Electrolux

In the late I99tte, consumer durables manufaclurer Etectrolux offered a range ol prtrlessioaal food service equipment in Western Europe. By the company had 15 brands in the professional Iwd service equipment market. but only one, Zanussi, was stud in more lhan one country in turope. By awing irom a segmentation sctieme bnged en price—low. medium. and h in h—to one based on consumer needs—from base solutions lo prestige gourmet—Electrolu* was able to go from 15 local brands lo having tour pan-European brands Trie resulting economies of scale and soope helped turn ilectnolux's fori ants around, so even Ihgugh itdeleled many brands * ils professional kitchenware division's sales never dwindled and it was finally able to lurrt a profil in 2001.

Brand lines with poorly differentiated brands are likely to he characterized by much can-nibaltoation and require pruning,159 Kcllogg's Hggo waffles come in 1ft flavors. Investors can Choose among tS.tJOu mulual funds. Students can choose among hundreds of business schools* For the seller, tins may spell hypercoinpelilion. For lhe buyer, this may spell tpo much choice.

Besides ihese considerations. there are a number of specific roles brands tan play 0s part of a brand portfolio.

Flanker or "fighter" brands are posiiioried with respect to competitors' brands so that more important (and more profitable) flagship brands can retain ihcir desired positioning, Procter fc Cambie markets tuvsdiaper? in a way ihat flanks lhe more p&niHim positioned hampers. In designing these fighter brands, marketers must walk a Fine line. Fighter brands must noi be so attractive ihat they take sales away from their higher-priced comparison brands or referents. Al the same time, if fighter brands are seett as connerled lo other bra nils in the portfolio in any way (e.g., by Virtue of a common lira tiding strategy), then lighter brands must not be designed so cheaply thai they reflect poorly on these other brands.

Some brands may be kept around despite dwindling sales because they still manage to bold on to a sufficient number of customers and maintain their profitability with virtually no marketing support. 'Ihese "cash cow" brands can be effectively "milked" hy capitalizing tin their reservoir of existing brand equity. I'pr example, despite the fact that technological advances have moved much of its market to the newer Mach III brand CrT razors« Cillctte still sells the older Trac II, Atra. and Sensor brands. Because withdrawing the.se brands may not necessarily result in customers switching lo another trilletle brand, it may he 11 Hire profitable for Cilletle to keep ihetn in its brand portfolio fur razor blades.

LE ":L ¡"lie role oTa relatively low-priced brand in the brand portfolio often may ho to attract customers to die brand franchise, Ret&HetiS like to ferfiute these Traffic builders" because they aire able to "trade up" customers to a higher-priced brand. l7or example, BMW introduced certain models inio its 3-series automobiles in part as a means of bringing new customers into the brand franchise with the hope of later "moving them up" to higher-priced models when they later decided to trade in their cars.

■ ¡-UN : :..: . ■.. The role of a relatively high-priced brand in the brandfamily often Is to add prestige and credibility to the entire portfolio. For example, one analyst argued that the real value of its Corvette high performance sports car to Chevrolet was in "its ability to lure curious customers into Showrooms and at the same time help improve the image of other Chevrolet cars. It does not mean a hell uf a lot for G\l profitability, hut there is no question that it is a traffic builder."70 Corvette's technological image and prestige were meant I oca si a halct nver the entire Chevrolet line.

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