Session 16

MANAGING THE
BRANDS
How to manage brands and product line portfolios?
On which brand to invest?
Which brand to wind up?
►Company operates in various businesses or markets.
►Each of its businesses operate in different conditions.
►Each of businesses will earn different amount of profits.
►Each of businesses require different amount of investments.
►Corporate should learn to expect different amounts of profit
from its different businesses.
►X-axis represents Relative Market Share Position.
►Relative Market share refers to the ratio of organization’s
divisional market share and the share of its largest competitive
firm.
►Y-axis represents the industry growth-sales.
 Question Marks Divisions in the quadrant-I
(High growth market/low market share)

►Cause a drain on cash flow as they incur huge marketing

expenditure in reaching out to growing no. of customers.
►Incur costs in setting up new manufacturing units to be able to
serve the growing markets.
►Low share products.
►These products are cash users.
 Stars Divisions in Quadrant-II
(High growth/ High market share)

► Market leaders and earn high revenues

► Substantial investments to meet competitive challenges.
►Cash flow is roughly unbalance.
 Cash Cows Divisions in Quadrant-III
(Low Market growth/High Market Share)

►Investment in new production facilities.

►Marketing is minimized.
►High market share leads to positive cash flow.
 Dogs Divisions in Quadrant IV
(Low Market growth/Low Market Share)

►Earn low revenues or negative cash flow.

 Question Marks:
(High growth market/low market share)

►Market Development
►Market Penetration
►Product Penetration
►Forward Integration (Availability of Huge resources)
►Backward Integration (Availability of Huge resources)
►Horizontal Integration (Availability of Huge resources)
►Concentric diversification (To reduce narrow product line)
 Stars Divisions in Quadrant-II
(High growth/ High market share)

► Market Development
►Market Penetration
►Horizontal Integration
►Divesture
►Liquidation
 Cash Cows Divisions in Quadrant-III
(Low Market growth/High Market Share)

►Retrenchment
►Concentric diversification
►Horizontal diversification
►Conglomerate diversification
►Divesture
►Liquidation
 Dogs Divisions in Quadrant-IV
(Low Market growth/Low Market Share)

►Concentric diversification
►Horizontal diversification
►Conglomerate diversification
►Joint venture
 General Electric 9-Cell Matrix
A C o m p e ti ti v e b u s i n e s s s t r e n g t h
T
T HIGH -------------- --------------
R -------------- --------------
MA
A C ----------- -----------
R T ######### --------------
K I
MEDIUM ######### --------------
E V
T E ###### -----------
N ######### #########
E
S ######### #########
S LOW ###### ######
HIGH MEDIUM LOW

__________
__________ #######

INVEST/GROW SELECTIVITY / EARNINGS HARVEST / DIVEST

GE 9 cell market attractiveness – competitive position matrix:
Businesses of the corporate operate in different markets and are
at different stages of evolution. The effort is to classify the
businesses in a way that the corporate is able to identify appropriate
investment policies and strategies for each of its businesses.
Business Strength (X-Axis):
Current Market Share
Size
Profitability
Technology Position
Image and People
Market Attractiveness (Y-axis):
Market size
Market Growth rate
Profit potential
Competitive Structure
Economies of Scale
Environmental and Social Impacts
 Product Strategies for growth:
Marketers always lookout for the new ways to grow their businesses.
Marketers have four variables:
►Existing Market
►New Market
►Existing Products
►New Markets

Growth Strategies
►Market Penetration
►Product Development
►Market Development
►Diversification
Market Penetration :
►Penetration in the existing market with the existing products.
► Brand Building
► Existing customers become brand loyal.

Product Development :
►Develop new products for current markets.
►Gain high sales among its present market.

Market Development :
►Existing products sold in new markets.

Diversification
►New products for new markets.
►This strategy is better if synergy exists between existing products and new products.
 Ansoff’s matrix – growth strategies

MARKET
P
Market Market
EXISTING R
Penetration Development
O
D
Product U
NEW Diversification C
Development
T
EXISTING NEW
 PRODUCT RECALLS

►Employees should understand the link between recalls and

customer satisfaction and safety, and the effect of the recall on
company success.
►Company should check if the company is suffering from “kill the
messenger”.
►“Kill the Messenger” culture that prevents news of product
problems from reaching the right people.
►Responsibility should be assigned to one senior executive.
►Recall should be seen as a task to use marketing skills to retrieve
the products from the customer.
►The recall manager should appoint a response team to manage
the recall on a daily basis.
►The team evaluates the situation, it should determine the scale of
response and the type of recall to be adopted.
►Crisis management team of the company should handle the
communication efforts on all the fronts.
►If the response team concludes that a recall action is warranted,
it should get into the act fast.
►It should decide who will make the announcement, when and
what he will say.
►It has to decide as to who will accept the faulty products, how the
returned products will be monitored and who will provide the repairs
or replacements.
►During the recall, the response team should keep customers
properly informed and persuade them to complete the necessary
exchanges.
►They can also plan a especially recall advertisement.
►Logistics and information system should have the ability to
accept notification of product defects.
►Provide toll free customer service line operated by people who
understand how to react and who know whom to report to if a
customer calls.
►System should be able to isolate the product defect by batch,
plant, process or shift though use of identifiers such as serial
numbers.