaynak et al. , 1999) and this foreign product can be more favorable if the brand is from the western or developed country.

Consumers evaluate products more positively which are particularly from the USA, Japan, Germany, Italy, the UK and France (Bhuian, 1997) brands are well recognized by consumers around the world, and are perceived as to representing a high status and quality we believe that this effect consumer assessment of brand quality rating (Lee,M,Y. , Knight,D. , Kim,Y,K. , 2008) Looking at how consumers perceive local brands. The study revealed that local brands benefit from a better value.

As it is mention by Simriti Bajaj (2007) that Value is linked with the fact that prices of local brands are usually lower than those of international brands, providing consumers as sense of better value for money. As tell by (Sankar,S,M. , 2006) Local brands are perceived as more “down to earth” than an international brand, Research shows that perceived brand globalness for global brands could create consumer perceptions of brand superiority (Shocker et al. , 1994)(Sankar, S. M. , 2006) Consumers prefer global brands because they usually offer more quality and better guarantees than other products.

Consumers look to global brands as symbols of cultural ideas “Local brands show them what they are while global brands show them what they want to be” Shocker et al. , (1994) cited by Sankar, S. M. , (2006) Consequently when companies are doing marketing of brands across cultures firms make strategies that assert a standardized brand through the use of advertising, symbols and other imagery Marketers seek to develop brand that is rational for all the consumers in the world. ( Foscht,T. , Maloles III,C. , Swoboda,B. Morschett,D. , and Sinha,I. , 2008) Culture play an important role in determining the Brands personality it is perceived differently by consumer either in culturally-homogeneous or heterogeneous markets the culture meaning which could be assigned to the brand is influenced by culture differences in diverse communities. In the paper of “Brand culture and consumption: Chinese consumers and foreign brands” Chen Li a professor of management science in France university d’Aix tells that Chinese have accepted foreign brands happily.

Culture values are thought of determining the attitude and behaviors of consumers (Kamakura and Novak, 1992) With the increase trend of globalization, Consumers in Pakistan are now becoming more informed, demanding and sophisticated consumers attitude is changing at rapid pace. consumers are becoming aware of westernized products and they feel that buying and having a foreign product make them feel proud between their families and friends and it give them prestige and status(Kaynak. E, Kara. A, 2000).

This shows that products today have now become more symbolic attribute for people. The study therefore focus on the reason that why consumers in the market particularly Pakistan prefer foreign brands over local brands and how culture play a role in molding the perception of consumers in making brand choice for the deep understanding interviews have been conducted with consumers that helps as a qualitative tool for the research to know the attitude and thinking of consumers towards local brand and foreign brands.

This study is restricted to upper and middle class. 1. 1. Problem Statement The research evaluates the impact of local and foreign brands on consumer perception and the moderating effect of culture on consumer perception 1. 2. Objectives of the study

The main objective of the study is to evaluate consumer perception of local and foreign brands in the Pakistani market other objectives are as follows: 1- To analyze the effect of consumer perception for foreign brands and that why people prefer foreign brands over local brands 2- To determine the increase influence of modernization and westernization (impact of culture) affects the consumer perception of brand choice 3- To identify the effect that culture plays a moderating role when consumers make a brand choice between local and foreign brands. . 3. Significance of the research The research is important for the marketers and the companies who want to enter into Pakistan as it will help them understand the changing perception of Pakistani consumers towards brand choice. While marketing across culture many firms make marketing strategies that emphasized a standardized brand through advertising, symbols and imagery the study help to understand the role of culture differences and acceptance of Pakistani consumers.

It tells us how culture plays an important role to understand the perception of consumers, as nowadays there is a trend of westernization and people are blending west with our eastern culture. They are using global brands as to get ideas of other cultures, and they adapt them to make themselves the global consumers. Therefore, this research will be of great help to the managers and companies, as they will get to know the acceptance level of their brand by consumers. In addition, studies aim to add to the knowledge about consumer behavior and their perception of foreign vs. ocal brand in a developing market like Pakistan A firm serving foreign brands must understand how consumers in different cultures evaluate the brand. Hence this understanding of consumer choice behavior will benefit both foreign companies and local companies. 1. 4. Scope of the research The scope of the research was to study the perceptional changes of consumer towards brand choice from the twin cities Rawalpindi and Islamabad (The capital of Pakistan). As being a student and resident of Islamabad the study is being done on small scale to get the overall idea about the topic.

The samples which seem appropriate for this particular study are consumers from Pakistan 1. 5. Limitation of research The limitations of the study are that the finding is mostly done between students and faculty of different private sector universities of Islamabad and Rawalpindi. Which limit the generalizability of the finding as student represents only a subset of consumers. Future research will be conducted with a sample more representative of the entire consumers. The study selected only two foreign brands Levis and Polo. 2.

Literature Review 2. 1 Local and Foreign Brands A brand is a “Name, term, design, symbol, or any other feature that identifies one seller’s good or service as distinct from those of other sellers (Aaker,1996) brand is an image that act as a pathway for image value and differential point (Cretu ; Brodie, 2007; del Rio, Vazquez ; Iglesias, 2001). One of the most cited definition of local brand was formulated by Wolfe (1991; 50) “A local brand can be defined as a brand that exists in one country or in a limited geographical area” .

Where a foreign brand is defined as “a brand that is marketed under the same name in multiple countries with similar and centrally located coordinated marketing strategies”. Levitt (1983). Competition has now become much complicated for brands as the number of brands originating from the foreign countries are increasing many foreign brands are now competing with domestic brands in all global markets and that foreign brands image is more related from brand country of origin and country image. Kim,C,K. , and Chung,J,Y. (1997) Foreign brands are perceived to be more reliable and safe in terms of quality, technology, status and esteem then local brands . Positive brand image is found in accordance to country of origin perception. Country of origin image influence the brand preference for the consumer so according to (Kinra,N. , 2005) country of origin is considered to be an important factor that differentiate the consumer attitude towards local and foreign brands. In the study of (Marin and Gonzalez, 2008) People preferred foreign brands over local brands because of differentiation and enhanced quality and that’s hy most of the consumers show loyalty towards global brands as far as local brands consumers perceives them in terms of popularity as they are from their own country so people mostly know about them means they are having high awareness level and they value to it in terms of fare prices The increase trend of Globalization has forced the companies to take their brands global and invest in them for the companies long term success(Arturo Bris, Willem Smit, and Michael Sorell, 2010) In some cases, preference for local brands may signify defiance against the forces of globalization (Russell and Russell, 2006).

Today’s in this inter connected world markets with its consumers all over the world the global brand creates consumer perception of brand superiority (Shocker, et al, 1994; Kapferer, 1997; Keller, 1994; Ozsomer and Altaras, 2008); and it has been seen that foreign brands have more prestige and status enhancement which make people more likely to prefer foreign brands in their purchase decision (Steenkamp, Batra, and Alden, 2003).

The main difference for brand are based on the things which differentiate them from others , something unique, something good it was found by Keller (2003) that brands like FedEx and McDonald form and create their attractive image in mind of consumers by speed reliability, quality food ,and comfort like characteristics (Harun. A et al. ,2010) consumer purchase intention for local and foreign brand is influence by brand specific variables quality emotional value e. g a sense of happiness and pleasure and need for uniqueness (Kumar. A et al. 2008) On the basis of literature of local and foreign brands it has been proposed 2. 2 Consumer Perception Perception is the process through which consumer attach meaning to the world around us our world consist of the people experiences and objects that influence us (Brignall. M, 1999-2012)Consumer perception is based on demographic variables which also may have an impact on brand preferences (Dogerlioglu-Demir. K , Tansuhaj. P,2011) consumer perception for different brands depend upon the amount of information consumer have with them about it (Vithala R.

Rao, 1972) consumer perception , values and behavior towards foreign brands when buying the luxury fashion products is to buy a brand which enhance their status (Jap. W,2010) “In a nation that has long tradition of valuing ‘face, ‘consumers take luxury products as a symbol of their high social status. ” Stated by Simons (2006) status consumption and incorruptibility are strong influencers of purchase intention (Phau. I, Teah. M, 2009). Consumer perception towards brand purchase intention is influenced by perceived quality, perceived risk, perceived value, prestige and involvement of consumer in a brand ( Hanzaee.

K. H, Taghipourian. M. J, 2012) consumer perceive quality of a brand from its intrinsic e. g. Performance, Durability and extrinsic cues e. g Brand name and service now consumer perception towards any brand is formed that how effectively a brand satisfy its quality and overall superiority with respect to its consumption experience (Kirmani and Baumgartner 2000). Consumer preference towards foreign products are seen due to the good quality , prestige and perceived value perception for foreign brands consumers think that possessing a foreign brand influence the other people perception about them (Ergin. E.

A, Akbay. H. O, 2010). So it is well supported in the literature that consumer perceptions are based on variables such as quality, explicit information, social status, prestige like variables consumer prefer to buy a brand that give them feeling of the ambience that creates enjoyment for consumers which is taken as a critical aspect of consumers’ consumption experience and in turn consumers perceive a brand in agreeable with them (Babin et al. , 1994). Brands that prove and indicate reliability and integrity ensure consumer trust in a brand and they create perception of loyalty for the brand ( Ok. C et al. 2011) perceived value is also a key strategic variable that helps explain repeat purchase behavior and brand loyalty (Parasuraman and Grewal 2000 ; Wong. A ;Zhou. L, 2005). 2. 3 Role of Culture What is culture? When looking in a national context it’s a way of life – a natural inherited way of life – that includes religion, spirituality, language, moral and social norms, family values, eating habits, and so on. (Tandon. S, 2004). Researchers in consumer behavior are very much aware of the necessity to understand culture so that necessities and behavior of consumers can be very well understood (Graham.

R. J, 1981) there is an impact of culture in consumer evaluation(Mattila. A. S,1999) with the increased trend of globalization, cultures trade with each other expand opportunities available to all, Critics of globalization say that even if the increased trade has promote the material success and fortune it comes with high spiritual and cultural cost (Cowen. T, 2003)globalization presents a fundamental challenge to companies around the world (Iversen and Hem 2011; Nijssen and Douglas 2011).

Culture, it has well been established in the literature that brands carry and communicate cultural meanings (Aaker, 1997; Aaker et al. , 2001; Escalas and Bettman, 2005). Three levels of Culture identity: individual, relational, and collective are suggested by Brewer and Gardner relational and collective self-identities most closely relate to social identities such as global and national identity. While individual self-identity has more personalized associations (Brewer and Gardner, 1996) (Westjohn. S. A et al. , 2011).

In different cultures there are set of shared consumption related symbols, product categories, brands which are known as global consumer cultures and those which are not known to be as local consumer cultures associating a brand with global consumer culture flows brand equity (Dana L. Alden et al. , 1999)in order to analyze a global consumer behavior an analysis of life style and cross cultural analysis of consumer lifestyle and traditional areas of consumer decision making should be focus Hassan. S. S, Kaynak. E,(1994).

Ethnocentrism is a concept which was introduced by (Sumner, 1906) (Evanschitzky. H, et al. , and 2008) it represents the universal tendency of people to view their own group as a centre of the universe they look at other social units from their group perspective. And they reject the person who is culturally dissimilar and accept the one without thinking that are culturally like themselves (Evanschitzky. H, et al. , 2008) in order to build a brand across market cultural differences across markets and communities should be analyzed (Moore. J,1993) 2. Link between Local and Foreign brands, Consumer Perception, Culture. While global brands may be perceived as status enhancing tools and vehicles for expressing a desire to be part of the global consumer community, local brands may suggest low status (Batra et al. , 2000) and even closed-mindedness (Steenkamp et al. , 2003). In some cases, preference for local brands may imply resistance against the forces of globalization (Russell and Russell, 2006). Marketers are increasingly applying marketing positioning strategies to appeal to either global or local consumer cultures.

In order to measure CE related to foreign- vs non-foreign-made products, (Shimp and Sharma, 1987) introduced a 17-item measurement instrument, the consumer ethnocentrism scale (CETSCALE) which we use to identify the culture dimensions and their behavior for acceptance and non acceptance of foreign products. Consumer perception or purchase behavior towards domestic and foreign product can be explained by many demographical variables and cross-culture study between two countries (Evanschitzky. H, et al. 2008) Culture orientation influences the local versus foreign origin and effect the consumer evaluation of products either favorable or unfavorable ( Gurhan-Canli. Z , Maheswaran. D, 2000, cited by Lee. W. J et al. , 2012) Due to traditionalism in consumer perception consumers are more loyal towards local products than foreign products (Rojsek. I, 2001) in order to standardized the foreign product in different diverse societies managers must understand the adaptation and competitive advantage and for local brand strategies strength and weaknesses which they can obtain through culture knowledge which can device competitive response. Gelder. S. V,2002) On the basis of above literature we proposed that: H1: The impact of foreign brands on local has positive effect on consumer perception H2: Culture has positive effect on consumer perception H3: Culture has a moderating effect on brand choice and consumer perception 3. Theoretical Framework and antecedents of variables Independent Variable Dependent Variable Consumer perception * Explicit information * Social status * Brand Prestige * Brand Value * Brand loyalty * Durability * Price Brand choice * Brand image * Country of origin * Brand awareness Brand quality * Purchase intention * Emotional Value(happiness) * Materialism Culture * Globalization * Collectivism/Individualism * Symbolic Value * Traditionalism * Competition * Ethnocentrism Moderating Variable Figure-1, Theoretical Framework and identified antecedents of the variables 4. Hypothesis H1: The impact of foreign brands on local has positive effect on consumer perception In our first hypothesis we hypothesized that the consumer perception towards foreign brands is more positive than local brands and that they give a preference to foreign brands when they are making a brand choice.

A semi-structured questionnaire has been developed to test the validity of the hypothesis. H2: Culture has positive effect on consumer perception Our second hypothesis was build on a perception that culture influence the perception of consumers and that factors like traditionalism, individualism, collectivism, Ethnocentrism like variables play a role in changing and making the perceptions of particular consumers in different part of the world because people living in different geographical areas and has different taste and preferences they have their own symbolic cultural values which come in way.

H3: Culture has a moderating effect on brand choice and consumer perception Lastly in our third hypothesis we hypothesized that when consumers make a choice between local and foreign brands their perception is influenced by the cultural values and affect their choice and decisions which they take 5. Data Analysis In order to test our hypothesis and the basic assumptions which we have made for this topic we are going to test this study based on some tests through which we are going to analyze the basic relationship between the chosen variables.

To test the validity of our research our testing process will include Bivariate Correlation and Linear Regression Analysis. In Bivariate Correlation we are going to determine that if two variables are linearly related to each other. In Linear Regression Analysis we will see the relationship between our independent variable local and foreign brands and dependant variable consumer perception. Through linear regression the researchers have tried to predict the value of consumer perception based on the value of local and foreign brand choice.

Before using the test of linear regression we have make some assumptions that the chosen variables are measured at the interval or continuous level, our variables are approximately normal distributed and that there is a linear relationship between the two variables. We have used different techniques to gather the specified data. We have observed the already done research on this issue for this purpose a thorough analysis of the research papers has been done.

A semi-structured questionnaire has been developed related to consumer perception towards local and foreign brands and then interview method and questionnaires were distributed among the sample to get the responses for the topic. 5. 1 Population Our study group consist of the random sample of both men and women which is the representatives of entire population of twin city Islamabad and Rawalpindi (Pakistan) and from students and faculty members of different private universities located in the city, friends and family members were also been approached as this research has been done to get the idea of verall research and to understand and analyze the problem of the research. The research was mandatory as the subject requirement so that we can survey and analyze consumer responses and study their perception changing factors. 5. 2 Sample size Pakistan is a developing country and it has an emerging market. A total of 10 respondents were interviewed face-to-face. Using a semi structured questionnaire and a sample size of 200 respondent data has been collected using a questionnaire and has been analyzed in the twin city of Pakistan. And students and faculty members were studied mostly.

Over the last six months considerable amount of effort has been devoted to constructing reliable and valid indicators. 200 respondents were asked to fill a questionnaire which was semi-structured. 5. 3 Sampling Method If a researcher wants to choose an appropriate data collection approach they must prepare in advance a sampling method. There are many types of sampling method which are divided into probability and non-probability sampling. Due to availability and accessibility of the sampling frame for our research we have chosen a non-probability convenient sampling.

Non probability sampling is a sampling method in which researchers can sample the group at random. This means that they can choose the sample that is available or easily approachable. Convenient sampling is a part of a non-probability sampling in it researcher have a sample which is most easily available to them and are geographically very convenient to them. Sampling method is done so that the research gets the result which is the representative of entire population. The research is done for high and middle class in Pakistan to get the idea of the perceptions for the brands from the consumers.

And to check the perception and symbolic value which is been given to the brands in term of materialism and social-status price, quality in Pakistan among these two classes. 5. 4 Data Description Table: 1 Correlation Descriptive Statistics| | Mean| Std. Deviation| N| Perception| 1. 98| . 530| 200| Brand| 2. 33| . 428| 200| Culture| 2. 27| . 441| 200| Correlations| | | Perception| Brand| Culture| Perception| Pearson Correlation| 1| | . | | Sig. (2-tailed)| | | . | | N| 200| | | Brand| Pearson Correlation| . 430**| 1| **| | Sig. (2-tailed)| . 00| | | | N| 200| 200| | Culture| Pearson Correlation| . 539**| . 402**| 1| | Sig. (2-tailed)| . 000| . 000| | | N| 200| 200| 200| **. Correlation is significant at the 0. 01 level (2-tailed). | | Table:2 Linear Regression Analysis Model Summary| Model| R| R Square| Adjusted R Square| Std. Error of the Estimate| 1| . 587a| . 345| . 338| . 431| a. Predictors: (Constant), Culture, Brand| | ANOVAb| Model| Sum of Squares| df| Mean Square| F| Sig. | 1| Regression| 19. 258| 2| 9. 629| 51. 790| . 000a| | Residual| 36. 627| 197| . 186| | | Total| 55. 885| 199| | | | a. Predictors: (Constant), Culture, Brand| | | | b. Dependent Variable: Perception| | | | Coefficientsa| Model| Unstandardized Coefficients| Standardized Coefficients| T| Sig. | | B| Std. Error| Beta| | | 1| (Constant)| . 053| . 196| | . 272| . 786| | Brand| . 316| . 078| . 255| 4. 043| . 000| | Culture| . 525| . 076| . 436| 6. 926| . 000| a. Dependent Variable: Perception| | | | In the first table which is representing the correlation analysis which determines the linear relationship between two variables.

The value of our variables is Positive Significant, because of probability value is . 000 and correlation value is greater than 0. 1. We analyzed the value of the variables and there significant relation with each other. The results shows the value of variables as r1=. 430, r2=. 539, r3=. 402 which show significant relationship among three variables as the correlation is significant the value of our beta is . 255 or. 436 it’s what regression co-efficient would be if the model were fitted to standardized data. Correlation is significant at 0. 1 level, two tailed test results give the value of correlation of . 430 between the independent variable local and foreign brands and dependant variable perception. That shows a strongly positive relationship among the two variables. r2=. 539 is the correlation value between the moderating variables culture and dependant variable perception the value show a more positive relationship between these two variables. The dependant variable consumer perception has more strong relation with the moderating variable culture.

Which means that consumer perception has more effect of culture implications, r3=. 403 is the correlation value between the independent variable brand choice (local and foreign) and the moderating variable culture this show a slightly less strong relation among the two as compared to r2. In table: 2 linear regression analysis our result give us the value of R2=. 345 which is a low value that means that model fits the data better our value for the data measured is 34. 5 %. It means that 35 percent of the consumer’s perception for local brands is positive and rest 65. % people prefer to buy foreign brands. F-Statistic determines the overall goodness of the test and strength of the test. The data is collected efficiently if its value is greater than equal to 10. If the probability of a F Statistic is . 000 than the data is reliable and significant. The Value of our Data is 51. 790 and significant with . 000 probability level it means that the data is collected efficiently and data is reliable. 5 Discussion The results drawn above show significant relationship among variables related to consumer perception about the local and foreign brands.

It has been seen that Consumer has positive perception towards foreign brands in Pakistan. Consumer give preference to the products made from US, Japan, France based on the specialty of that particular country. Perception toward a foreign brands are considered superior because of its better quality and perceived globalness its been notice that perception of people for quality towards a local brand is low one of the respondents during an interview for the research tells that as there is already so much corruption in Pakistan.

People are so much unsure about the products which are been labeled as made in Pakistan because most of the times the product quality is really low and is never guaranteed. Consumers are more satisfied when they purchase a foreign country product because it give them a sense of happiness. Consumers are ready and willing to pay for a brand who gives them an identity, a sense of trust and that is well recognized among their family and friends. Foreign brands are noticed and appreciated among consumers it make their social status and they feel proud to wear a foreign based brand.

In the research of Merino. M (2008) based on Latin America tells that foreign brands are considered to be in a distinct position and that consumers prefer foreign brands over local brands because they are perceived to be more value added for the consumers. While on the other side consumer perception towards a local product is that they are of low price then foreign products and one can easily afford them but don’t value and their purchase intention is low for local products. Existing literature support the view that consumers have different views and distinct preferences for local and foreign brands.

As Pakistan is a developing country their preference and perception is really positive towards the brands and products which are foreign made. Uncles,M. , Saurazas,J. , 2000 also explain this fact in their research that consumers who are from developed countries prefer to buy local products means their own country products while the perception of consumers from developing countries prefer to buy foreign products. They are of the view that the quality of developed country products is most reliable. Consumers were ostly of the view that people buy foreign products as a symbol of materialism there were multiple views about this concept but mostly agree with the fact that consumer do buy foreign products so that they can show to others that they are global consumers and that they are much better than those who did not wear or possess foreign brands with them. They judge a success of a person by the quantity of foreign based brands he/she wear. For these materialistic people value of possession of something means to reflect a social status.

Sometimes foreign brands are given preference just because of their attractive outlooks and brand image consumers buy them even if they are not satisfied paying a huge amount of money on it but it somehow enhance their social status in the society and they feel proud when people appreciate them and recognize them with their brands name but even because of the fact that foreign brands are better in performance, reliability, durability aesthetics and quality. It has seen in a result that many people response were that they regret after buying a foreign brand because of the high prices.

But just because they are good in quality and sometimes because of the reference group pressure they buy it. Increased globalization has made the consumers more aware of the brands and people purchase foreign based sometimes because of the explicit information that they receive about it. Hence based on the above discussion our H1 is confirmed 6. 5 Consumer perception and culture West has already impacted a lot in our society which can be clearly seen and observed. Even in clothing people prefer to blend a western touch in their eastern.

Many brands like “Crossroads”, “Stoneage” are the Pakistani clothing brands which give the blend of west and east clothes on the observation and results of the study it has been well analyzed that foreign brands are and will be widely accepted if introduced in Pakistan even the culture of Pakistan is traditionalist people are very much accepted towards the western society because they are so much impressed with the lifestyle and practices of the west that they want to adopt them in their consumption pattern . Local brands signify their traditions and values but foreign brands give them value and make them feel to be part of a global culture.

Now people in Pakistan think that if they don’t know about the particular popular foreign brands they will be considered as backward and not socially compatible with other consumers all over the world they think that different cultures have now many same norms and values there are no significant differences among the societies and they considered them the part of their own culture now. There are very few consumers who have firm beliefs and values still inside them and have ethnocentrism which makes them considered their own culture very important and they don’t like and accept the people and brands which are not the part of their culture.

Even for the marketers and companies who want to introduced their brands either local or foreign it is also very much important for them to consider the culture an important factor because without the significant knowledge of the consumers background, attitude, traditions, norms, values, and various other variables like either the culture of a country has collectivism or individualism approach, its going to help them to understand the attitude and behavior and purchace intention of consumers of that particular country how people are going to perceive the brand and how the brand image will be considered according to their culture the research done by Usunier.

J, (2000) his findings also tell that culture implications influence the consumer behavior which affects consumption and therefore affecting brand image. It simply exhibits that Consumer perception is influenced by the moderating role of culture when they are making brand choice between local and foreign brands. 7. Conclusion The research was aimed at understanding of the antecedents on which consumer perception is based and the impact of culture in consumer perception our findings indicate that consumer buy foreign brands because it is well recognized in a society and it give them a sense of having a very high quality product, half of consumers response was that it is also for prestige and status enhancement while mostly did not think it has any effect on buying of foreign products.

Pakistani Youth was found to be having favorable perception about foreign brands while the adult consumers still found their own traditions and values and local brands better. 8. Recommendations Looking at the conclusions and the results of the research we hereby have suggest some recommendations for the Marketers and Companies who want to enter Pakistan and how they can advertise their brands so that it will fit with the perception of consumers and they accept it and make it a part of their culture, and even for the local brands companies who are already establish and working in Pakistan 1. Companies who want to enter Pakistan should do a though analysis of consumer perception towards that particular product which they are trying to launch whether its fast moving consumer good, clothes or any other.

It will help them to get the overall idea about what people are thinking about it. 2. In order to build a brand image Marketers must see the culture factors which are most influencing and effecting the consumer behavior towards the purchase intention Batra, R. ,(2000) 3. Consumer level of ethnocentrism should be taken into consideration. 4. Local brand companies should try to improve the quality of the brands along with the low price in order to overcome the competition which is been given from foreign brands. 5. There is a huge scope for the foreign based companies to enter in the market of Pakistan because of the positive acceptability and perception of foreign brands been found in our research 6.

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Rao, (May,1972),” Changes in Explicit Information and Brand Perceptions”, Journal of Marketing Research, American Marketing association , Vol. 9, No. 2, pp. 209-213 Wong,C,Y. , Polonsky,M,J. , Garma,R. , (2008) “The impact of consumer ethnocentrism and country of origin sub-components for high involvement products on young Chinese consumers’ product assessments”, Asia Pacific Journal of Marketing and Logistics, Vol. 20 Iss: 4, pp. 455 – 478 Wong. A &Zhou. L,(May, 2005),” Consumption of Foreign Products: an Empirical Test in the People’s Republic of China” Graduate school for global leaders ,Universitas 21 global Working Paper Westjohn. S. A. , Singh,N. , Magnusson,P. ( 2011),” Responsiveness to Global and Local Consumer Culture Positioning: A Personality and Collective Identity Perspective”, Journal of International Marketing, published by American Marketing Association Appendix Name: Gender: Age: Occupation: 1. People in Pakistan prefer to buy local brands? a. Strongly agree b. Agree c. Neutral d. Disagree e. Strongly disagree 2. Local brands are given preference because of low price? a. Strongly agree b. Agree c. Neutral d. Disagree e. Strongly disagree 3. Foreign brands are much better in quality then local brands? a. Strongly agree b. Agree c. Neutral d. Disagree e. Strongly disagree 4. You buy a foreign brand because of its brand image? a. Strongly agree b. Agree c. Neutral d. Disagree e.

Strongly disagree 5. People purchase foreign brands as a symbol of materialism? a. Strongly agree b. Agree c. Neutral d. Disagree e. Strongly disagree 6. People prefer to buy a brand whose outlooks are attractive? a. Strongly agree b. Agree c. Neutral d. Disagree e. Strongly disagree 7. Buying or wearing foreign brands show a social status of a person? a. Strongly agree b. Agree c. Neutral d. Disagree e. Strongly disagree 8. Foreign brands are more durable and long lasting then local? a. Strongly agree b. Agree c. Neutral d. Disagree e. Strongly disagree . West has impacted a lot in clothing of our society? a. Strongly agree b. Agree c. Neutral d. Disagree e. Strongly disagree 10. Sometimes you buy a brand because of the information you receive from others about it? a. Strongly agree b. Agree c. Neutral d. Disagree e. Strongly disagree 11. US brands are well recognized by consumers around the world. a. Strongly agree b. Agree c. Neutral d. Disagree e. Strongly disagree 12. Do religious norms stop you from buying foreign products? a. Strongly agree b. Agree c. Neutral d. Disagree e. Strongly disagree 13.

Do local brands signify your culture and traditions? a. Strongly agree b. Agree c. Neutral d. Disagree e. Strongly disagree 14. In Pakistan people trust perception for local brands in terms of quality is low? a. Strongly agree b. Agree c. Neutral d. Disagree e. Strongly disagree 15. Due to increase globalization different cultures have many same norms and values? a. Strongly agree b. Agree c. Neutral d. Disagree e. Strongly disagree 16. Do you ever feel regret after buying foreign brands? a. Strongly agree b. Agree c. Neutral d. Disagree e. Strongly disagree

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American Express: Branding Financial Services – Essay

American Express: Branding Financial Services Introduction American Express is known worldwide for its charge cards, travelers’ services, and financial services. It is one of the best-known and most-respected global brands. As it grew from a 19th Centurynineteenth- express company into a travel services expert by the mid-1900s, American Express (AMEXAMEX) became associated in the minds of consumers with prestige, security, service, international acceptability, and leisure.

Advertising for the company, which began in earnest in the 1960s, reinforced these associations. For example, the now-famous taglinetag line “Don’t leave home without it” was created to convey the essentiality of owning an American Express cardAmerican Express Card. As the company grew, it expanded into a variety of financial categories, including brokerages, banking, and insurance, and by the late 1980s, American Express was the largest diversified financial services firm in the world.

The difficulty the company encountered integrating these broad financial services, combined with increased competition from Visa and MasterCard, compelled AMEXAMEX to divest many of its financial holdings in the early 1990s and focus on its core competencies of travel and cards. The company weathered a decrease in cardholdercardholders at this time by greatly increasing the number of merchants that accepted American Express cardAmerican Express Cards and developing new card offerings, including co-branded cards and a genuine credit card that allowed customers to carry over the monthly balance.

By the end of the 1990s, American Express was again seeking to broaden its brand to include select financial services in order to achieve growth. Beyond the challenge of integrating these services, AMEXAmerican Express faced a number of issues in the 2000s, including a highly- competitive credit card industry, a slowing economy, and a subdued travel industry. American Express Builds a Financial Empire Early History of American Express The American Express Company was formed in 1850 when two competing express companies merged.

The express business, which was less than two decades old, specialized in shipping packages that were smaller than the bulk freight that railroads handled but were over the U. S. Postal Service size limits. Before express companies began operating, stagecoach drivers and even civilian travelers were recruited to deliver packages. Express companies also carried packages that required special handling or were particularly valuable. Bank transactions involving cash, securities, and goldGold gave express companies much of their business. In response to losing business to express companies, the U. S.

Postal Service created the money order, which allowed people to send a cash equivalent through the mail that could only be cashed only by a specified recipient. The cash delivery service was traditionally the domain of express companies, since because postal workers would often steal cash sent through regular mail. To counter the Postal Service’s move into financial services, American Express created its own money order in 1881. The American Express money orders were easier to use than the Post Office money orders, and AMEXAMEX extended the line to include orders in foreign currency that could be cashed internationally.

The money order was a great success, selling 250,000 in its first year and more than half a million the next. In the late 1880’s, AMEXAMEX president J. C. Fargo returned from a trip complaining about how difficult it was to use his letter of credit, used to obtain cash abroad, at foreign banks. To solve the problem of obtaining credit abroad, in 1890 American Express employee Marcellus F. Berry designed the “Travelers Cheque,” intentionally using the British spelling of check to give it an international flair.

The Travelers Cheque used the same signature security system still in use today and had exchange rates guaranteed by AMEXAMEX printed on the front. AMEXAMEX also gave foreign merchants commissions to encourage them to accept the check. Aided by the network of international financial relationships established for support of the AMEXAMEX money order, sales of the Travelers Cheque quickly took off. From 1882 to 1896, Travelers Cheque sales quadrupled as travelers all over the world were using AMEXAMEX products more and more to make their journeys easier. In the meantime, AMEXAMEX’s express business was growing overseas.

Federal antitrust regulation led to the separation American Express’s express business from its financial services and tourism businesses. By that time, however, AMEXAMEX was already booking tours, hotel stays, and steamship and railway tickets. Money orders were still popular and tTravelers check Cheque sales were constantly increasing. AMEXAMEX had also been investing the float – —the money that remains in the company’s account during the interval between when Travelers Cheques are bought and when they are cashed – —and earning millions of dollars in interest.

The Travelers Cheque was AMEXAMEX’s flagship product. The travelers Travelers check Cheque fees and its float investments were responsible for most of AMEXAMEX’s earnings and almost all of their profits. History of the Charge Card In 1914, Western Union, another express company, issued the first “charge card” in the form of a metal plate given to preferred customers that enabled them to defer payment for services. Charge cards required that the balance be paid in full at regular intervals, but did not charge interest on the balance.

Soon, many different companies from department stores to oil companies issued charge cards that customers could use to purchase goods and services from the issuing company. In the 1940s, several U. S. banks began issuing a paper document – —similar to a letter of credit – —that customers could use like cash in local stores. Diner’s Club introduced the first modern charge card in 1950, when it issued a “travel Travel and entertainmentEntertainment” card designed for use by business travelers. The card was accepted by a large variety of merchants, who paid a fee to Diner’s Club in compensation for the added business.

The first bank card was issued by Franklin National Bank in Long Island, New York. The bank-issued card was accepted by local merchants only, unlike the Diner’s Club card. Shortly after Franklin National Bank debuted its credit card, several other banks across the United States. S. issued credit cards to their customers. “The Card” AMEXAMEX actually had considered issuing a charge card on several occasions before Diner’s Club unveiled its card in 1950. AMEXAMEX management discussed issuing a charge card as early as 1947, but then-president Ralph T.

Reed refused because of security problems given the possibility of fraud. In 1956, when DinersDiner’s Clubs’ card charges began to cut into AMEXAMEX travelers Travelers check Cheque sales, AMEXAMEX initiated negotiations to buy Diner’s Club. Talks lasted for two years, but Reed ultimately declined, citing concern about the dilution of AMEXAMEX’s prestige. In late 1957, AMEXAMEX leadership decided that the company would issue its own card. The public clamored to possess an AMEXAMEX charge card. Even before the card was officially available, thousands of customers had written in or visited AMEXAMEX offices to apply early.

By the launch date of October 1, 1958, AMEXAMEX had issued over more than 250,000 cards and signed on 17,500 merchants that would accept the cards. The American Express cardAmerican Express Card required the cardholdercardholder to pay off his or her entire balance monthly. The company also charged a six dollar annual fee, which was one dollar greater than the Diner’s Club fee, “for prestige. ””[1] AMEXAMEX’s worldwide network of offices, travel agents, and associated banks helped it build the card’s membership rapidly.

Since Because the American Express CardAmerican Express Card was initially designed for the travel and entertainment expenses of businessmen and the upper class, it was known as a Travel and Entertainment (T&E) card. This classification puts it in a category with such cards as Diner’s Club and Carte Blanche. In 1958, Bank of America issued the first modern credit card, called the BankAmericard. The key feature of the BankAmericard and other credit cards was a “revolving” credit line, which allowed cardholdercardholders to pay their account balance in installments, with interest assessed on the remaining balance.

The BankAmericard originally served the state State of California, but within a decade Bank of America was licensing its card services to banks throughout the country. While American Express earned most of its card revenue from annual fees and merchant discounts (the percentage of a dollar transaction the merchant was required to pay to American Express in compensation for the business brought in by the card), credit cards earned revenues from interest charges and a lower merchant discount. Another mportant difference was that AMEXAMEX issued its own cards while individual banks issued cards under license agreements from credit card companies. Neither AMEXAMEX management nor the accounting department had any experience with charge card operations. Rather than creating a separate accounting function for the card division, Reed had assigned AMEXAMEX’s existing comptroller’s office to handle all of the card transactions. This proved an overwhelming amount of paperwork, and within a few months of the introduction, the comptroller’s office was flooded with unprocessed transactions.

Compounding the internal problems was the fact that customers were not paying on time, while AMEXAMEX was required to pay merchants within 10 ten days after a transaction. The card division had lost over more than $4 million dollars in its first two years and an additional $14 million by 1962. One of the Howard L. Clark’s first moves after becoming AMEXAMEX president in 1960 was to try to sell the card division, ironically enough, to DinersDiner’s Club. The negotiations failed because of antitrust issues and so AMEXAMEX kept its card. In spite of the card problems, though, AMEXAMEX as a whole was financially stable, with 1959 profits of $8. million from $69. 6 million in revenue and Travelers Cheque sales of over more than $1 billion. Clark instituted measures to help the ailing card division, such as requiring cardholdercardholders to pay their balance within thirty days, raising the annual fee to ten dollars, raising the discount fee (the percentage merchants had to pay AMEXAMEX every time the card was used at their business), and imposing stricter credit requirements for cards issuance. The card division finally achieved profitability in 1962. By 1967, the card business yielded a net income of $6. 5 million, or one-third of the company’s total profit.

The American Express CardAmerican Express Card had surpassed the Travelers Cheque to become the most visible symbol of American Express. Marketing Strategy and Advertising The first AMEXAMEX President president to place a high priority on advertising was Howard L. Clark. Before he took office in 1960, AMEXAMEX’s annual advertising budget was only $1 million. Clark increased it every year thereafter and in 1962 replaced their ad agency, Benton & Bowles, with Ogilvy, Benson, and & Mather. The new agency designed AMEXAMEX’s first modern ad campaign with the slogan “The Company for people who travel. This tag line promoted AMEXAMEX’s travel and card products in a single campaign that conveyed AMEXAMEX’s one-stop travel shopping expertise. Campaigns The now-famous tag line, “Don’t leave home without it,” was developed by Ogilvy & Mather in the early 1970s. AMEXAMEX wanted a “synergy tag line” like the other Ogilvy-produced line: “The company for people who travel. ” Ogilvy came up with “Don’t leave home without them” for the AMEXAMEX Travelers Cheque, “Don’t leave home without us” for AMEXAMEX travel services, and the “Don’t leave home without it” tag line for the American Express CardCard.

Ads for the Travelers Cheques featuring screen actor Karl Malden speaking the taglinetag line ran for 21 years. In 1974, AMEXAMEX debuted its now-familiar “blue-box logo,” on which the words “American Express” are printed in white outline over a square blue background. Ogilvy & Mather tried several conceptual approaches to use with this tag line for the card, and eventually hit upon the idea of replacing everyday and unknown actors in the ads with endorsers whose names were famous, but whose faces were not as familiar. This was referred to as the “Do You Know Me? campaign. The ads typically began by showing the face of a moderately well-known celebrity, as with Neil Simon, and then showing a close-up of his or her American Express CardAmerican Express Card to reveal their his or her identity. The ads implied that using an American Express card Card would get the cardholdercardholder “recognized. ” This was an obvious example of marketing the card as a status symbol. Acquisitions In the 1970s, American Express executives looked for ways to grow the business beyond Travelers Cheques and credit cards.

The fact that Master Charge and the BankAamericard (later to become Visa) were already issuing cards themselves suggested that AMEXAMEX would soon lose market share of its Travelers Cheques and that the growth of its cardholdercardholder base would slow. AMEXAMEX also had been worried for some time that the company’s small size and high profits made it an attractive takeover target. A large acquisition would make a takeover less likely and give AMEXAMEX a new source of income. Clark chose a company three times the size of AMEXAMEX with the 1968 acquisition of Fund America Group, based in Novato, CACA.

It included Fireman’s Fund Insurance Company and four mutual funds that were later sold off. Other relatively small changes by Clark included the acquisition of the magazine which was later of US Camera magazine (later renamed Travel & Leisure) and the creation of the Travel Related Services (TRS) division in 1971, which pooled the travelers Travelers checkCheque, the card, and other travel and tourism businesses. AMEXAMEX also organized its banking operations under the renamed American Express International Bank Corporation (AEIBC).

The year 1977, in which Clark left as president, saw AMEXAMEX with $250 million in profits and 8 million cards generating $10 billion in charge volume. The American Express Company. had three divisions when James D. Robinson took over for Clark as CEO in 1977: Travel Related Services (TRS), American Express International Bank Corporation (AEIBC), and Fireman’s Fund (FF). Robinson pursued an aggressive acquisition strategy. In 1979, he purchased fifty 50 percent of a cable TV equipment and programming partnership with Warner Communications for $175 million with the idea of selling financial products through cable television.

A few months later in 1980, American Express bought First Data Resources for $50 million. First Data was a computerized billing operation that processed Visa and MasterCard transactions for banks. This was only a warm-up for Robinson, and in 1981 AMEXAMEX merged with Shearson Loeb Rhoades Inc. , the second largest public brokerage firm in the country behind Merrill Lynch. AMEXAMEX continued its expansion into a financial conglomerate by purchasing two additional brokerage houses and a real estate company. The international investment bank Trade Development Bank Holdings S.

A. (TDB) was acquired in 1983 for $520 million to shore up AEIBC and focus its operations on trade finance and international private banking. That same year, AMEXAMEX purchased Investors Diversified Services (IDS) for $773 million, a Minneapolis- based company that offered mutual funds, life insurance, annuities, and financial planning to middle- income consumers. The investment bank Lehman Brothers Kuhn Loeb Inc. was acquired in 1984 for $360 million, and AMEXAMEX again added to its brokerage cache by acquiring E. F. Hutton & Co. n 1987 for almost $1 billion. Marketing Strategy and Advertising American Express advertising conveyed the prestige associated with tthe he cards. CardholderCardholders are called “card members,” and the year they became members is on their card – —signaling membership to a club. American Express cards Cards were perceived by many as status symbols, signifying success and achievement. AMEXAMEX sought to maintain this elusive image through advertising, impeccable service, promotions, bonuses, special events, and so on.

The introduction of goldGold and platinumPlatinum cards to the credit card industry further enhanced their special cachet. By 1985, AMEXAMEX was spending $500 million a year in marketing. “Marketing is our number one priority,” said Robinson. [2] Service Customer service was a key element of American Express’s marketing program. One of James D. Robinson’s favorite sayings was “Quality is our only form of patent protection. ”[3] Before he became CEO, he Robinson developed a comprehensive system for measuring AMEXAMEX’s service quality.

His goal was to have customer service employees handling more than 99 percent of the requests without any mistakes. AMEXAMEX measured the time it took a customer service representative to answer the phone and the time it took for a replacement card to arrive. The company established a Quality University in Phoenix, AZ, where customer service representatives and their managers were trained to deliver excellent service. In addition, AMEXAMEX set up a committee of managers from throughout the corporation that who met to discuss new ways of measuring and improving quality. “Quality Conferences” were even held to disseminate and implement quality initiatives throughout the organization. Besides the internal monitoring, AMEXAMEX constantly surveys surveyed its customers and merchants by mail and by phone to ensure that the level of service remains remained consistent. AMEXAMEX developed a database system, which was was updated weekly, of customer information that tracks tracked spending patterns, age, and 450 other characteristics. This database enabled enabled the company to target specific marketing efforts to the customer segments most likely to respond.

AMEXAMEX also useds this system to recruit new merchants by demonstrating what AMEXAMEX can could do for their businesses using real customer data, not projections. For example, a customer that who shopped at a certain store might receive a discount for shopping there again based on an agreement between the merchant and AMEXAMEX. Throughout its lengthy history, American Express has earned a reputation for the highest level of customer service. One representative personally delivered a card in the middle of the night to a stranded cardholdercardholder at Boston’s Logan airport.

Another case involved an AMEXAMEX representative in New Delhi who arranged for another representative’s brother (a military helicopter pilot stationed close to the caller) to deliver cash to an AMEXAMEX Gold Gold cardholder cardholder who was stranded in a remote village in the Himalayas. One Enterprise Robinson and his top executives envisioned a transformed company structure called “One Enterprise. ” The One Enterprise vision would make AMEXAmerican Express a one-stop financial and travel services powerhouse with each division cross-marketing its products to the others.

The cardholdercardholders could obtain travel services from TRS; property & and casualty, flight and travel, and life insurance from Fireman’s Fund; financial advice and other products from IDS; and brokerage and investment banking services from Shearson Lehman Hutton; while the wealthier international clientele would be pampered by AEIBC (renamed American Express Bank Ltd. or AEB in 1986). Each division would in turn push American Express CardAmerican Express Cards to any of their customers who weren’t already cardholdercardholders or higher- end goldGold or platinumPlatinum cards to those who were.

Advertising in the 1980s The “Do you know me? ” campaign was targeted at older successful, affluent businessmen that who traveled a lot. The campaign’s nine years had seen these cardholdercardholders quadruple to 12 million, a full 40 percent of that market segment. Fearing that growth in this segment would soon level off, AMEXAMEX looked to stimulate growth in other segments. In the 1980s, women were attaining more powerful business positions in large numbers. AMEXAMEX wished to target this segment of the population with ads tailored towards young urban professional women. In 1983, women comprised only 2. million of current AMEXAmerican Express card holders, only 20 percent of the women the company thought were eligible for the card. Testing had shown that women did not respond positively to the older ad campaign. Marketing data from the early 1980s showed that consumers thought that status and prestige came not necessarily from huge wealth or success, but from a varied and exciting life. Ogilvy & Mather came up with the “Interesting Lives” campaign. It aimed to position AMEXAmerican Express cards Cards as symbols of people with interesting and multifaceted lives, people with unusual hobbies or who have had unconventional careers.

The AMEXAmerican Express cardCard, the ads indicated, gave these holders the opportunity to indulge in their varied interests, to be spontaneous by going to the Australian Outback or climb a mountain, for example. Rather than featuring celebrities, the ads showed confident independent women using the American Express cardAmerican Express Card to take their husband to dinner or their kids to lunch, bantering with a flirtatious man in a bookstore, or leaving a sporting goods store with a briefcase and a lacrosse stick. “The American Express cardAmerican Express Card,” the tag line says, “It’s part of a lot of interesting lives. The ad campaign included and featured women in ads, and soon the volume of female applicants doubled the number of men who applied for the card. By 1984, 27 percent of AMEX cardAmerican Express holdercardholders were women compared to ten 10 percent in the late 1970s. The “Interesting Lives” campaign also had an unanticipated, but positive, side effect: young men also started applying for the card in large numbers. This convinced AMEXAMEX to tailor some of the ads specifically towards them. One such ad was titled “Young Lawyer. It showed a father talking to his son over lunch about his decision not to join the family firm. The father was disappointed until the son got a job at the District district Attorney’s attorney’s office. The sons pays with the American Express cardAmerican Express Card and the father says, “The pay must be getting better over at City city Hallhall. ” Even though these campaigns did very well, AMEXAMEX’s marketing strategy for their core potential cardholdercardholders had become stale. They dropped the “Do you know me? ” TV ads in 1987 and Ogilvy & Mather devised a new series of print ads called “Portraits. Renowned photographer Annie Liebovitz was recruited to photograph celebrities rarely shown in advertisements. The ads showed these celebrities in a more intimate, playful light, without the pomp and circumstance that celebrity ads usually employed. America’s Cup yachtsman Dennis Connor played with a sailboat in his bathtub in one shot, while in another basketball center Wilt Chamberlain and jockey Willie Shoemaker were shown standing back to back wearing identical white suits. Another shot showed Christian rock singer Amy Grant walking on water while in yet another Tip O’Neill was shown at the beach under an umbrella.

The only text was their names, the date they became “members,” and the taglinetag line that was to become one of AMEXAMEX’s most enduring: “Membership Has Its Privileges. ” The ads received much praise for their ingenuity and quirkiness. That same year, AMEXAMEX unveiled its first major TV campaign for its goldGold card. The goldGold card advertising was handled by McCann-Erickson, and their ads for this campaign focused on showing successful businessmen in lavish surroundings. One businessman lounged in a jacuzzi complaining about an award acceptance speech he had to give.

His wife told him to just enjoy the honor. Another ad featured a successful businessman taking time from his busy schedule to learn the piano. These ads were the subject of criticism for their celebration of the opulence and free-spending attitudes of the decade. A year and a half later they gave the goldGold card account to Chiat/Day. This agency’s approach was over the top compared to McCann’s more subtle ads. Chiat targeted a younger, more affluent clientele by touting excessive spending. One ad in particular showed a man in a Jjaguar, sprawled with his legs dangling over the side.

A voice says, “For when you finally run into that 1953 XK120. ” The phrase “Worth its wait” flashed on the screen while a sax played sensually in the background. The ads were supposed to increase the goldGold card base by targeting younger wealthy men. By 1989, AMEXAMEX was spending $250 million annually on advertising, more than twice as much as Visa’s and MasterCard’s budgets combined. This expenditure reflected the numerous marketing initiatives underway to expand the company’s cardholdercardholder base, including efforts to attract more women, students, senior citizens, and small companies.

Additionally, the company developed a major ad campaign to get cardholdercardholders to use their cards at retail shops, not just fine restaurants and boutiques. Research showed that the majority of card purchases were made with other credits cards while only high-ticket items were charged to AMEX cardAmerican Express Cards. This campaign was developed by Chiat/Day, which in 1991 won the green Green card and Optima accounts from Ogilvy & Mather, AMEXAMEX’s agency of record for 30 thirty years. Chiat/Day immediately developed a new taglinetag line for the company: “The Card.

The American Express CardAmerican Express Card. ” The initial ads developed by Chiat/Day sought to convey the iconic status of the card, by superimposing oversized flagship green Green cards into images of a restaurant, a golf course, the tail of a Concorde jet, and the Easter Island monoliths. Cause Marketing Since 1981, AMEXAMEX has also embarked on many cause-related advertising campaigns where a percentage of the proceeds were donated to a specific charity. In fact, the company is credited with coining the phrase “cause-related marketing. Between 1981 and 1984, Amercian Express donated to more than 45 different charitable organizations. Most of these donation drives occurred at the local level, such as when American Express donated two cents to the San Francisco Arts Festival each time Bay Area card members used their cards. By encouraging card members to spend more to support the cause, AMEXAMEX profited from increased card usage. Similar campaigns around the country generated total donations in the tens of millions of dollars and increased card usage in locations where a cause-related marketing campaign was active by an average of 25 percent.

The company’s first national cause-related marketing campaign was organized in 1983 to raise money for the Statue of Liberty Restoration Fund. To build awareness for the program, American Express developed an $4 million advertising campaign that included print, radio, and television advertising. Each time a card member used his or her card, a one cent donation was made to the fund. For every new account opened, AMEXAMEX donated one dollar to the fund. Donations were also made for Travelers Cheques and travel purchases. Between September and December 1983, American Express gave $1. 7 million to the Statue of Liberty Restoration Fund.

Card usage rose 28 percent nationally in the first month compared with the previous year, while new card applications increased 45 percent. [i] . 1 Following its early success with cause-related marketing campaigns, AMEXAMEX developed more than 90 ninety programs in 17 seventeen countries. One of AMEXAMEX’s best-known campaigns was the “Charge Against Hunger. ” The Charge Against Hunger, begun in 1993, was a charity effort in which the company donated a certain amount of money to hunger relief agency Share our Our Strength every time a cardholdercardholder used an AMEX cardAmerican Express Card to make a purchase during the holiday season.

The 1993 Charge Against Hunger raised $5. 3 million. To raise awareness for the campaign, AMEXAMEX produced a series of advertisements featuring information about the charity and detailing the specifics of the program. Between 1993 and the last year of the program in 1996, the Charge Against Hunger campaign raised more than $21 million. AMEXAMEX Success Due to the acquisition-based growth and cross-marketing concepts, which were fashionable corporate strategies in the 1980s, Robinson was hailed as a savvy CEO in building up AMEXAMEX in this fashion.

By the end of 1984, AMEXAMEX had developed $61 billion in assets and posted annual revenues of $13 million. The TRS division, which supplied AMEXAMEX with almost three-quarters of its earnings, was selling $13 billion worth of travelers checksTravelers Cheques, while 20 million cards were generating $45 billion in charges. AMEXAMEX had name recognition of 75 percent and its services were used by 14 percent of the population, more than any other financial company. Credit Card Competition Heats Up By 1985, AMEXAMEX had issued over more than 20 million cards that were producing more than $47 billion in billings.

That compared with Visa’s 115 million cards with $82 billion in billings and MasterCard’s 103 million with $62 billion in billings. About 3. 3 million of AMEXAMEX’s cards were GoldGold cards (first offered in 1966) and about 60,000 were PlatinumPlatinum (introduced in 1984). Visa had 3 million higher- end “Premier Visa” cards and MasterCard had 2. 5 million “Preferred Customer” cards (both began issuing them in 1982) with annual fees of $55. In spite of their similar numbers, AMEXAMEX still had a clear advantage in the high-end market with GoldGold card charges totaling $13 billion while Visa and MasterCard only had only $7. billion combined. While Although most credit cards had features similar to AMEXAMEX’s charge cards, prestige still seemed to win people over in wanting AMEXAMEX’s cards and in using them for their more expensive items. One analyst said, “If you want to buy an expensive car, you tend to buy a Mercedes or a Cadillac, not a souped-up Honda. ” For AMEXAMEX customers, the fact that MasterCard and Visa were accepted at over more than 4 million sites while AMEXAMEX was only accepted at only 1 million sites was mitigated by the fact that only AMEXAMEX had offices in many remote locations capable of handling almost any travel emergency.

Indeed, prestige seemed to be so important to consumers that they signed up at twice the expected rate for AMEXAMEX’s $250 annual fee PlatinumPlatinum card Card and eventually numbered six times what AMEXAMEX expected. In the 1980s, the standard American Express Green card had an annual fee of $35 and offered $1,000 check cashing at representative banks and AMEXAMEX travel offices, the ability to withdraw $500 from ATM’s, and $100,000 travel accident insurance. For a $65 annual fee, GoldGold cCard members upgraded to $2,000 in checks cashed and a credit line of $2,000.

The PlatinumPlatinum card Card allows members to cash up to $10,000 in checks, get $1,000 from ATM’s, $500,000 in travel insurance, and nonresident privileges in over more than 25 private clubs around the world. AMEXAMEX offered these cards to only about 5 percent of its American cardholdercardholders who charged more than $10,000 a year and hadve good payment histories. Higher-end credit cards (e. g. , goldGold, platinumPlatinum) proliferated in the mid-1980s as the market for standard cards became relatively saturated.

Credit card delinquency rates were increasing due to banks’ efforts to shore up profits by signing up more cardholdercardholders. The average cardholdercardholder possessed seven cards, so banks had to find other ways to compete. Many consumers were frustrated with banks because they maintained high interest rates on their cards (around 19 percent) in spite of the fact that the prime lending rate had dropped 14 points since 1982. The banks defended their card rates, citing the cost of processing millions of card transactions every week.

In order to appease their customers, banks offered special perks like such as bonus points and cash back offers. They also began issuing goldGold and platinumPlatinum cards to attract more customers. These “elite” cards were used 50 percent more often than regular cards, and the average purchase with them was 150 percent greater than with a normal card. Visa and MasterCard gained enough GoldGold cCard members, 12 and 11 million, to beat AMEXAMEX’s 6 million. Optima Unveiled AMEXAMEX responded to the increasing popularity of credit cards by issuing its own credit card, called Optima, late in 1987.

Not only would it compete head-to-head with the revolving credit bank-issued cards, but also it would do so with a much lower interest rate of 13. 5 percent. Even the annual fee was lower, priced about half what other credit cards charged at $15. Optima also allowed AMEXAMEX to greatly expand its card base without damaging its upscale image since because it was a separate card. AMEXAMEX only offered Optima initially to its 8 – to 9 million current AMEX cardAmerican Express holdercardholders. Since Because these customers were accustomed to paying their balance monthly, they were considered the lowest-risk segment.

Banks were worried that Optima cardholdercardholders would use the new credit card for regular purchases and the AMEXAMEX charge cards for their T&E expenses, dropping regular and high- end bank cards in the process. Citicorp, the nation’s largest issuer of bank cards with close to 15 million, countered AMEXAMEX’s new card by lowering its rates to “preferred customers” to 16. 8 percent from 19. 8 percent. Visa USA Inc. even urged its issuing banks to stop selling American Express Travelers Cheques in protest.

AMEXAMEX replied with a Travelers Cheque ad that told consumers, “If your bank doesn’t sell them, go to one that does! ” In order to compete, most of the charge and credit cards furiously began cutting prices and offering special incentives. Co-branded cards also became very popular. Visa had 768 affinity programs approved by the end of 1987. Most MasterCard and Visa silver Silver and goldGold cardholdercardholders also got rebates on hotels and plane fare in addition to rental car discounts. WhileAlthough AMEXAMEX did not offer any affinity cards, it did continue to offer benefits and special offers.

In addition to its Buyer’s Assurance program, which doubled the manufacturer’s warranty up to a year on items purchased with its cards, AMEXAMEX also began its Purchase Protection program, which insured these items for 90 ninety days against theft, loss, fire, or accidental damage up to $50,000. AMEXAMEX also offered its GoldGold and PlatinumPlatinum members free rental car insurance. By the end of 1988, after being out for only 18 months, Optima ranked as one of the top ten credit cards in terms of cardholdercardholder volume.

Optima had 2 million cardholdercardholders with over more than $3 billion in outstanding balances. The interest and fees for Optima was were nearly pure profit sincebecause AMEXAMEX spent so little, only $100 million, in starting it. American Express had the advantage of an established cardholdercardholder base to offer it to and merchants already willing to accept it. Thanks to Optima and improved marketing to young men, women, and students, AMEXAMEX’s domestic share of the card market increased to ten 10 percent by 1989, totaling 22 million cards (30 million worldwide).

AMEXAMEX’s charge volume also increased to 27 percent or $69 billion, which lead all card issuers. Visa meanwhile had 52 percent cards hare with 115 million cards, and MasterCard had 38 percent with 84 million. The remainder was primarily Sears’ Discover card, which had about 28 million cards outstanding. Sears issued Discover in 1985 using its existing customer credit base of 40 million accounts, low interest, no fee, and a cash- back program as advantages. AMEXAMEX had signed up over more than 2. 5 million merchants to accept its card, compared to Visa’s almost 7 million merchants.

Nevertheless, AMEXAMEX maintained that because consumers only charged only 15 percent of the possibley number of items that could be charged, its main competition was not the other card companies, but rather, cash. AMEXAMEX Applauded Success continued through the late 1980’s. Revenue and profits grew in every division and earnings topped the $1 billion mark in 1986. In 1989 AMEXAMEX grossed over more than $26 billion and netted $1. 2 billion with a travelers checkTravelers Cheque float of over more than $4 billion to invest.

Compounded earnings and sales over the last decade had risen nine 9 percent and 13 percent every year, and AMEXAMEX had a return on shareholder equity of more than 15 percent a year. Their direct marketing department was the fifth largest in the nation selling electronics, furniture, jewelry, luggage, mutual funds, and insurance. AMEXAMEX’s publishing arm included “Travel & Leisure” and “Food & Wine” magazines, with having a combined circulation of over more than 2 million, and they planned on acquiring or creating more than ten more magazine titlespublications.

Overall, analysts were recommending AMEXAMEX stock, saying it was undervalued based on its future earnings potential with AMEXAMEX being called “one of the great success stories of the last twenty years. ”[4] AMEXAMEX STUMBLES Problems in Iits Subsidiaries James Robinson III had spent a total of $3. 5 billion in acquiring Shearson, IDS, TDB, Lehman, and E. F. Hutton, and in the process had built American Express into what was one of the most respected and well-known companies in the USUnited States. AMEXAMEX was rated by one poll as among the top three brands in America behind only Coca-Cola and McDonald’s.

In the late 1980s, AMEXAMEX was the largest diversified financial services company in the world. But Ddespite the apparent success, however, signs of future troubles appeared as early as the early 1980s. In the latter years of that decade, the financial empire slowly began to crumble. While Although each subsidiary had its share of problems, consensus seemed to be that AMEXAMEX had expanded too rapidly without enough attention as onto how all the parts would fit together and so could not manage itself efficiently. AMEXAMEX’s first big problem with a subsidiary came in 1983.

An insurance industry price war had caused Fireman’s Fund (FF) to lower its policy prices and add business. A surprisingly large number of claims on these policies caused AMEXAMEX to have to add $230 million to FF reserves causing a $141 million fourth quarter loss for the unit and a $22 million loss for AMEXAMEX. AMEXAMEX managers said they were blindsided by the losses while FF managers said they had tried to warn their superiors at AMEXAMEX but were ignored. AMEXAMEX profits dropped 11 percent in 1983 due to FF losses, breaking the much hallowed 35- year earnings record.

AMEXAMEX later sold off Fireman’s Fund to the public, keeping the life insurance division, but retaining only 27 percent of the property and casualty business. In spite of their magnitude, the problems at Fireman’s Fund had little impact on AMEXAMEX as a whole. They did, however, draw attention to AMEXAMEX’s management style and what impact it might have on the other divisions. Shearson Lehman Hutton, the nation’s second largest securities firm, was probably the biggest disappointment of all.

After the acquisition, Shearson imposed its existing no no-bbonus onus policy for clerical employees at the investment bank where everyone was up to that point used accustomed to annual bonuses. Shearson also imposed its much less generous medical benefits plan on Lehman employees and even made them take lie detector tests. Most job openings after the acquisition were filled with Lehman employees in an attempt to appease them, but this wound up alienating Shearson employees. Lehman also lost many top clients after the acquisition including ABC, Chase Manhattan, and Uniroyal.

Big M & A deals, the reason Lehman was acquired in the first place, never materialized. The loss of clients and internal talent was too big to overcome and only a trickle of small deals and its brokerage operations kept the unit going. Even with 1988 revenues of $10. 5 billion (same as Merrill Lynch), the unit’s earnings had dropped to 81 eighty-one cents from $4. 34 two years earlier. Robinson admitted he wanted to sell Shearson, but couldn’t because he wouldn’t get the price he wanted. Card Competition

In 1991,, AMEXAMEX debuted its “Membership Miles” loyalty program, which gave customers one point for every dollar spent on the card. These points could be exchanged for credit in frequent flier airline miles. The program had the dual benefits of attracting more customers and increasing the spending volume of customers who wanted airline miles. The success of this program’s introduction was offset, however, by problems with the Optima card. Though Optima made the company one of the ten largest credit card issuer issuers worldwide, AMEXAMEX’s first offering in the credit card category was fraught with problems.

The company’s decision to offer the card only to existing cardholdercardholders, who were accustomed to paying their entire balances monthly, led to millions of dollars in bad debt. AMEXAMEX failed to account for the fact that a significant portion of charges on their classic cards were business expenses for which the cardholdercardholder was reimbursed. Therefore, the majority of Optima cardholdercardholders used that card strictly as a credit device, and as a result only five 5 percent of Optima accounts paid the full monthly balance.

The resulting losses rose to 10 percent of outstanding balances in 1992, which was double the industry average. In its first three years, Optima cost American Express $2. 3 billion. The company was forced to re-evaluate its Optima portfolio, and relaunched the card in 1992 with a slightly different payment structure. In 1994, the company pared the number of Optima cardholdercardholders to 3 million from about 3. 5 million. By 1996, Optima’s 5. 2 percent annual loss rate was only marginally higher than the 4. 6 percent industry average.

Other card companies were able to make up enormous ground on the American Express by offering bonuses, service benefits, and cheaper fees to both merchants and consumers. Bank cards certainly lacked the prestige factor, but, as one analyst noted, “Prestige is less of a Nineties concept than an Eighties concept. ”[ii]2 AMEXAMEX’s traditional points of difference were service and prestige, but 1990s’ consumers appeared to place greater value on “function [and] utility. ”[iii] Compounding problems was the launch of Visa’s brilliant ad campaign, “Visa.

It”s Everywhere You Want to Be. ” That campaign highlighted desirable locations, resorts, events, restaurants, etc. – none of which would take American Express. AMEXAMEX was under siege from a number of new competitors, such as Capital One, which in 1991 was the first company to issue so-called “teaser rate” cards with introductory rates well below the standard 19 percent. Other sources of competition came from co-branded or “affinity” cards, which were becoming increasingly popular with consumers seeking added value in the form of additional goods or services.

AMEXAMEX had the opportunity to issue one of the first co-branded cards back in 1985, when American Airlines approached the company with a proposal for a joint credit card that would offer frequent flier miles for dollars spent on the card. AMEXAMEX rejected the offer and American Airlines inked a deal with Citibank instead, which that attracted 4 million cardholdercardholders within a decade and set off a co-branding trend. AMEXAMEX similarly declined to enter into a co-branding agreement with AT&T in 1990.

Within five years, the AT&T card had more than 11 million cardholdercardholders. Many corporations began to issue co-branded credit cards, including General Motors, Shell, all major airlines, and Sony. Other entities with co-branded cards included NBA basketball teams, the University of Alabama Alumni Association, Star Trek, and the National Wildlife Federation. Between 1990 and 1992, the number of American Express cardAmerican Express Cards in circulation dropped by 1. 6 million, or six 6 percent. The company was in danger of seeing its competitive advantage disappear.

Attempts to diversify into financial services had largely failed, and the company’s flagship card business was faltering. “We were losing relevance with our customers,” said current CEO Kenneth Chenault. “We were trying to be all things to all people with a few products. ”[iv] This developments led AMEXAMEX’s board to force James Robinson to resign as CEO in 1993. AMEXAMEX FOCUSES ON ITS CORE BUSINESS Divestiture After forcing Robinson’s resignation, American Express selected Harvey Golub to succeed him as chairman and CEO in February 1993.

Golub was a nine-year veteran of the company, having come to the IDS division from McKinsey & Co. consulting firm. He immediately initiated a series of divestitures to reduce AMEXAMEX’s holdings. Golub negotiated the sale of the Shearson brokerage operation and the Lehman Brothers investment bank. These sales, combined with other profit-saving cutbacks, eliminated 50,000 of the company’s 114,000 workers. Following these moves, the now-leaner company was in a position to focus on its core competencies: charge and credit cards, Travelers Cheques and travel services, and select banking and financial services.

In the midst of these cutbacks, Golub pursued aggressive plans for high growth in the card sector. In mid-1994, he announced plans to introduce up to 15 fifteen different credit cards. Ready to improve on the company’s first credit card offering – —Optima – —AMEXAMEX introduced its next card, called Optima True Grace, in August 1994. The Optima True Grace card Card featured a low introductory rate of 7. 9 percent and came with an automatic “grace period” of 25 twenty-five days after a purchase, during which time no interest would be charged to the cardholdercardholder.

Additionally, the company would waive the annual fee for cardholdercardholders who used Optima True Grace at least three times per year. These features came as a result of a year-long research effort that included 4,000 consumer interviews. The Optima True Grace launch was accompanied by a $40 million marketing campaign starring lifestyle maven Martha Stewart. In its first year, Optima True Grace was selected by about 1. 4 million users, a figure that doubled the company’s membership predictions.

The flexibility of Optima True Grace marked a departure from AMEX cardAmerican Express Card policies of the past. As bank-issued cards exploded in the 1980s by enticing customers with low annual fees, cash back offers, partnerships, points bonuses, and other special offers, AMEXAMEX continued to charge high annual fees and flatly refused to partner with other corporations despite offers from companies such as American Airlines. The gap in market share between AMEXAMEX and Visa and Mastercard only widened, and Golub reflected in 1995, “We should have seen what was happening. . . We were inflexible. We were arrogant. We were dreaming. ”[v] To spur growth in the card category, Golub sought to greatly increase merchant acceptance of American Express cardAmerican Express Cards. In October, responding to the requests of over more than 14,000 card members, AMEXAMEX inked a deal with Wal-Mart stores to have its cards accepted at over more than 2,300 Wal-Mart locations. During 1995, other retailers such as Laura Ashley, ShopRite, Service Merchandise, and Vons Supermarkets signed on to accept AMEX cardAmerican Express Cards. That year, research by the ompany showed that based on card member purchasing patterns, AMEXAMEX customers charged 86 percent of their spending to AMEX cardAmerican Express Cards. Said CEO Kenneth Chenault, “If our customer wants to use the American Express cardAmerican Express Card at a hot dog stand, we want to be there. ”[vi] In addition to adding merchants that would accept the cards, Golub worked to improve relations with the existing merchant roster. In the past, AMEXAMEX was able to demonstrate to merchants that its cardholdercardholders charged a higher volume with their cards.

For many merchants, this mitigated the fact that AMEXAMEX’s merchant discount was considerably higher than Visa or MasterCard’s. Purchases by AMEX cardAmerican Express holdercardholders carried discount fees of over more than 3. 5 percent, compared to merchant discounts lower than 2 percent for Visa and Mastercard. By 1991, however, the case for accepting American Express was not as compelling. Not only were there a greater number of Visa and MasterCard goldGold cardholdercardholders, but also nearly 90 percent of all AMEXAMEX customers carried bank cards as well.

AMEXAMEX needed to retain as many merchants as possible, since overbecause more than half of its annual revenues came from merchant discounts. The turning point came in 1991, with the so-called “Boston Fee Party. ” A group of Boston restaurant owners coordinated a boycott of the American Express cardAmerican Express Card because they believed the discount rate to be too high. American Express worked rapidly to repair relationships with these and other merchants. By 1996, the discount rate for AMEXAMEX purchases was below less than 3 percent and all the Boston Fee Party boycotters had been re-signed.

Golub also attempted to better relations with current cardholdercardholders. In October 1995, the company expanded its Membership Miles program to include points bonuses for retail merchandise and gourmet gifts, as well as more travel offerings such as car- rentals, hotel stays, and vacation packages. This revised program was named Membership Rewards, and points earned through the program had no limit or expiration date. The renewed focus on American Express’s core business led to the first new campaign for American Express Travelers Cheques in twenty years.

Though still dominating the Travelers Cheques category with $64 billion in annual worldwide sales and a 45 percent market share, AMEXAMEX was looking to protect its lead against competitors like Visa. In 1994, a new $15 million advertising campaign updated the classic Travelers Cheques commercial, which traditionally featured hapless travelers falling prey to criminals while abroad and then experiencing firsthand the safety and security features of the Travelers Cheques. The new crop of ads focused on the “Cheques for two” feature, which enabled the same checks to be shared between two parties.

Instead of getting stolen, the Travelers Cheques in the new ads were only lost, and features featured lost-and-found employees in travel destinations describing the quirky items they encountered in the line of duty. The ads were intended to illustrate in a more lighthearted fashion the benefits of AMEXAMEX Travelers Cheques. In 1995, the company renamed its IDS division “American Express Financial Advisors” (AEFA) in an effort to provide with a more uniform image to its customers.

AEFA, which provided financial and estate planning, annuities, mutual funds, life insurance, pension plans, 401(k) plans, and loans and accounting services to businesses and individuals, was part of the “select financial services” that contributed to AMEXAMEX’s core competencies. A One-third of AMEXAMEX’s net income in 1996 came from AEFA, which controlled $130 billion in assets. After firing Chiat-/Day, AMEXAMEX re-hired Ogilvy- & Mather, who introduced a corporate ad campaign themed, “Do More. ” This global ad campaign extended the company’s advertising to include financial services and travel in addition to its card businesses.

The purpose of the campaign was to underscore the transformation that had taken place at American Express during the previous several years, given that the company had: 1)Sold or spun off subsidiaries and refocused on businesses operating under the American Express brand; 2)Broadened its traditional charge card business to include revolving credit, co-branded cards and other products aimed at specific customer segments, such as students and senior citizens; 3)Expanded its global travel network; )Begun a major expansion of its financial services businesses; and 5)Introduced new products to its corporate services customers. “For much of our history, our company’s brand was defined by our card and Travelers Cheques businesses,” said John Hayes, executive vice president of Global Advertising. “Now we are extending our brand to a variety of other products and services to mirror both where our company is and where it is going. What will remain consistent is our vision— — to become the world’s most respected service brand. The new advertising campaign was designed to capitalize on several of American Express’s historical brand attributes: trust, customer focus, travel, and financial insight. “American Express is one of the very few global brands in the financial services arena,” Hayes added. “All over the world, people’s experiences with our travel services, card products, and financial advice have defined our brand’s characteristics, reflecting the reasons that both corporations and consumers are loyal to American Express. Themed, “ American Express Helps You Do More,” the campaign attempted to bridge both the company’s historic strengths and, as well as its newer initiatives. The pool of advertisements included commercials that featured a range of American Express products and services, as well as those designed to focus on individual businesses, such as American Express Financial Advisors. It also included ads for the American Express charge cards, “Our advertising used to be about a limited number of products and services, and was often defined by the people who used them.

This campaign stresses our growing number of services and what American Express can do for you,” Hayes said. The television spots will ruran on network, cable, and spot television, supported by newspaper and magazine ads in a variety of publications including USA Today, tThe Wall Street Journal, The the New York Times, Time, and Newsweek. Card Wars American Express launched its first co-branded card in 1995 with Delta Air Lines. The airline miles card was called the Delta SkyMiles Optima, and within two years of its introduction it was the number-two airline affinity card with over more than 1 million cardholdercardholders.

American Express forged co-branding relationships with other partners, including Hilton Hotels, ITT Sheraton, and the New York Knicks. Beginning in 1992, American Express used comedian Jerry Seinfeld in advertising that emphasized the card’s flexibility and added humor to the personality of the brand. In 1997, as part of the “Do More”– themed campaign, American Express used ads featuring Seinfeld to emphasize the card’s acceptability in locations such as supermarkets and gas stations. In one ad, Seinfeld stops at a gas station to fill up.

The premise is that he aims to put an even dollar amount into the car, presumably so he can pay with cash without breaking change. Upon reaching the target amount, he gives the pump an extra squeeze that pushes the total a few cents over. Onlookers gasp in dismay, until he pulls out his American Express cardAmerican Express Card in dramatic fashion and pays at the pump. Another ad starred Seinfeld and an animated Superman. The unlikely duo were depicted walking along a city block, when Superman spotted Lois Lane in peril at the front of a grocery store line.

When the two come to her rescue, Lois informs them that she has forgotten her wallet. Superman pats his suit where pockets normally would be located and sighs, “I can’t carry money in this. I’m powerless. ” Seinfeld exclaims, “I’m not! ” and begins spinning around in a blur brandishing an American Express cardAmerican Express Card. Again in dramatic fashion, he swipes the card and pays for the groceries. American Express signed one of the leading athletes in the world in 1997 when it inked a five-year, $30 million endorsement contract with Tiger Woods.

That year, Woods appeared in print ads and television commercials that promoted American Express Financial Advisors. In one television spot titled “Tiger Wants,” the phenom golfer discusses discussed personal aspirations, which included “tak[ing] care of the ones who took care of me” and “help[ing] people who need help. ” The campaign also featured Tiger’s father, Earl, who explaineds that with the help of an American Express Financial Advisor, he was able to retire early and dedicate himself to helping Tiger reach his goals.

John Hayes characterized the endorsement deal as follows: The appeal of Tiger Woods – —and, indeed, of his father, Earl – —transcends the world of golf. While Tiger’s tenacity, work ethic, and abilities are outstanding, we also recognize him as a person whose achievements are the result of perseverance and an incredible focus on a goal. That kind of earned success is a hallmark of financial success as well. [vii] In appraising AMEXAMEX’s position, Hayes also noted: The market became very segmented, and we needed to catch up with that to become more relevant to more segments.

So now we’ve gone from a brand that was basically represented by one card product to one that has 25 products. That’s a drastic change. [viii] Our toughest balancing act is not to lose our traditional core customers and our reputation for premium quality and service while we enact new initiatives to expand against other segments. We’re tracking that on a quarterly basis to make sure we don’t go too far in one direction or the other. [ix] Marketing and Advertising In 1999, American Express unveiled the biggest new card launch since Optima, with the “smart smart cardcard” Blue.

Blue, which was launched with a $45 million advertising campaign, was considered a smart card because it contained an embedded chip that enhanced security for Internet purchases using a home-encryption system. American Express issued Blue cardholdercardholders a home card card-swiper free of charge, which could be used for Internet transactions. The card targeted the 25 percent of Americans that owned computers and used sophisticated consumer technology, as well as another 25 percent of the population learning to use such technology. Unlike other American Express cardAmerican Express Cards, Blue carried no annual fee.

One perceived risk of the Blue marketing campaign was the implication that the other American Express cardAmerican Express Cards were not secure for use with Internet purchases. Said Alfred Kelly, president of the American Express Consumer Card Services Group, “I would rather be cannibalizing myself than have the competition do it. ”[x] Launch advertising involved television, print, and subway advertising, as well as event marketing. The introductory television ads focused on the technology aspect of Blue. One ad showed a sea of amoeba dancing and multiplying over a rock-and-roll soundtrack.

This ad was intended to demonstrate the “evolving credit” aspect of the card, which meant that Blue would improve as the company added new functions features to it. Another ad emphasized Blue’s payment flexibility – —unlike other American Express cardAmerican Express Cards, monthly balances could be carried into the next month – —by showing the card bent, pulled, and reshaped by robotic arms to the sounds of a classical score. In addition to major network broadcasts, these ads ran during television programs targeting young people, such as Fox’s “The X-Files” and “Futurama. Print ads appeared in newspapers and magazines, as well as in sports clubs and on restaurant table-top menus. The ads did not use the familiar Roman Centurion soldier logo associated with other cards, choosing a new look that suggested a compact disc with blue concentric circles bordered by white. American Express also sponsored a concert in New York called “Central Park in Blue. ” The concert was promoted by a “street team” of sharply- dressed scooter riders, who used handheld swipers to enable cardholdercardholders to pick up free tickets at nearby Blue information kiosks.

These marketing activities were designed to give the card “a different, modern, more hip feel,” said Alfred Kelly. “We wanted to break out. ”[xi] American Express continued to market cards based on prestige. In 1998, it introduced the matte Matte black Black Centurion Card – —otherwise known as the “black Black cardCard” – —for elite clients. To obtain an invitation invitation-o

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Brand Personality

Brand Personality > Brand personality is what distinguishes one brand from another or a particular brand from a product. is easier to intuitively understand brand personality rather than define it > It Brand personality of DABUR > Strong heritage > Herbal or ayurvedic benefit > Healthy > Nurturing > Consumers find it easy to deal with brands that have strong personality because it is easier to remember them. Ex : Parle G the largest selling biscuit in the low price segment has carved a niche for itself because it is seen as a “Heritage” brand enjoyed by both Grand Parents as well as Grand Children. > Besides possessing personalities, also acquires “Charisma” so much the better. > Ex : Lux has the aura of “The cine star’s soap” this aura of aspiration & achievements makes it irresistible. > The definition of Brand Personality available in literature can be classified into three types : > A) Emotion centered definition > B) Human centered definition > C) Others Emotion Centered Definition >Christine

Restall of McCann Erikson contends that it is because of an emotional pre disposition that people choose one brand instead of the other though there is no discernible difference between them thus, we can see brand personality as the emotional between the consumer & the brand. brand. >Crask & Laskey’s view of brand personality is that it is the sum of intangible assets of the brand. (Eg. Quality, Prestige etc. ) like intangible assets of Lifebuoy soap are germs killing platform, health positioning. >Its tangible aspects are its long lasting ability , its red carbolic cake and its bright packaging .

Projective technique has been used to identify the emotions underlying the brand > Maggi sauce > Red & White > Onida > Exide hot & Sweet Chili > Humor > Valour > Irritation > Peace TV battery Another way of using projective techniques is to identify the brand with an adjective. > Tata > Ayur Tea shampoo Blade > Fresh > Traditional > Macho, , Nurturing > Gillette Tough Human Centered Definition > Southgate defines personality as “the human characteristics of the brand in question, whilst taking special care that it is the brand that is being described and not he target customer. ( Is the brand male or female?…. Technocrat or nurse?…. Puritan or Hedonist? ” This route to defining brand personality transforms a brand into a human being. >Aaker’s definition of brand personality is close to this. He sees brand personality as the set of human characteristics associated with a brand. For Instance, Harley Davidson motorcycle is seen as a macho, freedomfreedom-seeking person. This is a personality. Similarly, Coke’s personality is “REAL” (the real thing! ); Pepsi’s is young, spirited, exciting. ” > 1. 2. 3.

Human characteristics might be demographic traits such as gender , age , socio-economic socioclass besides subtle personality traits like Warmth , concern and sentimentality. Brand personality can thus have demographic characteristics : Feminine (Sunsilk , fair & lovely ) vs. Masculine ( Fair handsome , Old spice ) Psychographic characteristics like upper class ( Surf Excel matic ) vs. blue collar ( Nirma , Ghadi ). Sophisticated ( Esteem ) vs. Rugged ( Tata sumo ) > 1. 2. 3. 4. 5. 5 Personality factors namely are Sincerity Excitement Competence Sophistication Ruggedness Each personality factor composed of several sub-factors which is illustrated subbelow as a brand personality scale. 1. > > > > Sincerity Down to Earth Honest Wholesome Cheerful 2. Excitement > > > > Daring Spirited Imaginative Up-toUp-to-date 3. Competence >Reliable >Intelligent >Successful Inspire a leadership brand 4. Sophistication > Upper Class > Charming What we buy often speaks about ourselves > Van Heusen 5. Ruggedness > Outdoorsy > Tough Brand Personality Symbolism > The Marlboro Man is one of the most famous and controversial ads of all time

The Marlboro Man represents/is: > Being a cowboy (a boy’s fantasy) > Cool > Independence > Rugged/Tough > Ability > Style > Steadiness > Fearless Elements of Brand Personality Brand Values Rational Appeals to the reason (Beliefs) Sensory Appeals to the senses (Reactions) Emotional Appeals to the emotions (Feelings) Symbolic Appeals to the Self- image (Associations) sensible, practical, hardworking, affordable efficient stylish, sizzling, tasty, attractive warm, caring, fun, exciting, trendy, trusted asp rational, status-conscious, cult figure, macho

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Ikea Strategic Brand Management

When people talk about furnitures, the first brand which comes to mind is IKEA. Originating from Sweden, IKEA first open shop in 1958, then in Norway in 1963 and soon after, it spread throughout the whole of Europe and thus slowly making its way to the whole world. With their biggest market in Germany with 45 stores followed by United States with 35 stores, now IKEA have 313 stores in 30 countries. (Cult Branding, 2012). Known for its simplistic design which has maximum optimization, IKEA product ranges from not only furniture but also different furniture segments such as kitchen cabinets, build-in wardrobe and much other furniture.

IKEA strategic brand management in making the brand such a craze among its customer and thus leading to a brand value which is important for IKEA’s entire product line making IKEA one of the most valuable brand in the furniture niche. A visit to IKEA for either shopping or leisure would reveal several factors on why customers come back over and over again for not only products from IKEA but also the shopping experience from IKEA. Comparing a visit to IKEA with any other furniture outlet is different as one gets the sense of belongingness as the layout of every IKEA store makes one feels homely.

It is so that customers can visualize their homes when buying IKEA products. IKEA’s interior designing team designed the rooms or kitchens in a way that people could visualize how their homes will look like before purchasing the product from IKEA making a purchase from IKEA a worthwhile one. Adding to that, IKEA made things different as its furniture and home furnishing shopping is differentiated so well, consumers who wanted specific products from specific departments of the home. Another value added to IKEA’s brand is about the design of the products.

Eventhough IKEA’s product design are minimalistic, the products presents itself in an innovative way in such that it does not take much space and yet still being able to function better or on par with what the particular product will do which still look pleasant to house owners or visitors instead of a sore eye. For instance, IKEA’s simple Lackside coffee table might look like a dull one in black and white, but throwing in the colours made it fun to look it although an old school design is used.

In a sense, that the designs are modern and traditional with functionality. IKEA’s products always come with a set of instruction manuals that are not complicated and are straightforward making IKEA’s product being easily assemble without much of hassle which in turn keep their prices low and reasonable to the range of products being sold. Making products in such way added value to the brand IKEA as furnitures are often regarded as comes in one piece or do it yourselves which is very difficult to assemble.

Having products in low and reasonable price range, it is no surprise that the brand IKEA appeals to most people, primarily to young urban couples or families which do not want to burn a deep hole in their pockets in their investment of their first house. However, this does not mean that people on the middle income or higher income do not buy products from IKEA. IKEA produces products in such it varies in prices depending on its differences. Therefore, the brand IKEA is made stronger by introducing a variety of product ranges with different product prices which caters and fulfill to any level of income consumer’s need in the market.

Despite having products at such low prices, this does not show that products sold are not of quality as buyers are given a sense of value to their household items but satisfying the customers saying “less is more”. Not only that, every single year, IKEA’s product prices are cut down even further which made it favourable for consumers who could not afford to get it the following year, thus making the IKEA brand also a favourable one. Taking things a few steps back, most of IKEA’s product are made of wood which somehow does not go well with the word environment in various ways. Therefore, waste reduction is a crucial key in production.

IKEA’s designers and engineers strive to reduce the amount of material used and wasted in production of its furnitures. Additionally, many waste products are then used to make new products, which in turn further reducing overall cost both to the pocketbook as well as to the environment. Adding on to this, the Recovery Department is responsible for sorting and recycling all recyclable materials, including packaging broken down in-sotre as well as materials collected from customers at recycling donation bins where available. In conclusion, IKEA’s strategic brand management involves its retail and alue to be seen by consumers all around the world. Using differentiation to its advantage, IKEA differentiates themselves with other big home furnishing and furnishing outlets available such as Big Brand, Darby and Vandrie through products which are innovative, quality and yet low in prices. And thus, living to its tagline “affordable solutions for better living” says it all. (IKEA 2012) References Cult Branding. (2012). The IKEA Cult Brand Profile. The Cult Branding Company. Retrieved from http://www. cult-branding. com/ikea-cult-brand-profile IKEA (2012). Welcome to IKEA. Retrieved from http://www. ikea. com/

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Nike: Building a Global Brand

| Nike: Building a Global Brand| MKTG 4082W| | 1. Nike’s brand image, a set of emotions, feelings, and experiences with the brand, developed over time through advertising campaigns and consumer experiences with Nike. The core attributes of Nike’s brand image include high performance, innovation, and aggressiveness. Nike positioned itself as a company that makes products for athletes, by athletes. They tailor their products for serious/winning athletes and also stress their point-of-difference to be performance, as opposed to Reebok, whose point of difference is style.

Nike is perceived as a high performance brand and they always make performance a top priority, which is a key building block for their brand image and brand equity. They designed more durable, lightweight shoes that were tailored for runners and allowed them maximize their athletic ability. Nike, from the beginning, was open to input from runners and listened to their needs and wants, sharing their true passion for running. By doing this, they were able to design a shoe that performs well and meets the demands of serious athletes.

In addition to performance, Nike is an innovative brand and that can be seen by the introduction of innovative products to the market like the Waffle Trainer, Air Max, and Air Jordan shoes. When looking at the Consumer Brand Equity Pyramid (Exhibit A), Nike’s source of brand equity comes mostly from salience and performance. Nike used brand associations in order to establish a positive brand image and build their brand equity by endorsing popular, successful athletes like Michael Jordan and Tiger Woods. These associations convey the American spirit of competition and winning and work very well in the United States.

Nike capitalized on how much Americans idolize their favorite athletes and it once again projected their image of high performance and their dedication to serious athletes. Their advertisement campaigns also helped build their brand equity by increasing awareness, as can be seen with the Air Max, Air Jordan, and Just Do It ads that conveyed powerful brand statements and reflected Nike’s attitudes, while remaining “provoking and unique. ” Nike successfully applied their new marketing formula of blending performance and attitude through strategic product development, endorsements, and advertising, which built their equity.

Their perceived quality and brand credibility is based off of high performance and innovation and their brand loyalty is strong as well, stemming from their early relationships with runners to get feedback and input. In addition, they used a “finger on the pulse” strategy to hit the streets and really find out what was on the minds of consumers, in terms of brand perceptions. Another source of brand equity for Nike is their Swoosh logo and as of 2000, 97% of Americans recognize it. 2. I am not surprised that the irreverence characteristic of Nike advertising in the U. S. id not sit well with many European consumers. The culture in Europe differs from the one in America and European consumers vary in significant ways from Americans. Nike introduced many changes in their marketing mix to tap into the European and Asian markets. They established a grassroots allegiance of local sports teams, mainly with soccer, tennis, and rugby. In addition, they evolved their marketing strategy to a two-tiered approach. Individual markets featured ads with local stars, while all of Europe saw ads that featured popular sports like soccer, tennis, and track.

Nike also focused its attention on the 1992 Barcelona Olympics, raising their overall global advertising and promotion budget to $240 million. With the rising popularity of basketball in Europe and Asia, Nike also planned to lead its marketing charge with its strong stable of basketball superstars. In addition, Nike implemented a global advertisement campaign during the 1994 World Cup, recognizing that soccer was the best way to enter new markets. In Asia, Nike abandoned its brash advertising attitude and celebrated local athletes as heroes in their ads.

Overall, Nike had a kinder, gentler marketing approach with ads that projected a more international image (use of Tiger Woods and Ronaldo in ads). Nike’s new focus was to be seen as culturally, geographically, and personally relevant to local consumers abroad. I am not surprised that the advertising did not sit well with many Europeans because of the vast difference in the cultural aspects. Europeans saw Nike’s marketing actions as intimidating and too aggressive. Also, the brand did not have the history or heritage in the market and was starting more from scratch.

In addition, fashion trends inevitably changed which caused Nike to be behind the curve. 3. To become a global corporation, Nike had to adopt a globalized strategy to build their global brand equity. They did this by broadening their portfolio of athlete endorsements and focusing their ad campaigns on different sports that were more popular in those areas. They kept the essence of the brand, the same core values, and stayed consistent with their marketing communications, but tailored to different regions by using local athletes.

This was possible because they had 90% control of the marketing advertisement strategies in Europe and were able to stay consistent. As I mentioned before, Nike also sponsored global events like the Olympics and the World Cup, which increased their credibility and awareness on a global scale. Nike also reduced their overwhelming use of the Swoosh logo and their overall aggressiveness in their advertisements. In Asia, Nike was able to improve its brand equity by establishing the Corporate Responsibility Division and celebrating local athletes as heroes in ads. Exhibit A

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Brand Development

Question: Analyze ESPN according to the brand development strategies from the text. What have they done in the past? What would you recommend to ESPN for future brand development? Discussion: Brand development in the past has consisted of creating new and exciting ways to bring the latest sporting events. A company has four choices when it comes to developing brands. It can introduce line extensions, brand extensions, multi brands, or new brands.

Line extensions occur when a company extends existing brand names to new forms, colors, sizes, ingredients, or flavors of an existing product category. A company might introduce line extensions as a low-cost, low-risk way to introduce new products. Or it might want to meet consumer desires for variety, use excess capacity, or simply command more shelf space from resellers. However, line extensions involve some risks. An overextended brand name might lose some of its specific meaning.

Or heavily extended brands can cause consumer confusion or frustration. A brand extension extends a current brand name to new or modified products in a new category. A brand extension gives a new product instant recognition and faster acceptance. It also saves the high advertising costs usually required to build a new brand name. At the same time, a brand extension strategy involves some risk. Now for ESPN. ESPN loves its name. It puts it name on everything. ESPN The Magazine. ESPN2. ESPN News. The ESPN Zone.

To a degree it is fine, as long as it stays within the bounds of extending ESPN’s core value: getting sports into every ounce of your life. ESPN The Magazine is the only one that isn’t worhty of the ESPN headliner. They should have named it something else. It’s not up to the minute, so it isn’t consistent with everything else ESPN promotes. Anyways, ESPN Mobile fits the bill. Every sports fan has been stranded to some degree without being able to access sports info they needed to have. And die hard sports fans NEED their info.

The concept of the insane amount of sports data being pumped over that network is mind blowing. What is also mind blowing is that for what it is, its restrictive. Today, I don’t see the ESPN phone in a family plan or the Mobile ESPN service being offered through standard phone outlets. If Dad or Junior could get a Samsung on Verizon’s network featuring Mobile ESPN? Done and done. And with the move to converged handsets, I see the market for Mobile ESPN as single guys with 40 hour-per-week blue collar jobs who like to watch football at the bar.

If that’s the segment they are targeting, good for them. Love the concept, just wish it fit my profile a little better. The middle class loves the family plans because they don’t have to spend twice as much to get the core function of a phone: the phone. For the small service business: stay focused on what makes your name valuable. If you absolutely need to get into a new business opportunity. Sleep on it. If you still must get in, you need a new name for that new business!!!! Nothing dilutes a brand like the jack of all trades.

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Unbranded to Branded

Eyewear market in India remains buoyant despite recession Despite the economic crisis, the eyewear market in India as a whole displayed healthy growth in volume sales in 2009, while growth in its value sales slowed marginally relative to 2008. The demand for premium lenses, frames and sunglasses slowed more than that of the low-price and economy segments, so there was an overall slow-down of growth in value sales at the end of review period. Spectacles still preferred over contact lenses

While marketers of contact lenses made an aggressive push into the Indian consumer market, especially the young adult segment, the mass market continued to favour spectacles over contact lenses. The two factors that have kept the level and growth rate of sales of contact lenses below those of spectacles are concerns about their use and their price. The prescription market remains biased in favour of spectacles and opticians rarely prescribe contact lenses unless the patient specifically requests them.

Direct imports keep market completely fragmented Retail shelves across the country are full of imported spectacle frames and sunglasses. These low-priced imports played an important role in sustaining demand, especially for sunglasses, whose sales enjoyed the highest growth of any subsector in 2009, as they had in 2008. These imports have also kept the spectacles market entirely fragmented, with only eight companies holding even a 1% share of retail sales in Indian eyewear market. Chained specialists enjoy significant growth

The review period saw the growth of several chained specialist retailers, such as Titan Eye+, GKB Opticals and Vision Care. Titan Eye+ has been a game changer in that it has modernised the retail sector and forced others to follow suit. In order to remain competitive, opticians feel compelled to increase their ranges of frames, offer eye-testing services and carry contact lenses as well. Reliance’s Vision Express is another large player that is likely to influence marketing and distribution in the years to come.

Chained specialists are also able to negotiate better deals with suppliers, undertake promotions, offer better prices to customers, and provide greater visibility for new products and launches. Demand for spectacles expected to continue driving retail sales of eyewear The prescription market is expected to continue to drive demand in the forecast period, as literacy rates increase, more children become prospective wearers of spectacles, and economic growth sustains the increase in purchasing power.

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Fasion Brand-Zara

Title: Examine the underlying factors in the current success of a well-known fashion brand of your choice and assess the extent to which the brand’s success looks set to continue. Word counts: 1218 This essay will introduce a well-known fashion brand, ZARA, and illustrate the underlying factors in the current success of its company. Meanwhile, it will also evaluate ZARA’s prospective development and provide possible strategic suggestions.

Established in 1963, Inditex group is one of the largest fashion retailers, welcoming customers at its eight store formats -Zara, Pull & Bear, Massimo Dutti, Bershka, Stradivarius, Oysho, Zara Home and Uterque – boasting 5. 618 stores in 84 markets across the world, and operating in textile design, manufacturing and distribution. Figure shows that the subordinate brand of Inditex group, Zara, contributed two thirds of the Group turnover (Annual Report, 2011) and continued to develop in a flourishing tendency.

Meanwhile, it has been developed in a mushroomed tendency across the world within a short period of time since 1975. ZARA places the customer in the central position of its marketing management and its entire business model, which consists of attractive design follow the fashion trend, manufacturing in a relatively high quality, distribution in an effective way and sales with a worldwide distribution network. (http://www. zara. com/webapp/wcs/stores/servlet/category/cn/en/zara-I2011/11112/Company).

Zara is aiming to democratize its unique concept by offering the latest fashion in relatively high quality at affordable prices. What differentiates Zara’s business model from that of its competitors which lead to success is the turnaround time, and the store as a source of information. Zara’s vertical integration of design, just-in-time manufacturing, delivery and sales, flexible structure, low inventory rule, quick response policy and advanced information technology enable a quick response to customer’s changing demands (Castellano, 1993).

To sum up, there are three main factors to ensure the success of ZARA, which are offering the latest fashion items at fair prices, rapidly putting items into market and employing test orders to ensure risk reduction, and realizing a three dimensional development. Firstly, most designers of ZARA are such young people who have the unique creativity, discerning insight, sharp fashion mind with dye-in-the-wood of

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Brand Repositioning

WHAT IS RE-POSITIONING? A company or product is new and people already formed judgments about it. In other word, the company or product already has an image either good or bad or in between. Many companies are not aware of their exact image but it is important if that image can be identified. If a company does not know where it is now, then that product or company unlikely to get to where it wants to go. RE-POSITIONING BRANDS As markets and customer needs evolve; brands can lose customers to new competitors.

In addition, brands can become diluted as product or service offerings become commodities. When a brand loses meaning and relevance to target customer, a new brand promise should be defined so the brand can be repositioned. TYPES OF BRAND RE-POSITIONING Brand Re-positioning Brand re-positioning is changing the positioning of a brand. A particular positioning statement may not work with a brand. Brand re-positioning is undertaken in order to increase a brand competitive position and therefore increase sales volume by seizing market share from rival products.

When re-positioning companies can change aspects of the product, change the brand’s target market or both. There are four types of re-positioning options for develop a new product in market. I. Image Re-positioning This option takes when both the product and the target market remain unchanged. The aim is to change the image of the product in its current target market. For example product Adidas were seen as reliable but dull in early 1990s. The company created an image of ‘street credibility’ in an attempt to reposition the brand to appeal to the customer in the sports shoe market.

During the 1990s, Tango the Britvic soft drink has been transformed from a minor UK brand into a brand showing dynamic growth. This has been achieved by creating an anarchic image for the products through a major promotional re launch that was aimed to appeal to consumers in the critical 16-24 age of group. II. Market Re-positioning The product remains unchanged but the product repositioned to appeal to a new market segment. For example, Lucozade is a brand of carbonated glucose drink was originally targeted as a product for individuals suffering from illness, particularly children.

Now it has been repositioned as an isotonic drink aimed at young adults undertaking sporting activities. III. Product Re-positioning Product re-positioning is materially changed but is still aimed to appeal to the existing target market. Product positioning is closely related to market segment focus. Product positioning involves creating a unique, consistent, and recognized customer perception about a firm’s offering and image. A product or service may be positioned on the basis of an attitude or benefit, use or application, user, class, price, or level of quality.

It targets a product for specific market segments and product needs at specific prices. The same product can be positioned in many different ways. IV. Total Re-positioning This option involves both a change of target market and accompanying product modifications. For example, Skoda has managed under Volkswagen’s ownership to reposition itself totally. The product quality and design has changed significantly and the brand now has credibility with new, more affluent consumers. This has also allowed the brand to expand its sales outside its Eastern European heartland.

REASONS TO CONSIDER BRAND RE-POSITIONING 1. The brand has a negative image This can easily happen and often is not the company’s fault. Damage can be done by maverick individuals as in the notorious cases of poisoning of the products such as Tylenol and Perrier. It can also be an effect of government policy. For example, if a company builds a highway and forecasts year ahead the toll charges for the government, the public may know nothing about any intended road price increases until the government announces them at a much later date.

This announcement may be handled badly by the government, perhaps being made during recessionary times when disposable income is reduced. Although it is not within the control of the company collecting the toll, it still reflects badly on the company. Public relation is usually the fire-fighting answer, but forward looking companies use advertising and public relation strategically to think ahead about potential problems. This is sometimes scenario planning or issues management. The company looks ahead for a certain length of time.

It can be months with fast moving consumer goods or a couple of decades with conglomerates. An example of how a company thought about its brand image in this way is seen in Telekom Malaysia’s sponsorship of the 1998 Malaysian Everest climb. Many things could have happened including the injury and death of the climbers. But a comprehensive set of guidelines was prepared for staff covering responses to possible questions the company would be asked in both positive and negative scenarios. On the other hand Coca-Cola did not seem to react quickly enough when the European scare surfaced in mid-1999.

They suggesting that it might not have planned what to say in such unlikely circumstances and now it has a major re-positioning job to do. 2. The brand has a blurred or fuzzy image When this happen, people do not feel strongly about image one way or the other way or have mixed perceptions about it. This is quite likely to happen when a brand has not been positioned properly. Perceptual mapping would probably reveal that the brand is very close to other brands in terms of customer preferences and has little to differentiate it.

A re-positioning exercise would need to be carried out to get the brand into a space away from the other brands. This may involve changes to product or packaging. 3. Competition has moved close or taken over brand position This is constant threat facing any successful brand because everyone wants to emulate success. It sometimes takes companies by surprise as Japan brand Lexus did to BMW in the U. Ss this is a constant hazard in the consumer goods category. Companies have to be prepared to constantly innovate with existing products and bring out new products to surround the category space.

FedEx, one of the world’s leading courier companies upon finding out that all other Asian courier companies had positioned themselves around the benefit of speed as it had done moved away with a very large advertising campaign and suggesting that whatever the adverse circumstances, FedEx would deliver. It has not lost the speed benefit because this product related. It has instead added a dimension of corporate personality to strengthen overall company image hence differentiating it from the rest of the crowd. 4. The company embarks on new strategic direction

When a company embarks on a new strategic direction move into a new industry or introduces a brand that is remote from the core business, brands with an already powerful image faces less of a problem this might bring. However, weak brands will find it essential to reposition it to convince the target audience of its credibility. For example, Coca-Cola feels confident enough to bring out its own brand of clothing. There are limits to brand extensions. If the brand name is not too elastic, a totally new brand name may be necessary. 5. The company introduces new brand personality

When a company introduces new brand values or personality characteristics it needs to undertake re-positioning. Privatization and deregulation have forced many government institutions to change their practices, values and their cultures. This is a significant challenge as consumer perceptions are deeply entrenched and re-positioning requires considerable persistence repetition backed up by a totally different brand culture and customer experience. Similarly, re-packaging a brand requires re-positioning. 6. The company addresses a new target audience

Moving to a new market segment in addition to the existing ones is always tempting for the brand development. The danger lies in alienating the brand’s existing customer base. Example presented by Toyota, which said it is considering joining the Formula One racing by 2003. It is trying to revitalize its image to appeal more to the youth, a segment that tends to buy more innovative products such as those produced by Honda. By joining Formula One it hopes to send a message to young people about the fun of driving and position Toyota as technically up to date. 7. The sales are declining.

This is the basic reason why Marlboro considered re-positioning in the 1950’s. If the absolute sales start to drop, you need to take a step back and figure out the cause. If you think that you are offering your service or goods at its best, but it still does not continue to attract customers, it could be that your brand needs to be refreshed, if not represented differently. 8. New competitors have a better value proposition. In that case, rest assured that your initial position will be destabilized. If customers see that other brands offer better than yours, they tend to shift.

Hence, company option is to either step up or get left behind. 9. Customers think that your brand is outdated and not established. Being an older brand does not necessarily put you at a higher position. Customers may see your brand as outdated or irrelevant. What you need to work on is how you can really ‘establish’ your brand. You know your brand is established when customers trust and go back to it again and again. In other words, established brand produces loyal customers. 10. Your products and services have evolved drastically. Over time, companies change and expand.

You may have added new products, refined old ones, or expanded the line. This would help you stay relevant and fresh. However, if you have changed your products or offerings over a long stretch of time, chances are, the branding strategy that you started with does not reflect the brand anymore. It might be out of sync already. You may need to change it to mirror what the brand stand for now. HOW TO REPOSITION BRAND FOR HIGHER MEANING? To be successful at re-positioning your brand, you have to create higher meaning and aim higher. Aiming higher requires outward thinking and learning from the marketplace.

Some companies have been engaged with a variety of consumer products brands whose managers are seeking new opportunities to grow their brand’s value. In all these engagements, I have noticed a common thread among all of them which was consumers no longer care about them because they have lost their compelling meaning in the consumer’s mind. Once a consumer’s mind is made up about a brand, it’s next to impossible to change it. The decisions facing brand managers and marketing executives regarding how they deal with our ever-evolving market landscape usually comes down to three options: i. ontinue to invest in the existing brand meaning ii. create a sub-brand iii. invent a completely new brand All of these options have advantages and disadvantages, more so if the brand is also facing dramatic challenges in distribution. The driver underpinning all these options is change. Brands are dynamic. They have their cycles and they run their course. What is hard for managers to grasp is when to move on. This is particularly true if the brand was once a leader. Market success always creates size, power and a false sense of security.

Over time, this creates an unrealistic view of the external reality, and a lack of urgency to correct course in maintaining relevancy among consumers. Brand managers naturally become inwardly focused and they tend to miss seeing new opportunities or competitive threats. Complacency becomes the norm and the brand’s compelling meaning in the minds of consumers gets blurred and sales drop. If the companies are faced with reinventing brand, the problem that they faced most likely is obvious. Somehow many people believe a good idea has to be clever, mysterious or layered in complexity. The best ideas for re-positioning brands are simple.

If the core idea behind the brand’s meaning is not simple and obvious, it would not stand a chance in the over-crowded slush pile of a marketplace in which the brand must reside. Simple ideas are self-evident, which is why they work so well. Positioning is the art of sacrifice. A brand can only stand for one compelling, radical differentiating selling idea. The trouble with simple ideas is they have no appeal to the imagination and are easily over-looked. We are naturally drawn to the more clever and ingenious ideas. Resist this temptation. The company needs to aim higher thinking toward the simple, obvious differentiating idea hat elevates the brand to a new meaning people really care about. RE-POSITIONING STRATEGIES TO ACHIEVE COMPETITIVE ADVANTAGE It is high time we re-examine the way re-positioning of brand is done in this ever changing market place. Uncertainty and trends have placed companies in a race against time. Gone are the days when work for every segment of consumers like a charm. The life and soul of the market place today is focusing and engaging specific target market. Major paradigm of strategic re-positioning is now introduction of small scale change with budget.

Value based system is the money spinner that competitors have been using to bring companies down. Strategic re-positioning and exploitation of brand advantage is the only cash cow that can be used to counter them. The re-positioning strategy below will keep the company aware from the failure. 1. Reposition brand internally. Internal brand building is an emerging trend in marketing that is used to solidify the position of a brand in an organization. Brand based internal communication will communicate new strategic position of a brand to employees of an organization.

Major home improvement companies like Home Depot, and Lowes are example of companies with strong internal communication. Engagement will foster strategic intent of re-positioning in to the training experience and job activities of employee. Organization alliance with brand re-positioning activities will enable company to achieve increased customer referral expanded sale portfolio, and customer service efficiency. 2. Carry out consumer analysis The essence of carrying out consumer analysis is to identify prospects, customers and target group in order to position brand correctly.

Success will go an extra mile if new product development can focus consumer’s need and wants. New brand profile should correlate with consumer behavior and value. New product development manager have to make sure that they meet and exceed consumer expectation in order to make them loyal to brand. And lastly company should engage brand in the mind of consumers consistently in order to create a lasting emotional affinity. 3. Competitive analysis Competitive analysis is the assessment of the strength and weakness of your rival. Company does not underestimate the power of their competitors.

Emergence of technologies has made it easy for them to gain insight in to the future before anyone does. New product development should create an uncontested market space by making sure their marketing mix is innovative in nature. They can differentiate the position of their brand by instilling a distinct feature in price, promotion, distribution and the product itself. 4. Fine tune to advertising strategy Companies like Verizon, gap, apple, Microsoft and MacDonald have fine-tuned their advertising strategy to “consumer needs” tactics. Appealing message will create brand awareness and increased sales to them.

By using a medium that will clearly communicate new brand position and features to existing customers and prospects. They have to employ message that has specific objective in order to add value, success, quality, excitement, substance, and equity to the positioning of their brand. Besides that, advertising objectives should be derived assessment of market situation, price position, competition, and channel of distribution. 5. Create good relationship with trade partner and channel members Trade partner and channel members are people that ensures product or brand gets to the hands of final consumers.

Intermediaries have very strong ties to brands. Good strategic partnership and relationship with channel members are very important in ensuring that new brand position is communicated to consumers. They can also supply sales force and marketing communications necessary persuade consumers to go beyond buying a product. Companies like Dell Computer, FedEx, and Charles Schwab have a very great system that have enabled them achieve a very powerful competitive advantage. 6. Reassess It is always good to carry out assessment of brand position continuously to ensure relevance in the market.

This strategy will eliminate risk and problem from piling up. It is done by carrying out internal and external analysis of brand rating within employees, customers and prospect. The result of the analysis will enable them to know the strength and weakness of brand position. Furthermore, data collected will enable you map out informed strategy to reposition their brand all over again. PROFITABLE WAYS TO REPOSITION A BRAND The reason is because brand re-positioning strategy is applicable to wide range of real business problems and marketing issues.

Brand re-positioning is the only effective strategy that can generate feasible solution to problems based on current needs of the market. Therefore, it is imperative organizations understand specific ways to reposition a brand. Below are illustrations of ways to reposition a product or services. i. To make brand relevant One way to reposition a product or service in the mind of target market is to make it relevance. Brand relevance can be defined as the alignment of brand’s identity, attribute and personality with the needs of target group.

The reason behind making brand relevant constantly is because of changing needs of the society and profusion of alternatives. Brand relevance entails keeping brand current and significant in the mind of target group. It also encompass ensuring that brand resonate and connect to consumers emotionally. ii. To enhance brand identity Another way to reposition a brand is to enhance its identity in the market place. Brand identity is the visible element of a brand such as colors, logo, design, symbol and name that distinguishes a product or services in the mind of consumer.

Identity enhancement is done especially if there is no consistency between brand interfaces and consumers. Redefinition of identity is also done when two or more company is merging together. Brand identity is strategic or substance oriented in nature. Brand identity begins with analysis of marketing environment and ends with using research data to create relevant brand portfolio. iii. To enhance brand personality Organizations reposition brand personality especially when they need to solidify customer loyalty and engagement.

According to David Aaker, author of the book “Building strong brand” “brand personality can also be defined as the set of human characteristics associated with a given brand”. It is also the personification of intangible and tangible traits of a brand. Brand personality projects beliefs and core value of product or services. It is a framework that creates passion and affinity for consumers. Types of brand personalities include trustworthiness, sincerity, strong, reliable, consistency, sophistication, and emotional. iv. To enhance brand experience

Another way to reposition a brand is to enhance consumers experience in order to gain long term competitive advantage. Brand experience encompasses aligning product or services to end-user mood, needs, desires, and behavior. It also involves using stimuli to invoke feelings, sensation and responses. A memorable and unforgettable experience is created by being insightful, remarkable, valuable, dynamic, relevance and accessible enough to unravel gaps and deliver satisfaction incessantly. Customer’s physical & emotional expectations are enhanced by creating great experience at all faucet of interaction. . To enhance brand essence Periodically, organizations enhance the essence of their brand by associating brand with meaningful and relevant substance. Brand essence is a pathway for adding value and equity to a product or services continuously. The concept of brand essences is also defined as a phrase or statement that contains emotional connection or impression about product or services experience. It is the DNA or core characteristic that distinguishes a brand from other alternatives. Illustrations of traits associated with brand essence include unique, relevance, scalable, and sustainable. i. To enhance brand image/reputation Another Way to reposition the image of a brand is through its appeal, fame, and value. Business dictionary defines brand image as the “impression in the consumer’s mind of a brand total personality”. Brand image can be also defined as what a brand stand for or set of specific belief about brand in the mind of consumers. It deals with readjusting the perception of consumers on brand. It is tactical or appearance oriented in nature. Various ways to enhance brand image is through advertising, promotion, word of mouth, customer service and other touch points. ii. To adjust brand association Re-positioning of brand association is done by organizations to increase product or service appeal to core target group. Business dictionary defined brand association as the “extent to which a particular brand calls to mind the attribute of a general product category”. It can also be defined as the meaning, attributes, image associated with a brand in the mind of consumers. Associating brand with enchanting features can solidify loyalty and turn consumers to evangelist or advocates.

Various brand association include customers contact, advertisements, character, word of mouth, celebrity, category, geography, end-users, slogan, intangibles, products, extensions, and displays. viii. To emphasize on brand attribute Sporadically, factors like unstable market, short product life cycle, technological advancement, and alternative can make the attribute of a product or services irrelevant. Re-positioning of brand attribute is done by emphasizing on attribute that matter most to consumers or target group. Brand Attributes is defined as the properties or characteristics of a product or services.

It can also be defined as the emotional as well as functional association consumers confer to a brand. Types of attribute include cost, friendly, authentic, innovative, prestige, and reliability. ix. Brand differentiation Organization indulges in differentiation strategy when they need to establish a strong identity in the mind of consumers. Business dictionary defined brand differentiation as the “result of effort to make a product or service stand out as a provider of unique value to customers in comparisons with its competitors”.

Chosen point of differentiation need to be significant to target market, not used by competitors and supported by organizational resources. Types of differentiation include components, performance, experience, market leader, convenient, innovation, pioneer, essential, expertise, and responsiveness. WHY BRAND RE-POSITIONING COULD BE THE BEST SOLUTION THROUGH WEBSITE? When you have been working on a brand for a long time, it can be depressing to find out that it is not having the positive effect that you hoped.

Examining the brand equity for the website can sometimes reveal that there is virtually no difference between marketing your company with the brand, and promoting it without. This usually means that your current brand is missing the mark, and you are just not connecting with your customers. In order to create a better equity, and retain more customers while bringing in new traffic, you should seriously consider brand re-positioning for your website. Re-positioning a brand means changing the angle or design of your current brand marketing campaign, or even simply discarding your brand and starting again.

On a website, which needs to be constantly changing in order to keep up with modern trends, it can actually be a good idea to reposition your brand every so often. This keeps the website fresh for your clients, and can also attract and retain customers who would not be otherwise connected, while also allowing you to fine-tweak the Brand Promise or other elements which affect the levels of brand equity. There are a number of reasons why you should consider brand re-positioning for your website. If you are just not attracting the sales that you had at the beginning, then changing the brand can bring back former customers.

You would also need to focus upon promoting different elements of your products or services to keep the interest, but this can be a positive side effect of brand re-positioning. Another reason may be that brand you have chosen does not really match your website, and you are therefore losing customers. For example if you are promoting a brand of shoes with puppies and kittens on, then you would not want a brand image that more resembles a heavy metal poster. Your customers base their opinions of your values upon your branding, so the item and the brand need to be a close, if not completely perfect, match.

A brand which clashes with your website or the item or service offered for sale simply has to go, and changing the logo, colors and appearance of your brand can be the incentive that some websites need to completely overhaul the way that they operate which was by leading to new initiatives that generate more income for the owners. Brand re-positioning can also be a step designed to help the owner of the website with brand management, keeping the brand to a set design, and making it clearly different from other types of brand which are very similar to your own.

If a rival company has put out a product with a virtually identical brand to your own, then you can cut down their stealing of your clients by changing the appearance of your brand. This type of brand re-positioning can also ensure that you keep up-to-date with your opposition, and don’t become the traditional website, as this can put off some buyers. There are also several different types of effects which can result from brand re-positioning. For example, you may find that changing the look and feel of your brand can make your company more relevant to the customer.

If you offer a service, then you may find that your regular customers increase their levels of use, because re-positioning the brand has opened up potential uses that the customer had not previously thought of. It may also serve to make the customer take your product more seriously. Sometimes when a website has been used for a long while, clients can feel a bit bored about your site, and re-positioning can make them think again about your products. Re-positioning can also ensure that your brand keeps up with changing market conditions that would otherwise have resulted in a drop in sales.

By constantly re-positioning the brand in the market, websites can keep themselves one step ahead of the competition, and keep up with current trends. Making sure that you don’t fall behind ensures that you retain customers and keep bringing in new ones. In the more modern era of the social network site, companies also rebrand in response to changing customer demands. Some websites may need re-positioning in order to keep the interest of ‘followers’, because it gives them something to notify their fans about, and so keep the company in the user’s memory.

Others may hear direct complaints about their current brand, and this can lead them to reposition their brand in the market, hoping to ease customer dissatisfaction with a particular part of the brand’s products. Although you may not have experienced any opposition as yet, re-positioning is a good idea even for a very small company with social networking contacts, and in order to ensure that effective branding is installed, working with a company such as www. expertsbranding. com can ensure that you keep your brand contemporary and consistent even after it has been repositioned.

SUCCESSFUL BRAND RE-POSITIONING There are three key factors in successfully planning for and delivering on brand positioning. There are of course many examples of this not going to plan and in fact companies having to back-track on their new promise to a more pragmatic place. The three components to success or consideration on this topic to be: i. Planning new positioning so that it fits within the existing reference points of the target market. Some company much like the creation of social media personas and communities and not trying to create a new identity or personality or place for the brand.

That is too far away from the existing perception of that brand in its category and market position. ii. Ensuring that the audience will grant you permission to re-position. This stage essentially encourages the brand to again consider current customer sentiment. The question is they looking for the brand to evolve and change, or are they comfortable with where it is or not even aware of the current positioning. Essentially efforts are wasted if the audience are not likely or be receptive. iii.

Finally, and I think critically, the last component is ensuring the organization delivers on the new brand promise. This seems logical, but the best examples of brand re-positioning are where brands start transforming internally and fundamentally – brand of course needs to behave like it wants to be seen. No one likes a big talker with no follow through. EXAMPLES OF RE-POSITIONING BRAND SUNKIST In this digital age where music and the virtual world dominate most of the younger generation’s daily lives, marketers have to change and adapt their strategies to reach their target market.

Recently, the American soda brand Sunkist has initiated a brand re-positioning. They are now aimed at trend savvy teens and young adults. Sunkist’s brand manager said that they just can’t rely on traditional marketing. The brand’s mother company, the Dr Pepper Snapple Group, is now utilizing YouTube, MySpace and Facebook platforms to promote their products. The company has also partnered with MySpace to promote its project. Sunkist has also created four new videos featuring young break dancers out at night.

Many brands and companies are now using digital communication mediums and social media tools for a more relevant communication strategy that is in line with their target markets’ interests and ways of life such as LG, Unilever, and Nutella. In an era when people are switching from television to computers and mobile phones, companies cannot only use traditional advertisement channels and must find new ways to reach their customers. Today, the proliferation of online platforms seems to be a great opportunity for marketers to enter this new age of communication.

There is no doubt that Sunkist’s new strategy will help the brand increase its global awareness and successfully reach their consumers. Today, the young generation is more health conscious and probably less willing to buy drinks containing huge amounts of sugar. Sunkist did their market research before launching the new campaign to ensure their brand re-positioning is a success. JOHNSON AND JOHNSON Liquid petroleum is low-value, mass-produced and has a wide variety of uses; there is huge potential for mass marketing.

The market name for this substance has been long known as Mineral Oil, used primarily for health and medical uses. But US pharmaceutical and fast-moving-consumer-goods manufacturer Johnson and Johnson bridged the gap between the initial R&D and the market-ready innovation by defining a baby-care niche: Johnson’s Baby Oil was born. This extended their ‘baby’ product range, which later also included ‘No more tears shampoo’. These products demonstrate the benefits and drawbacks of a ‘Focus’ strategy as the consequential brand re-positioning shows, operating in a niche has its limitations.

The branding of their baby oil and shampoo has highly effective in defining their niche: happy babies in above-the-line advertising, pink packaging and a trusted producer sends out all the right connotations; mothers know that these products will never harm their babies. As a result of this, Johnson and Johnson can differentiate themselves from the competition by which is the essence of what a brand should aim to do that seduces a female-orientated target market to ignore generic competitors. This may have been key to uccess as Micheal Porter’s Five Forces demonstrates, Johnson and Johnson has less power than their customers, the supermarkets, who are also trying to sell their own-brand alternatives. Hence, branding to create a niche is a competition-driven objective. However, while it was a competitive strategy, nowadays the products are marketed to a wider, mass market and the ‘baby’ niche, which limited sales, has been ditched to pursue a new sales growth aim. This is essentially re-positioning a brand.

The baby oil and shampoo, it is argued, if soft and gentle enough even for babies, then surely new consumers can be attracted to use the product, which mirrors a form of market development. Predictably, more customers equates to more sales and therefore greater revenue; also, by increasing demand Johnson and Johnson can benefit from internal economies of scale to reduce average unit costs, which boosts profit margins. But this is easier said than done: very good marketing was needed to successful reposition their products.

Ironically, therefore, the secret behind successful brand re-positioning is not to change the branding to match the new consumer, but change the consumer’s perceived ‘needs’ to match the brand. REFFERENCES Brandsource. (2009, June 8). Retrieved 4 3, 2012, from Sunkist Brand Re-positioning: http://www. labbrand. com/brand-source/sunkist-brand-re-positioning Johnson and Johnson – Brand Re-positioning. (2010, August 4). Retrieved April 3, 2012, from Johnson and Johnson – Brand Re-positioning: http://manifestedmarketing. com/tag/johnson-and-johnson/ Derrick, E. (2011, September 9). The Blake Project.

Retrieved April 3, 2012, from Branding Strategy: http://www. brandingstrategyinsider. com/2011/09/how-to-reposition-your-brand-for-higher-meaning. html Levey, C. (n. d. ). Re-positioning:Marketing Strategies. I. T . Partners. Lyle, S. (2011, June 13). The Academy of Business Strategy. Retrieved April 3, 2012, from http://theacademyofbusinessstrategy-brandre-positioning. com/ McKinsey & Company. (2001). Successful Brand Re-positioning. Marketing Practice. Norlander, T. , & Unander-Scharin, M. (2007). Re-positioning- A Brand Personality. Bachelor Thesis, 139. Ryken, C. (2011,

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Looking for Alibrandi Extra Chapter

Chapter 33 Three months have passed since Josie and Jacob’s break and the completion of their final year at school, the summer holidays are coming to an end and a new year has begun. My heavy eyes ached as I closed them listening to music. I was nearly asleep when the song I was listening to paused and my familiar message tone sounded through my headphones. I picked up my phone just as the song faded back in, my eyes blurred as they adjusted to the light of my phone screen but the only thing I could see was Josie’s name. I sat up in shock and re-read the sender name a few times before believing it.

I opened the message and started reading. ‘I’ve missed you so much Jacob, this is so hard and everything I do reminds me of you, I really want to see you again. ’ I stared at it for a moment in shock before a huge wave of emotion came over me. I kept reading it over and over thinking I must be in a dream. I didn’t know what to do or say. My mind was soon crowded with thoughts and suddenly I felt wide awake. Every day that passed I thought how I wished I was good enough to be with her, because in reality I wasn’t over Josie and I really missed what we had.

When I did reply I wrote ‘I need you in my life Josie, I can’t bear not having you next to me anymore, I miss your company and want to see you’ I pressed send and anxiously waited for a reply. I heard another buzz so I picked up my phone. ‘Meet me at Subway at 12’ she said. The morning went so fast, I was slightly nervous about seeing Josie again since it had been three months since our last encounter. I put on a t-shirt and shorts on then stood in front of the mirror as I splashed my face with water. I looked at the clock and saw it was 11:50 so I grabbed my helmet and jacket as I pushed my motorcycle out the garage.

It wasn’t until I got to the street before Subway that I realised my phone had fallen out of my pocket and I had left my wallet at home. I knew then I was going to be late and Josie was going to be left waiting. I turned around and was accelerating down the road when my bike slowed and came to a halt. ‘Could things get any worse? ’ I asked myself as I stared down at an empty fuel gage. I was scared that Josie would be thinking I stood her up and that I had no intention of getting back together with her. I had no choice at this point but to push my bike back home. All I could picture was Josie sitting at Subway all alone waiting.

I arrived back home feeling stuffed but I refuelled my bike and sped back down to Subway. I saw Josie sitting at a bus stop nearby and I knew she had recognised the familiar sound of my motorcycle. I parked and got off right beside her. ‘You actually bothered to show up? ’ she exclaimed with anger in her voice. ‘Jose I’m so sorry, I’m sorry for everything! ’ I said still taking off my helmet so my voice was muffled. I tried to wrap my arms around her but she resisted trying to be mad. Even though I knew her better than anyone and I could tell she was happy to see me.

The butterflies from three months ago had probably just filled her stomach like she told me they used to. ‘I was nearly here when I realised I forgot my wallet, then my bike ran out of fuel, I’m so sorry… I’ll make it up to you,’ I looked at her in the eyes as she pushed out a smile. ‘Let’s go, I want to take you somewhere’ I said as I grabbed her hand and she jumped on the back of my bike. We went down to the beach and took a long walk on the sand. Having that break between us was the best thing, it feels like nothing was ever wrong and we are just meant to be together.

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Study of Brand Loyalty Towards the Organized Retail Stores

Insights into Indian English Fiction and Drama Edited by Capt. Dr. Arvind M. Nawale Access -An Academic Consortium Publication ISBN No. 978-81-921254-3-5 Aspects of Campus Novel in Makarand Paranjape’s The Narrator: A Novel Shridevi P. G. The Narrator: A Novel is the well-known critic Makarand Paranjape’s debut novel, published in 1995. It is a mishmash of several stories woven together and presented to us from view-points of several writer-narrators or character- narrators.

This novel has attracted considerable interest in the academicians because of the unique narratology of the novel which is different from the rest of the Indian novels written in English. The novel is experimental, and breaks away from the conventional methods of story-telling used in Indian English Fiction. Throughout the narrative, the readers notice that there is little attempt to create an illusion of realism or naturalism. 1 With the use of multivoiced and polyphonic narration, as in the great epics Ramayana and Mahabharata, the writer tries to relocate himself with the ancient Indian tradition of the narratology. The story of the novel can be divided into three main threads: The first is the story of Rahul Patwardhan, lecturer in English at Asafia University, Hyderabad who is suffering from creative schizophrenia since his childhood and, in the process has a libidinal alter ego, Baddy. The second is the story of Badrinath Dhanda, who comes out of Rahul through emanation. The final thread is that of the movie script, Manpasand. Campus novel is a kind of novel which originated in the West but is emerging as a very prominent sub-genre in Indian English Fiction.

As David Lodge, a well-known practitioner of this sub-genre opines, Campus Novel is mainly concerned with the lives of University professors and junior teachers. 3 The present paper attempts to explore the aspects of campus novel in this novel. The novel centers around Rahul Patwardhan who is a lecturer in English at the Asafia University, Hyderabad. His reputation as a lecturer is displayed when he meets his Head of the Department in the novel. The Head of the Department does not doubt him when he lies; asking for leave for four days on the pretext of illness and reading accepts it.

This is because, this type of aberration was a recent development in Rahul’s character, and is therefore unknown to the Head of Department. The author presents the characteristics of a good lecturer through Rahul Patwardhan’s character. He is responsible about his duties as a lecturer: …. tomorrow was Monday. I had to teach. It was the beginning of a new week. I couldn’t afford to have a very late night today. But meeting him tomorrow would screw up Tuesday’s schedule. [TNAN 67] His anxiety to complete the syllabus is also depicted in the novel.

He abstains from listening to the gory details of incest when Badrinath is narrating his story. When Badri goes on describing how the ugly women are better partners then the beautiful ones, Rahul is unable to contribute his view as he is a loyal husband to Neha and thus had slept only with her. It is the curiosity generated in him by his literary sensibility or on humanitarian inclination that he expresses his wish of meeting prostitutes. He thinks, What were these women like? What did they feel? What was the meaning of their lives………I was interested in getting to see them at close quarters.

I told myself I didn’t want the sex, but only the experience of meeting a prostitute, of talking to her, getting to know her. [ TNAN 168] Rahul immediately revolts at Badri’s mention of co-habition with college girls. “For heaven’s sake, Badri, I teach them myself”. “You never know”, he continued, “you may even meet one of your students! ” “Please, Badri, stop it”. [TNAN 168] This conversation indicates Rahul’s strong professional ethics. He has also followed certain principles in life which are unfortunately jettisoned after his acquaintance with Badri.

He leaves a lot of food on his table, much against his principle of not wasting food He starts lying and finds people believing it easily He consumes beer He cohabits with a prostitute. This shows that he had been morally corrupted to a certain extent. This task of corrupting Rahul had been attempted several times by Baddy but all of them had been found fruitless. But years later Badri proves successful in this. The Novel sketches Rahul’s academic progress and his strict regimen for his Ph. D. , degree quite conspicuously. He would religiously enter the library every morning and work till the evening, often skipping his lunch.

Sometimes, I wondered if I would ever get out of the library alive. I mean, I was losing all sense of time. I thought to myself that one day they would find my bones in the musty corridors, resting somewhere among the shelves full of books. [TNAN 75] He describes his guide as a ‘cool guy’ whose motto was “Do what you like, but show me the final draft within five years”. [TNAN 75] The under note of sarcasm does not go unnoticed in this line which highlights the negligence or failure of some guides to train their research scholars. The procedure of Ph. D. degree is also briefly explained.

He says, “My five years in Hyderabad passed. I submitted my thesis in October 1986; the viva was held next year in April”. [TNAN 75] The whole description of this kind reminds one of Saros Cowasjee’s novel Goodbye to Elsa where similar kind of description of the research methodology is found. Rahul also writes an introductory guide to fiction entitled “Indian English Fiction – Theory and Practice” the first 500 copies of which are sold out in six months and it then goes into second edition. The relation between colleagues also forms an important aspect of the campus.

Here this is displayed through Rahul’s relationship with Raghavan. Their addressing each other with abusive words indicates their intimacy. Both were doing doctoral research. Though Rahul is younger of the two, he had got the job before Raghavan and thus was technically senior to him and which made Raghavan grumble. “We were, in a sense, rivals, but had never stopped being friends”. [TNAN 148] One interesting point found here is the absence of professional jealousy which is very common among colleagues and which is found in most of the campus novels like M.

K. Naik’s Corridors of Knowledge, Ranga Rao’s The Drunk Tantra, Rita Joshi’s The Awakening –A Novella in Rhyme. Students are the inevitable and the most significant aspect of campus novels. Even in this novel, the behavior and misadventures of students are pictured in an amiable way. Rahul presents two sets of students – his classmates when he was studying and his students, after he becomes a lecturer. Rahul joins Tambaram College, which had a history of 150 years but had become a semiwild campus with the kind of behavior of the students.

Music and drugs were the two things which dominated the college. “Bunking classes, acting wild, breaking rules, and doing the unconventional thing were considered hip. There was nothing worse than being a good boy; it was the most despicable way to live”. [ TNAN 55-56] The students think of themselves as the lost generation, India’s equivalent of the hippies. The senior students spent most of their time smoking and listening to music. The mention of a ‘drunken brawl’ among students is made in such a way that it is not very uncommon in colleges. In one such quarrel a student was stabbed.

An instance of suicide committed by a student is also pictured. He had consumed downers and jumped off the top floor of the International Students’ Hostel because he had stolen a large sum of money from one of his friends and had blown it all on drugs. With these instances the novelist seems to be indicating the lack of discipline and control among the students. The novelist then describes the drinking bouts of the students and the way they acquired booze. The first of the two ways of getting booze was through someone in the Air Force Station which was quite near the college.

When this became much difficult by the Commanding Officer’s instructions, the students were left with the second and the more strenuous way. The students would travel five long hours to Pondicherry and would lounge about the beaches the whole day, drinking and chattering continuously on all sorts of topics. They would then take the night bus back with one or two bottles of rum with them. They would try to trick the cops by using a very cheap bag and keeping it away from themselves. So that even in a surprise check they wouldn’t get caught.

And if by chance they get caught redhanded, they would simply give it away to the cop so that he would let them go. The students did not even hesitate to start ‘visiting’- a word used by the author for visiting a prostitute. And they were available right outside the college gates after dark. About affairs, the writer says that only rich guys could afford them by giving expensive gifts to the ‘chicks’ from the women’s college. Love affairs are an indispensable aspect of the campus and so forms one of the aspects of campus novel. But most of the campus novels exhibit a very frank treatment of sex. few examples are- Saros Cowasjee’s Goodbye to Elsa, K. M. Trishanku’s Onion Peel, Rani Dharker’s The Virgin Syndrome, etc. The Narrator also depicts sex quite freely. The novel abounds in extramarital relationships, child abuse, incest, sodomy, mental adultery, voluptuousness and pure love. Rahul’s students are brought in only in one scene but this one episode reveals a lot about the students of the present generation. When Rahul enters 15 minutes late to the class, giving the reason that he had a late night, some students titter taking his words as an indication of a private encounter.

Many students had left for coffee not to return to the class. Their lack of patience and audacity is expressed in the words-“Oh Sir, they went of for coffee when you didn’t show up until ten-fifteen”. [TNAN 96] and today’s teachers also seem to accept this kind of behavior. The novel can also be considered Crit-Fiction. “Crit-Fiction” is a kind of novel which is written by a lecturer or a professor. In the recent years many professors have started writing novels. A few examples of such Indian writers are Manju Kapoor, M. K. Naik, Amitav Ghosh, Anita Desai, Meena Alexander and others.

As Elaine Showalter puts it, the novelist before writing his novel should create or imagine a world which has some kind of logical relation to the real world, within which he can explore the themes that interest him through the narrative. The university or college provides such a world ready-made – a small world which is a kind of microcosm of the larger world. An author’s writing will be realistic if it is inspired by his experience. The author Makarand Paranjape has been able to write about the campus so lucidly because he was a professor and has the first-hand information about the aspects of campus.

It is quite interesting that in the novel The Narrator, the protagonist, Rahul Patwardhan is also a lecturer and he too is a writer. Finally one cannot afford to overlook the very unique and exalting theme of the novel which is the difficulty of writing a work of art. Rahul had such an extensive knowledge about the narratology or the art of the narrative, that he had become an inhibiting influence on Baddy, the other half of his split personality, as he shot down Baddy’s attempts of writing narratives. I knew too bloody much about the theory to let even my imagination do the actual writing. TNAN 75] He discusses his difficulty with Dr. Jenny O’Sullivan, a visiting British Council scholar, who had come to visit Hyderabad, researching on a book to be set in India. I am too critical; I cannot get to put pen to paper without scratching out what I’ve written. [TNAN 258] By O’Sullivan’s suggestion, he finds out the solution: Every attempt at creation is founded upon a similar act of deconstruction. Writing, thus, is a cruel activity. ……Before one writes one had to give birth to a writing self.

This is the self which will then invent characters, situations, and themes. [ TNAN 269] The novel The Narrator: A Novel has many aspects of campus novel in it like the kind of life lead by a lecturer, his loyalty and involvement in his academic pursuits, his struggle to produce substantial literary works, his relations with his colleagues and students; the behavior of the students, their misadventures; the lavish lifestyles of students who are not disciplined either by the parents or the authorities in the college, their love affairs etc. re delineated in a very conducive way. The protagonist’s views both as a student and then as a lecturer are involved in the novel. Makarand Paranjape has been able to throw sufficient light on all these aspects of campus life as he has been a professor and very well-acquainted with the campus. So with the points discussed so far, The Narrator: A Novel can be considered a campus novel. Works Cited 1.

Rahul Chaturvedi, “Self as Narrative in The Narrator: A Novel: A Narratological Perspective”, The Criterion: An International Journal in English, ISSN 0976-8165 Vol. II. -Issue 1, 2011. 2. http://www. makarand. com/reviews/ReviewsofTheNarrator. html. 3. http://is. muni. cz/th/66512/ff_b/Bakalarska_prace_24. 4. 2006. doc 4. Makarand Paranjape, The Narrator: A Novel, (New Delhi: Rupa & Co. 1995), Hereafter cited as TNAN with page nos. in parentheses. 5. Showalter, Elaine- Faculty Towers: The Academic Novel and its Discontents; Oxford University Press, 2005.

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Brand Management Mid Term Study Guide

Biswas: Brand Management (MAR 6936; Spring 2013) MAR 6936: MIDTERM EXAM STUDY GUIDE Exam Format: The exam will have a mix of multiple-choice questions and short answers, with a higher total number of points for short answer questions. NOTE: Anything and everything covered in class (through lectures, discussion, articles, activities, etc. ) and/or posted on Blackboard, are potential exam material. The topics listed below can be used as a Study Guide.

However, from an exam point of view, that does NOT preclude the other material covered in class. Introduction to Basic Issues: defining a brand; new challenges; the concept of brand equity; steps in the strategic brand management process. Branding Innovations and New Products: Issues in branding innovations; different options in naming a new product/innovation; becoming brand exemplars; first mover issues; reasons for new branding innovations to succeed versus fail; reasons for branding an innovation.

Brands, Branding, and Meaning of Brands: Brands and competitive advantage; brand story/meaning; brands and competitive advantages; brands as signals of product quality; designing branding strategy. Brand Positioning: Defining comparative frames of reference; issues related to PoP and PoD; brand positioning; product category membership; challenges in positioning; core brand values; brand mantras. Brand Extensions and Brand Portfolios: When are brand extensions appropriate? When are they successful/unsuccessful?

Advantages/disadvantages of brand extensions; key aspects of brand portfolios; criteria for cutting down brands and brand extensions from a portfolio. Managing Brands over Time: Long-term vs. short-term foci and the related strategies; revitalizing a fading brand; improving and reinforcing brand image over time. HBS Cases: You should be familiar with the concepts/principles that we discussed in class in the context of the HBS cases, such as traditional vs. non-traditional branding strategies and breakaway positioning strategy.