Garold shirts and trousers is a household name in northern and eastern India. ‘Reasonably good quality at very reasonable price’ is the most important success factor for Garold. The markets of northern and eastern India are very price-sensitive and hence Garold’s present strategy works well.
During the last two years, the influx of Indonesian, Malaysian and Chinese garments have really affected Garold’s market share considerably. These foreign garments are competitively priced and are available in wide varieties of design and color. European and American garments may not enter these markets, as the factor of price-sensitivity would exist for another one decade at least. The present influx is without any ‘brand identity’ but is getting stabilized through a strong ‘agent network’. These agents are happy with ‘volume-based margins’ from the foreign goods. It is also a reality that customers too are happy with fresh, new designs and colors of the foreign garments.
Garold has to seriously think of countering the moves and activities of the foreigners and their agents. Volumes, variety and further price-competitiveness are definitely the primary compulsions for Garold. But, Garold will also have to think of a long-term strategy for building up strong brands. Strong brands have multiple advantages like customer loyalty, lesser promotional costs, and lesser cost for market penetration, negotiate advantages while forming joint ventures and extension of the ‘mother brand’ to ‘segmental brands’ or ‘new product brands’.
Price-sensitivity and brand-loyalty very often work as ‘hedging strategies’ for long-term sustenance. Hence, Garold must think, decide and act on ‘sophisticated approach to brand building’. Garold will have to also plan fast for the global extension of its brands. It can think of price-sensitive and brand-cautious markets of Mexico, Brazil and other African and American countries. Indonesia, Malaysia, China, Thailand could be ‘responsive destinations’, with some variations in company’s brand and price strategies.
The Company’s top management is now thinking of various approaches to brand building. These are both, conventional and non-conventional. A few approaches under discussion are as follows:
1) Use of media advertising (possibly all types of media)
2) Direct communication with ‘opinion markets’ in local communities
3) Sponsoring local events
4) Participating in exhibitions and discussion seminars
5) Sponsoring academic and research centers
6) Acquiring some strong brands from foreign markets
Question:-
Discuss the pros and cons of various approaches in brand building for Garold.
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