changes were instituted to address the changes in consumer tastes in
the product’s target market.
4 Total repositioning: This option involves both a change of target market
and accompanying product modifications. Skoda has managed under
Volkswagen’s ownership, to totally reposition itself. The product qual-
ity and design has changed significantly and the brand now has cred-
ibility with new more affluent consumers. This has also allowed the
brand to expand its sales outside its Eastern European heartland.
Raising a brand’s profitability. If a brand is in a static or declining market
and a company judges that the brand has finite potential, then it may be
prudent to force the maximum profitability out of the product. This can be
achieved by:
● Raising prices: Although this may lead to a drop in sales it is likely to
dramatically improve margins. In a declining market competitors may
be dropping out of the market, restricting consumer choice. Thus con-
sumers who still purchase the product may have little choice but to
accept the higher price.
● Cut costs: This action will obviously be a matter of management judge-
ment as it will obviously mean ceasing to invest in the brand and it
may hasten its decline.
● Cut the brands product range: Rationalising the range of marginal prod-
uct lines will save additional costs whilst having a limited impact on
overall sales.■ Brand extinction
Inevitably, over a period of time, brands die. They may last for decades or
even in some cases centuries but even well-established brands can falter.
This can happen for a number of reasons:
● Intense brand competition: Weak brands face increasing competition from
both overseas brand entering domestic markets and the growth of retail-
ers own label brands. This leads to poor profitability for brands with
small market share and in the end withdrawal from the market.
● Acquisition and mergers: Companies that acquire brand names or undergo
a merger often rationalise the portfolio of brand names owned by the
new organisation. Since acquisition, Nestle has over time replaced the
Rowntree brand name on its products.
● Rationalisation: Organisations periodically review their brand portfolio
and may decide that in relation to their promotional budgets they can-
not sustain the range of brand names that they have propagated. The
now deceased Rover Group over a 40-year period terminated the pro-
duction of a stable of famous brand names including Triumph, Austin,
Morris, Riley and Wolsey. The Jaguar and MG brands have been lucky
to escape this cull having been transferred to different owners who saw
value in the heritage of the respective brand names. Jaguar is now208 Strategic Marketing: Planning and Control