Russ Merz, Firm A CEO
October 23, 2011
There are five market segments within the SONITE industry, three of which our firm has
developed a specific product or brand for that segment. Firm A has the SAKE brand that targets the Hi-
Earners; however, Professionals seem to prefer and purchase this brand too. We have the SAFE brand,
which targets the Buffs segment. Then we also have the SABY brand, which was recently developed
specifically for the Others segment. For this memo, we will focus on the SABY brand that targets the
Fortunately for Firm A, developing the SABY brand for the Others segment looks to be most
profitable. SABY has been on the market for two periods and each period it has grown. From utilizing
our market research we were able to develop a brand that the Others segment desires; therefore, SABY
started in a very high competitive position with a very high market attractiveness! The initiatives for
Firm A, in regards to our SABY band, are to invest in the brand in order to protect our position and to
maximize our potential growth in this market segment. Below you will find a bulleted list describing
each initiative and their importance:
Increase Advertising for the SABY Brand.
SABY is a new brand within the SONITE market and it is developed specifically for the
Others target segment; therefore, we need to generate awareness in both the SONITE
market and the Others target segment about the fact that the SABY brand exists. Not
only that the brand exists, but that it was developed specifically for the Others segment,
who demanded non-expensive, low performance, products with average convenience.
It is important for Firm A to increase our advertising for the SABY brand because it will
generate awareness, which will then lead to purchase intentions. Currently, our brand
awareness for SABY is 24.1% and our purchase intentions are 20.4%. Most of our
customers who are aware of the SABY brand intend on buying the brand! Once we
increase our purchase intentions this will lead to an increase in unit sales; therefore,
increasing our revenues and gaining more market share against our competitors within
the Others segment.
Increase Sales Force.
When we launched the SABY brand, Firm A was unsure of how well the brand will
take. We estimated on how many sales representatives to incorporate within each
distribution channel – specialty stores, department stores, and mass merchandise stores.
Firm A added sales representatives when the SABY brand was launched, but did not