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Evaluate the 3 marketing strategies outlined in Exhibit 15.

Which of these strategies would you advice Diesel to adopt andwhy?Branding strategy is crucial to build up the image of a brand and ensuring its acceptance by the target market. Beforechoosing the appropriate branding strategy for StyleLab it would be advisable to analyze the pros and cons of each strategy.Strategy 1The first strategy involves the use of sub-branding which basically implies distinguishing between different product lines. Ahigh degree of importance is given to playing up the role of the master brand. The company aims at portraying its ability toinnovate and move into new product areas. All new product lines are defined in terms of the master brand.When Diesel is used as the 'main driver' it virtually dominates the whole StyleLab logo. Attaching the name of the mainbrand 'Diesel' to the sub brand 'StyleLab' is an implicit guarantee of quality, helping to reduce the perceived risk of theconsumer. He expects an equally high level of satisfaction from StyleLab as he received from Diesel.Using Diesel as the 'co driver' allows the company to maintain a subtle connection between the company's image andStyleLab without imposing the master brand all over the logo.This strategy is not advisable since StyleLab would be completely overshadowed by the company brand name; the newproducts uniqueness would be undermined i.e. not seen as individual by the consumer.Strategy 2Endorsement Branding is suitable when the new product to be launched is not in line with the master brand's objectives butit would benefit the company to depict a relationship between both the brands. Involvement of the master brand addscredibility and allows the company to differentiate its products from each other.Adopting this strategy implies giving more prominence to StyleLab in the brand logo. However, the company would retainthe use of the 'Diesel' brand name in the logo to remind customers that after all, StyleLab is a Diesel offering and thereforethey should expect high quality from the new product as well. The minor variation here is the concept of umbrella branding,wherein Diesel could create a completely new umbrella brand e.g. 'Diesel Planet' and market both D-Diesel & StyleLabunder this name.Although StyleLab is given a more prominent position in the brand logo here as compared to sub branding it is still a riskyproposition. On one hand, it allows the company to use its past success to hype up the expectations and demand for its newproduct. On the other hand, if StyleLab fails to live up to these expectations, it could do irreparable damage to the masterbrand.Strategy 3The last strategy which is independent branding is used when the new product line to be launched doesn't fit in with themaster brand's long term goals and vision. This is the best branding strategy when the company wants to make a consciouseffort to differentiate its products since both the products are likely to cater to completely different market segments.In case of Diesel, the best branding strategy to market StyleLab effectively would be the 'acknowledged ownership' strategy.Here, the company shall not use any visual linkages between Diesel and StyleLab although many customers will be awarethat StyleLab is a Diesel offering. Under acknowledged ownership the company will continue to make use of the existingresources to produce the new product line as well. The main benefit of adopting this strategy is that it permits Diesel toportray a high degree of product specialization to its customers. It can convince customers that D-Diesel and StyleLab arecompletely unique and different types of products, catering to completely different market segments. Diesel wants to ensurethat there is no confusion in the minds of its consumers regarding its

products. The company was worried by the declininginterest in its main product brand on account of brand commoditization. Therefore, by introducing StyleLab the companywants to divide its market segment even further to ensure that it can offer something unique to all its customers.Acknowledged ownership would be preferable for Diesel as compared to total independence since the latter would involvethe creation of completely new facilities and staff to produce StyleLab. There would be no link between the master brandand StyleLab. This would be a huge disadvantage since StyleLab wouldn't have access to Diesel's main strength which is itsexperienced and innovative designers. By introducing StyleLab, Rosso wants to give his existing designers a chance to

express themselves, there is no mention to recruiting completely new designers to handle StyleLab.Therefore, it can be concluded that StyleLab would benefit most from an independent branding strategy but throughacknowledged ownership and not total independence.Ideal Brand Logo:One can argue that D-Diesel brand can be damaged by the confusion arising from its association with StyleLab. Providearguments for and against this statement.The main purpose behind introducing StyleLab was to segment Diesel's target market even further and ensure thatcustomers didn't confuse StyleLab with the core product i.e. D-Diesel. However, there is always the possibility that this planmight backfire and the resulting confusion between D-Diesel and StyleLab might actually hurt the image of the company'score product. This can be justified on the following grounds:- Churning out too many products under different brand names might lead to improper allocation of resources between D-Diesel and StyleLab which might compromise the quality and success of not only the new product but also the masterbrand, D-Diesel.- Customers might equate the quality and desirability of a product with just one particular brand name, D-Diesel. In suchcases multiple brand extensions might make customers feel that the exclusivity of the Diesel brand name is declining andmay affect D-Diesel's market adversely.- Diesel might not be able to market the various brands in its portfolio with equal effect. In case the company focuses amajority of its resources on promoting StyleLab, D-Diesel might be forced backstage to the category of a mainstreamproduct which is definitely not the image that Diesel would like to put across to its target market.- In a rather ironical fashion, D-Diesel's success could actually work against its favor. D-Diesel is the company's main brandand it has already attained a high degree of success. This will automatically generate exaggerated expectations for Diesel'snew offering i.e. StyleLab among the customers. Failure to match these high expectations may do irreparable damage to theDiesel brand name.On the contrary it can also be argued that by introducing StyleLab the company might actually be able to consolidate D-Diesel's position in the market. This viewpoint can be justified on the following grounds:- StyleLab could help to support the company's main brand by taking some pressure off DDiesel's market and catering to itdirectly. Launching a separate brand for a new market segment helps to ensure that the demands of all the customers are metpreventing brand commoditization of the company's products.- D-Diesel would benefit if it could specialize in only its primary target market (1825 years) rather than cater to a broadrange of customers including trendy youngsters as well as mature professionals. It would ensure a higher degree of brandloyalty among the primary market segment for each type of product.- In certain cases brand association can also help to enhance the core brand by

giving it greater exposure. Customers whoare trying Diesel products for the first time through StyleLab might take note of the fact that StyleLab has evolved from D-Diesel thereby encouraging them to try out D-Diesel products.- Diesel quite obviously wanted D-Diesel and StyleLab to have distinct identities but retain some common roots as well.(Page 7)Although the company wanted to separate its markets by introducing a new brand it did not want to miss out on a chance ofcapitalizing on its already powerful brand image at the time of introducing StyleLab.- Diesel seemed to be quite aware of the possibility that customers might get confused by the introduction of a new brand.Hence, they were clever enough to adopt completely different marketing and distribution strategies for D-Diesel andStyleLab to minimize the chances of any damage to its brand image.As is the case of most other things in life, there are both pros and cons for launching StyleLab and measuring its impact onD-Diesel. It can be concluded that keeping in mind the relationship between risks & returns, Diesel should iron out theshortcomings in their strategy and go ahead with it as planned to capture a bigger market share.AppendixFigure 1 (Competitor's Prices)COMPETITORS PRICES(StyleLab = Index 100)

Figure 2 (StyleLab's Positioning in the Market)Positioning and Distribution of D-Diesel and StyleLabFigure 3 (Target Customers of D-Diesel & StyleLab)CriteriaDDieselStyleLabGEOGRAPHICRegionInternationalInternationalDensityUrbanUrbanDEMOGRAPHICAgeFoc us on 16-25Focus on 25-34GenderMale-FemaleMale-FemaleIncomeMedium/medium-highMediumhighOccupationHigh school/ college students/ young professionalsProfessionals; managersGenerationHIP generationGeneration XSocial ClassMiddle class/ upper middlesUpper middles/ lower uppersPSYCHOGRAPHICLifestyleHigh media exposureHigh media exposureShopoholicTravelerNeo hedonistWorldlyTribe memberTrend followerPersonalityOpen-mindedIndependentIndependentVisually educatedInnovation receptiveFashion perceptiveCuriousCulturally awareCuriousBibliography1.Aspects of Marketing Management-Module Handbook [2005-06]. Westminster Business School.2.Doyle, P. [2001] Marketing Management and Strategy. 3rd Edition. Harlow: Financial Times Prentice Hall.3.Diesel for Successful Living: Branding Strategies for an Up-Market Line Extension in the Fashion Industry [2004]. CaseStudy. INSEAD, Fontainebleau, France

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