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LANGBERG &

CO.

Since 1989

LANGBERG &
CO.
INTEGRATED GO-TO-MARKET
STRATEGIES TM

Since 1989
www.langberco.com

Copyright Langberg & Co. 2009


LANGBERG &
CO.

Since 1989 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 Copyright Langberg & Co. 2009
LANGBERG &
CO.

Since 1989 WE WORK WITH LEADERS

● Sprint ● American Standard

● Butler Manufacturing ● Mannington Mills

● CSX ● J&L Specialty Steel

● Cook Compression ● Hallmark

● Michelin ● Crayola

Copyright Langberg & Co. 2009


LANGBERG &
CO.

Since 1989

BRAND PORTFOLIO
WORKSHOP & FACILITATION

Copyright Langberg & Co. 2009


LANGBERG &
CO.

Since 1989
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.

Copyright Langberg & Co. 2009


LANGBERG &
CO.

Since 1989
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
Copyright Langberg & Co. 2009
LANGBERG &
CO.

Aligned & Integrated For Profitable Growth


Since 1989

1. Concept Formulation
2. Features & Benefits Definition
3. Target Audience Definition Strategic
4. Positioning Statement Elements
5. Product or Service Mix
6. Distribution Channels
7. Pricing
8. Sales & Selling Processes & Disciplines Tactical
9. Customer Care Processes & Disciplines Elements
10. Packaging
11. Graphics & Design
12. Site Selection Criteria
13. Promotional & Merchandising Programs
14. Supply Chain Management Enabling
15. Human Resources Plan Elements
16. Management Information Systems
Continuum Marketing; Copyright Leslie S. Langberg 1989-2009
LANGBERG &
CO.

Aligned & Integrated For Profitable Growth


Since 1989

1. Concept Formulation
2. Features & Benefits Definition
3. Target Audience Definition Strategic
4. Positioning Statement Elements

• 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

Continuum Marketing; Copyright Leslie S. Langberg 1989-2009


LANGBERG &
CO.

Since 1989
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

Copyright Langberg & Co. 2009


LANGBERG &
CO.

Since 1989
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

Copyright Langberg & Co. 2009


LANGBERG &
CO.

Since 1989
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
Copyright Langberg & Co. 2009
LANGBERG &
CO.

Since 1989
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

Copyright Langberg & Co. 2009


LANGBERG &
CO.

Since 1989
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
Copyright Langberg & Co. 2009
POSITIONING STATEMENTS:
LANGBERG &
CO.

Since 1989 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.
Copyright Langberg & Co. 2009
LANGBERG &
CO.

Since 1989
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 ATTACKING A LEADER

• 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.
LANGBERG &
CO. CONDITIONS FOR
Since 1989 ATTACKING A LEADER
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.
LANGBERG &
CO.

Since 1989
A LEADERS MANDATE
• 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!
LANGBERG &
CO.

ADDRESSING COMPETITIVE THREATS


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
LANGBERG &
CO.

Since 1989
The Value Equation
A View Incorporating Brand Equity
Value = Price (P) + Tangible Attributes (T) + Brand Equity (B)

Undifferentiated Meaningful & Differentiated

Innovation

Tangible Attributes
Product and service related features and benefits

Brand Equity
Trust, longevity in marketplace, social responsibility, consistent
performance, etc.
Copyright Langberg & Co. 2009
LANGBERG &
CO.

Since 1989
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

Copyright Langberg & Co. 2009


LANGBERG &
CO.

Since 1989
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?

Copyright Langberg & Co. 2009