FIRM BRAND AND PRODUCT LINE OBJECTIVES Firm objectives

FIRM, BRAND, AND PRODUCT LINE OBJECTIVES Firm objectives l l Specificity Distinctiveness Realism “Balance” within market Brand objectives l l Relation to firm objectives Balance Product line objectives l BSAD 113 Relative to firm and brand objectives FIRM, BRAND, AND PRODUCT LINE OBJECTIVES Lars Perner, Instructor 1

Firm Level Objectives Usually ultimately to maximize present value of total profit—but HOW? l Specificity l l BSAD 113 Distinctive competencies Leveraging of other resources Market balance Willingness/ability to assume risk FIRM, BRAND, AND PRODUCT LINE OBJECTIVES Lars Perner, Instructor 2

Specificity Distinctive competencies l l Product development Manufacturing l Quality Cost effectiveness Timing l l l BSAD 113 Leveraging other resources Distribution Promotion l l l Brand image People Running facilities Contacts Financing l l Equity/cash Ability to raise money FIRM, BRAND, AND PRODUCT LINE OBJECTIVES Lars Perner, Instructor 3

Market Balance Differentiation tends to reduce—but not eliminate—price competition E. g. , clothing retailing l l l l BSAD 113 Mass market: K-Mart, Wal-Mart Department upscale: Nordstrom Department: Sears, J. C. Penney Full service, general category Sole brand: Laura Ashley, T. Hilfiger Special target: Gap Specialty stores Liquidation/outlet FIRM, BRAND, AND PRODUCT LINE OBJECTIVES Lars Perner, Instructor 4

Market Balance Prepared food l Upscale restaurants l l Hamburger Ethnic Niche l BSAD 113 Chinese, Mexican, Argentine Fast food l l Affiliated Unaffiliated Specialty/ethnic l l Beverages… Health FIRM, BRAND, AND PRODUCT LINE OBJECTIVES Lars Perner, Instructor 5

Risk For higher level of risk, a higher rate of return is generally necessary Some risks l l l Liquidity Short term earnings Long term l l l BSAD 113 Damage to brand Loss of resources Other profitability impact FIRM, BRAND, AND PRODUCT LINE OBJECTIVES Lars Perner, Instructor 6

Brand Objectives Ultimate objective: Contribution to overall firm profitability Implementation objectives l Margins: l l BSAD 113 Absolute vs. percentage Long term vs. short term Volume/market share Prestige/brand premium FIRM, BRAND, AND PRODUCT LINE OBJECTIVES Lars Perner, Instructor 7

Distribution Issues in Brand Objectives Margins l l Absolute vs. percentage Product line issues Long term vs. short term —brand building vs. “harvesting” Volume/market share l l Cost of production/marketing Selectivity of distribution Brand premium l l Quality of brand Specialization/ niching l l Service l l l BSAD 113 Variety/selection Specialization to target market Adaptation Warranty Support Training FIRM, BRAND, AND PRODUCT LINE OBJECTIVES Lars Perner, Instructor 8

Product Line Objectives Objective: Maximize overall contribution of product line l l BSAD 113 Margin components (e. g. , printers vs. supplies) Promotion (e. g. , Coca Cola clothing) Ease of availability Building vs. harvesting FIRM, BRAND, AND PRODUCT LINE OBJECTIVES Lars Perner, Instructor 9

DISTRIBUTION OBJECTIVES: THE BIG PICTURE Distribution to achieve firm objectives Tradeoffs between distribution options l l l BSAD 113 Cost Selectivity/ image Intensity Service impact Opportunities FIRM, BRAND, AND PRODUCT LINE OBJECTIVES Lars Perner, Instructor 10

Some Very Interrelated Objectives! Selectivity/Intensity l l l Exclusivity Service/support capacity Dealer loyalty Visibility Convenience vs. l l BSAD 113 Cost vs. l l l Speed Intensity Brand image effects Specialization Channel relations Cost Brand image FIRM, BRAND, AND PRODUCT LINE OBJECTIVES Lars Perner, Instructor 11

Some Tradeoffs Reach vs. exclusivity l Consumer behavior l l Willingness to search Purchase situation l l BSAD 113 Planned Impulse Semi-planned, location specific Brand effects FIRM, BRAND, AND PRODUCT LINE OBJECTIVES Lars Perner, Instructor 12

Some Cosmetics Outlets Prestige l l Upscale department stores Company stores Specialty stores Personal selling Impulse l l Vending machines Convenience stores Other intensity l BSAD 113 Planned purchase l l l l Category discounters (e. g. , Sally Hansen) Supermarkets Discount stores Avon ladies Specialty catalogs Department stores Impulse Supermarket checkout Hair/beauty salons College book stores FIRM, BRAND, AND PRODUCT LINE OBJECTIVES Lars Perner, Instructor 13

More Tradeoffs Reach vs. dealer service/support l l Advice Accessories l l l BSAD 113 Product specific Complementary Warranty service/repairs FIRM, BRAND, AND PRODUCT LINE OBJECTIVES Lars Perner, Instructor 14

Reach vs. Dealer “Loyalty” Upscale dealer is often more interested in pushing exclusive brand Effects of loyalty l l “Push” of brand Service/support However, brand may not develop identity of its own BSAD 113 FIRM, BRAND, AND PRODUCT LINE OBJECTIVES Lars Perner, Instructor 15

Cost of Distribution vs. Speed Intensity Visibility Brand image effects Specialization Channel relations BSAD 113 FIRM, BRAND, AND PRODUCT LINE OBJECTIVES Lars Perner, Instructor 16

Some Distribution Opportunities Product promotion l l l Shelf-space Demonstrations Placement “Parallel” distribution l l Factory outlets Electronic/catalog Partnerships (joint distribution and promotion) BSAD 113 FIRM, BRAND, AND PRODUCT LINE OBJECTIVES Lars Perner, Instructor 17

Deciding on a Distribution Strategy Consumers l l Focus groups, interviews, surveys Scanner data l l l Observation in the field l l BSAD 113 Frequency of purchase Correlated purchases Communication with distributors (retailers, intermediaries) l l Meetings/calls Trade shows Usage Purchase l Decision method l Competing products l Complementing products FIRM, BRAND, AND PRODUCT LINE OBJECTIVES Lars Perner, Instructor 18