Brand Management: The Case of Ted Baker PLC - Essay Example

Brand Management – the case of Ted Baker PLC Overall aims 2. Introduction - brief outline of proposed product 3. Rationale 3 Market characteristics 3.2. Main competitors for sub-brand 3.3. Likely customer groups 3.4. Company audit 3.5. SWOT 3.6. Analysis of ‘Primary’ Market Research 3.7. State and summarise opportunity 4. Response 4.1. Proposed sub-brand – details 4.2. Proposed target audience 4.3. Brand value proposition/positioning/image 4.4. Company changes needed to produce/retail the sub-brand 4.5. Brief outline of launch activity 5. Issues for consideration 6. Conclusion 7. Recommendations References 1. Overall aims Ted Baker Plc is a firm based in UK while it also has a significant presence within the USA market. The firm’s activities involve in the following sectors: ‘Menswear, Womenswear, Global, Endurance, Accessories, Teddy Boy, Teddy Girl, Teddy Baby, Fragrance, Skinwear, Footwear, Eyewear and Watches’ (corporate website, [1]). The products of the firm are also presented in some of the major department stores in UK. Currently the firm is interested to expand its activities lunching a new brand referring to a new make up range. However, because of the turbulences within the British and the international market, the firm needs to prepare in advance a careful plan for the relevant initiative estimating the effectiveness and the feasibility of this project in the long term. 2. Introduction - brief outline of proposed product In order to design the plan related with a specific product, we should primarily examine its potential market in terms of the customers’ preferences as they have been observed in relation with similar products. In this context, it is suggested by Henderson et al. (2000, 112) that ‘the building of a brand starts with a precise definition of the target customer group and its needs and expectations and proceeds to a realistic assessment of how well the brand currently meets them’. From a similar point of view, Dennis et al. (2002, 355) noticed that ‘branding is well known for consumer products but power has shifted from manufacturers brands towards retailers while the term image is more common than brand in the context of shopping centres, but branding may become more important’. In accordance with the above, the design and the development of a brand can be a challenging task especially when the targeted market is a competitive one (like in the case of UK). The proposed product will include a series of sub-products. More specifically, the firm is interested in launching a series of make up products including: a make up crème, a make up powder, a mix – make up product (crème and powder in one product) and a compact make up product which will be characterized for its long duration. 3. Rationale 3.1. Market characteristics The careful examination of the British market – especially of the specific sector – showed that this market is offered for the specific product. More specifically, in accordance with a series of statistics published by Market Research Portal (2006) the value of British cosmetics market is estimated to approximately 1.5 billion Euros for 2006. On the other hand, it is noticed that ‘over the past five years the make-up market has seen vibrant growth of almost 40% and by the end of this year will be worth more than those in Spain (0.6 billion Euros), Germany (1.2 billion Euros) and even France (1.2 billion Euros), home to many of the worlds leading cosmetic houses’ (Market Research Portal, 2006). In other words, the firm’s plans for launching a product that will address the consumers in British cosmetic market are considered to be justified and are expected to be successful. 3.2. Main competitors for sub-brand The sub-brand will be established within the British cosmetics industry. The competition which is expected to face is hard. More specifically, in accordance with a report published by the association of manufacturers of cosmetic, toiletry and perfumery products (CTPA) the following firms operate actively within the British cosmetics industry (they are mentioned indicatively): Albion Cosmetics, Avon Cosmetics, Bayer, Beiersdorf, Carita, Chanel, Elizabeth Arden, Estee Lauder, Herb, Keyline Brands, Unilever UK home and so on. In other words, the British cosmetics industry is a highly competitive one but the entrance in this market is easily achievable. As for the particular firm, the establishment of its brand in the British market should be followed by the appropriate measures in order to avoid any potential failure of the firm’s relevant operational plan (with the cost that such a failure could have for the company). 3.3. Likely customer groups As stated above the suggested product includes a series of sub-products (as described above). The suggested products will be able to respond to the needs of an extended number of customers in British market. More specifically, these products are likely to attract the interest of women of a wide range of ages: from 13 up to 60. In fact, because the products suggested do not address consumers of a particular age they can be used by women of all ages as long as they tend to use cosmetics in their daily activities. 3.4. Company audit In accordance with a series of statistics related with the firm’s performance in 2006, last year the firm managed to achieve a turnover of 66.21 millions (Hemscott Report, 2007). On the other hand, it is clear that the revenue of the firm is continuously increased reaching in 2006 the 117,832 millions instead of 62,095 in 2002 and 88,842 in 2004 (figures from the corporate website). The performance of the firm shows that there are chances and potentials for further development; however this development should be appropriately prepared in order for any severe loss to be avoided. 3.5. SWOT The SWOT analysis of the British market could lead to the retrieval of the following issues related with the specific market – with a special reference to the cosmetics industry sector: the strengths of the British cosmetics industry are the following ones: a) the particular industry is a competitive one (the value of this industry in 2006 it was estimated approximately at 1.5 billion Euros – as noticed above), b) the sales of the particular product present continuous increase reaching the 433,936 (in £000s). However, the specific market has also certain weaknesses: a) extremely strong competition (as revealed above the competitors within the particular industrial sector are many and powerful); b) lack of appropriate regulation for the control of operational activities of firms that operate in this industry (the entrance in this market of products that included human skin - a case related with imports of relevant products by China was revealed years before. However, the British cosmetics industry has also many opportunities to present: a) chance for high profits (in terms stated above); b) various operational activities available to the firms that operate in this market. From another point of view the above chances could be regarded as threats by firms that are already established in this market. More specifically, the entrance of new competitors may change the balance of power in this sector with all the relevant consequences for the firms involved in the long term. 3.6. Analysis of ‘Primary’ Market Research A Primary Market Research made within the cosmetics industry of UK showed that the sales of products for the face have been increased reaching in 2006 the 433,936 (in £000s) while in 2005 the profits from the sales of the above products reached the 399,983 (which results to a difference of 8.5% compared to 2006) (CTPA, 2007). In accordance with the above, the promotion of the specific product within the UK market is expected to be extremely successful even in the long term. 3.7. State and summarise opportunity The firm has the appropriate financial strength – as this assumption can be made in accordance with the figures and the statistics presented above - in order to develop a new brand within the British cosmetics industry. However, in order for this effort to be successful, it would be necessary that the appropriate support would be offered by the State. This could have the form of a tax – relief or other financial benefit encouraging the firm to invest within the local market. 4. Response 4.1. Proposed sub-brand – details In the context described above, the proposed sub-brand is expected to be successful; however there are certain details that need to be taken into consideration; the product’s presentation in its market should be appropriately prepared (referring mostly to advertising involved but also in to the design of the whole initiative). On the other hand, its price should be in accordance with the similar products already existed in the British cosmetics industry. Finally, the package of the proposed products should be innovative targeting to the attraction of the interest of the potential buyers. 4.2. Proposed target audience The target audience of the particular effort (establishment of a new brand) will be constituted mostly by women of a wide range of age (13-55). In fact, these ages are mentioned because there is no limit of age regarding the use of the firm’s proposed product. The strategies used for the promotion of this product within the British cosmetics industry would have to be aligned with the above target. In this context, the firm’s marketers would possibly have to design and implement a series of marketing plans covering the above parts of the population. 4.3. Brand value proposition/positioning/image The proposed product will have specific qualities that will make it unique within its market. Moreover, its price will be attractive for potential customers. In accordance with the above, the value of the brand will be decided on the following issues: the positioning of the brand within the particular market, the quality of the product promoted, the image of the product (related with its name and package). The examination of the British cosmetics market (as presented above) led to the conclusion that the proposed product is very likely to be successful within the particular market. However, the performance of the specific industrial sector cannot be considered as stable in the long term. For this reason, even if the positioning of the specific brand is primarily excellent, in the long term the changes in balance within the particular era (regarding the political and social power of parties) will need to severe financial turbulences influencing also the performance of the specific product. For this reason, it is necessary that appropriate description of all its aspects (price, marketing, place, people and so on) will take place. 4.4. Company changes needed to produce/retail the sub-brand In order for the firm to produce and retail the sub-brand no particular changes are required within the firm’s current operational framework. More specifically, because the firm already produce and sells fragrances, the production and selling of similar products (make up range) cannot lead to severe changes in the firm’s operational plan. The required machinery and marketing options are already available and the firm will have just to appropriately present and promote the specific product within the British cosmetics market. 4.5. Brief outline of launch activity The launch activity related with the particular product can be divided in many parts. Briefly, the following stages could be observed in the relevant effort: a) design of the product’s marketing plan (the product’s name and package will be included in this stage), b) promotion of the product within its market and c) monitoring of the performance of the product and additional promotion – if necessary. 5. Issues for consideration The development of a new brand as explained above in relation with the specific product is a challenging task as many issues of the relevant initiative have to be appropriately addressed. However, in the case of Ted Baker it seems that the achievement of the required target will be easier comparing to its competitors. In fact, the company has managed to be expanded globally within a rather short time, a fact that proves the effectiveness and the power of the organizational strategy through all business activities. In accordance with the corporate website ‘Ted Baker continues its global expansion with the opening of stores in Hong Kong, Singapore, Bangkok and two in Dubai before Christmas 2006, with plenty more planned for 2007’ (corporate website, [1]). In other words, the firm has the financial strength in order to support such an initiative but its managers should make sure in advance the success of the project (at the level that such a target is feasible). Customers should be also considered as the targeted group. Indeed, in accordance with Henderson et al. (2000, 113) ‘another important step in the brand-building process is assuring a brands proximity to consumers’. In other words, the means (sources and funds available) for the achievement of the target set (establishment of a new brand) are not sufficient when dealing with the presentation and the establishment of a brand within a specific market; it is necessary that appropriate provisions and forecasts have been made for the performance of the relevant project in the long term. 6. Conclusion The firm’s managers will be responsible for the success of the effort described above (establishment of a new brand). In this context, it is noticed by Macrae et al. (1997, 64) that ‘brand managers face many challenges (including questions of brand strength, world-class culture, “global” branding, seeded marketing channels, “service smart” integration, brand architecture and brand organizing)’. On the other hand, branding is a common activity among entrepreneurs around the world. In fact, the study of Glemet et al. (1995, 174) led to the conclusion that ‘in recent years, most European retailers have been working to develop their distributor own brand (DOB) product lines, sometimes by extending own brand into new categories, sometimes by widening the assortment in categories where it is already present’. The effort of the particular firm can be considered to be justified in terms of the funds required and the target set. We could refer at this point to the view of Chung et al. (1997, 361) who stated that ‘two concepts have been identified as key variables for the long-term success of brands or firms in global markets: brand popularity and country image’. In case of Ted Baker the above strategic variables could be also used in order to identify the value of the plan proposed. 7. Recommendations As stated above, the proposed brand will be adequately supported both by the firm as well as by the State (at least the support of the latter will be pursued by the firm). However, even if the support expected will not exist, then it would be necessary that appropriate mechanisms will be developed in order for the firm to avoid any severe financial loss resulting from the specific activity. Alternative plans of action should be also available in case that the initial plan related with the establishment of the new brand is proved to be inefficient. References CTPA (2007), available at http://www.ctpa.org.uk/page.asp?Section=1&Page=0 Glemet, F., Gonzales, S., Leitao, P., Ribeiro, R. (1995). How Profitable Are Own Brand Products. The McKinsey Quarterly, 4: 173-177 Hemscott Report (2007), available at http://www.hemscott.com/companies/company-summary.do?companyId=3477 Henderson, T., Mihas, E. (2000). Building Retail Brands. The McKinsey Quarterly, 110-116 Macrae, C., Uncles, M. (1997). ‘Rethinking brand management: the role of “brand chartering”’ Journal of Product & Brand Management, 6(1): 64-77 Market Research Portal (2006), available at http://www.marketresearchworld.net/index.php?option=content&task=view&id=972&Itemid= Wright Reports (2007), available at http://wrightreports.ecnext.com/coms2/reportdesc_COMPANY_C826C6480 Websites http://www.tedbaker.com/ [1] http://www.tedbaker.com/about/company-information/ [1a] http://ww7.investorrelations.co.uk/tedbaker/ [2] Read More