Experience dissatisfaction.

Experience by def involves individuals Start from the experience-go backwards Cell phone - feature function set Digital technology crammed Frus, dis-satn.- why navigate through all the stuff that I don't need Feature rich but experience poor

Answer Customer,adjective to noun

Value is created in the intersection of the firm and the consumer The exchange- POE to MOT to POS Why involve ??? Ford CDMA v/s GSM Television and Cellular ind. USA

Why involve???
product development risks- I/P from Cus. companies increase their V.C opport. consumers create more value for themselves due to unique experience Music Industry- Cos.unilaterally define choice for the consumer, Napster no mechanism to sample the music Apples strategic blunder

Why involve???
Do I listen to a million prospects before I innovate Liability v/s resouce M. soft- 600 000 cus. Tested beta version XP NT , 600 mn $ R & D Peter Jackson Lord of the rings, Gordon Patterson,

Seek to understand
Before brand innovations, understand markets and the BCG positioning M. leader, follower, challenger Each has essentially an offensive and a defensive strategy that is different Branding-highly strategic, hence in line

Market leaders branding strategy

Defensive:
Fast follower Not a pioneer IBM (Bell labs), Microsoft (best labs in voice recognition) Use capital side and not the brain side Apple v/s IBM DNR- development first, n then research

Market leaders branding strategy

Offensive
Grow the pie Understand topography- cellular India BSNL(2003), huge market access Mature markets- Attract for newer markets Attract newer customers Rural marketing-eliminate class differentials Packaging- the fifth P

Market leaders branding strategy

Offensive
Non consumers to consumers Maruti-800 expansion mode, TATA Motors Reliance Rural markets

The challenger
Defensive
Coexist with no. 1 Imitate no. 1(Berger King, Pepsi) India- most markets are coexisting. Banking, Airways,

Clone- follow- defensive-attack-offensive Quietly defend first, attack later Offensive- challenge, but beware

Follower
Defensive
Segment within segment Luggage Cos., Canteen contract, Jeep Car makers suppliers- pseudo specialists

Attack - innovation,
Create radical change Chrysler
automotive transmission, Convertible designs, cap forward design, Minivan Manufacturing rebate Legitimacy financial plus marketing

Follower
Limited
limited express, Catalogue company- Victoria secrets Galion Lane Bryant

Tata Automobile Sprint

Price point innovation, 10 cents per minute Show business personality a spokesperson

Sears, JC Penny toys, Cola.

Finance drives branding

Market share concentration depends on the extent to which fixed costs dominate financial structure
Aerospace, Auto Semiconductor, Intel v/s AMD v/s Motorola Software Intel-70 % m. share, 70 % fixed cost intensive Wall-scope and scale of investments

Unity is strength
Solutions-attack in consortiums IBM- assembler, micro processor and machine language- 7 dwarfs + B.L=UNIX Boeing v/s Mcodonalds, Airbus Microsoft monopoly- Linux+ IBM+Oracle Economies of scale and scope in manufacturing + procurement = effective branding

Seek to understand
Market follower
Small, niche, margin driven

Market leaders Large, full line, volume driven

Seek to understand
M. Leader Size and speed (reaction) Increased fixed costs Full line of products Follower Selectivity and service

Increased variable costs

Limited products

Network and alliances

Vertically integrate strong CEO leadership

Seek to understand
Never shall meet NBC, CBS, ABC, FOX Cultural issues Neiman Marcus v/s Walmart For a volume driven market leadercommon corporate overhead, integrate operations, share fixed costs, distribution, plants, corporate functions

Branding for M. leaders

Have a corporate brand Common brands and common distribution M. cap: revenue GM / Toyota Chevrolet, Optra, Buick, Oldsmobile Internal fight among dealers

Seek to understand
Umbrella brand a byproduct of economies of scale, lest Brand proliferation
Line extensions

Corporate v/s non corporate- cost efficiency GM- 10 different brands

Managing the brand Acquisions

Brand managers- investment banking Acquisition one stop shop??? OR part of your growth strategy???

Flair v/s disclipline

Hard edged finance legal experts Continuously skeptical Relationship building, strategies issues to look Deal makers, Strategists, org. and cul. issues

Flair v/s Discipline

Growing through acquisitions can itself be a branding process and PLC Bias towards acquisitions, supported by experts Thrill of the chase may blind you
1997- $ 3.7 mn ton psydol plant

ISPAT
pre acquision discussion and debate to post acquisition integration

Need identification
Non-profitable growth, leveraged cash 65 years old Divestment Decisiveness and lightning speed
Electrolux

Stage 3- Intergration
Do you jump into it ??? Strategically understand How to integrate Acquisition integration

Integration stage 1
Remove the top Develop their infrastructure, simultaneously optimally utilize existing Invest and build their competence, brands Operationally clean, strategically sound Linkage between ur and their managers

Again- finance drives marketing

Yes, it is financial, but that does not mean it is only financial Stop the bleeding Stage-2 Efficiency of operational processes Quality of products Customer satisfaction indices

Integration Stage 3
Strategic planning Employee commitment Product development

Services marketing
Service industry Growth rate 1982-1996 Finance and 30 % insurance Wholesale 27 % trade Retail trade 22 % Transportation utilities 40 % Growth rate 1996-2006 20 % 13 % 32 % 22%

Franchiser - advantages
Expansion- at low cost or expansion without expenditure. Capital enhancement by franchising fees and royalty. Both the corporate brands as well as merchandise get exposed. Fastest way to expand. Getting local knowledge.

Franchiser dis-advantages
The brand rides the wave of fame and success with the franchisee You part with know-how in a quest for geographical expansion over cost; creating room for franchisee monster You need share to profits and prosperity. Cut off from customers.

Franchiser dis-advantages
Difficult to drive home a uniform corporate responsibility. People and organizational processes Every one may not have same orientation- knowledge processors. In service sponsored franchisee, difficult to establish uniform service encounter.

Service encounter
when you call to make a reservation to take a flight, when you arrive at the airport and check your bags curbside, when you go inside and pick up your ticket at the ticket counter, when you are greeted at the gate, when you are taken care of by the flight attendants onboard the aircraft, and when you are greeted at your destination

Franchisee advantages
Gets to choose successful partners. Low establishment time Low risk in Business- established experiences Problems regarding I/O are less operational, accounting know-how from the franchiser. Bank guarantee (trusted and time tested brand). No mass communication but local communication.

Franchisee dis-advantages
Conformity v/s Individuality: He has to conform to franchisers rules; stringent norms of conformity. No Identity of Franchise. Multi brand outlets. Under same agreement you cant have multi brand outlets. If franchisers brand fails, you also fail.

Need identification
ISPAT
pre acquisition discussion and debate to post acquisition integration

Non-profitable growth, leveraged cash 65 years old Divestment Decisiveness and lightning speed
Electrolux

Need identification
Effective market research Assess financial needs of the seller Urgency of the seller Speed
Electrolux ISPAT N.Piramal

Discipline v/s flair.

Stage 3- Integration
Do you jump into it ??? Strategically understand How to integrate Acquisition integration

Integration stages
Stage 1: Remove the top Develop their infrastructure, simultaneously optimally utilize existing Invest and build their competence, brands Operationally clean, strategically sound Linkage between ur and their managers

Again- economics drives markets

Yes, it is financial, but that does not mean it is only financial Stop the bleeding Stage-2 Efficiency of operational processes Quality of products Customer satisfaction indices

Integration Stage 3
Strategic planning Employee commitment Product development Simple

Sample
1988- textiles to pharmacy Acquisitions, organic growth and strategic alliances Mutually exclusive??? Acquisitions
Nicolas labs- 1988, Indian operations of Hoffmal La Roche Hoechsts R & D facility Lacto Calamines R & DBoeringer Mannheim Germany