Brand Extension Essay

Brand Extension Essay.

Brand extension is a marketing strategy according to which a company marketing a product or a service launches a new offering (product or service) that is related to the one of the existing brands of the company, but offers different benefits and/or targets a different segment. Organizations use this strategy to increase and leverage upon their brand equity. When a firm is introducing a new product, it has the following 3 choices on branding: 1. Developing a new brand for the new product

2. Using the existing brand for the new product
3. Combining the new brand and the existing brand

The use of 2nd and 3rd strategy is referred to as brand extension. Brands may be classified as one of the following: Parent Brand: If an existing brand gives birth to a brand extension, it is referred to as parent brand. Sub Brand: When a new brand is combined with an existing brand, it is called as sub brand. Family Brand: If a parent brand has links with multiple brands through brand extensions then it is called as family brand.

Brand Extension Dimensions

There are a large number of ways in which brand extension can be accomplished. One of the vital differences is if the extension is in the same or different category of the product. Thus they can be classified as: vertical or horizontal extensions.

Vertical extensions

Vertical extensions refer to the introduction of a related brand in the same product category but having a different price and quality balance. Vertical extensions offer the firm a quickest way to leverage upon the core product’s equity. As an extension strategy, vertical extension is widely practiced in many industries. For example, within automobile industry, the various brand models attempt to offer different price-quality bundles to attract various market segments. Often a product is extended in an attempt to just gain more of the market share.

Vertical extension direction

New product introductions using vertical extensions can extend in 2 directions, upscale and downscale vertical extensions. The vertical brand extension is that type of new product introduction that seems to be carrying less risk and seemingly having more appeal to management. The new product which is being introduced is in the same category as the parent product; aims at a same market segment as the parent, and may or may not enjoy the same acceptance as the parent.

Upscale vertical extensions

Upscale extensions involve a new product introduction by the firm with higher price & quality characteristics than the original product.

Downscale vertical extensions

It involves a new product introduction with lower price & quality characteristics than the original. Downscale vertical extensions may target sampling to a new segment, and bring some gain in market share.

Horizontal extensions

Generally, horizontal brand extensions either use or extend an existing product’s name to a new product in the same product category or to a product category new to the organization. There are 2 types of horizontal extensions which differ in terms of their focus area. They are termed as line extensions and category extensions.

Line Extensions

All the customers differ in terms of their usage needs. The brand has to fill the market with variety of products as per the needs of the segments. If a parent brand is used to brand a new product that targets a new segment in the market within the same product category that was previously served by the parent brand, it is called as line extension. Line extension leads to the addition of a new and distinct flavour or ingredient to the category. It sometimes might also lead to a new application for the brand or an introduction of a different form or size. For example, Bisleri is the pioneering brand in category of mineral water. Originally, Bisleri started off with 1 ltr bottle. But recently, the brand has launched bottles of different sizes and quantities.

Brand Extension Essay

Brand Personality Assessment of Royal Enfield Essay

Brand Personality Assessment of Royal Enfield Essay.

Introduction

Manufactured in Redditch, UK, the Bullet was the culmination of designs that date back to 1933. The classic 350 cc model made its debut at the Earl’s Court motor show in 1948 and was an immediate success. Its big brother, the 500 cc came along later, in 1953. In 1955, a satellite factory was established in Madras, India, to meet demands from the Indian Army. When the UK factory closed in 1970, the Madras plant continued production. In 1994, Enfield India was acquired by the large engineering group, Eicher, which has since made a number of improvements to the bike.

However, despite these, its distinctive appearance remains unchanged and provides an opportunity to enjoy the privilege of riding a “classic” reproduction bike. First World War (1911–1920) Inter-war years (1921–1939) Second World War (1939–1945)

1913 Enfield 425cc 1923 Royal Enfield 225cc 1941 Royal Enfield 250cc

Royal Enfield in Nepal

All the Royal Enfield motorcycle in Nepal is imported from India by Dugar Brothers and Sons. It is manufactured in Chennai, India and by 2013 its Pune branch will also start manufacturing and the facility will be of same capacity.

Currently 70,000 to 75,000 units of motorcycle are manufactured in a year. Dugar Brothers and Sons is the sole distributor of Royal Enfield in Nepal. It branches are in Kathmandu, Narayanghat, Birgunj, Nepalgunj and Biratnagar. Among these branches Narayanghat and Biratnagar branch has the highest number of sales. It has many distributors spread around the nation. Among all the branches and distributor the most number of Royal Enfield motorcycle is sold by the dealer in Pokhara and dealer in Butwal’s sales volume is the second highest. The highest number of sales is usually during festival season. Royal Enfield Bullet Electra/classic 350 cc are the two most selling brand here in Nepal and the same product of 500 cc is the second highest selling Royal Enfield bike.

Royal Enfield’s most popular brand of today is Bullet and it is often taken as synonymous to Royal Enfield. And this is the only bike in the 350 cc and 500 cc segment of bike here in Nepal. And thunderbird segment is least popular and not sold currently. Royal Enfield was first manufactured in England more than hundred years ago. It has a long legacy and a war history as this motorcycle was used in both first and second world war. It has always been perceived as a quality product and it has been able to retain the same perception even after a century and it has been able to position itself as a Luxurious, Premium and a quality product. Royal Enfield’s target customers for Nepal are upper middle and upper class segment. It faces competition from new brands like KTM Duke, VR and others sports bikes. But it has its own set of loyal customer and these competitors are of very little threat to them as the model and performance both vary largely from other bikes. It is a premium brand and its part and maintenance cost is high as well and it even consumes more fuel as its millage is about 20-25 Km per liter of petrol and petrol in Nepal is expensive too. It is a luxurious item for Nepalese people and hardly used by a middle class commuters.

There is no age limit for the product like Royal Enfield Motorcycle as people from teen to older generation of 45 and above still have the love for the bike. Customers of this bike can be adventure rider, traveler, once that have the love for classic things or admirer of a legacy it carries. Royal Enfield has become very popular among the youngsters of Nepal. They seem to prefer this brand among other. Although it does not have a proper showroom in city area where most bike showrooms are located instead it has only one show room inside the industrial state of Kathmandu but still it has been selling the same unit of bike as it used to when it had its showroom in New Baneshwor as well. Its market share is only about 1% of total market share in the two wheeler segment. People buying Bullet usually find the place to buy the bike as it is a premium product here in Nepal and people generally come prepared through research in internet visiting www.royalenfield.com of India and as same bikes are imported and sold here in Nepal adequate information can be gathered from there and they find the place to buy the bike through friends and relatives or from NTC call centre which will provide the phone number of the distribution centre on demand.

The point of difference for the Royal Enfield with other two wheeler motorcycle is its physical strength, quality assurance, retro look and traditional system still incorporated and above all it is the oldest two wheeler company. The price of the motorcycle is not over charged as well for the segment of the bike it lies in. Royal Enfield has not changed with advancement of the technology. This bike is still very similar to the bike that was produces decades ago. But this is what customer mostly like about the brand and it even has even advertised its classic chrome saying “old school magic, recreated” and this brand has really done well in the market in terms of sales. Nut there is still that segment in the market that would like to own a Royal Enfield but want it with a change and new technology incorporated; keeping this in mind Royal Enfield has come up with a Thunder Bird 500 cc with led light, double disk brakes and other various changes which will soon enter the Nepali market as well. There are various clubs like Nasa Bullet Club (managed by distributor themselves), Himalayan Enfield and Sector Summit in Nepal that unites Royal Enfield owners and organizes tours and rally.

These rally and tour are also a source of promotion and it has been able to lure more customers to the showroom. People like to get associated in such events and to do so they even buy the motorcycle. When other clubs organize such events the distributors mostly participate through sponsorship. They participate in different auto show like NADA Auto Show. They publish print advertisement in popular national daily newspaper every fortnight and even influence some magazines to cover a story of the Royal Enfield. They do not do television commercials but appear in programs like Wheel Factor in news 24 where over all description of the motorcycle is given. The main reason for the company not being able to tap all the potential market is its age old technology which requires special knowledge for the maintenance of the Motorcycle.

Customers have different types of problem and most number of customer complain is about the limited number of service centre which makes it very difficult for customer to have their motorcycle repaired and moreover private workshop owner are not capable to repair the bike as it has a very complex engine, and its engineering is also very different from other motorcycles of today which make it very difficult for every motorcycle mechanic to have idea to repair the motorcycle so customers had suggested them to have service centers in different location rather than having a single service centre. Keeping this in mind the Dugar Brother and Sons even had a workshop and training program for the existing workshop owner and the interested new people who want to open a motorcycle workshop. The training was for free and it had a good number of enthusiasts joining the program.

Customer’s attitude towards Royal Enfield

I had interviewed few Royal Enfield owners and there was mixed comments on the motorcycle. Pride, power and superiority was something that everyone pointed out. They were satisfied with the functionality aspect of the bike and loved the sound emitted by the bike. On asking what made them buy the bike I found out that it was the retro look of the bike, the sound it emits, the powerful engine and the pride that comes with the bike. they even shared their experience they had joining different tours from Royal Enfield owners club, they found such tours very interesting and exciting as they would mostly travelling in a group and in the rest point they would have various activities for entertainment and they could socialize with the likeminded people on the tour as well. Riding Royal Enfield gives them a certain level of satisfaction, joy, pride, excitement and confidence. They said it was very comfortable on a highway; bike really gets lighter as you race it and even turning will be easy. The main problem that everyone indicated was the limited number of service centers and workshops.

People have faced many problem due to unavailability of service centers that could fix the Royal Enfield bike and due to the complex nature of bike every mechanic cannot repair and maintain the bike thus the owners really gets in trouble when there is problem in the bike as they have to take the bike to some limited number of service center of Royal Enfield. They said it would be better if the bike adopts some new technology like led headlights, fuel indicators, tubeless wheel etc but without changing the appearance, as it has already introduced self start on the bike and is of huge success. Another well recognized problem was the high maintenance cost and expensive parts of the Royal Enfield. Where normal bikes that run in the street of Kathmandu run on an average of 1 liter engine oil it needs 2.5 liters which makes the regular maintenance cost double the cost of normal bike. Moreover the costly part that is not readily available and takes long lead time for arrival and the labor cost associated with it is also higher making it more expensive to keep and maintain. It is because of this reasons people despite their outmost love for the bike had to sell their beloved possession, and some don’t even buy the product when they know all these about the product.

Positioning of Royal Enfield as a brand

Royal Enfield has positioned itself as a premium brand in Nepal and targeted upper middle and above class of people but it is actually for middle class people in India. It is perceived as a quality product. Although it is made in India people because of the age old legacy it carries people are confident on its performance and quality. It is targeted for travel enthusiasts and adventure riders more than for daily commuters. Although its price with reference to its engine cc is not that high its spare parts and maintenance cost is definitely high which makes it more attractive to the upper middle and above class of people. It spends very less in advertisement and promotion, still people find their ways to learn about the bike and buy it even if they have to search for the vendor. People find pride in owning the bike. There are different clubs started by the authorized dealer and likeminded people who love to ride and own the bike.

FINDINGS

Aaker’s Brand Personality Scale

A sample size of 16 responded were asked to fill the questionnaire, which included the five major factors (i.e. sincerity, excitement, competence, sophistication and ruggedness) with their underlining facets as suggested by the Aaker’s model. Respondents were asked to rate how descriptive each
personality trait was for Royal Enfield on a 7 point scale (1being extremely not descriptive & 7 being extremely descriptive). The summary of the result is shown below

Factors| Ratings |
Sincerity| 1.0555|
Excitement| 1.6420|
Competence| 1.3203|
Sophistication| 0.9687|
Ruggedness| 1.8125|

From the obtained result we can say that Royal Enfield as a brand has received high scores on all except the sophistication. The reason behind the brand to score low point in the sophistication factor might be because the customers are actually looking for the age old traditional antic bike which has very less modification to its original design thus making it less sophisticated and people like it that way.

Projective Technique

Here in the research I have used a comparison task to uncover the true feelings of the respondent about the brand. The respondents were asked to compare Royal Enfield with animal, activity, car, music, perfume, profession, sports, emotion and fabric and provide reason for their selection as well.

Royal Enfield and animal
Most of the respondent has compared the Royal Enfield with animals like Lion, Tiger, Rhinoceros, Giraffe and Dog. The highest number of respondent however has compared the brand with Lion because of its appearance, its power and king’s status in jungle and the roar which is comparable with the sound emitted by the bike. It is compared with tiger looking at its strength and toughness. Rhinoceros was mostly selected for classic and huge body of the bike. One respondent has even compared the bike with dog keeping the sound in mind he has compared it with the dogs barking.

Royal Enfield and car

Royal Enfield has been compared with different cars. The highest number of respondent has compared Royal Enfield with beetle because of its classic look. The respondents have a feeling that Royal Enfield is classy and are totally different from other bikes. Similarly, it has been compared with several other cars like Hummer, Ferrari, and BMW because of its sound and advanced technology.

Royal Enfield and occupation

All the respondents have come up with an individual occupation. Fashion Stylist as an occupation is somewhat mentioned by most of them. Royal Enfield however is compared to Fashion icon because of its classy, antique look and because of its individuality. Moreover, Royal Enfield is also compared to the job of Army, engineer, drilling mining because of the effort and power it possess.

Royal Enfield and Sport

The highest number of respondents has compared Royal Enfield to Football because of the enthusiasm and excitement it possesses while playing it. Moreover, Golf is the next highest sports that have been compared to Royal Enfield because of its nature. The respondents has revealed that playing golf shows your standard similarly riding Royal Enfield shows your Status and shows your living standard. Royal Enfield has been somewhat been compared to bike racing, ping pong, rugby, swimming, Marathon and Baseball.

Royal Enfield and TV Show

The highest respondents compared Royal Enfield to a TV show” FRIENDS” and “ How I Met Your Mother”, which has revealed some different opinion towards Royal Enfield, which says that these shows makes you feel so attached to each other and so delighted everytime you watch it, likewise riding Enfield gives you the same feeling of delightness and attachment .One of the respondent has compared Enfield to a show ‘ Mind Your Language’ where the show makes you laugh loud and this laughter has been compared to the sound that Enfield emits. Similarly, Enfield has also been compared to a show like ‘Kofee with Karan’ where I see no relevance . Moreover other shows like Larry King Show, X-factor, Pimp my ride has been compared to the Royal Enfield.

Royal Enfield and Perfume

Most of the respondents have compared Enfield to ‘GUCCI’ because of its unique fragrance and its brand which depicts that Enfield has its own uniqueness in every other way. Moreover, Enfield has also been compared to AXE because of its strong attachment. Enfield has also been compared to other Perfumes like VERSACE, Channel, Playboy, Hugo Boss, Brut, Euphoria because of its masculinity.

Royal Enfield and Fabric

Some of the respondents have mentioned silk because of its softness and smoothness and some have compared Enfield with RUG which depicts its roughness meaning the bike is rough and tough. Some other respondents have mentioned that Enfield should be compared to such a fabric which shows its masculine power being very tough one. Some have compared Enfield with leather jackets and some have compared it with Wool and Raymond.

Royal Enfield and Emotion

The highest number of respondent has compared Enfield with happiness which reveals the fact that riding Enfield makes you feel happy and pleasant. Most of the respondent also has compared Enfield with aggression and violence as the bike itself shows the attitude and the aggression.

In a nutshell, Royal Enfield is viewed as a tough bike with the class of its own having features totally different from other bikes. Many respondents seemed to like Enfield because of its classy look, because of the sound it produces, its individuality and the attitude it possess. Zaltman Metaphor Elicitation Technique (ZMET)

ZMET is used to have an understanding of how brand is perceived by the customers. The study is conducted with 5 participants who were shown the collage of pictures related to the brand and asked to follow the following steps to bring out their true feelings about the brand. Step 1: The participants were asked to describe the content of the pictures. Step 2:The Participants were then asked to describe the pictures that they thought would be appropriate and asked to explain its relevance. Step 3:The Participants were then asked to sort the images into three meaningful groups and provide a label or description for each group. Step 4: The respondents were then asked to indicate the most representative picture among the 12 pictures. Step 5: The respondents were then asked to indicate the picture that signifies the opposite of the brand.

Step 6: The participants were then asked to indicate what does or doesn’t describe the Royal Enfield in terms of color, emotion, sound, smell, taste, and touch. Step 7: Participants were then asked to create a mental map using constructs and relationships. Step 8: Participants were then asked to create a summary image with a final story. After collecting the responses I found out that people related these pictures do reflect the image of Royal Enfield. They found pictures to be rough and tough, cool, showed some attitude, bad boys, junky, biker, loud, stylish, masculine, strength, classy and legendary. Most of the respondents felt that had I included something related with the bike tours and antique bikes as this brand is closely related with bike tours and carries age old history with it.

Most of the respondent arranged pictures like bike and its parts in one group and labeled it like cool bikes, antique pieces, old school etc. pictures of bull skull, sword, key rings etc were mostly placed in different group and labeled as bad boys toys, strength and masculine, classy and dangerous. Pictures of jacket, shoes, gloves etc were grouped in one group and labeled as harness, protection, save with speed. Most of the respondent did not find the picture of helmet and leg guard to be related as they felt it off the beat whereas they felt jacket, flag and antique bike to be most related with the bike. On asking the participant to construct a mental map they made up a story using these pictures and made a story full of actions and adventure, some were a lead character in the story and some were just a spectator.

Fournier Brand Typology

Fournier has indentified fifteen different types of relation a customer can have with a particular brand. Among these fifteen my relationship with Royal Enfield would be Committed Partnership. I wanted to own Royal Enfield bike since very long. I love the sound that the bike emits, its appearance and except for the complex engine structure that needs specially trained mechanic to fix it I love everything about the bike. Even though the bike makes loud sound it is not disregarded in the society and moreover the sound is high only when the bike is started and as it starts to run it gets smoother and emits lower sound. With the century long legacy and a history that beats all the two wheelers of the world trust over bike is definitely high. Its performance on both off road and black top road is very good and could be trusted to function very well even in adverse situation like low temperature. It gives a different feel when I ride it, I feel like I rule the street itself.

Conclusion and Recommendation

Royal Enfield as a brand has still not lost its charm among the youngsters even after a century of its operation. It has tried to position itself as a bike for a bike lover, a premium brand and a quality product. It has targeted the upper middle class and above class of people, but there is no as such age bracket of people that are targeted as people of different age from teen to old tend to like the bike. It has captured a large share of bike market in the upper middle and above class segment. It follows a differentiation strategy and focuses itself to the specific target market only. The bike is a sole player in the 350 cc and 500cc segment of bike in Nepal. Its age old legacy has been able to attract a good pool of enthusiast to its show room although its presence in the market is not that visible. People generally investigate well ahead and make contact to the showroom via various sources like from NTC call centre, asking people who own the bike etc. People also perceive it to be a premium brand. People mostly associate it with long tour, loudness, biker, bad boys, adventures and masculinity.

It still has the power to stand out from the crowd of bike. People like the classic look and features that the bike offers but some small changes like led headlights, disk brakes etc are suggested by the customer, but largely it is preferred in its original state. Various programs like bike tour and different events are organized by the different clubs like Himalayan Enfield which enhances the brand value and keeps the charm for the bike alive. The engine of the bike is very complicated and cannot be fixed by all the mechanics of Nepal and it has very limited number of workshops and service centre that provide the facility, thus customer get into trouble every now and then when they find they need to fix a problem in their bike.

Keeping this into mind the company has now started training the local workshop owner to make them capable of working on Royal Enfield and fix the problem. Royal Enfield as a brand is positioned very well. They have targeted the right segment of people. But they are not being able to provide good service after sales. With all the huge investment made on the bike people want it to be in condition and find a feasible location for maintenance. But there are very limited numbers of service centre that can repair and maintain the bike.

Moreover the spare parts are not readily available and customer has to wait for week or more for the parts to arrive from India. This has certainly hampered the brand equity. The technology like LED headlights and disk brakes are in huge demand after it started producing the bike with self start and shifted gear in the left side. But bringing in these changes should not affect its original look as people have special love for the appearance itself. Thus the company should look into these aspects to enhance the brand image.

Brand Personality Assessment of Royal Enfield Essay

Brand Personality Framework Essay

Brand Personality Framework Essay.

Sincerity:

Sincerity brands are those which makes caring image towards customers by showing honesty, wholesome and Cheer. Examples:

Dalda is comes under sincerity category because the positioning statement (JAHA MAMTA WAHA DALDA) shows the sincerity towards customers and culture. Cadbury dairy milk is also the good example of sincerity because they are positioning themselves as “Toh phir kuch meetha ho jaye” which shows that it is used on the occasions of happiness and also shows sincerity and respect toward customers. There customers are kind and family-oriented.

Excitement:

These type of products promote daring, imaginative and adventurous environment and target people which are experiencers.

Examples:

Mountain dew and Marlboro cigarettes create daring and adventurous environment in their ads and usually target young people who are experiencers. They show the different style in their ads which are apart from regular drinks and regular cigarette brands. There customers are care free, youthful and spirited in nature.

Competence:

These brands are famous and successful in market.

These products attract customers because they are reliable and intelligent.

Examples:

Most of the Sony customers are loyal and not ready to shift to other brands. Same case is for Lipton, many people have tradition of drinking Lipton tea because their ancestors also drink this also. Sony and Lipton, these types of brands have loyal customers and are successful and reliable in market.

Sophistication:

Sophisticated brands are those brands which targets upper class and have charming look. They promote executives and decent style.

Example:

Mercedes and Rolex both brands have similar image in customer’s mind, both offer luxury and charm. These both brands target upper class and their advertisements are not for everyone, there advertisements are very rare and in some specific regions.Their customers are elegant, prestigious and pretentious in nature.

Ruggedness:

In this category tough and outdoor products comes which have long durability and strong nature. These are usually outdoor products which can be used in travelling and have long life.

Examples:

Hummer and woodland both targets the people with tough personalities who likes to travel and hike and prefer adventure in their lives. They both gives strong durable quality products to survive the ridged and tough areas in travelling like in villages and hilly areas. Their customers are outdoor loving, loves travelling and have athletic behavior.

Brand Personality Framework Essay

Red Bull Brand Essay

Red Bull Brand Essay.

Red Bull is the most popular energy drink in the world, selling over three billion cans annually. Started in 1987 by Austrian entrepreneur Dietrich Mateschitz, Red Bull pursued an aggressive yet different marketing strategy to grow their brand globally. Red Bull met an untapped need within the beverage consumer market and the strength of their carefully cultivated brand provided them leverage to market themselves in a non-traditional manner. What were the key Brand elements for Red Bull?

A brand element is trademarkable device intended to identify unique goods or services and differentiate themselves from their competition.

Brand elements are designed to enhance brand awareness by cultivating brand associations that are memorable, meaningful, and likeable. Red Bull possesses three key brand elements that helped create points of differentiation (POD) for the Red Bull brand; therefore positioning Red Bull as the world’s dominant functional energy drink. Brand Name – “Red Bull” – Red Bull is an energy drink that promises to “revitalize body and mind”.

Recognizing that Red Bull does not have a distinct target demographic, Red Bull concluded that all people need energy and promoted Red Bull as consumption for energy and health, not for enjoyment. Red Bull Mystique – By positioning Red Bull with influential people and places, ccurious and adventurous customers tried the brand and spread the word.

Red Bull promoted a “cool” public image to raise their brand power and used a slender container to suggest a “sexier” image than their competitors. A mysterious position created a sense of need and urgency to the everyday consumer. Slogan – “Red Bull gives you wiiings!!” – Red Bull is marketed as a product that can refuel a person and create sharper minds. The combination of six different ingredients (taurine, glucuronolactone, caffeine, B-group vitamins, sucrose, and glucose) enables Red Bull drinks to contain more energy than any beverage in the marketplace. Red Bull also used humorous animated cartoon characters to demonstrate the safety and fun-loving virtues their energy drink. This slogan helped create worldwide brand recognition. How did Red Bull’s marketing activities contribute to Brand equity? Brand equity is defined as achieving a different outcome resulting from the marketing of a product or service because of its brand name, compared to the same product or service without the brand name.

Red Bull built their brand equity through strategic marketing initiatives involving the product, price, placement, packaging, and promotion of the Red Bull functional energy drink. Product – Red Bull was designed to improve physical endurance, stimulate metabolism, improve overall well-being, improve speed and concentration, and increase mental alertness. The flavor, color, texture, and ingredients of the drink were markedly different from a traditional carbonated beverage. The energy drink beverage category did not exist – Red Bull created it and was able to generate tremendous brand equity by marketing the product in shroud of mystery. Consumer felt they HAD to try a Red Bull. Price – Red Bull pursued a premium priced beverage strategy from the beginning. By adding 10% to the most expensive competitor’s price, Red Bull tried to position itself as a best in class product because of the added energy-enhancing functionality.

Pricing above the competition, Red Bull positioned their brand to be unique, one of the tenets needed for creating strong brand equity. Placement – Red Bull used product placement to build brand equity by containing their distribution and selectively choosing the events, venues, and advertising medium to display their product. By limiting the amount of product available at hand-picked locations, an aura of exclusivity was engineered. The “cell” philosophy of expansion and growth by dividing key markets into targeted geographic segments allowed Red Bull to strengthen their brand from bottom up, fostering strong brand equity. Packaging – Red Bull used a thinner and more slender looking can, signaling that the product was different than a traditional soda beverage. Also, Red Bull would not extend bulk packaging or unit bundling so each can had to be individually sold by the retailer AND purchased by the consumer.

The sleek look and steadfast packaging requirement grew the value of the Red Bull brand Promotion – Red Bull used aggressive media campaigns to grow their brand but only promoted events, venues, and/or personalities that coincided with their brand strategy. They performed very little traditional product promotion, rather focusing on promoting fringe athletic events like extreme sports and relying on the consumer’s self-promotion. Positive consumer testimonials are better than some of the best promotional material money can buy. Peer pressure helped Red Bull’s brand equity to grow exponentially. How did Red Bull’s marketing programs differ from those of conventional soft drinks? Red Bull used advertising, event sponsorship, and sports marketing to promote their product as a functional energy drink. Red Bull aimed to make their marketing programs innovative, individual, non-conformist, unpredictable, and humorous. Rather than pursue conventional marketing methods, Dietrich Mateschitz felt that the best method for Red Bull to attract customers would be through peer testimonials – or word-of-mouth marketing.

More importantly, Mateschitz and team were intent on creating a mystique for Red Bull. Through seeding programs designed to micro-target “it” shops, clubs, bars, and stores, cultural leaders were the first to discover Red Bull and spread the word to their sphere of influence. By seeking out opinion leaders who represented the Red Bull brand (athletes or entertainment celebrities) and creating limited availability of the product, Red Bull was able to maximize their awareness while focusing on their consumer base building. Pre-marketing, creating awareness in markets where the product wasn’t sold, was another program that Red Bull used to become recognized as the pre-eminent brand of energy drinks. Red Bull expended tremendous effort around product trialing and sampling.

The bulk of Red Bull’s marketing activity encourages product trials with sampling, word of mouth, and point of purchase efforts. Red Bull sought to reach consumers in ideal usage situations (concerts, parties, sporting events, highway rest areas, on campus) and wanted to control the amount of consumers that sampled the product. Red Bull deployed energetic and believable brand managers who evangelized the product through explanation and consumption. This controlled product distribution allowed the consumer to see the dedication and focus of each brand manager but did not permit for maximum product reach. Traditional beverage marketers usually try to maximize the number of consumers their product reaches so Red Bull’s strategy flew in the face of the industry standard. What rules were broken during the initial unsuccessful launch of Red Bull UK, per the CBBE model? The Customer-Based Brand Equity Model (CBBE) recognizes that the customer is aware of and familiar with a specific brand and holds a strong, favorable, and unique brand associations in memory, i.e. brand image.

Brand associations can be strengthened by personal relevance and/or consistent delivery. Historically, direct product experience creates the strongest brand attributes and benefit associations for consumers. After multiple setbacks trying to enter the United Kingdom, Red Bull found an entry point into Scotland but varied their traditional market entry strategy. Red Bull made three strategic mistakes upon entering the United Kingdom: 1) Altered their marketing formula by classifying their product as a sports drink and not a stimulation drink By marketing Red Bull as a sports drink and not an energy drink, Red Bull UK took a strong brand name that was successfully associated with energy drinks and changed the unique favorable links that Red Bull created with consumers in other EU nations.

2) Departed from their proven “word-of-mouth” marketing strategy The Red Bull brand was created by grassroots, bottoms-up word-of mouth marketing. In the UK, brand managers worked directly with the largest supermarkets and convenience outlets. This is a deviation from the strategy that fueled Red Bull’s growth in other markets and deteriorated consumer’s brand association with Red Bull. 3) Overhauled the Red Bull advertising strategy by eschewing electronic media for traditional billboards By changing their advertising strategy, the creativity and simplicity of the animated Red Bull ads and precisely worded slogans lost much of their meaning. How can Red Bull maintain its growth momentum in the future? Red Bull continues to be the global leader in the functional energy beverage category. However, the marketplace has become saturated with competition from hundreds of companies, both small and large, in many different markets around the world. In order to maintain their dominant position in the market, Red Bull continued to innovate. They began offering a sugar-free product and recognized that their product’s consumption reason changed as more consumers are using Red Bull as a mixer or supplement.

Red Bull also contemplated venturing into herbal tea products, a quarterly magazine, and fast food restaurants. In contemplating how Red Bull can continue to grow their brand’s momentum in an increasingly competitive marketplace, I thought of three ideas – two suggestions for product diversification and one concept for increasing brand exclusivity. Red Bull Gum – An edgy gum would help grow the value of the brand and expand the Red Bull mystique. Red Bull does not have a target demographic but they market their energy drinks to consumers who are innovative, individualistic, non-conformist, unpredictable, and humorous. Creating Red Bull gum would serve as a natural complement to their suite of energy drinks.

The gum could be shaped in a solid round shape and contain a small drop of Red Bull energy juice inside, similar in texture and fill to the popular Trident or Dentyne brands. The pricing strategy for the gum would be consistent with the pricing strategy for the energy drink (10% above the nearest competitor) but I would recommend giving away the initial product as a sampling practice during Red Bull sponsored events to create interest and raise brand awareness. Red Bull gum should be offered in convenience, drug, and grocery stores. Offering the gum at bars and night clubs would not be ideal. The packaging for Red Bull gum could look like miniature Red Bull can – long, slender and cylindrical.

I would use aluminum foil wrapper rather than an actual miniature can but the design should be identical to the energy drink can. To promote Red Bull gum, I would have Red Bull’s top athletes and entertainers create spots (either over the internet or on traditional TV and radio mediums) that should how Red Bull gum provided the same benefit as the energy drink. I would also conduct extensive sampling at universities and trendy public urban settings; to help raise the “coolness” quotient. Finally, Red Bull gum could be produced with sugar or sugar-free, tying in nicely to the brand extension of the energy drink and helping to raise the overall brand equity.

Red Bull Heart Monitors – Red Bull has received criticism over the years causing certain aliments, specifically related to the heart and circulatory system. Although it has never been scientifically proven that Red Bull causes any negative side effects, Red Bull has received numerous public accusations claiming problems from repeated use of the energy drink. As a consumer of Red Bull for years, I have personally felt the aftereffects of consuming too much Red Bull in one evening. I never felt that my health was in danger but I know that my circulatory system was acting abnormally. Since Red Bull brands itself as an energy drink that promotes an active and healthy lifestyle, creating a wristwatch heart monitor would help send the message that Red Bull heard the criticism and is actively working to educate consumers about any risks associated with Red Bull.

The wristwatch heart monitor can be plastic and have a digital readout of your heart rate. The price would be between $30-50 in the US (or its equivalent in other markets). I would design the watch to match the Red Bull color scheme and would also offer it three standard mono-chromatic colors (black, white, silver). I would suggest the product be sold at big box retailers/sporting goods stores after the watch has been sampled at niche extreme/outdoor stores. I would consider offering it to online retailers and medical supply organizations.

However, I would want to keep the focus on athletics and healthy living so I would see how market adoption occurred at the niche stores before expanding my distribution channels. Promotional displays could be set up in the niche stores as well as energy drink retailers, select physical therapy offices, gyms, fitness centers, and Red Bull sponsored extreme athletic events. As a doctor, my brother constantly warns me about the risks of ingesting too much Red Bull. Offering consumers a branded opportunity to self-regulate their health and alleviate their concerns would be another method for Red Bull to increase brand equity.

Red Bull Fraternity – Red Bull provides an energy drink that gives consumers “wiiings”. As previously mentioned, Red Bull does not believe that they have a target demographic. However, Red Bull does promote the athletic and thrill-seeking adventure type. If Red Bull were to create a Red Bull fraternity (ΓΒΦ) that would allow consumers to become members by completing a series of Red Bull sponsored challenges and events, the possibility for brand strengthening would be endless. The goal of the fraternity would be to continually promote the Red Bull lifestyle through exclusivity and activity. A Greek organization inherently contains an air of mystery, which coincides with Red Bull’s market entry and expansion strategies. Greek life would be extremely familiar to the university crowd, where Red Bull performs a large percentage of their sampling, and Red Bull could draw large crowds of passionate users to the “pledging” events.

Once the “pledge” period ended, members of ΓΒΦ would have closer access to all things Red Bull – sponsored parties, athletes, entertainers, new product offerings, priority status at high-profile events, discounts on products and merchandise, etc. I would charge a one-time fee to “pledge” the fraternity. There would also be annual fees –“dues” – and not all activities open to the fraternity members would be free but being a member would provide strong discounts and incentives that would not be available to non-members. A fraternity, by definition, is an all-male institution; I would permit men and women of all ages to join – remember Red Bull does not have a target demographic!

Red Bull Brand Essay

Unilever Brazil Essay

Unilever Brazil Essay.

Executive Summary

Unilever is assessing whether to enter the low-income NE market. Our analysis shows that there is a profitable opportunity to offer detergent powder to low-income customers living in Northeast Brazil and capture market share in a high-margin, high-growth market. We recommend that the firm keeps the existing brands but deploy a horizontal extension of the Campeiro brand – adding better scent / softness and utilizing specialty distribution network, thereby marginalizing Invicto, an inferior but better-known competitor.

Situation Overview

NE Brazil has long lagged behind the rest of the country in terms of technology and income.

However, economic reforms instituted by Finance Minister Cardoso has seen the purchasing power of the poorest Brazilians increase dramatically. These reforms, combined with tax incentives for investment in the NE has led to a 17% annual growth in detergent powder.

In NE Brazil, detergent is still primarily used to supplement soap in order to make the clothes whiter and smell better. Campeiro, Unilever’s current budget offering detergent powder, competes primarily with Invicto.

These products are offered at the same price ($1.7/kg) and have roughly the same market penetration (6% for Campeiro vs. 5% for Invicto) – even as consumers view Campeiro as a superior brand. The problem for Unilever is Campeiro’s brand penetration, which lags approximately 15% behind Invicto. This is because of the decentralized purchasing habits of women in NE Brazil. This situation is an opportunity because if Unilever improves market penetration, it will drive sales in this high-margin, high-growth segment of the laundry industry.

By contrast, the soap industry has slower growth (6%) and lower barrier to entry, which makes it tough to sustain high margin. In addition, the market is very fragmented, with “other” producers supplying 64% of the market, making it tough to systematically beat competitors and capture market share. Therefore, at this time we do not think it makes sense to enter this market.

Action Overview

Strategy
We will target the following market:
•Customer: Low-income consumers in NE Brazil
•Company: Unilever
•Collaborators: Special store owners as low-income consumers do not shop in wholesale and get financing and advice from specialty owners •Competitor: Invicto
•Context: Increasing purchasing power in NE and role of powder as fragrance / softening agents

Our value proposition to this segment will be: An affordable detergent powder with a “special touch.”

We will deploy the strategy as follows:
Tactics

•Products: “New and improved” Campeiro with enhanced smell and softness oSmell / softness is ranked second only to whiteness in perceived importance by consumers, but going after whiteness has potential to cannibalize OMO (see Action Rationale section for more details) oThe added fragrance should be at a level just enough to set Campeiro apart from Invicto, but far enough from Minerva to prevent cannibalization •Brand: Campeiro

•Price: Same price – whole sale of 1.7 / kg •Distribution: Specialized distributors that can increase awareness of target audience at a lower variable cost than generalist wholesaler; specialized stores are significant influencers of target customer’s behaviors •Incentives: Launch new Campeiro via specialized distribution as larger campaign to influence small shop owners; give away free samples to specialized store to promote awareness to small shops; use more point-of-purchase marketing as small shop owners are more susceptible to such tactics •Communication: “New and Improved Campeiro” or “add something special to your clothes at affordable price”

Action Rationale

The proposed strategy is best suited for Unilever’s goal of finding a profitable entry into low-income NE market because: •Profit growth from increasing market share in Campeiro is significantly higher than Minerva soap oMargins for laundry detergent is superior to soap ($2520 per ton vs. $1250 per ton) oPowder market is experiencing a higher growth (17%) compared to that of soap (6%) o Increase New Campeiro market share by 6% would have and additional benefit of 1.38MM in year 1 and 2.21 MM in year 3, compared to 1.19 and 1.42 if we increase Minerva soap market share by 5% (See exhibit 2) Increasing market share in soap is already a big challenge given the fragmented market •Campeiro has a strong brand name – by giving it a new feature such as smell, it can separate itself from the generic Invicto and other smaller producers of “no frills” powders

•R&D cost of formulating should be low as Unilever already has a fragrance-based brand Minerva •Cost of matching fragrance / softness is too prohibitive for ASA and other small, regional competitors •Cannibalization is optimized – cannibalization % is better if Campeiro targets smell / softness instead of whiteness (see Exhibit 1) •Campeiro is a better extension candidate than Minerva as Campeiro has a better break-even cannibalization rate (See Exhibit 1) •Significant barriers to entry also make it difficult for additional firms to compete at this price point •Using specialty store distribution makes sense as low-income NE residents tend to shop at smaller supermarkets •Improvement to Unilever brand image as being at the forefront of helping rural Brazil

Potential Drawbacks

•There is still risk that a fragrance / softness based brand extension will cannibalize Minerva beyond the threshold calculated, thereby decreasing profit •Cost of re-formulating Campeiro may be higher than expected •Unilever already owns a 75% market share; therefore, there is a finite additional share for Campeiro to absorb •Unilever premium brand equity may suffer as Unilever makes investment in lower-end products •Most low-income household do not own washing machines, so it would be hard to absorb additional market share currently owned by competitors’ soap brands with a powder product •There is always the risk that ever-changing socioeconomic and political factors will defer target segment from purchasing powder

Conclusion

Based on the analysis above, our team believes that the appropriate strategy to grow in the low-income NE market would be to extend the existing Campeiro brand while keeping the same price point. Distribution through specialty stores instead of wholesale will best position Unilever to grow in this high-margin, high-growth market.

Unilever Brazil Essay

Persil Company Essay

Persil Company Essay.

1. BACKGROUND

Henkel is a multinational company founded in Germany in 1876. Henkel is a leading firm with international recognition and is ranked among the Fortune Global 500. The organization produces many leading products and brands such as Persil, Schwarzkopf, Loctite, Pritt, Sellotape and Right Guard. It operates in three business areas: Laundry & Home Care, Cosmetics/Toiletries and Adhesive Technologies. As shown in Figure 1. (see Appendix), Adhesive Technologies represent 48% of total sales, followed by Laundry & Home Care with 29% and Cosmetics/Toiletries at 22%.

In 2010, Henkel achieved annual sales of €15,092 million and a net income of €1,143 million. (Henkel 2011)

The company operates in over 125 countries, in five continents. Henkel employs over 48,000 staff, 80% based outside of Germany. Figure 2. (see Appendix) shows that most sales are to Growth regions (41%) followed by Western Europe (36%) and then Northern America (18%) (Henkel 2011). Henkel targets both industries and households, aiming some campaigns at organizations such as laundries, hospitals and parlours and others towards households.

Henkel states that “For a large proportion of our cosmetic products, our laundry and home care products and our consumer adhesives, women count among the direct or indirect target user group” (Henkel 2011).

Henkel’s strategy consists of three priorities: achieve full business potential, focus more on customers and strengthen the global team. The ultimate purpose of Henkel’s strategy is the further improvement of the company’s competitiveness and to permanently establish a winning culture. (Henkel 2011)

Persil is one of Henkel’s leading brands. First introduced in 1907, Persil is renowned as being the first commercially available “self-activated” laundry detergent. Persil had huge success and captured the majority in the German market share. Nowadays, Henkel sells Persil products in numerous countries; mainly Germany, France, Spain, Mexico, China. Persil has also adopted local names such as LeChat in France, Dixan in Greece, Italy and Cyprus and Wipp in Spain and China.

The success of Persil was due to two main factors. Firstly, for being the pioneer in changing the whole detergent market, making itself discernible from the competition. The second, was Persil’s product presentation and packaging, making the European people feel identified. These competitive advantages have brought a large following of loyal customers throughout the different countries Persil is sold in. In this paper we will analyze Henkel’s strategy for the Persil brand and make recommendations.

2. BRANDING STRATEGIES

Brand strategies are a very important part of the marketing strategy process. There are three aspects within the idea of brand strategy: brand reach, brand positioning, and brand architecture (Homburg, Kuester, and Krohmer 2009, p.141). Brand reach is about the geographical and vertical reach of the company. Brand positioning is the act of designing the company’s brand to a distinctive place in the minds of the customers. Brand architecture looks at the structure of the brands in the company and the relationships between those different brands.

Brand reach has two different aspects, geographical reach and vertical reach. The geographical reach refers to the scope the brand reaches over an area. Henkel’s redesign of the brand will reach all of the different countries they are selling in. The vertical reach explains the use of the brand throughout the value chain. There are two options regarding the vertical reach of a brand; ingredient branding and processing branding.

Ingredient branding explains the use of brand materials throughout the entire value chain. For example, the use of Intel processors in several different computer brands. The opposite is explained by processing brand, where the brand is not seen throughout or even at the end of the production process. An example of this can be seen when purchasing a car. Buyers are aware of the car brand but do not know who produced the airbags. (Homburg, Kuester, and Krohmer 2009, p.142)

Brand positioning is the next aspect of brand strategy, which has three parts to analyze. The brand core is the identity of the company, which is also known as the mission statement. Persil’s brand core is the pioneer of first active-agents in detergents market. The next part in the brand-positioning model is brand benefits. This illustrates what the product brand offers its customers. Persil’s laundry detergents offer the public an easy way to wash clothes and a large range of different products, in turn leading to an improved quality of life.

Both of these aspects are integrated within the overall brand personality, which means the traits associated with the brand. Trustworthiness, authenticity, reliability and resilience are examples of traits that fit Persil’s brand personality. Brand image is the impression of a brand’s total personality in the customers mind. The closer the brand image and brand personality are to each other, the more successful a brand is likely to be. This is shown in Figure 3. (see Appendix). (Homburg, Kuester, and Krohmer 2009, p.143)

The relationship to competitors’ brands is also a useful way to analyze brand positioning. There are two different types of positioning in branding, differentiation and similarly positioning. Differentiation is positioning your brand in a remarkably different area than any other brand on the market. Similarity positioning is positioning your brand in a similar area to those already on the market. A product map is used to illustrate similarities are differences. As Persil was the pioneer for active-agent detergents in the laundry detergent market, it used the differentiation approach.

Brand architecture is the third and last aspect of the brand strategy. Brand architecture is the structure of all the brands in a company and their inter-relationships within the company. Brand architecture does not look at decisions made for individual brands but more, the structural decisions for the entire brand collection of a company. There are three types of branding strategy when considering brand architecture; single branding strategy, single umbrella branding strategy, and multiple umbrella branding strategy. (Homburg, Kuester, and Krohmer 2009, p.145)

The single branding strategy illustrates a company where each product has its own brand, and is sold under its own brand name rather than under the company brand name. Henkel markets its products, such as Persil, under individual brand names rather than under the Henkel company brand. Single umbrella branding is the opposite of single branding strategy. This is where all products or services are marked under the same brand. Multiple umbrella branding is the mix between both types.

Keeping different brand names separate can be challenging for most companies. However, Henkel has so many years of experience in this area that managing this would not be a problem. Persil, for example, is marketed as a separate brand by Henkel and has been a leader in the laundry detergent market for over 100 years. Changing the name of Persil or other Henkel brands should not be an alternative, as it may bring a negative effect to the company. Since Henkel’s customers, are familiar with separate brand names, they may not appreciate a change to new unfamiliar names.

3. PRODUCT MIX

In today’s dynamic market environment, organizations constantly need to adapt their products due to rising competitive situations and changing customer needs. The product mix is a helpful term when it comes to maximizing the organization’s potential. This can be defined as the entire range of products supplied by an organization at a given point in time (Homburg, Kuester, and Krohmer 2009, p.133). There are three main options for expanding an organization’s product mix in order to get the optimal product portfolio. These are product variation, product differentiation and diversification (Homburg, Kuester, and Krohmer 2009, p.134).

Product variations are modifications of the features and characteristics of an already existing product on the market, without changing the core functions of the product (Homburg, Kuester, and Krohmer 2009, p.134). The variation can be made in many ways but the most common variations are changing the products’ aesthetic properties (e.g. shape, color), physical-functional properties (e.g. quality, material) or symbolic properties (e.g. brand image, brand name). An important point is that product variation is just a matter of changing an already existing product, not creating a new product. Examples of product variations are a new ”face lift” design of a car or a new packaging design of a product.

Product differentiation is an organization’s process of adding new product variants to an already established product (Homburg, Kuester, and Krohmer 2009, p.135). This is an opportunity for an organization to create competitive advantages, by distinguishing its product from competitors.

An organization can do this by basing the product differentiation on either offering superior products or creating better customer relationships (Homburg, Kuester, and Krohmer 2009, p.72). In product differentiation the original product still exists, in comparison with product variations when the modified products are no longer available on the market. MasterCard is an example of a product differentiation, due to its various range of payment solutions.

Diversification is when an organization integrates products into its product mix that do not have direct connections to already available products in the organization’s product portfolio (Homburg, Kuester, and Krohmer 2009, p.136). By diversifying, the organization is seeking to increase profitability through greater sales volume acquired from introducing new products in new markets (Homburg, Kuester, and Krohmer 2009, p.76). A diversification strategy can be very risky for organizations but can also create opportunities with great potential. McDonalds’ introduction of its “McCafe” concept is an example of a diversification move, which proved very successful.

In 1907, when Henkel was in its roots, the organization used a product differentiation approach. It was able to introduce a new unique laundry detergent formula of a self-activating detergent that resulted in being the pioneers of this type of product. Henkel was able to create competitive advantages by implementing its new superior formula on the market and therefore distinguishing its brand from competitors.

Another aspect of Henkel’s product differentiation is its great product range. Henkel differentiates itself by being the leading supplier of laundry detergent, offering detergent to a wide customer group. These diverse products target different categories of washing such as: low temperature washing, premium market washing, detergents for allergenic people and environmentally friendly washing.

1962 saw the introduction of a completely new Henkel product in the market called Somet. This product did not focus on washing clothes, but instead on washing dishes. The introduction of this product was very successful and is an example of diversification by the company. Henkel integrated a detergent for washing dishes in its product mix hence, operating in a new market. By doing so, Henkel was able to increase profits through greater sales volume of its products.

In recent years, Henkel has changed its product mix approach with an increased focus on product variation techniques. Henkel recognizes the need to modify already existing products in order to survive in today’s dynamic market. This is shown in Henkel’s ability to change their laundry detergent products’ aesthetic packaging properties, which is an example of product variation. Through the years Henkel has changed the design of the detergent packages several times which all proved successful. Henkel realizes the importance of presentation for potential buyers and hence places a lot of emphasis on this area.

4. ALTERNATIVE STRATEGIES

Henkel’s goal is to reassure customers that Persil is still as effective as any other laundry detergent on the market. Henkel embarked upon this strategy by changing its product decisions through product variation, as discussed earlier. The organization developed new ideas for its already established products by redesigning and improving formulations, as well as developing a clearer distinction between their different product groups to attract new customers. Henkel undertook pre-tests to analyze customer responses, redesigned its website and engaged in promotional activities such as the Persil Future Ship which toured 18 German cities, showcasing the new campaign. Henkel also contributed €1,000,000 to the Project Futurino initiative.

There are many other options that Henkel could have pursued to enforce its new strategy. Under the heading of product decisions, Henkel could have used product differentiation or diversification, as explained above, to expand the product mix to enforce its new strategy. Henkel has used these methods before and could implement these methods again. Henkel could have also established synergies, reduced the product range or considered areas such as brand management activities.

When examining the area of establishing synergies, there are two options that Henkel could have considered; product bundling and product platforms. “Bundling is when a company sells two or more separate products in combination and sells the bundle at a single price” (Homburg, Keuster and Krohmer, 2009, p.137). This can encourage cross selling and also reduce costs. This may have been a good idea for Persil as many customers may buy more than one of their products. However, as each customer has different needs and preferences, a lot of research would have to be done to discover optimal bundles that suit many consumers. Consumers may also not use the products in equal measures so may still need to buy products individually.

Henkel could also have considered establishing product platforms. This is when individual products can be produced using common standardized product components (Homburg, Keuster and Krohmer, 2009, p.137).

Although this would save costs for Henkel and may make the Persil products more recognizable, it may make it harder for customers to differentiate between the Persil products themselves. Persil would have to ensure that their products are still clearly distinguishable from each other for this to be successful. As Persil is aiming to develop an even clearer distinction between their different product groups, this may not be a wise strategy for them to take.

Product elimination is another area that Henkel could have considered. This would involve removing one of its products from the market. By removing a less popular product it could show customers that Henkel is concerned about standards and only wants to keep its best and most effective products on the market. On the downside, Henkel may lose the customer base that used to use the now eliminated products.

Another alternative for Henkel could have been to engage in brand activities. This involves moving into other product groups but under the same brand name. If brand loyalty already exists, which it does in the case of Persil, this can prove to be very successful. “Brands signal a certain level of quality so that satisfied buyers can easily choose the product or service again” (Kotler et al. 2009, p.428).

As Persil has been voted the most trusted brand in its category nine years running by Readers Digest, it is clear Henkel already has brand loyalty and a strong customer relationship. If Henkel had moved into an entirely new market area, different to laundry detergents and home care, it could have captured new market segment. This could have lead to an expansion of the company and potentially increased overall profits. Persil also has many years of experience in the market so would already have a lot of consumer information. This could prove highly successful, as they would have a competitive advantage over new entrants.

Henkel could have also looked at areas such as pricing decisions, communication decisions and sales decisions. Another option was to lower prices, redevelop communication methods or come up with new sales decisions such as: new distribution channels or a new advertising campaign to reassure customers of the effectiveness of the Persil brand.

Although all these options have advantages and benefit Henkel in different ways, we believe that Henkel’s choice to focus on product variation was the most suitable for its strategy to assure customers that Persil is still as effective as any other laundry detergent on the market.

5. PRODUCT INNOVATION
Many products are subject to a life cycle, which is becoming increasingly shorter for a number of product categories. Given this, the development of new and successful products is essential for companies’ long-term survival. First of all, companies need to generate innovative ideas. In general, these ideas come from company-internal sources or external sources.

Company-internal sources are information from the R&D department employees, field sales force employees, customer service/service hotline employees, complaint information or suggestions from employees (Homburg, Kuester, and Krohmer 2009, p.115). Using this source of information, the organization can benefit from more directly available information that takes into account more knowledge of the existing products and resources.

On the other hand, sources of information from outside the company could be through customers, competitors, market innovation in other markets, technological developments, findings from trends, market research institutes, business consultants and advertising agencies (Homburg, Kuester, and Krohmer 2009, p.115). Gathering these information sources, the company can benefit from an “outside the box” thinking resulting in more creative ideas (company-external information sources tend to be more innovative). In particularly, customers can be a very useful source of information for product innovation.

Using creativity methods can also generate new product ideas. These methods can promote and encourage creative thinking by creating synergies, for example in cross-functional project team. Creativity methods can be: brainstorming, brainwriting, or the morphological box (Homburg, Kuester, and Krohmer 2009, p.116).

Our recommendation would be to use company-internal sources of information. By doing so, the company can benefit from its large number of employees, that are at the same time are customers. Henkel could also benefit from more direct and cheaper information. Although, to avoid a biased view the company should also hire an expert in this particular field, to get an outside opinion.

6. PERSIL PEN

Innovation has always been a main focus for Henkel. In 2007, Persil Megapearls with Anti-Gray formula was named as the “most successful innovation” in its category and voted among the top 10 most successful innovations of all food categories by Lebensmittel Praxis (Henkel 2011). Henkel works hard to innovate new products to satisfy constantly changing consumer needs. Henkel wants to focus more on the new “Green movement” that has been present in society for the past decade. According to Henkel’s mission, its aim for each product is to contribute to the sustainable development and combine top performance with human and environment responsibility.

To extend on this idea our group has thought of a new innovative product for Henkel. The “Persil Pen” is a small pen, with concentrated detergent in it that can be used on-the-go to remove stains and spills from fabrics. The Persil Pen will be small enough to fit in someone’s briefcase or purse, for a convenient and quick way to deal with life’s on-the-go accidents.

The Persil Pen in the beginning will be targeted mainly to professionals in the work force. The product can be used discreetly in the office to take care of small accidents at lunch or on the way to work in rush hour. The new product for Henkel’s detergent market will bring convenience and reliability to the busy, unpredictable workday. After the Persil Pen has gained market recognition, we plan to expand to different target groups such as students. Another possibility could be to team up with restaurants and have the pen available for use for diners, free of charge. This way they can try out the product and hopefully later purchase it themselves.

Our marketing strategy will consist of two ideas. First, we plan to target large companies and hand out the Persil Pen at meetings, offices, trade fairs and conventions. This will get the new product directly into the hands of our target market. Another promotion to get the product out in the market would be to attach a free pen with the new brand labeled detergent in the stores. This will open up the new product to the already existing group of customers that buy Persil detergent.

The Persil Pen can be advertised and communicated to the public with a focus on the redesign of the Persil Brand. This new brand strategy of changing all the packaging for their detergent to a new and more modern look, will be the perfect time to introduce Persil Pens. This will spark interest in the current customer base and attract interest in the entire Persil brand, in turn raising market shares.

As Henkel originates from Germany, we have chosen Germany as the first market for Persil Pen to be launched in. If the launch is successful we will launch in other countries using the Persil brand name. In the development of this product we think a low price would captivate a larger number of new customers, and make them aware of its existence. The price should not be too low, so that customers do not think that we are selling a low quality product. By the time that a reasonable number or percentage of the target customers are using the new product, the price should be gradually adjusted to a mid-range price, comparable to Persil’s price range.

Once the product is launched and sold, variations on the product concept can be made. This will be a unique way to stand out from competitors in the market. “Tide”, a very well known detergent company, has developed and is producing a product like this in North America. Persil can work to concur the European market for this product. Persil is already a well-established brand in Europe so brand loyalty will already be established.

This product illustrates Persil’s goal of facilitating washing for their customers and improving their quality of life. The Persil Pen will eliminate having to wash an entire work shirt with just one stain on it. Not only is this extremely facilitating for users but will also add to Persil’s environmentally friendly campaign. People will not have to waste as much water washing a garment with only a small stain. This new product will increase customer loyalty and in turn increase sales volume for Persil and

Henkel. 7.CONCLUSION

Henkel is a leading company in three core business areas: Laundry & Home Care, Cosmetics/Toiletries and Adhesive Technologies. Henkel is successfully marketing its products under individual brand names, for example Persil. Persil has a clear view of their brand reach, positioning and architecture. Henkel is constantly expanding its product mix through methods of product variation, product differentiation and diversification. Henkel gathers vital information from both external and internal expertise (Henkel 2011).

We believe that Henkel could explore alternative strategies such as brand activities, but that product variation is still the most suitable option for its current strategy. Henkel has always thrived in the area of innovation, for example Persil’s pioneer formula in 1907. We think that the Persil Pen could prove to be a new successful product with great potential. Henkel is performing well despite the downturn in economic conditions worldwide in recent times (Henkel 2011). We are confident of Henkel’s ability to create a strong foundation for the future success of the company.

LIST OF REFERENCES
Henkel 2011 (accessed October 1, 2011), [available at http://www.henkel.com]. Homburg C., Kuester S. & Krohmer H. (2009), Marketing Management; A Contemporary Perspective. Berkshire: McGraw-Hill Education. Kavaratzis M. & Ashworth G.J. (2005), City branding: An effective Assertion of Identity or a Transitory marketing trick? 96 (5), pp. 506-514. Kotler P., Keller K.L., Brady M., Goodman M. & Hansen T. (2009), Marketing Management. Essex: Pearson Education Limited.

Persil Company Essay

Positioning and Repositioning- Dove Essay

Positioning and Repositioning- Dove Essay.

Introduction:

        Dove is a company branch of Uniliver Group. It has a marketing department that is composed of a group of women from all over the world who would like to help other women with their personal beauty products needs. In essence, they are a marketing organization that chats with other women online as they position  the Dove products. (Dove, 2008, Online).

             Dove is also repositioned as a website that does more than sell products to the women of beauty substance. The home page has a product link that lists all their product collection and even follows up on whether they are seeing them on advertisements.

The connections page has got a live interaction with the editors who monitor real life experience of Dove product customers with their collection.  This connection page has also got blogs for women customers to chats amongst themselves following their beliefs and requirements. Additionally the connection link has column for women magazine experience ad also a platform for discussion.

(Dove, 2008, Online).

            The expert link is used to tips on products as well as articles that guide women customers on which products to buy. The features link has got additional articles for women of different ages and videos of the real time application of the products. This area also enable women to share real experience by use of interactive writings as well as give them quizzes which are later used as survey platform. Once customers are registered, they get access to the Dove site and will get periodic notification of products as well as take surveys. (Dove, 2008, Online).

          The website link to offers elaborates which products are on promotion. This link also has a rare sweepstakes for women to participate. They also offer coupons that will be used to promote sub products and exclusive purchase offers. (Dove, 2008, Online).

        Finally the Dove site has link for campaign for beauty. This has provision for fund raising to her those with skin problem at hospitals. They also have a site that is exclusive to girls and another for mothers and caregivers. This site has an expert link to answer all the women customers concerns and a photo gallery of all their products. (Dove, 2008, Online).

External factors and their influence in the marketing decision

         Government Regulations

       There are regulations that influence the marketing decisions of Dove beauty products. First the collection of products must conform to health and safety standards. Since these are made from either chemical compounds or natural products, the products are limited by dermatological health standard. This covers  level of dangerous chemical like lead, silver and other heavy metals.  There are minimum residue level that must be adhered to, otherwise the customer can get ailments such as skin cancer and others. (Idaho Business Education Standard, 2008, Online.); (Kottler, 1999, Online)

       Therefore, respective government inspection group are keen to acquire the list of ingredients per products. They have also been asking for material safety data sheet, to be supplier to them every time a product undergoes modification. Any products that are non conforming to the minimum requirements is subjected to products withdrawal from the production and  retailers and banned. (Idaho Business Education Standard, 2008, Online.)(Kottler, 1999, Online)

          There are also government standards that must be followed in the disposal of beauty product packs. These are supposed to be done in an environmentally friendly manner that does not cause contamination to the land and water points. Some of these products are also highly inflammable and must therefore be handled with adequate care and safety. This is applicable both nationally and internationally.  (Idaho Business Education Standard, 2008, Online.)(Kottler, 1999, Online)

     The government regulation vary from one country to the other as far as Done products are concerned. In the Arabian Gulf States region , women will be unlikely to display the experience of the products in public due to the dress code. The opposite happens in other parts of the world. This pattern follows even to the advertisement that come up on TV in the example of the above two regions. Thus there could be less sale in the Arabian Gulf States region as compare to other areas in the segment of skin care products. This is a demerit of excess government regulations. The implication is that certain mass marketing promotions are varied in application by region. (Idaho Business Education Standard, 2008, Online.)(Kottler, 1999, Online)

          Economic Environment

           The Dove products, being sold internationally are faced with factors like exchange rates and inflation. Even though the company would like to maintain a stable price for most products, the fluctuation of exchange rates will always impact on the profit margins. The alternative would be for the company to produce these locally, but this can only happen after a cost benefit analysis has been done. The implication is that the sales and marketing team need to set the price above all the external economic factors and forecast for a reasonable period of time. (Idaho Business Education Standard, 2008, Online.)(Kottler, 1999, Online)

          Special Interest Groups

          Dove has been very specific in the identification of the demographic group that it wants to serve. It has chosen the ladies as a potential market that can meet its market missions and goals. This choice of the women interest is further segmented by age. The product are also made and marketed along these age segments, for example, skin lotions for 60 years plus ladies are not positioned as those for 18 years ladies. (Idaho Business Education Standard, 2008, Online.)(Kottler, 1999, Online)

        There are also special interest groups like environment pressure group who may be concerned about packaging of the product. Plastic packaging has recently caused a lot of political and environmental debate following threat to wipe them out in many countries. Since many product have a shelf life of more that 2 years, they may be caught up in the settlement of the environmental policy. Therefore the Dove marketers need to work out other packaging styles for their products that are acceptable by all special interest groups. (Idaho Business Education Standard, 2008, Online.)(Kottler, 1999, Online)

         Cultural Differences

         There are cultural norms and values that may influence the marketing of Dove products in certain areas of the globe. In Asia for example, there is very deep belief in Neem based skin care products due to their biological and natural effects. This belief goes deep in to their faiths. Therefore the Dove products that  have industrial chemical combinations may struggle in penetration in some customer cultures in Asia. (Idaho Business Education Standard, 2008, Online.)(Kottler, 1999, Online)

        This illustration is a confirmation of how culture affect product choice by the consumer. In order to penetrate, the Dove Company may be forced to do more promotions and demonstration that the beliefs are just myths. The Dove company can also come up with new products that are Neem based to help sell the brand, especially if these are produced at a place in Asia. (Idaho Business Education Standard, 2008, Online.)(Kottler, 1999, Online)

          Technology

          In the use of technology, Dove Company has been doing a lot of TV ads as well as online advertisement and interaction . This technology has also enable the customers to interact with the company about their specific concerns, inquiries and proposal. Using the internet, the customers have been able to make their selections of products and share back experiences via surveys. (Kottler, 1999, Online)

           The TV and Online propositioning have helped Dove to have a competitive advantage over their competitors in the product segment. This has enabled them to reach the masses every time and appeal to them to buy their products. The internet has a product gallery that the customers can explore to help the make faster decisions. Since Dove website has a membership log on status this can be used to appeal to the market segment of existing market with existing product and existing market with new products. (Idaho Business Education Standard, 2008, Online.)

          Competition      

         The Dove products are facing both the direct and indirect types of competition. Within the same product range that is positioned for a certain age bracket such as 18- 30 years old customers, they are faced with direct competition. These are from competitors who are facing them head on  or by encirclement for market share. The marketing strategy here will be aggressive promotions, product differentiations or price differentiation.(Kottler, 1999, Online)

           Within a certain cultural set up of customers who prefer to offers smaller and specific products, they are facing indirect competition from customers who prefer to operate as niches. The marketing strategy here is specialization. (Idaho Business Education Standard, 2008, Online.)

       The weaknesses for skin care products that are industrial chemically based and are therefore not preferred by some cultures will lead to opportunities of Dove product differentiation that are Neem based so that they may be able to compete with the others in that segment. This will help to sustain the Dove brand. (Idaho Business Education Standard, 2008, Online.)(Kottler, 1999, Online)

7Ps, 7Cs and their relation to Value

        The Dove marketing mix is an elaboration of all their products that the company is offering so that for the target female customers. In the recent past , this consisted of just the 4Ps and 4C. But due to Dove companies deeper focus on the customer needs, in the beauty skin and care product, they have an extended marketing mix that will give them competitive advantage. (tt100.biz, 2008, p. 1-2)(Kottler, 1999, Online)

           The first 4Ps consist of Product, Price, Place and Promotion. Dove offers a very wide range or products for the different consumer demographics. These product are in the category of bar and body wash, body lotions, hair products, face lotions and creams, body deodorants, and other collection such as DOVE energy glow, DOVE sensitive skin, DOVE go fresh and DOVE pro-age. (Dove, 2008, Online).(Kottler, 1999, Online)

           The Dove product have also been offered in different prices that vary with sizes and quality. These prices are cost effective to the customers. A pack of hair lotion can be bought for as low as $3, while a can of deodorant can go for as low as $ 2.9 (Dove, 2008, Online).(Kottler, 1999, Online)

            The Dove products are available at major supermarket places as well as local shops. All these outlets are a guarantee of consumer convenience. This comes after the consumers have had knowledge of the products via promotional outlets such as TV, radios and internet. (Dove, 2008, Online).(Kottler, 1999, Online)

          Other than these four market mixes, there are three more to show the Dove company’s deeper commitment to the customer needs. The fifth ‘P’ is the physical lay out of the product. From the internet gallery, the products have been well laid out so that the good presentations appeals to them to buy. This is also important at the super markets, saloons and shop outlets. The physical lay out also helps the customer to locate the specific product that they saw in advert or have been using. (Dove, 2008, Online).(Kottler, 1999, Online)

        The sixth ‘P’ is the provision for customer service. By use of the online interactive phases and surveys, the customers of Dove products can make inquiries, forward complains and get complements. The customers have also got regional customer care numbers to call for services. (Dove, 2008, Online).(Kottler, 1999, Online)

           The seventh ‘P’ of the marketing mix is the processes of Dove company. They have an elaborate customer concern handling procedures. They have also got processes of knowing what the customers needs as well as the procedures of purchases and ordering. (Dove, 2008, Online).(Kottler, 1999, Online)

Market segmentation

           Dove Company have a strategy of market segmentation that will enable their products to be sold. This is for the purpose of maximization of sales. Thus, in the area of needs, there are products that are available for strategic purposes. These are the very high quality products that are also charged higher prices for the high income clients. These products help the Dove company to reap some strategic investment. ( Business Resource Software,2008, Online.)(Kottler, 1999, Online)

           The business needs category  has also got operational product segmentation. This has separated the product used by ages of the clients such as 60 yrs and 18-30 years lotions products. The last types of business segmentation is the functional needs. Dove have skin lotions to be used after swimming and after regular bath. ( Business Resource Software,2008, Online.)(Kottler, 1999, Online)

           The second major needs category of product is the use by the consumers. The Dove company offers product that are for social prestige such as deodorants. The smell of some characteristic deodorants can signal the product  and class. The other segmentation under customer use if the functional purpose. The same deodorants can be used by laboring customer who would like to feel fresh. ( Business Resource Software,2008, Online.)(Kottler, 1999, Online)

            All the two main segmentations have been implemented by Dove Company. The needs segmentation is to enable them cut down production costs, have steady cash flow, gain better productivity, focus on manufacturing quality. give better services to customers, establish good work relations, gain bigger market shares and leading positions, educate the customers, respond to environmental trends and finally be specific to the customer characteristic.( Business Resource Software, 2008, Online.)(Kottler, 1999, Online)

        The functional consumer is to enable the Doves customers to avail products into varying sizes, react to fad like aroma of fragrance, meet customers geographic requirements, be applied at different times for example morning fresh deodorants in the morning sessions. meet specific gender, in this case women, vary the ages of application of products, define the social application of products such as perfumes, achieve specific features of the products and get access to some product ingredients. ( Business Resource Software,2008, Online.)(Kottler, 1999, Online)

Positioning

        Dove Company has an elaborate positioning scheme for all their product. They use Ansoff’s matrix as elaborated in the diagram below.(Kottler, 1999, Online)

 When they have an existing market and an existing product, the position as market penetrators. They do achieve  this by promotion via advertisement such as TV and internet or reduce prices of the products. When they have existing product  and new market, they position as market developers. In this case they strive to find out if there are more customers to buy their products.  (Learn  Marketing, 2008, Online)(Kottler, 1999, Online)

       When Dove have a new product and existing market, they position as product development. In this case , they seek a better understanding of the segment that they are operating. The plan here is to have more customers and bigger market share. Fourthly, when they have  new product and new market, they will be expected to position under diversification. In this case, they will be trying to come up with newer and trendier products. Finally, when they are faced with very stiff competition, they can consolidate they business and divest from that area to another place that has lesser competition with the same products. (Learn  Marketing, 2008, Online)  (Kottler, 1999, Online)

Decisional Process / Targeting ( consumer/organization)

            Dove Company has got a targeting and decision making process for their marketing. They use 3 main strategies for undifferentiated markets, differentiated markets and concentrated markets. Under the undifferentiated marketing, they have products that they offer to the overall market. An example would be to offer skin lotions to all customers irrespective of their age, culture or location. They make this decision hoping that the customers will be attracted to purchase. This is elaborated below. (Kottler, 1999, Online)

     The second plan that they use in decision making is differentiated marketing. In this case, Dove is targeting very many markets segments while still ensuring that the products are different.  They are focusing at the many different customers groups, such as lotions, hair gels, deodorants.

This is elaborated below. (Kottler, 1999, Online)

                       Adopted from www.learnmarketing.net

       The third way of marketing decision making is by concentrated markets. Dove will decide to focus on a particular segment such as body lotion for the market along the coasts and beaches. These can be sun tans lotions of similar products that are specific to tourists and others along the coasts and beaches. (Kottler, 1999, Online)This is elaborated below.

                   Adopted from www.learnmarketing.net.
Marketing Research and Demand Projection

          Dove have a survey method of doing their market focus. This helps them to assess the potential business at their markets including those who offer competing products. This survey is done for market share, consumer demographics, consumer product knowledge and the distribution. They also forecast by using known scenarios as base. One of the surveys  is positioned in their internet homepage. The customers answer questions then send these to the research data base that does automatic tallying and give feedback. This survey looks at the customers attitudinal features of their products, how they make preferences and choose when products are in competition, what appeals to them and what does not. The also carry out demographic  surveys .(Watters ,2003, p. 1-27)(Kottler, 1999, Online)

            Dove also have simulated product choice surveys and ghost shopping. Using this method, they get information about the product characteristic, the customers opinion on the products and the overall ratings. Using this process of survey, they choose a specific product and its associated attributes. Then they come up with real time consumer choice guides. Once they are able to know why certain customers make certain decisions, they will come up with a model to aid them in decision making. This data will then be used to forecast on the products future attitudinal and attributed characteristic. (Watters ,2003, p. 1-27)(Kottler, 1999, Online)

       Then the marketing staff project these to real time market scenario. These will include the existing scenario, and they establish what will happen when, say, the price is increased by 5%. If the competitors react by lowering by, say, 1.5%, they will be able to maximize their revenues or unit sales.   Use of models like MARC’s Assessors Forecasting help Dove to combine both the attitudinal and attributed characteristics. (Watters ,2003, p. 1-27)(Kottler, 1999, Online)

         In the attitudinal research, Dove looks at the customers preferences to product factors like why they buy, what they like, what is important to them, whether they feel that the price charged gives them value for the product, and if these product meet their needs. These are then streamlined to predict why the customer buys a certain product. (Watters ,2003, p. 1-27)(Kottler, 1999, Online)

          On the other hand the simulated research will dwell on the likelihood of the customer buying a product under some competitive conditions. Then the intensity of product preference is gauged following the gap between what the customer really like and what they actually purchase.(Watters ,2003, p. 1-27) (Kottler, 1999, Online)

         The next stage if the assessment of the Dove matrix of inertia and loyalty evaluation and quantification. This is first based on actual Dove product customer, who are both inert and delighted. It has been found out that Dove customers who are both inert and not delighted are about 15%. Those who are both not inert and not delighted are about 50%. These are regarded as the most vulnerable to switch loyalty. Those who are inert and delighted comprised of about 10% while those who are not inert but are delighted comprised of 25%. Therefore Dove will need a market projection that will lead to retention of the 50% who are vulnerable to loyalty swing.(Watters ,2003, p. 1-27)(Kottler, 1999, Online)

            On the category of non-Dove customers, a similar matrix is used. It has been found that those who are both inert but delighted made up about 18%. Those who were inert but delighted comprised of 10%. Those who were not inert but delighted were 25% . Finally, those who were not inert and were also not delighted were about 47%. This last lot of cisutomet is where Dove needs to project as these are not loyal to the current competitors of Dove and should be won. (Watters ,2003, p. 1-27)(Kottler, 1999, Online)

         Dove also use economic models that exploit the ‘what if’ cases to come up with realistic market scenario. These are also used to work out market relationships, consumers trends, price effects, market capabilities, product  plans, demand and supply changes  by markets and periods. The results will also be used to establish which product Dove need to sell most, set up supply contracts with regional dealers and draw up financial plan and pricing values. ( Watters , 2003, p. 1-27)(Kottler, 1999, Online)
Conclusion: Strategic Planning

         The Dove marketing strategy has two main points of focus. The first is the competition arena definition and the second is the implementation of the decisions. These may include generic strategies, product prices, advertisement, product distribution and market types. The right strategies must be adopted. (Business Resource Software, 2008b, Online)(Kottler, 1999, Online)

            Whenever Dove finds itself in attractive markets, where it has also got good markets leadership, it will invest in modern resources like internet positioning to enable it  give better offering to the customers. In attractive markets, where Doves businesses are not strong, they  focus on consolidating their businesses while preparing themselves for that market in the near future. (Business Resource Software, 2008b, Online)(Kottler, 1999, Online)

            If the market unattractive, but Dove have better business capabilities, they  develop the market so that they can be able to position their products to the customers. The sales will need a promotion to meet the profit targets. If the market is unattractive and the Dove business is equally low, they divest unless convinced that the businesses will yield some minimum profits. All the above four steps define the business path as well as consider stake holders interest.(Business Resource Software, 2008b, Online)(Kottler, 1999, Online)

           Next, Dove have to select the most competitive strategy for their business. They can adopt a cost leadership strategy that will guarantee the customers ace quality with very low prices that will still realize good profits. This strategy is only done if Dove has some capital reserve base, lean management of process, low labor costs and low transportation and distribution cost.(Business Resource Software, 2008b, Online)(Kottler, 1999, Online)

             Dove  also adopt a differentiated strategy when they want their product(s) to look unique from those of competition. They can do this by branding, good process technology, product parts, good service and better supply chains. Again this process must be seen to add profit value and Dove must ensure they have good marketing skills and productions staff.  (Business Resource Software, 2008b, Online)(Kottler, 1999, Online)

         Thirdly, Dove  adopt a focus strategy when they want to concentrate on a particular market area. This mean they can choose to act in different ways to address the particular product market issues that they has established other players are not keen on. (Business Resource Software, 2008b, Online)(Kottler, 1999, Online)

           The next point of the Dove strategy is the pricing. In this case , they adopt skimming strategies, penetration and comparison strategies to gauge how much better of they are when compared with their competitors. (Business Resource Software, 2008b, Online)(Kottler, 1999, Online)

          Dove company has also adopted a promotion strategy that either utilizes push or pull strategies. They use push by offering discount so that they can get in all available revenue in the market. They use pull when they would like to want to attract the customers to buy their products. In this case they use advertisement. Dove have also got modern distribution strategies for their business. They do this by direct modes, whole sale, and full retail distributions. (Business Resource Software, 2008b, Online)(Kottler, 1999, Online)

            Dove have also got strategies for market environment, market prospects, products, market competition, development, production, sales and marketing, customer services, cost of market penetrations and profit potential.  (Business Resource Software, 2008b, Online).(Kottler, 1999, Online)

List of References:

Business Resource Software. (2008a) Market Segmentation. Center for Business Planning.        Available at < > Accessed on April 24, 2008.

 Business Resource Software. (2008b) Marketing Plan. Center for Business Planning. Available            at  <http://www.businessplans.org/Market.html> Accessed on April 24, 2008.

Dove (2008). Welcome to the Dove Community. Available at

            <http://www.dove.us/?            __utma=1.2002634254.1209043692.1209043692.1209043692.1&__utmb=1&__utmc

            =1&__utmx=-&__utmz=1.1209043692.1.1.utmccn%3D(organic)%7Cutmcsr%3Dlive%

            7Cutmctr%3DAbout%2520Dove%7Cutmcmd%3Dorganic&__utmv=-            &__utmk=151003194#/connections/>  Accessed on April 24, 2008.

Idaho Business Education Standards. (2008). Marketing. Available at             <http://www.educ.uidaho.edu/standards/Mktg_mod3.htm> Accessed on April 24, 2008.

Kottler, P. (1999). How to create, Win and Dominate Markets. ISBN : 0684850338.

tt100.biz (2008). The Extended marketing mix (7Ps). Available at <http://www.tt100.biz>           Accessed on April 24, 2008.

Learn Marketing (2008). Ansoffs Matrix. Available at         <http://www.learnmarketing.net/ansoffs.htm> Accessed on April 24, 2008.

Learn Marketing (2008) Targeting. Available at <http://www.learnmarketing.net/targeting.htm>             Accessed on April 24, 2008.

Watters, J. (2003). New Product Demand Projections and Pricing Research. Frost Sullivan        Advanced market Research Summit. p. 1-27.

Positioning and Repositioning- Dove Essay

Pepsico’s Corporate Review Vision and Mission Statement Report Essay

Pepsico’s Corporate Review Vision and Mission Statement Report Essay.

“PepsiCo’s responsibility is to continually improve all aspects of the world in which we operate-environment, social, economic-creating a better tomorrow than today.

Our vision is put into action through programs and a focus on environmental stewardship, activities to benefit society, and a commitment to build shareholder value by making PepsiCo a truly sustainable company.

” (i) Shortcoming matrix of current vision statement

“PepsiCo’s responsibility is to continually improve all aspects of the world in which we operate-environment, social, economic-creating a better tomorrow than today.” There is vague for this sentence. Vision should easy to read or understand. It does not mention what aspects of the world that PepsiCo’s improve to become better. PepsiCo should provide clearly vision statement for their employee and management as guideline to follow. “Our vision is put into action through programs and a focus on environmental stewardship, activities to benefit society, and a commitment to build shareholder value by making PepsiCo a truly sustainable company.”

This vision statement is not distinctive and too board. Any company also can be like this where focus on stewardship and activities to benefit society and shareholder. It does not focus on specific area such as become the world premier consumer products company where focus on beverage and food industry. Besides, this vision is not easy to understand. It required further explanation to understand more details and the hidden meaning. (ii) Evaluation of current vision statement

From PepsiCo’s current vision statement, there are no directional on product and market. Customers do not know what product that they sell and which industry are they from their vision. The graphic that appear from PepsiCo’s current vision statement is having strong financial resources where success in business while leaving a positive imprint on society in food beverage market. They keep undertaken various protect environmental projects to enhance their brand equity. PepsiCo is focus on building shareholder values by its sustainable competitive advantage without forget environmental stewardship.

PepsiCo continuously launched out programs to create win-win situation where can benefit society and increase shareholder wealth. PepsiCo had undertaken numerous projects and alliances around the world where group by the Earth Institute to increase use of recycle materials and reduce materials used in packaging. It is the critical to PepsiCo long term success. When their image is good in society then customers may purchase more and more products from him to support its action. So, it is feasibility.

From PepsiCo’s current vision statement, the desirable is to become a truly sustainable company in which operate-environment, social, economic-creating a better tomorrow than today. PepsiCo desire to create win-win situation where can benefit society and increase shareholder wealth to enhance their brand equity and create brand awareness to the society and public.

PepsiCo’s current vision statement is not easy to understand. It is clear language but it needs few explanation to further understand what are hidden meaning to motivate PepsiCo undertake few projects to protect the environmental. (iii) Developing to real vision statement

From PepsiCo’s current vision statement, there are no directional on product and market. This will be their weaknesses because their vision statements not able to give a proper direction of what goals that they want to achieve. Customers do not know what product that they sell and which industry are they from their vision. In this case, PepsiCo vision statement slightly mismatch with the mission statement. Their mission statement does not mention how to improve the social and environment. Therefore, it will confuse customers by PepsiCo direction to achieve goals.

The graphic that appear from PepsiCo’s current vision statement is they have strong financial resources where success in business while leaving a positive imprint on society in food and beverage industry. Their strength is strong financial resources. PepsiCo can continuously develop R&D activities to further know customers’ needs and wants. Then, their opportunity is create a new market for its drinks products such as expand to all class of customers where not just focussing on young customers. PepsiCo can launch out fruit juice or low sugar drinks and beverage to target different age groups of customers.

The weaknesses are requiring take more time and effort when doing R&D activities. PepsiCo is focus on building shareholder value by its sustainable competitive advantage without forget environmental stewardship. Their strength is well-known brand name where can help PepsiCo to gain larger market share in the industry. Therefore, it creates an opportunity for PepsiCo where their new products can easily penetrate in the market because customers know their brand name and trust of it. PepsiCo had undertaken numerous projects and alliances around the world where group by the Earth Institute to increase use of recycle materials and reduce materials used in packaging. It is feasibility.

Their strength is strong brand equity with corporate social responsibility. PepsiCo undertaken numerous save environment projects can build a good image where sustainable competitive advantage to other competitors. This will create an opportunity where PepsiCo can easily diversify their business to other industry. Customers will look forward to PepsiCo brand because it is a truthfully brand. They will buy PepsiCo product to support PepsiCo actions where consider as put some effort to save our earth environment.

The weaknesses are this sustainable competitive advantage easily copy by competitors. PepsiCo desire to create win-win situation where can benefit society and increase shareholder wealth to enhance their brand equity and create brand awareness to the society and public. Their strength is strong management team to support PepsiCo to well define the core value for all shareholders. It creates an opportunity for PepsiCo to build partnership among various type of business.

(B) PepsiCo’s Current Corporate Mission Statement

“Our mission is to be the world’s premier consumer products company focused on convenient foods and beverages. We seek to produce financial rewards to investors as we provide opportunities for growth and enrichment to our employees, our business partners and the communities in which we operate. And in everything we do, we strive for honesty, fairness and integrity.”

(i) Shortcoming matrix of current Mission Statement

“Our mission is to be the world’s premier consumer products company focused on convenient foods and beverages.”
This mission statement is too relying on superlatives. PepsiCo should lower down its mission statement where can reach it less than 1 year.

(ii) Mission Statement Evaluation Matrix

In this mission statement, there is no customers been mentioned. In the view on products, PepsiCo want to focus on the convenient foods and beverage for its customers. In the view on market, they are selling their products globally and target to be the world’s premier consumer products company. In the view on concern for survival, growth, profitability, PepsiCo provide financial rewards to their stakeholders. PepsiCo have high market share in food and beverage market where second place after Coke Company which is PepsiCo strongest competitors. In this mission statement, there is no technology provided.

Technology that using to increase the efficiency and effectiveness during production is not focusing by PepsiCo. For philosophy, PepsiCo believe everything that they do is striving for honesty, fairness and integrity. It shows that their corporate culture is focusing on the belief to their stakeholders such as employee, suppliers, investors, business partners and shareholders. On the view of self-concept, PepsiCo know its strength and weaknesses and able to survive in this high competitive environment of food industry. PepsiCo started produce healthy drinks and go for other sector to increase its market value because healthy foods become the next trend in this industry.

PepsiCo concern for public image where they keep undertaken numerous protect environment projects. It helps PepsiCo to enhance their brand equity. They take care the community where not just concern with its investors and shareholders. Besides, PepsiCo also concern for employees. They concern with the development of employee and provide rewards for its employee based on their performance. For them, employee is their company assets where representative for PepsiCo.

(C) PepsiCo’s New Corporate Vision Statement

“As we moved to be the global market leader in foods and beverage industry, we will continuously provide various choices of beverage and products to meet different type of customer’s preferences and wants around the world. We desire to undertake our responsibility where continually improve all aspects of the world in which put into various protect environmental actions, build shareholder value and treat our employee well.” From PepsiCo’s new vision statement, it states a clearer direction for PepsiCo as guide for their daily operation activities. Their target is become the market leader in food and beverage industry, this is not rely on superlatives because their brand is well known and PepsiCo sell its products globally.

The graphic that appear from PepsiCo’s new vision statement are they having a clear vision where want to satisfy all expectations from customers, investors, and employees. They also use the profit that earn and disburse to community by leaving a positive imprint on society. PepsiCo is focus on satisfying all stakeholders’ expectation from investors, employees, business partners and community. They continuously launched out different projects and plans to bring benefit to all parties without harm shareholder wealth. It is feasibility.

PepsiCo have strong financial resources to help them to do R&D activities in order to study consumer’s preferences and wants for the beverages. PepsiCo also can use its strong financial resources to improve all aspects of world especially protect environmental actions without harm shareholder wealth.

From PepsiCo’s new vision statement, the desirable is to continually improve all aspects of the world in which continually improve all aspects of the world in by various protect environmental actions, build shareholder value and treat our employee well. PepsiCo desire to create win-win situation where can benefit society and increase shareholder wealth to enhance their brand equity and create brand awareness to the society and public.

PepsiCo’s new vision statement is not easy to understand. It is clear language and it shows the clearer direction for PepsiCo employee as guideline to follow during daily operations.

(D) PepsiCo’s New Corporate Mission Statement

“Our mission is to be the world’s premier consumer convenient and healthy foods and beverages to our customers around the world. We will develop our most efficient process where using the best machinery and production process. We also provide opportunity for our employees and emphasis on their growth and enrichment developments. We seek to provide rewards as motivation to our business partners and communities and society that we operate. What we do in everything always strive for integrity, honesty, fairness and responsibility.” In this new mission statement, PepsiCo want to increase customer value by increase the customer’s choices and increase the customers base such as increase the range where not just focusing on the youngster age.

Based on the previous mission statement, there is no customer mentioned. In the mission statement, there should be has customers component because customers is the revenue for a company. Therefore, PepsiCo should concern the quality and statements of company vision where sensitive to customers wants and increase their satisfaction. The product that PepsiCo want to focus is the convenient foods and beverage. In year 2009, the fast food industry was a trend. Therefore, PepsiCo was targeted on this sector. But now, the healthy sector is slowly replacing the fast food industry. Customers are more concern on their healthy compare to convenience. PepsiCo should start to develop R&D activities to study the customer preferences and their buying behavior.

PepsiCo is selling its product though globally where international market. They are selling their products globally and target to be the world’s premier consumer products company. In the view on concern for survival, growth, profitability, PepsiCo able to survive in this competitive environment and grab the larger market share in this food industry. PepsiCo products such as non-carbonated drinks face mutual process in the product life cycle.

Therefore, they should develop the R&D activities to study customer behavior and preferences. Then, open a new market for a new product. In this new mission statement, they can improve their technology by start to change their traditional way and using online application for processing process. Now, e-commerce activities are the common and popularity used by corporate to decrease their expenses and cost. PepsiCo can start go through e-commerce or internet for their processing process such as payment, order processing and so on. This will help Pepsi to increase their productivity by lower production cost.

For philosophy, PepsiCo believe everything that they do is striving for honesty, fairness, integrity and responsibility. It shows that their corporate culture is focusing on the belief to their stakeholders such as employee, suppliers, investors, business partners and shareholders. Compared to previous mission statement, I add on more belief which is responsibility. I found this belief is important as a company to do corporate social responsibility and employee responsibility to complete a task or mission to help company reach the goals. If all the departments can play its own role well by responsible, then the corporate will be get high productivity.

On the view of self-concept, PepsiCo know its strength and weaknesses and able to survive in this high competitive environment of food industry. PepsiCo started produce healthy drinks and go for other sector to increase its market value because healthy foods become the next trend in this industry. PepsiCo concern for public image where they keep undertaken numerous protect environment projects. It helps PepsiCo to enhance their brand equity. They take care the community where not just concern with its investors and shareholders.

In this component, PepsiCo had done well because they taking action to take care our environment and leave a positive image in the society and public. A negative image may prompts firms affect their achievement of goals. Besides, PepsiCo also concern for employees. They concern with the development of employee and provide rewards for its employee based on their performance. They will provide training for its employee to increase their knowledge of products. For them, employee is their company assets where representative for PepsiCo. They are the persons who help PepsiCo to earn money and profit.

(E) Referencing
“PepsiCo Home | PepsiCo.com.” RSS. N.p., n.d. Web. 18 Feb. 2013. “PepsiCo Our Mission and Vision | PepsiCo.com.” RSS. N.p., n.d. Web. 18 Feb. 2013.

Pepsico’s Corporate Review Vision and Mission Statement Report Essay