Brand Portfolio Mgt. Presentation Pdf

LANGBERG & CO.

Since 1989

LANGBERG & CO. INTEGRATED GO-TO-MARKET STRATEGIES TM

Since 1989

www.langberco.com

Copyright Langberg & Co. 2009

LANGBERG & CO.

Since 1989

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WHAT IS LANGBERG & CO.

A consulting and ventures firm with three areas of focus: 1.

Product / Customer / Sales ● Profitable customer segmentation and customer insights ● Product development or rejuvenation ● Brand portfolio management ● Channel optimization including sales force and distributor effectiveness

2.

Operations / Supply Chain / Manufacturing

● Network optimization, including the number, location, and size of dist. & manufacturing facilities ● Sourcing partnerships ● Product life cycle mgt. where products are optimally integrated into the supply chain

3.

Mergers & Acquisitions – factory to consumer integrated due diligence

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A trademarked process to ensure strategy and operational integration – Avoid academic theory

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20 years of enriching B2B and B2C companies

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Only senior level executives

Copyright Langberg & Co. 2009

LANGBERG & CO.

Since 1989

WE WORK WITH LEADERS

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Sprint

● American Standard

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Butler Manufacturing

● Mannington Mills

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CSX

● J&L Specialty Steel

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Cook Compression

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Hallmark

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Michelin

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Crayola

Copyright Langberg & Co. 2009

LANGBERG & CO.

Since 1989

BRAND PORTFOLIO WORKSHOP & FACILITATION

Copyright Langberg & Co. 2009

LANGBERG & CO.

Since 1989

Today’s Goal Lay the foundation to objectively evaluate the need for 1, 2 or 3 brands and their value and profitability to the company’s overall brand portfolio.

Copyright Langberg & Co. 2009

LANGBERG & CO.

Since 1989

What Type of Company Are You?

DEFINITION & EVOLUTION OF “DRIVEN” COMPANIES Manufacturing Driven - 1940’s – 1970’s Develop products and go-to-market strategies primarily based on equipment utilization

Sales Driven – 1970’s – 1990’s Develop products and go-to-market strategies primarily based on the “voice of the sales force”

Marketing Driven – 1990’s to present Develop products and go-to-market strategies primarily based on the “voice of the customer” and external dynamics • • • •

Customer (properly defined and segmented) Competition (properly defined) Legislation Societal environment Copyright Langberg & Co. 2009

LANGBERG & CO.

Aligned & Integrated For Profitable Growth

Since 1989

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16.

Concept Formulation Features & Benefits Definition Target Audience Definition Positioning Statement Product or Service Mix Distribution Channels Pricing Sales & Selling Processes & Disciplines Customer Care Processes & Disciplines Packaging Graphics & Design Site Selection Criteria Promotional & Merchandising Programs Supply Chain Management Human Resources Plan Management Information Systems

Strategic Elements

Tactical Elements

Enabling Elements Continuum Marketing; Copyright Leslie S. Langberg 1989-2009

LANGBERG & CO.

Aligned & Integrated For Profitable Growth

Since 1989

1. 2. 3. 4.

Concept Formulation Features & Benefits Definition Target Audience Definition Positioning Statement

•

Structure – 3 Core Components −

Strategic Elements

Target Audience Definition The attitudinal and demo (firmo) graphic description of the primary prospect to whom the brand is intended to appeal

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Frame of Reference The category in which the brand competes; the context that gives the brand relevance to the target audience

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Benefit Statement The most compelling and motivating meaningful benefit that the brand can own (or have a first-to-market sustainability) in the hearts and minds of its target audience relative to the competition Continuum Marketing; Copyright Leslie S. Langberg 1989-2009

LANGBERG & CO.

Since 1989

Brand Portfolio Mgt.

• Objective −

Specify the roles and relationships of a company’s brands to one another ensuring they are clearly positioned and marketed to the company’s target audience(s).

• Key Advantages −

Avoid consumer and customer confusion

− Ensure internal efficiency by preventing investment in overlapping product development and or marketing efforts −

Maximize overall profitability and market share

Copyright Langberg & Co. 2009

LANGBERG & CO.

Since 1989

Types of Branding

• Private Label A brand created and owned by a reseller of a product

• Co-Branding Using established brand names of two different companies on the same product (in most cases one company licenses the other to use with its own)

• Line Extension Using a successful brand name to introduce additional items in a given product category under the same brand name

• Brand Extension Using a successful brand name to launch a new or modified product in a new category

• Multibrands Introduction of additional brands in the same category

Copyright Langberg & Co. 2009

LANGBERG & CO.

Line Extension

Since 1989

Using a successful brand name to introduce additional items in a given product category under the same brand name Pros −

Low-cost, low-risk to introduce new products

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Meet consumer demand for variety

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Utilize excess capacity

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Command more “shelf space” from resellers

Cons −

Lose its brand meaning

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Cause marketplace frustration – with both resellers and consumers

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Could come at the expense of other items in the line Works best when it takes sales away from competing brands, not when it cannibalize a company’s other products Copyright Langberg & Co. 2009

LANGBERG & CO.

Brand Extension

Since 1989

Using a successful brand name to launch a new or modified product in a new category Pros −

Typically saves high advertising costs needed to build a new brand

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Gives a new product instant recognition and faster acceptance

Cons −

Unsuccessful brand extensions can de-value the core brand

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The “mother” brand can lose its meaning through brand extensions that “don’t fit.”

The brand extension must have the “permission” of the marketplace to work best Copyright Langberg & Co. 2009

LANGBERG & CO.

Multibrands

Since 1989

Introduction of additional brands in the same category Pros −

Establishes different features and appeal to different buying motives

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Secures more resellers and or more shelf space

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Protects the core brand by setting up flanker or fighter brands

Cons −

Typically each brand secures a small share, each fighting to be profitable

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Spreads the company’s resources

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Brands are often developed to appease resellers, claiming exclusivity or provide a veil of “non-competing” brands

Works best when there is identifiable differentiation in features and appeal to different buying motives Copyright Langberg & Co. 2009

POSITIONING STATEMENTS: MUST THEY BE UNIQUE?

LANGBERG & CO.

Since 1989

No. In a commodity category highlighted with relatively shortlived advantages in technological advances – virtually all of which are duplicated within a short time frame by competitors finding a unique benefit with sustainability is difficult. Consequently, the players in the category need to compete largely on how well they: 1.

Can accurately understand customer needs and desires – both rationally and emotionally driven;

2.

Can align those needs and desires with their internal business functions (manufacturing, product development, marketing, etc.);

3.

Can assist their respective distribution channels build a meaningful bridge to the consumer and;

4.

Can tactically execute and sustain that execution against a defined strategic position. Copyright Langberg & Co. 2009

LANGBERG & CO.

Since 1989

A MARKET LEADER

• A firm that has the largest percentage total sales revenue of a market or product. Often dominates its competitors in: − − − − − − − −

Customer loyalty Distribution Coverage Image Perceived value Price Profit Promotional spending

LANGBERG & CO.

Since 1989

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ATTACKING A LEADER The cardinal rule in offensive strategy is not to attack a leader head-on with an imitative strategy • Successfully attacking a leader requires that a challenger meet three basic conditions.

LANGBERG & CO.

Since 1989

CONDITIONS FOR ATTACKING A LEADER

1. A sustainable competitive advantage – in either cost or differentiation. Without sustainability the challenger will not sufficiently have time to close the market share gap before the leader can imitate. 2. Proximity in other activities – the challenger must have some way of partly or wholly neutralizing the leader’s other inherent advantages. Unless challenger maintains cost proximity, the leader will typically use its cost advantage to neutralize the challenger’s differentiation. Attack on a cost advantage alone must create an acceptable amount of value the the buyer. 3. Some impediment to leader retaliation – The leader must be disinclined or constrained from protracted retaliation against the challenger or a changing marketplace.

LANGBERG & CO.

Since 1989

A LEADERS MANDATE

• Pursue strategies and programs to strengthen and protect its position • Build total demand for its products – consumption, more usage, new users • Product innovation • Market share growth • Assess and address competitive threats – quickly!

LANGBERG & CO.

ADDRESSING COMPETITIVE THREATS

Since 1989

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Two Key Tactics • Blocking −Countering a competitive thrust with a forceful, direct response • Covering −A replication of a competitive move, not allowing a competitor to occupy “marketing” space that might pose a danger to the ongoing success of its products • Typical Considerations −Service −Distributor programs −Product attributes −Price −Warranty −New product or brand

LANGBERG & CO.

Since 1989

The Value Equation A View Incorporating Brand Equity

Value = Price (P) + Tangible Attributes (T) + Brand Equity (B)

Undifferentiated

Meaningful & Differentiated

Innovation

Tangible Attributes Product and service related features and benefits Brand Equity Trust, longevity in marketplace, social responsibility, consistent performance, etc. Copyright Langberg & Co. 2009

LANGBERG & CO.

Since 1989

The Value Equation

As tangible attributes (T) and brand equity (B) decrease in value (i.e. become less differentiated), price (P) becomes the major component in the value equation. >P = B =

Copyright Langberg & Co. 2009

LANGBERG & CO.

Since 1989

Attack Yourself

1. If we were starting a company and had significant VC

money behind us, how would we attack AO Smith to steal share? 2. How many brands would we go-to-market with? 3. If more than one, how would we differentiate the

brands and… 4. Would we offer the brands to all distributors?

Copyright Langberg & Co. 2009