randing, o reinforcing, isa key ele- 3 differentia BOX 5.4 BASF Sustains Two Brands That Differentiate Back in the 1960s, BASF acquired a German coatings company called Glasurit. Later on, in 1986, the group acquired another brand, R-M, friginally from the United States. At that time, a debate arose within the firm among, those who wanted to fold the RM brand and retain Glasurit as the unique brand and others ho argued that the company should get rid of both brands and replace them with the BASF name. Some, finally, forcefully made a ‘ease for the survival of Glasurit and R-M believing that two brands with different iden tities would allow the company to target two segments of customers and result in larger sales. This last group prevailed, and today, Glasurit and RM are both strong brands Glasurit and R-M produce very similar ‘coatings. The production of the paint is done ‘with the same technology, the same molecules and the same chemical reaction. The d Hiation take production process to allow differentiation at Towest cost. Glasurit and R-M target repair shops all over Europe, which use the coati to repaint cars and trucks. In theory, the two brands are competing with each other. To minimize the competition and reinforce their separate brand identities, each brand main- tains its own distribution channel, with no Aistributor allowed to carry both brands ‘The main difference between Glasurit ‘and R-M is their brand identity, which comes from the marketing messages and augment ing services each provides. As a “German’ brand, Glasurit has a technical and technolog Jeal character. Its tag line is "The Preferred Technology Partner.” In con “American” brand, R-M is business-oriented, with the tag line: “Bus BASF ‘Coatings managers have developed and pro- rmoted these distinct characters tone place as late as possible in the lessly Shure: BASF Coatings Strat Carbonneau, Kellogg School of Ma sgement, North ic Marketing Department: Contributed by Ri Glasurit is 1 to body shop owners of managers with requirements fot best-in-class paint quality. Thus, many of its customers repair segment emphasize techn: performance. Glasurit salespeople en ant to appe snd to be Tn the high-end car Its marketing messages y and state-of-the-art repair shop managers in technical discus: sions, educating them about innovations and providing documentation on technical fea tures, They assist these repair shops in “pushing the edge” of what is possible applying coatings. In addition to this tradi tional sales argumentation, which has made the reputation of Glasurit, best-in-class profit ability enhancement services also are offered to shop owners whose main focus is shifting now from technical to botton-line considera (On the other hand, R-M is the “business partner.” Its marketing messages are about productivity, profitability, and lowering costs for customers. The services that augment the R-M coatings reinforce this positioning. For example, RM sales reps advise their cus- tomers on organizing their workshops to be more efficient and on new paint methodolo- gies that would lower cost When an innovation occurs, manage ment makes sure that Glasurit get it in prior: ity. For example, in keeping with it technical prowess, Glasurit first introduced water borne paint. Later on, R-M presented water borne paint as an innovation that would lower customers’ costs In terms of pricing, there is a slight pre lasurit. The goal of having two brands is but rather to meet the differing require ments and preferences of two segments of estem University