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SANJEET KUMAR

· started a discussion

· 1 Months ago

answer is given wrong (Question: 142908.2 )

answer is given wrong

Question:

DIRECTIONS: Read the following passage and answer the questions that follow:


The process of brand reinvention must begin by taking a step back to decide when exactly a brand has to be reinvented. How does a brand come to a pass where it is deemed to be mature ? The problem most companies and marketers face is that they are much too comfortable with their success. This is especially true of large companies, or large brands, which have an inertia inherent to their success. If a brand is doing well, why change ?


While it could be true of the marketing function, one of the worst areas is manufacturing. Because large brands mean large investments in operations. Large investments mean large, high-speed lines, which lead to a lot of inflexibility in the system. Because of the ramifications of a change, there is inertness at the management level. Exaggerating this are the consequences of the decision to re-invent a brand. Which is why a large number of brands go past the time when they need to be re-engineered. One great example is Metal Box: its product-line never got re-engineered and, eventually, it had to shut shop. The dilemma was that Metal Box defined its area of business as tin packaging whereas it should have been packaging. Or take the example of chocolates.


My own business and brands were re-engineered only during a crisis. Back in 1993, we were faced with stagnating volumes and a zero-profit situation. Classical marketing theory tells you that once demand peters off, the marketer should start analysing what is wrong with the brand. But, to my mind, that is only symptomatic of the fact that a brand has gone past the stage when it should have been re-engineered. In that case, the real issue is why–and when–a brand should be reengineered. At most points of time, a marketer tends to define markets wrongly or too narrowly. Over a period of time, as markets and categories expand, their definitions change dramatically. Therefore, you need to keep the brand contemporary with those so as to be able to stay with the times. One of the best examples of this is the tooth-paste category. Toothpaste was a cleaning exercise. Then, it became mouth-freshening and then, oral care. As the market has expanded, and the definitions have changed, the consumer has seen the introduction of different brands. Colgate provided basic cleaning. Colgate Plus was about germ protection and dental care. Close Up and Colgate Gel ushered in the mouth-freshening era. And Pepsodent-G provided dental care and total protection.


So, the definition of the category has changed, and if Colgate continues to view it the way it was 10 years ago, to my mind, it will be in a soup. It relies only on the basic cleaning function, it could get marginalised. Sure, there is a Colgate Plus and a Colgate Gel. But, ultimately, what does the main brand represent ? Dental care, which is only cleaning and germfighting, while the market has moved on to the next stage of its evolution. That would have worked if the product was, say, in the penetrative mode. Then, Colgate could go in for penetration in the rural areas, convincing users to shift to toothpaste instead of using alternatives. But in today’s urban context, Colgate can’t adopt that strategy because a large part of its target market, the upper-and middle classes, are buying niche products. So, you have to do your brand in the renewed context of the category.


 A marketer could be defensive, offensive, or proactive in re-inventing brands. A defensive strategy would be: my competitor has re-engineered because he has identified a niche and, therefore, I should do the same. Or, you could be proactive: I will do a construct of what the consumer will need three years later, and design products to fit those needs today. Or you could adopt an offensive stance, and say: I will re-engineer my brand to be a state-of-the-art product, spend a lot of money, and be a leader today.


We used a combination of variables for re-inventing Cadbury’s chocolate brands: advertising, sizing, pricing. There were pricing changes and iterations which a consumer may not have even noticed. Pre-reengineering, the 35-gm 5 Star retailed for Rs 8, and the 19-gm for Rs 5. We kept the prices the same, but increased the size to, respectively, 40 gms and 20 gms. And the Value-For-Money equation shifted. It also had a great macro-effect in terms of sales. Essentially, re-inventing brands is all about strategic marketing and an intuitive anticipation of consumer needs. And therefore, it is, basically all in the mind.

The worst area for making a change is :
Options:
A) sales
B) Marketing
C) Finance
D) Structuring of prices
E) None of the above
Solution:
Ans: (b) Option (2) is the right answer and also finds a mention in the 1st line of 2nd para. All the other options are wrong.

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