Question

Topic: Strategy

New Company Or New Brand?

Posted by Anonymous on 5/5/2011 at 7:21 AM ET 500 Points
Dear Marketers,

I am an intern at the marketing department of a South African Cabinet/Kitchen manufacturer/company.

The company is a well-known middle/high end company, who manufactures and sells hand-made, customized, exclusive kitchens and cabinets.

The company wants to become the number 1 company for the top end market. All the resources are available and the company can really move forward but it does not how to go there.. Basically they want to become a luxury brand.

They have not done anything on marketing so far and are considering repositioning itself with a new name, logo, vision, mission etcetera.

I am not sure if this is the right solution and I am thinking of launching a new ''brand''/product line targeted on the top segment instead of a totally new company with new name etc.

I was wondering how you think about it? I have tried to look for case studies on companies who launched a new brand or product upwards but most of the companies launch new products or brands in a lower category.

I am really confused and hope you can give me more information.

Best regards,

Salim
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RESPONSES

  • Posted by CarolBlaha on 5/5/2011 at 7:34 AM Accepted
    I think they're nuts. I agree with you this is not the right decision.

    They should leverage their existing reputation. Think about home builders. I remember when one, known as a spec builder went into custom high end building. They didn't dump all the goodwill they built. I couldn't recall their name but did some searches of other spec home builders-- horton, pulte, richmond today all build homes from 100K to million plus. All under their main umbrella.

  • Posted on 5/5/2011 at 7:56 AM Author
    Thank you for your response.
    I will look up the building companies..
  • Posted on 5/5/2011 at 8:11 AM Author
    @ PhilGrosilia

    Thank you for your response.
    The company is not really happy with their current name and therefor want to reposition themselves with a totally new name, logo etc. I said that its to risky to do that and like you said more difficult to start from nothing.

    But I need more information on launching new products/brand for a higher segment then the company is doing now. What are the disadvantages and advantages compared with repositioning with new name etc. ?

    Moreover the company want to target the top end, luxury seeking customers and they need a totally different approach.

    I mean, can a middle/high end company just launch a new exclusive brand and say they are now better and more exclusive company etc than before and that the wealthy clients/top end segment just believes that...

  • Posted by Jay Hamilton-Roth on 5/5/2011 at 8:19 AM Accepted
    Why not start a new division with this high-end marketing message? If this fails, they'll still have their existing business/marketing that's served them well.
  • Posted by CarolBlaha on 5/5/2011 at 8:02 PM Member
    Per Monarch-- when the builder I can't remember the name went into the high end market-- they were "Legacy" by bob the builder. Would the same impact come from "high end homes by unknown builder" carry the same impact?? No. then you put yourself in the masses of those claiming to be credible builders.
  • Posted by cookmarketing@gmail. on 5/6/2011 at 8:44 AM Accepted
    New name (Brand)
    Created by Present name (Brand)
    or what the tend to use in South Africa

    New
    Made By...Old

    New
    Distributed By...Old

    New
    Manufactured By...Old

    etc
  • Posted by Gary Bloomer on 5/6/2011 at 9:15 PM Accepted
    Here's a repost of my answer to the same question you posted in the Student Questions section of this forum from a few days ago:

    Dear Salim,

    A new brand, name, logo and so on might look nice,
    but in truth, these things won't do your company a great deal of marketing good. They don't, as a general rule, advance the notion of company X as top provider of ABC. They might be nice as eye candy, but when it comes to cinching the sale, they're not all they're cracked up to be.

    To become the best in the luxury kitchen category your company needs to put out, it needs to complete a high end kitchen: soup to nuts, for a high end client at no cost to the client, with the written consent and understanding that the results (photographs, testimonials, walk throughs, etc.,.) and name, photographs of the happy customer can then be used by the company in their marketing mail shots as social proof to mail to other people in that income bracket.

    You do this by pulling a list of high net worth addresses and mailing to them by postal code and by street. Then you follow up by phone and in personal, nose to nose appointments where you outline the benefits to the customer of the final result and what it can do for their social standing, and for the value of their home.

    I hope this helps.

    Gary Bloomer
    The Direct Response Marketing Guy™
    Princeton, NJ, USA

  • Posted by Peter (henna gaijin) on 5/6/2011 at 9:54 PM Accepted
    To sell luxury products, the products must meet the quality and experience desired by luxury consumers. One step required would be to make sure that the products do meet this requirement. You won't be able to be luxury unless your customers feel the product they receive is luxury. Now, most companies automatically say they are luxury , and unfortunately some find out the hard way that they really aren't. Is your company?

    The name issue causes problems. They don't like it, so they want to change. But the name has value, as they are well known. Change the name, and you lose that value. Doesn't mean they can't change names, but there is a cost to it beyond just buying new letterhead and business cards.

    I like Monmark's suggestion above about starting a new product line as luxury. Get the new name here. But make sure you connect it to the parent company (the old name), so you can get as much value from the old name as possible.
  • Posted by SteveByrneMarketing on 5/7/2011 at 11:48 AM Accepted
    You have received great input from the above posters. I'm thinking about your comment of " ... want to reposition themselves with a totally new name".

    They really want to "reposition" themselves with a totally new strategy (in a sense the brand name is the name of the strategy). The "high end" is a market segment with its own competitive landscape. Your primary concern should be why is there room in this segment for a new brand, can you further segment the high end segment to your advantage, who would be your prospective customers say you need to beat to get their business and the like.

    Hope this helps.

    Steve


  • Posted on 5/9/2011 at 3:44 AM Accepted
    Salim,

    I read all the comments you recieved...there is no much info you have provided about your company without that it is not that easy to help you solve your query. I am a branding professional in India and have handled some of the international luxary brands as well.

    The idea of total re-brandig is cool since your company is thinking of it that means that their brand is not that reknown and even if it is...its catering to differrent consumers. When handling luxary range you need to have the brightest possible reputation and i dont mind if the image is virging...you can always cultivate that...as in total new imaging is easier and productive than reimaging or cultivationg old brand to the 'newer' version...as far as luxury is concerned consumers have the delicate choice and crucial decision making point...so even a single dab from your old brand can make product range suffer...going brand new is the rigth decision...
  • Posted on 5/10/2011 at 7:45 AM Author
    Dear all,

    Thank you for your comments, I am almost certain that I am going for the new division/product line targeted on the top/luxury segment instead of changing the whole company, name, logo etc.

    To give more information about the company, it is now a middle/high end cabinet/kitchen company. Which makes all cabinets and kitchens hand made by craftsman and we are specialized in bamboo and exclusively on paperstone and soji screens. We are the only company who offers the last two products and this gives us a monopoly in the market.

    The company wants to rebrand, because its not happy with its name since its covers only one product, namely cabinets. Moreover our owner is a famous and well-known mountain climber and base jumper and we want to link his life story with the new division/product line.

    We are already considered as a well know, high end company but have never done anything on marketing. With the rebranding we want to capture the attention of the high end/top segment and position ourselves there because there is less competition there.

    So I have chosen to take the path of new division/products line targeted on the high end.

    So first step is creating new brand identity, vision/mission etc for the product portfolio(via new website?) and after this i have to find the right marketing tools to capture attention of the high end clients and architect.. but I am not sure which tools i have to chose? I mean to much exposure in magazines is not good and I am thinking of hosting an special event where we invite a few top clients/architects and promote our new division/brand.

    what are the essential things that i have to have in mind when launching/implementing a new divison/productline?

    Thank you again so much for all your answers.

    Salim
  • Posted on 5/10/2011 at 9:47 PM Accepted
    Contact for branding services at [Email address deleted by staff. This info belongs in Member Profile]
  • Posted by CarolBlaha on 5/19/2011 at 10:23 PM Member
    With your response in mind-- I have additional thoughts.

    Soji screens have been around forever and I wouldn't want to spend a lot of money marketing them. They are practically a commodity. I don't know if you have an exclusive for Paper Stone in your area, but f you don't you don't have a differentiator there either. Even if they gave you an exclusive, there are many counter top material suppliers with recycled content as paperstone. The way green building has evolved consumers want more than a cool story. And as someone coming from the field-- there is probably no supplier that doesnt' have an enviro statement. Look at Wilson Art, a manufacturer of plastic laminates. https://sustain.wilsonart.com/

    Think this way-- why does someone buy from your company vs anyone else? And you are back to many of our posts-- your standing reputation for doing what you do well.

    Cabinet makers do all sorts of millwork and that is the image of the current brand that needs to be developed. That can include soji screens. (as well as high end custom doors, which I have sold and did very very well with).

    what I would do -- your CEO is an outdoorsman. With a background he has, he probably has a higher sense of the environment -- he at elevations he's explored seen first hand effects of climate change. "You know the product now get to know the man behind it"-- would be my focus.

    Now, "getting the attention" is too passive. I have been an architectural rep probably more years than many posters were alive and you have to get in front of them with a new line-- a full line and with the proper marketing collatoral they are used to.

    That my friend is another post-- which would dwarf my already lengthy post 6fold. My short is, research competitors (have you identified them) and see their collatoral. After you get your ducks in a row, hire a manufacturer rep in one territory who already has these contacts. This will be easier said then done if you don't have the tools to support them. A manufacturer rep is paid straight on performance-- and they won't waste their time on a company without the support they need to succeed.

  • Posted on 5/20/2011 at 6:50 AM Author
    Dear Rob and Carol,

    Thank you for your comments..
    I am handling such weighty issues because the company is very open-minded and want to have insights from every angle I guess.. and I made it my project.. thats the most important reason...

    But Carol.. we are the only company in the country who manufactures and sells Soji screens and your right therefor we do not really have to spend money on marketing because its already a good business for us.. But regarding the paperstone.. we again are the only one who offer that product and we do differentiate ourselves from the competiton because they can not offer the same quality. You are totally right, and I like the idea of of ''get to know the man behind it'' That is exactly what I am trying to do regarding marketing and the re-branding of the company.

    The competition does not really do something special regarding marketing.. they spend a lot of money to have a place in well-known magazines and ads.. I have to find a way to reach the big architects and clients so they will choose for us instead of the competition..

    One thing I didnt understand.. what do you mean with manufacturer rep? Representative?

    thank you again so much for your time!
  • Posted on 5/20/2011 at 7:46 AM Author
    Thank you all on my behalf!
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