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Brand Management(Mktg 545) Question Paper
Brand Management(Mktg 545)
Course:Business Administration
Institution: Kenya Methodist University question papers
Exam Year:2011
TIME : 3 HOURS
INSTRUCTIONS Answer question ONE and THREE other Questions
FALLING BIRTH RATES ARE PUTTING PRESSURE ON NAPPY BRANDS – HOW CAN BRAND MANUFACTURERS RESPOND?
Introduction
Pampers and Huggies - the two biggest brands in the UK nappy market – are tying to increase sales at a time when the UK’s birth rate is declining. The demand for nappies is a “derived demand” – it derives from the needs of parents with children aged from birth up to three. A changes in the number of children requiring nappies is, therefore, potentially significant.
Pampers (owned by Proctor and Gamble “P&G”) and Huggies (owned by Kimberley-Clark) dominate the UK nappy market. According to Mintel, Pampers and Huggies together accounted for 90 per cent of the UK market by value in 2001.
Falling birth rates The number of children aged four and under in the UK fell by 5.1 per cent between 1997 and 2001. Over the same period, sales of disposable nappy sales fell by 19 per cent, from £457m to £370m.
The UK birth rate is predicted to fall by a further 3.5 per cent in 2002, meaning that 23,000 fewer babies are expected to be born in 2002 than in 2001. What effect does this have on the product strategy for these two market leaders?
Brands respond with product innovation and brand extensions One response to falling demand has been a significant amount of new product innovation and product re-launches. The Pampers and Huggies brands are also being extended beyond nappies into all aspects of baby care. P&G recently announced a re-launch of its Pampers Baby Dry range. The re-launch was backed by a £5m advertising and marketing campaign in an effort to put pressure on Huggies’ Freedoms nappy range. This initiative was announced just a month after the £6.8m re-launch of Huggies’ parent and baby club.
In August 2002, P&G launched a Pampers baby wipes range, called Kandoo. This is marketed as a transitional tool for three-to-five year olds as they progress from nappies to the toilet.
The Pampers brand has also been extended into:
• Disposable bibs called Bibsters
• Packaged face-and-hand wipes called Wipesters, and
• Sunscreen lotions on a wipe – called Sunnies
P&G has also agreed a licensing deal to make Pampers Clean ‘n’ Play, a cleaning fluid that can be sprayed and has licensed the Pampers brand to a clothing company to make baby pyjamas and blankets. How successful is this brand extension strategy with customers? Do product re-launches and extensions mean anything to customers? Are they confused by the proliferation of products carrying a familiar brand name so strongly associated with one product – disposable nappies?
One baby product buyer at a leading supermarket chain dismisses the Pampers Baby Dry re-launch, questioning how adding “new” in front of the brand name will drive sales. He says:
“With increasing competition, manufacturers are tweaking their existing products to create some sort of interest, in a market that is falling in both value and volume. Such revamps mean little to shoppers and only end up confusing them”.
Advertising executives feel that nappy brands may expose themselves to ridicule if they are over-extended:
“The fear is that Pampers and Huggies could soon become commoditised and hence devalued. Consumers today can see when manufacturers are trying to milk brands, and they could lose their credibility. There is only so much that you can do with a nappy brand – you can improve on the absorbency, breathability, feel and fit. I cannot see any nappy brand being extended into baby food. Even extending it into clothing may not work, because clothes are all about aspirations.”
Brands must also be careful not to extend into products that have the potential to seriously damage brand value. One example is the launch in 1999 of Pampers Care Mats. The Care Mats were disposable mats on which infants could be placed while changing their nappies or to protect toddlers against bed-wetting. Less than six months after the launch, P&G was forced to label the mats with a safety warning after fears were raised that they could suffocate young babies.
Skeptics feel that new product and variant launches in the nappy sector are often simply a means for companies to gain a temporary edge over rivals. Whether all the new product development and brand re-launching will help to expand the sector in the long term is open to question.
Question 1
a) Advise P&G on strategies to create brand Loyalty on their brands. Use information provided in the case as a guide. (7marks)
b) What benefits is P&G likely to accrue from extending its Pampers Brand? What are the possible dangers of such a move. (8marks)
c) Discuss the brand revitalization strategies that Proctor and Gamble to revive its dying brands. (10marks)
Question 2
a) Many brands fail because of use of a wrong brand name. Describe the main guidelines for developing an effective brand name. (6marks)
b) Using examples discuss the role of symbols and sign in enhancing brand equity. (8marks) c) Using examples discuss the main strategies used by companies to achieve brand awareness. (11marks)
Question 3
a) Perceived quality differ from other types of quality. Using examples, distinguish perceived quality from other types of quality. (9marks)
b) Consumers buy brands not products. Critically discuss this statement. (10marks)
c) Distinguish between brand identity and brand image. (6marks)
Question 4
a) Using examples discuss how brand association generates value to the firm/brand. (10marks)
b) Discuss the benefits of building a strong brand. (15marks)
Question 5
a) Using examples, discuss how brand personality creates brand equity. (12marks)
b) Using examples discuss the dangers of frequently changing brand identity and position. (10marks)
c) Describe the role of slogan.
d) Who is a brand ambassador? (5marks)
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