bsad 113 firm, brand, and product line objectives lars perner, instructor 1 firm, brand, and product...

BSAD 113 FIRM, BRAND, AND PRODUCT LINE OBJECTIVES Lars Perner, Instructor

1

FIRM, BRAND, AND PRODUCT LINE OBJECTIVES

Firm objectives Specificity Distinctiveness Realism “Balance” within market

Brand objectives Relation to firm objectives Balance

Product line objectives Relative to firm and brand

objectives


2

Firm Level Objectives

Usually ultimately to maximize present value of total profit—but HOW? Specificity

Distinctive competencies Leveraging of other resources Market balance Willingness/ability to assume

risk


3

Specificity

Distinctive competencies Product development Manufacturing

Quality Cost effectiveness Timing

Distribution Promotion

Leveraging other resources Brand image People Running facilities Contacts Financing

Equity/cash Ability to raise money


4

Market Balance

Differentiation tends to reduce—but not eliminate—price competitionE.g., clothing retailing Mass market: K-Mart, Wal-Mart Department upscale: Nordstrom Department: Sears, J.C. Penney Full service, general category Sole brand: Laura Ashley, T. Hilfiger Special target: Gap Specialty stores Liquidation/outlet


5

Market Balance

Prepared food Upscale restaurants

Affiliated Unaffiliated

Specialty/ethnic Chinese, Mexican,

Argentine Fast food

Hamburger Ethnic

Niche Health

Beverages…


6

Risk

For higher level of risk, a higher rate of return is generally necessary

Some risks Liquidity Short term earnings Long term

Damage to brand Loss of resources Other profitability impact


7

Brand Objectives

Ultimate objective: Contribution to overall firm profitability

Implementation objectives Margins:

Absolute vs. percentage Long term vs. short term Volume/market share

Prestige/brand premium


8

Distribution Issues in Brand Objectives

Margins Absolute vs. percentage Product line issues Long term vs. short term

—brand building vs. “harvesting”

Volume/market share Cost of

production/marketing Selectivity of distribution

Brand premium Quality of brand Specialization/ niching

Variety/selection Specialization to target

market Adaptation

Service Warranty Support Training


9

Product Line Objectives

Objective: Maximize overall contribution of product line Margin components (e.g.,

printers vs. supplies) Promotion (e.g., Coca

Cola clothing) Ease of availability Building vs. harvesting


10

DISTRIBUTION OBJECTIVES: THE BIG

PICTUREDistribution to achieve firm objectives

Tradeoffs between distribution options Cost Selectivity/ image Intensity Service impact Opportunities


11

Some Very Interrelated Objectives!

Selectivity/Intensity Exclusivity Service/support

capacity Dealer loyalty Visibility Convenience vs.

Cost Brand image

Cost vs. Speed Intensity Brand image effects Specialization Channel relations


12

Some Tradeoffs

Reach vs. exclusivity Consumer behavior

Willingness to search Purchase situation

Planned Impulse Semi-planned,

location specific

Brand effects


13

Some Cosmetics Outlets

Prestige Upscale department

stores Company stores Specialty stores Personal selling

Impulse Vending machines Convenience stores

Other intensity College book stores

Planned purchase Category discounters

(e.g., Sally Hansen) Supermarkets Discount stores Avon ladies Specialty catalogs Department stores

Impulse Supermarket checkout Hair/beauty salons


14

More Tradeoffs

Reach vs. dealer service/support Advice Accessories

Product specific Complementary

Warranty service/repairs


15

Reach vs. Dealer “Loyalty”

Upscale dealer is often more interested in pushing exclusive brand

Effects of loyalty “Push” of brand Service/support

However, brand may not develop identity of its own


16

Cost of Distribution vs.

Speed

Intensity

Visibility

Brand image effects

Specialization

Channel relations


17

Some Distribution OpportunitiesProduct promotion Shelf-space Demonstrations Placement

“Parallel” distribution Factory outlets Electronic/catalog

Partnerships (joint distribution and promotion)


18

Deciding on a Distribution StrategyConsumers

Focus groups, interviews, surveys

Scanner data Frequency of purchase Correlated purchases

Observation in the field Usage Purchase

Decision method Competing products Complementing

products

Communication with distributors (retailers, intermediaries) Meetings/calls Trade shows

bsad 113 firm, brand, and product line objectives lars perner, instructor 1 firm, brand, and product...

Documents