session 17 managing the brands
TRANSCRIPT
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How to manage brands and product line portfolios?
On which brand to invest?Which brand to wind up?
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Company operates in various businesses or markets.
Each of its businesses operate in different conditions.
Each of businesses will earn different amount of profits.
Each of businesses require different amount of investments.
Corporate should learn to expect different amounts of profit
from its different businesses.
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Question Marks Divisions in the quadrant-I
(High growth market/low market share)
Cause a drain on cash flow as they incur huge marketing
expenditure in reaching out to growing no. of customers.
Incur costs in setting up new manufacturing units to be able to
serve the growing markets.
Low share products.
These products are cash users.
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Stars Divisions in Quadrant-II
(High growth/ High market share)
Market leaders and earn high revenues
Substantial investments to meet competitive challenges.
Cash flow is roughly unbalance.
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Cash Cows Divisions in Quadrant-III
(Low Market growth/High Market Share)
Investment in new production facilities.
Marketing is minimized.
High market share leads to positive cash flow.
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Dogs Divisions in Quadrant IV
(Low Market growth/Low Market Share)
Earn low revenues or negative cash flow.
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Question Marks:(High growth market/low market share)
Market Development
Market PenetrationProduct Penetration
Forward Integration (Availability of Huge resources)
Backward Integration (Availability of Huge resources)
Horizontal Integration (Availability of Huge resources)Concentric diversification (To reduce narrow product line)
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Stars Divisions inQ
uadrant-II
(High growth/ High market share)
Market Development
Market Penetration
Horizontal Integration
Divesture
Liquidation
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Cash
Cows Divisions in
Quadrant
-III
(Low Market growth/High Market Share)
Retrenchment
Concentric diversification
Horizontal diversification
Conglomerate diversification
DivestureLiquidation
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Dogs Divisions inQ
uadrant-IV
(Low Market growth/Low Market Share)
Concentric diversification
Horizontal diversification
Conglomerate diversification
Joint venture
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General Electric 9-Cell Matrix
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GE 9 cell market attractiveness competitive position matrix:
Businesses of the corporate operate in different markets and
are at different stages of evolution. The effort is to classify the
businesses in a way that the corporate is able to identifyappropriate investment policies and strategies for each of its
businesses.
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Business Strength (X-Axis):
Current Market Share
Size
Profitability
Technology Position
Image and People
Market Attractiveness (Y-axis):
Market size
Market Growth rate
Profit potential
Competitive Structure
Economies of Scale
Environmental and Social Impacts
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Product Strategies for growth:
Marketers always lookout for the new ways to grow their businesses.
Marketers have four variables:
Existing Market
New Market
Existing Products
New Markets
Growth Strategies
Market Penetration
Product Development
Market Development
Diversification
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Market Penetration :
Penetration in the existing market with the existing products.
Brand Building
Existing customers become brand loyal.
Product Development :
Develop new products for current markets.
Gain high sales among its present market.
Market Development :
Existing products sold in new markets.
Diversification
New products for new markets.
This strategy is better if synergy exists between existing products and new products.
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Ansoffs matrix growth strategies
Market
Penetration
Market
Development
Product
DevelopmentDiversification
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PRODUCT RECALLS
Employees should understand the link between recalls and
customer satisfaction and safety, and the effect of the recall on
company success.
Company should check if the company is suffering from kill themessenger.
Kill the Messenger culture that prevents news of product
problems from reaching the right people.
Responsibility should be assigned to one senior executive.
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Recall should be seen as a task to use marketing skills to retrieve
the products from the customer.
The recall manager should appoint a response team to manage
the recall on a daily basis.
The team evaluates the situation, it should determine the scale ofresponse and the type of recall to be adopted.
Crisis management team of the company should handle the
communication efforts on all the fronts.
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If the response team concludes that a recall action is warranted,
it should get into the act fast.
It should decide who will make the announcement, when and
what he will say.
It has to decide as to who will accept the faulty products, how
the returned products will be monitored and who will provide therepairs or replacements.
During the recall, the response team should keep customers
properly informed and persuade them to complete the necessary
exchanges.
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They can also plan a especially recall advertisement.
Logistics and information system should have the ability to
accept notification of product defects.
Provide toll free customer service line operated by people who
understand how to react and who know whom to report to if acustomer calls.
System should be able to isolate the product defect by batch,
plant, process or shift though use of identifiers such as serial
numbers.