GUIDE 1 - BRANDS

LEARNING OBJECTS

2.1 Become acquainted with brands-related vocabulary! Open your Market Leader book on page 7 and complete exercises A, B, and C. (IMAGE)

2.2. Interactive Activity. In the first interactive activity (objeto virtual de aprendizaje No. 1) you will play a game to help you memorize the new vocabulary

ACTIVITY 3

3.1         Open your Market Leader book on page 8. Read the article “Made in Europe” and do exercises C and D. (IMAGE)

ACTIVITY 4

4.1         Open your Market Leader book on pages 12 and 13, and read the case study. Analyze the possible solutions that are mentioned on page 13. Write down the advantages and disadvantages of each solution. Write down what you would do to stop the decline in the product’s market share and to increase profits.

Solution	Advantage	Disadvantage
Repositioning the product	The brand can expand its market and appeal new segments.	The brand can lose its image and can confuse to its consumers.
Pricing	The company can recover market and win new consumers.	The brand can lose its image like an exclusive product.
Advertising	The brand can renew its image and close to new segments.	If there is not a clear strategy, the company can lose money and don’t get outcomes.
Multiple brands	The company can be attract a lot of segments of consumers by age and power of purchase.	The brand can lose its exclusive image and confuse to the consumers.
Own brand label products	The company can increase its sales and profit.	The company can lose its image like an exclusive brand.

4.1         Imagine you are the head of a company and have just hired a new employee. Send an email to everyone in your company to introduce your new colleague. Introduce him/her, describe his/her profile, and give him/her a warm welcome. Send this email to your tutor. After you get feedback from your tutor, rewrite the email if necessary and post it on your Portfolio for credit.

  

E mail

Dear staff:

I want to introduce you to our new employee, Jose Benavides.  He will be in charge of Marketing Department.

Jose Benavides is 30 years old and has 5 years of experience in marketing areas and commercial departments on important companies like Microsoft.

He has a  Bachelor’s degree in International Trade and currently, in his spare time, is studying Modern Languages.

On our Marketing Department, Jose Benavides will be responsible for design strategies to drive us to first position on sales.

You can contact him on e mail: jbenavides@gmail.com

Thanks for joining me in welcoming  José Benavides to the team.

Regards,

Diana Marcela Tinjacá

CEO

ACTIVITY 5

5.1         Contact your group members and set up an appointment (you may have a physical or virtual meeting, it is up to you). Discuss the advantages and disadvantages you came up with in the previous activity to address Caferoma’s problems. Reach a consensus as to what the best solution might be. Optional: you may record your conversation and upload it onto your portfolio if you would like to share it with your classmates and tutor.

Case Study: Caferoma

1.            Strategy to reposition product

1.1 Analysis

If we check the information about the market, about the changes of consumer’s preferences and priorities and Caferoma´s competitors, we can see that the problem is not only the price, the problem includes failures of image and the bad ways to exploit markets.

Thus, the Caferoma´s problems are summarized in a backwardness compared to requirements by economic and market changes. For example, people think that Caferoma is old-fashioned and the company has lost market because has used the same strategies to sell. So, the solution is a strategic change and at all levels to find the repositioning the brand.

1.2 Solution

We need to work in all fields; there is not a unique solution. Now I show you the ways to reposition Caferoma in the market:

1.2.1. Image

Caferoma is seen like an old fashioned company by the 80 % the consumers. For this reason, we need change their image, but is not necessary change the target or market segment. Then, ¿how we can change the image? First, I propose change the logo's color, because black is boring, and is better to use red or yellow in these products.

According to the studies, red attracts the funny and dynamic people and our brain creates a relation between this color and the good aromas. This change will drive us to show a young and renewed image.

We can think to include an element representative of Italia if Caferoma wants a positioning in the world like an authentic, luxurious and qualified Italian coffee.

1.2.2 Value migration

1.2.2.1 Create own coffee shops

According to the specialists, currently a profit model only can be used by 5 to 6 years, because the market is changed all time. For this reason, after to check the results of market study, I propose to bet in the most profit places and leave the no profit spaces. Then, we need focus on the areas with sales increasing like restaurants (the last year the sales passed from 10 % to 20 %) and specialist shops (passed from 10 to 25) and to try rescue the sales in hotels with a gourmet product. With this numbers, in my opinion Caferoma is a success or has more opportunities to increase profit in places with a personal service, like coffee shops and restaurants, and where the coffee is seen like an experience. We can focus on this point. This is my value migration plan.

Although, in the book, at exercise 1,6 (to listen), the Caferoma’s manager suggests as principal solution a new advertising campaign for hotels (coping some competitor's strategies like the endorsement) , I think this is a mistake because their value is migrating to other places and a company can´t play the game of their competitors.

So, I propose to reposition Caferoma as an exclusive and gourmet coffee. How? In my view a first step is to create own coffee shops, focusing on selling coffee products to the consumers. The strategy includes a change in the chain of value because the idea is to leave intermediate sales firms and put an own and original image in the service.

Studies about the coffee shops say that these places are used more by business man and students to drink coffee but are seen too as places to relax after lunch or a hard day, so I advise to open Caferoma shops with a calm atmosphere and near the business centers and universities and inside the airports, malls and fashion sectors of the cities.

These places must have a luxurious but fashion style and we must offer the traditional Italian products to eat with the coffee.

1.2.2.2 Agreements with exclusive services

To my mind, the second step is to translate the “experience concept” to other places trough the strong agreements with exclusive services as airlines (can you imagine Caferoma cappuccino as product exclusive for businessman in luxurious class on American Airlines?), in museums or exclusive offers in chains of hotels (Caferoma now has offers in hotels but I propose to have a specific product created for tourists and that only can be got in the hotels).

1.2.3 New advertising campaign for connecting consumers

1.2.3.1 Old people and businessman

In this matter, I advise to use a famous coffee consumer to promote our brand. It depends of budget but I suggest to call someone to sell the brand in the world. We can use a traditional campaign for adults and business man with photos, posters or TV advices. Can be thus:

1.2.3.2 Young people

I suggest a different endorsement campaign for the younger people. How? We can use a famous person but we pay her to leave to see herself in our coffee shops when he or when she goes to the job or in the airport or drinking a coffee Caferoma cup in the street. Can be thus:

1.2.4. Renewing the brand

Finally, another strategy we can use to renew the brand is the stretching. I feel very strongly we can apply at final.

In this case, we can create advertising products with the Caferoma's image, as mugs or umbrellas. This is a way for a brand to increase, but is not a new line of products. Remember: the central product is the gourmet coffee.

ACTIVITY 6

 Open your Market Leader book on page 133. Read the second email sample. Write a similar email where you recapitulate the main ideas that were discussed in your group chat about the Caferoma case. Be very specific when you discuss the various advantages and disadvantages, and make sure that you are persuasive enough when you explain the solution you have chosen for Caferoma. You must write a minimum of 250 words and a maximum of 350 words. This is an individual assignment. Even if in the previous activity you worked in groups on this, you must write this on your own.

To: Diana González (Diana.gonzalez.correo.ean.edu)

From: Diana Marcela Tinjacá

Subject: Analyze Caferoma Case

Dear Mrs. González: I want show you my analyze about the Caferoma case. I checked the information about the market, about the changes of consumer’s preferences and priorities and Caferoma´s competitors, and I saw that the problem is not only the price, the problem includes failures of image and the bad ways to exploit markets. Thus, the Caferoma´s problems are summarized in a backwardness compared to requirements by economic and market changes. For example, people think that Caferoma is old-fashioned and the company has lost market because has used the same strategies to sell. So, the solution is a strategic change and at all levels to find the repositioning the brand. We need to work in all fields; there is not a unique solution and I thing  that the ways to reposition Caferoma in the market are to change the image to drive us to show a young and renewed brand. In addition, I propose to bet in the most profit places and leave the no profit spaces to sell our product. In my opinion Caferoma has more opportunities to increase profit in places with a personal service, like coffee shops and restaurants, and where the coffee is seen like an experience. We can focus on this point. To my mind, the second step is to translate the “experience concept” to other places trough the strong agreements with exclusive services as airlines, in museums or exclusive offers in chains of hotels. We need too a new advertising campaign for connecting consumers.  In this matter, I advise to use two famous coffee consumers to promote our brand within old people and young people. Finally, another strategy we can use to renew the brand is the stretching. I feel very strongly we can apply at final. I hope your answer about it after you reading my report. Best wishes, Diana Marcela Tinjacá Brand Manager Caferoma Company Bogotá.  ------------------------------------------------------------------------------------ ACTIVITY 7 7.1 Open your Market Leader book on page 7, listen to the recordings from the Listening section “Why brands matter”. Complete exercises A, B, and C. (IMAGE) 7.2 Interactive activity #3 (objeto virtual de aprendizaje No. 3): In this interactive activity you will listen to a short speech about a person’s daily activities. Listen to the recording, take notes of what you hear, and then read the audio transcripts to make sure you understand everything.