Brand Plan and Challenges HMV - Essay Example

BRAND PLAN FOR HMV By Location Brand Plan for HMV Brand challenges Financial burden HMV is a global retail chain that produces products such as videos, music cassettes, gaming devices and books. There are a number of challenges that the company has been experiencing in operation of operations in the UK lately. These challenges have a direct effect on the growth and development of the company. During the fiscal years of 2008 and 2009 the company experienced a financial burden. An increase in production cost has also affected the production volume, meaning that the sales volume has to be low too (Luther 2001, p. 145). Diversification of channels was another challenge that the business organisation faced. Overdependence on promotional prices The company also faced challenges in terms of their overdependence on promotional prices and not paying much attention to penetration strategies. Competition in this industry grew bigger and fiercer making it hard for the company to thrive. Given the fact that there were many players in the market, HMV lost some of their customers due to customer preference (King, Lannon& Baskin 2007, p. 187). There were companies who offered customers better prices, making them more attractive to customers. Lack of investment in technology HMV was also not able to cope with the technological advancement while their rivals took advantage of technological advancement. The company also lacked sufficient funds to remain competitive. As a result of their inability to cope with the changes in the market, HMV lost a big percentage of their market share. The company was also not able to effectively manage the changes that they would have made to cope with the situation that there are in. Most of their competitors offered lower prices, making them irrelevant in terms of price competition (Young2014, p. 219). The popularity of online gaming means that many people prefer playing games online as opposed to buying games from stores. This has significantly reduced the company’s sales on games. Brand Repositioning Brand repositioning refers to the process of changing the status of a brand in dependence to the status of the brands that it is competing with. Repositioning is in most cases affected by changing the marketing mix of a brand. When a company is repositioning they obviously want their customers to see the brand in a different way. For every business organisation that decides to reposition their brand there are always performance reasons as to why they want to rebrand. As for the case of HMV the reasons as to why they would need to reposition their brand has been discussed in the above section. One of the problems that HMV is facing is low sales volume. However, it should be noted that knowing only the problem might not be sufficient in solving it. It is always good to know the root cause of a problem before attempting to solve it. Low sales volume might be a result of poor promotional technique, poor distribution methods, pricing system, and other external factors such as technological advancements and nature of competition in the market (Aaker 2009, p. 199). Figure 1: Market prices of HMV’s range of products Brand strengths One thing that must be done in order to reposition a brand if viewing its strengths and comparing them with the strengths of its competitors. One of the strengths of HMV is that it is a global company which means that is does not have to depend on markets from specific regions.Strength also comes from the fact that the company has been in existence for a long period of time. Some of their competitors do not have global operations and most do not have the historical richness that the company has. Given the fact that they have been operational for a long period of time they can take advantage of the popularity that they have built over the years. Prices review If HMV wants to do better in the market, they will have to consider working on their cost. The cost has been one of the things that have been leading to low production volume. In order to increase their sales they have to make sure that the products to be sold are there in the first place. One of the ways that they can be able to make their products more presentable is by adopting advanced technologies. Technologies have been adopted in this industry to make products more presentable and increase their effectiveness. Failing to adopt the technological advancements simply means that the company will have inferior products and services (Chattopadhyay & Laborie, 2005, p. 15). This will lead to a situation where customers will loss trust or connection to their products and thus prefer products that are produced by their competitors. This explains why the company has been struggling with the loss of market share over the past decade. One of the ways through which this company can improve their products is value addition. Value addition will give their customers the impression that the companies offer products that have a little bit more to offer. There have been many of complaints from customers on the prices of products at HMV. Their prices are considered to be very high as compared to the prices of their competitors. This is the main contributor to the loss of market share. The company should consider reducing their prices as low as possible so that they can be able to compete with the other players in the market. This will only be possible if they can be able to reduce the cost. Use of advance technology can be very helpful in reducing an organisation’s cost. The company will also need managers with better skills in order to reduce their prices (Kapferer 2008, p. 211). They can be able to attain this by either seeking for more experienced and skilled managers or putting the existing ones through development programs. However, it should be noted that seeking managers who are already experienced and skilled will cost the company more financial resources, something that they clearly do not have in abundance at the moment. Distribution channels Even having the best products in the market, its not the answer to the situation at HMV if they will not be able to make sure that the products gets to target market. As seen in the challenges part, one of the challenges that the company has been facing is a diversity of channels. As time goes by people have the urge to get diverse ways of acquiring products. HMV should consider investing in online stores. This will enable them to curb the increased influence of online games. This will make it easier for their products to do well in the market especially video games, whose sales have been very low as a result of the popularity of online gaming. They can also reconsider making deliveries on products bought by online customers so that customer can have some ease in accessing their products (Giehl & Lepla 2012, p. 199). Online presence For the customers to know the changes that the company has made on their brand there is a need for investment in promotion. Given the fact that the company has been going through financial difficulties, the choice of promotional methods to be used in this case will be of high importance. For the sake of their finances the most appropriate media to use is the internet. In the modern society a majority of people use the internet (Davis & Dunn 2002, p. 176). This implies that using the internet gives them higher chances of reaching out to people. They can consider using their websites and social media. Social media will be more appropriate because they will be able to reach even people who are not aware of the existence of the changes. People do not have to login to their site to get information about the changes made if in any case they will choose to use the social media. They can use professional networks such as LinkedIn. Figure 2: Setting up for e-marketing Communication In the 21st century, there are a number of things that have changed in marketing communication practices. For instance, business organisations have shifted from using mass messages to using messages that target specific market segments to enhance customer relations. As a result of technological advancements, there are new ways of creating unique marketing messages that target specific market segments. There are five main promotional tools that this company can used in their marketing communication. These tools are: advertising, direct marketing, personal selling, public relations, and sales promotions. It is important for a company to be able to use a blend of these tools. However, HMV did not use a blend of these tools (Dunn 2004, p. 201). In fact, the company was observed to be relying on promotional sales. When promotional tools are properly used there is always creation of awareness which leads to knowledge. With knowledge of a certain brand consumers usually develop preference leading to acquisition. Figure 3: The marketing communications system Brand positioning Brand positioning is a very important part of brand communication. This is because it always communicates brand identity and the benefit that the brand has in comparison to alternative brands. HMV could consider using quality positioning which will communicate the brand’s commitment to availing products of high quality to their customers. After reviewing their prices, the company can consider using value or price positioning that will give their customers the impression that regardless of the fact that the company offers high quality products, they will not have to pay extra money to get the products (Hilicki 2005, p. 156). With the current economic status most people will not be able to fight the temptation of buying such brands as long as they are convinced that the quality is good and would have cost more elsewhere. In order for the brand positioning to be successful, the company will have to invest in making their brand image better. Brand image refers to the perception, ideas, understanding that people have regarding a given brand. For a company to be able to create a brand image that will be attractive to customers they should do a research that will help them in knowing the expectations of their customers. It will also be prudent if they checked the brand images of their competitors in order to be able to know some of the aspects that they have left out in their image (Wilson & Blumenthal 2008, p. 213). For brand imaging, a company should always focus on what is different about their brand. Brand image is not all about the logo, but the perception that the customers have of a brand, therefore, HMV should know that for their case, their image will include their customer services, how their employees treat their clients, prices of product, and the kind of services that customers get in their stores. Brand Attitude Brand Attitude is usually brought about by the kind of experience that a customer have with a brand. Negative experiences usually yield negative attitude while positive experiences bring a positive attitude. With regard to attitude, the company should make sure that their products are of the highest quality possible. The kind of services that the customers are subjected to should also be made as good as possible. The company should also invest in public relations and sustainable operations. Figure 4: The need for integrated marketing communications Brand atributes When articulating the benefits of the brand to their customers, HMV should make sure that they take consideration of the attributes of the brand, the characteristics, and emotional components of the brand. Attributes are the objective components of a brand that makes it able to satisfy the needs of customers in a way that the other brands are not able to. Characteristics are those suggestive claims that relate to the nature of the product. Emotional attachment to a brand is very important for brand communication. With proper research, a company can be able to know the best way through which they can create the emotional attraction to a certain brand. A common way through which companies do this is by using celebrity endorsement (Middleton, 2013, p. 186). As a result of such endorsements, people who adore the celebrity used for the brand communication will always be emotionally attached to the product even if there are cheaper or even better alternatives in the market. If the products are of affordable prices and high quality, then the brand will have an extra advantage if they choose to use celebrity endorsement. The only challenge will be that such involvements can prove to be costly, especially for a company such as HMV, which has been having some financial crisis over the past few years. Brand audit brand finance According to the loyalty measures of the company, it was observed that the Price Premium of the brand was very low. Many of the customers had the belief that the company could do better in terms of prices. Many of the customers also believed that the company had not done much to market their products. As a result of the prices and nature of marketing strategies it was discovered that the level of loyalty of the brand’s customers was very low. The perception of the public regarding the quality of products sold by HMV is that much of their company sells products of high quality. However, it should be noticed that the company has gradually lost its popularity over the past years due to poor management, which led to poor pricing policies and laxity in adoption of new and advanced technologies (Temporal 2010, p. 172). Many of their competitors have been reviewing their prices and adopting new technologies. The brand personality of HMV can also be said to be a big let down. Most of the people associate the brand to higher prices, which means that people who want to go for the most affordable option usually avoid the brand. Lack of investment in promotional program has also affected HMV’s brand awareness. Despite the fact that it has been in existence for decades, there are brands that came to existence later that are more popular as compared to them (Lowitt 2011, p. 202). Their market share has also been reducing at an alarming rate. Much of this is attributed to the fact that the company has been unable to adapt to the changes in the environment in which they operate. As a result the company has become less competitive and less appealing to customers. They would have done much to improve their status, but their financial situation is making it even harder for them to do so. Conclusion HMV is a company that has not been doing well. There are some of their problems that are caused by internal factors while others are external factors. The good thing about the external factors is that the company can have influence over them. Examples of internal factors that have been discussed herein include poor management, pricing strategies, and promotional programs. However, external factors such as consumer preference, new market entrants, and emergence of alternatives to some products such as online games can be out of their control. However, the plan that have been given herein can enable them to take charge of the internal factors that have been affecting their operations while at the same time influencing some of the external factors such as consumer preference and availability of alternatives Bibliography Aaker, DA 2009, Managing brand equity, Simon and Schuster. Chasser, A. H., & Wolfe, J. C. (2013).Brand rewired connecting branding, creativity, and intellectual property strategy. Hoboken, N.J., Wiley.http://rbdigital.oneclickdigital.com. Chattopadhyay, A &Laborie, JL 2005, “Managing brand experience: The market contact audit” Journal of Advertising Research, 45(01), 9-16. Davis, SM & Dunn, M 2002, Building the brand-driven business.San Francisco. Dunn, D 2004, Branding: the 6 easy steps,Cameron Street Press, [Oakland Calif.]. 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