Carlsberg - Changing an iconic slogan

Positionering och en framgngsrik sdan Hur frmja ett varumrkes framgng Hur diversifiera en produktportflj (BCG) Produktens prestanda under sin livslngd (PLC)

Identify Carlsbergs current stage in terms of its Product Life Cycle

A useful tool for conceptualizing the changes that may take place during the time that a product is on the market is called the product life cycle. The four stages of the product life cycle are introduction, growth, maturity and decline. Carlsberg is at the late stage of maturity. In this stage sales will eventually peak and stabilize as saturation occurs, hastening competitive shake-out as can be seen in the global beer market. Similarly, the need for effective brand building is felt most acutely during maturity

Strategic Objectives and the Boston Box

The Boston Consulting Groups (BCGs) growth-share matrix is a simple technique borrowed from strategic management that has proved useful in helping companies to make product mix and/or product line decisions. The matrix allows portfolios of products to be depicted in a 2 2 box, the axes of which are based on market growth rate and relative market share.

Problem children
Stars Market growth
Build sales and/or market share Invest to maintain/increase

leadership position Repel competitive challenges

Build selectively Focus on defendable niche where dominance can be achieved Harvest or divest the rest

Cash cows
Hold sales and/or market

Dogs
Harvest or Divest or Focus on defendable niche

share Defend position Use excess cash to support stars, selected problem children and new product development

Relative market share

3

Carlsberg Group has a portfolio of over 500 brands varying significantly in volume, price, target audience and geographic penetration. Outline the benefits of using the Boston Consulting Group growth-share matrix to manage this portfolio to the Carlsberg Group. In what quadrant of the matrix would you place the Carlsberg brand?
Carlsberg can use the matrix to assess market attractiveness and competitive strength of their brands. Having plotted the position of each product on the matrix, Carlsberg will be able to develop the appropriate strategic objective for each. The BCG matrix has four quadrants; stars, cash cows, problem children and dogs. Problem children are cash drains because they have low profitability and require investment to enable them to keep up with market growth. Carlsberg can be classified as a problem child because the brand has low profitability and requires investment to enable them to keep up with market growth. The Carlsberg group has made the choice to increase investment (build) to attempt to turn the problem child into a star. If the rebranding is unsuccessful then Carlsberg could move into the Dog quadrant.

The Anatomy of Brand Positioning

The anatomy of brand positioning is an analytical framework that can be used to dissect the current position of a brand in the marketplace, and to form the basis of a new brand positioning strategy. The strength of a brands position in the marketplace is built on six elements: brand domain, brand heritage, brand values, brand assets, brand personality and brand reflection. Brand Domination

Brand Heritage

Brand Values

Brand Positioning

Brand Assets

Brand Personality

Brand Reflection

Discuss using Figure 6.3 (the anatomy of brand positioning) the effect of Carlsbergs new tagline on the positioning of the Carlsberg brand.
Brand domain: the brands target market, i.e. where it competes in the marketplace. The rebranding has seen Carlsberg actively target the younger generation of drinkers Brand heritage: the background to the brand and its culture. Carlsberg has a rich heritage of innovation in the brewing industry by introducing a number of important scientific developments. This has been reinforced by Carlsberg in the new campaign e.g. new barley Brand value: the core values and characteristics of the brand. Carlsbergs new tagline asks a new younger generation of drinkers to stand up and do the right thing and consequently, reward themselves with a Carlsberg. Brand assets: what makes the brand distinctive from other competing brands Carlsbergs new modernised packaging and visual identity (Crown) will be important assets as part of this campaign. Features such as the Null-lox barley and relationships with sponsorship partners such as UEFA will be important factors in determining success. Brand personality: the character of the brand described in terms of other entities, such as people, animals or objects. The product design appeals to younger costumers. Brand reflection: how the brand relates to self-identity; how the customer perceives him/herself as a result of buying/using the brand. Carlsberg have targeted the younger generation of drinkers and have positioned Carlsberg as a reward for achieving something in their daily lives.

Critically evaluate the advantages and risks associated with utilising a single global branding strategy for Carlsberg. Explain what is meant by a glocal approach
Arguments for introducing a single branding strategy for Carlsberg include:
Carlsberg need to have a global positioning strategy in order to achieve the groups objective of becoming a global beer icon

New slogan more contemporary and translates well across markets. This overcomes the difficulties in translation of the word probably which is important for growing market such as Asia. Sales of the Carlsberg brand only account for 10% of the overall Carlsberg group sales
The new approach has a greater appeal to younger consumers. This is important as Carlsberg have clearly identified the market for which they are targeting with the campaign A new single global positioning strategy would allow Carlsberg to gain significant economies of scale

Arguments against introducing a single branding strategy for Carlsberg include:

Campaign change is very risky. Carlsberg risk alienating some of their primary markets including the UK. Large investment required with no guarantee of success By changing a long held and very successful slogan, Carlsberg risk confusing customers by changing their marketing communication messages as well as introducing new brand values