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LANGBERG & CO.
INTEGRATED GO-TO-MARKET STRATEGIES TM
LANGBERG & CO.
Copyright Langberg & Co. 2009
Since 1989
Since 1989www.langberco.com
WHAT IS LANGBERG & CO.● A consulting and ventures firm with three areas of focus:
1. Product / Customer / Sales● Profitable customer segmentation and customer insights
● Product development or rejuvenation
● Brand portfolio management
● Channel optimization including sales force and distributor effectiveness
2. Operations / Supply Chain / Manufacturing
● Network optimization, including the number, location, and size of dist. & manufacturing
facilities ● Sourcing partnerships
● Product life cycle mgt. where products are optimally integrated into the supply chain
3. Mergers & Acquisitions – factory to consumer integrated due diligence
● A trademarked process to ensure strategy and operational integration – Avoid academic theory
● 20 years of enriching B2B and B2C companies
● Only senior level executives
LANGBERG & CO.
Since 1989
Copyright Langberg & Co. 2009
WE WORK WITH LEADERS
● Sprint
● Butler Manufacturing
● CSX
● Cook Compression
● Michelin
● American Standard
● Mannington Mills
● J&L Specialty Steel
● Hallmark
● Crayola
LANGBERG & CO.
Since 1989
Copyright Langberg & Co. 2009
BRAND PORTFOLIOWORKSHOP & FACILITATION
LANGBERG & CO.
Since 1989
Copyright Langberg & Co. 2009
Today’s Goal
Lay the foundation to objectively evaluate the need for 1, 2 or 3 brands and their value and profitability to the company’s overall brand portfolio.
LANGBERG & CO.
Since 1989
Copyright Langberg & Co. 2009
What Type of Company Are You?
DEFINITION & EVOLUTION OF “DRIVEN” COMPANIES Manufacturing Driven - 1940’s – 1970’s
Develop products and go-to-market strategies primarily based on equipment utilization
Sales Driven – 1970’s – 1990’s
Develop products and go-to-market strategies primarily based on the “voice of the sales force”
Marketing Driven – 1990’s to present
Develop products and go-to-market strategies primarily based on the “voice of the customer” and external dynamics
• Customer (properly defined and segmented)• Competition (properly defined)• Legislation• Societal environment
LANGBERG & CO.
Since 1989
Copyright Langberg & Co. 2009
Aligned & Integrated For Profitable Growth
1. Concept Formulation
2. Features & Benefits Definition
3. Target Audience Definition
4. Positioning Statement
5. Product or Service Mix
6. Distribution Channels
7. Pricing
8. Sales & Selling Processes & Disciplines
9. Customer Care Processes & Disciplines
10. Packaging
11. Graphics & Design
12. Site Selection Criteria
13. Promotional & Merchandising Programs
14. Supply Chain Management
15. Human Resources Plan
16. Management Information Systems
StrategicElements
TacticalElements
EnablingElements
Continuum Marketing; Copyright Leslie S. Langberg 1989-2009
LANGBERG & CO.
Since 1989
Aligned & Integrated For Profitable Growth
1. Concept Formulation
2. Features & Benefits Definition
3. Target Audience Definition
4. Positioning Statement
StrategicElements
Continuum Marketing; Copyright Leslie S. Langberg 1989-2009
LANGBERG & CO.
Since 1989
Structure – 3 Core Components
Target Audience Definition
The attitudinal and demo (firmo) graphic description of the primary prospect to whom the brand is intended to appeal
Frame of Reference
The category in which the brand competes; the context that gives the brand relevance to the target audience
Benefit Statement
The most compelling and motivating meaningful benefit that the brand can own (or have a first-to-market sustainability) in the hearts and minds of its target audience relative to the competition
Brand Portfolio Mgt.
Objective
Specify the roles and relationships of a company’s brands to one another ensuring they are clearly positioned and marketed to the company’s target audience(s).
Key Advantages
Avoid consumer and customer confusion
Ensure internal efficiency by preventing investment in overlapping product development and or marketing efforts
Maximize overall profitability and market share
LANGBERG & CO.
Since 1989
Copyright Langberg & Co. 2009
Types of Branding
Private Label
A brand created and owned by a reseller of a product
Co-Branding
Using established brand names of two different companies on the same product (in most cases one company licenses the other to use with its own)
Line Extension
Using a successful brand name to introduce additional items in a given product category under the same brand name
Brand Extension
Using a successful brand name to launch a new or modified product in a new category
Multibrands
Introduction of additional brands in the same category
LANGBERG & CO.
Since 1989
Copyright Langberg & Co. 2009
Line Extension
Using a successful brand name to introduce additional items in a given product category under the same brand name
Pros
Low-cost, low-risk to introduce new products
Meet consumer demand for variety
Utilize excess capacity
Command more “shelf space” from resellers
Cons
Lose its brand meaning
Cause marketplace frustration – with both resellers and consumers
Could come at the expense of other items in the line
Works best when it takes sales away from competing brands, not when it cannibalize a company’s other products
LANGBERG & CO.
Since 1989
Copyright Langberg & Co. 2009
Brand Extension
Using a successful brand name to launch a new or modified product in a new category
Pros
Typically saves high advertising costs needed to build a new brand
Gives a new product instant recognition and faster acceptance
Cons
Unsuccessful brand extensions can de-value the core brand
The “mother” brand can lose its meaning through brand extensions that “don’t fit.”
The brand extension must have the “permission” of the marketplace to work best
LANGBERG & CO.
Since 1989
Copyright Langberg & Co. 2009
Multibrands
Introduction of additional brands in the same category
Pros
Establishes different features and appeal to different buying motives
Secures more resellers and or more shelf space
Protects the core brand by setting up flanker or fighter brands
Cons
Typically each brand secures a small share, each fighting to be profitable
Spreads the company’s resources
Brands are often developed to appease resellers, claiming exclusivity or provide a veil of “non-competing” brands
Works best when there is identifiable differentiation in features and appeal to different buying motives
LANGBERG & CO.
Since 1989
Copyright Langberg & Co. 2009
POSITIONING STATEMENTS:MUST THEY BE UNIQUE?
No. In a commodity category highlighted with relatively short-lived advantages in technological advances – virtually all of which are duplicated within a short time frame by competitors - finding a unique benefit with sustainability is difficult. Consequently, the players in the category need to compete largely on how well they:
1. Can accurately understand customer needs and desires – both rationally and emotionally driven;
2. Can align those needs and desires with their internal business functions (manufacturing, product development, marketing, etc.);
3. Can assist their respective distribution channels build a meaningful bridge to the consumer and;
4. Can tactically execute and sustain that execution against a defined strategic position.
LANGBERG & CO.
Since 1989
Copyright Langberg & Co. 2009
A MARKET LEADER
A firm that has the largest percentage total sales revenue of a market or product. Often dominates its competitors in:
Customer loyalty Distribution Coverage Image Perceived value Price Profit Promotional spending
LANGBERG & CO.
Since 1989
The cardinal rule in offensive strategy is not to attack a leader head-on with an imitative strategy
Successfully attacking a leader requires that a challenger meet three basic conditions.
ATTACKING A LEADERLANGBERG & CO.
Since 1989
1. A sustainable competitive advantage – in either cost or differentiation. Without sustainability the challenger will not sufficiently have time to close the market share gap before the leader can imitate.
2. Proximity in other activities – the challenger must have some way of partly or wholly neutralizing the leader’s other inherent
advantages. Unless challenger maintains cost proximity, the leader will typically use its cost advantage to neutralize the challenger’s differentiation. Attack on a cost advantage alone must create an acceptable amount of value the the buyer.
3. Some impediment to leader retaliation – The leader must be disinclined or constrained from protracted retaliation against the challenger or a changing marketplace.
CONDITIONS FOR ATTACKING A LEADER
LANGBERG & CO.
Since 1989
Pursue strategies and programs to strengthen and protect its position
Build total demand for its products – consumption, more usage, new users
Product innovation
Market share growth
Assess and address competitive threats – quickly!
A LEADERS MANDATELANGBERG & CO.
Since 1989
Two Key Tactics
Blocking
Countering a competitive thrust with a forceful, direct response
Covering
A replication of a competitive move, not allowing a competitor to occupy “marketing” space that might pose a danger to the ongoing success of its products
Typical Considerations
Service Distributor programs Product attributes Price Warranty New product or brand
ADDRESSING COMPETITIVE THREATSLANGBERG & CO.
Since 1989
The Value EquationLANGBERG & CO.
Since 1989
A View Incorporating Brand Equity
Value = Price (P) + Tangible Attributes (T) + Brand Equity (B)
Tangible Attributes
Product and service related features and benefits
Brand Equity
Trust, longevity in marketplace, social responsibility, consistent
performance, etc.
Undifferentiated Meaningful & Differentiated
Innovation
Copyright Langberg & Co. 2009
The Value Equation
As tangible attributes (T) and brand equity (B) decrease in value (i.e. become less differentiated), price (P) becomes the major component in the value equation.
>P = <T + <B
When price (P) and tangible attributes (T) become less differentiated, brand equity (B) becomes the major component in the value equation.
>B = <P + <T
LANGBERG & CO.
Since 1989
Copyright Langberg & Co. 2009
Attack Yourself
1. If we were starting a company and had significant VC money behind us, how would we attack AO Smith to steal share?
2. How many brands would we go-to-market with?
3. If more than one, how would we differentiate the brands and…
4. Would we offer the brands to all distributors?
LANGBERG & CO.
Since 1989
Copyright Langberg & Co. 2009