assignment : advanced brand management 4...

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© IMM Graduate School of Marketing Assignment: 1

st Semester 2014 ABM401

ASSIGNMENT : ADVANCED BRAND MANAGEMENT 4 (ABM401)

DUE DATE : 3:00 p.m. ON 18 MARCH 2014 TOTAL MARKS : 100 MATERIAL SUPPLIED : SALE OF MRS HS BALL’s CHUTNEY

INSTRUCTIONS TO CANDIDATES FOR COMPLETING AND SUBMITTING ASSIGNMENTS

The complete ‘Instructions to Students for Completing and Submitting Assignments’ must be collected from any IMM GSM office, the relevant IMM GSM recognised Additional Tuition Centre or can be downloaded from the IMM GSM website. It is essential that the complete instructions be studied prior to commencing your assignment. The following points highlight only a few important notes.

1. You are required to submit ONE assignment per module.

2. The assignment will contribute 20% towards the final examination mark, and the other 80% will be contributed by the examination, however, the examination papers will count out of 100%.

3. Although your assignment will contribute towards your final examination mark, you do not have to earn credits for admission to the examinations; you are automatically accepted on registering for the exam.

4. Number all the pages of your assignment (e.g. page 1 of 4) and write your name and surname, student number and subject at the top of each page.

5. The IMM GSM requires assignments to be presented in a typed format, on plain A4 paper. Unless otherwise specified, this assignment must be completed within a limit of 3500 words, excluding the bibliography. Students who exceed the word limit may find that only part of the submitted assignment will be marked.

6. A separate assignment cover, which is provided by the IMM GSM, must be attached to the front of each assignment.

7. Retain a copy of each assignment before submitting, in case the original does not reach the IMM GSM.

8. The assignment due date refers to the day up to which assignments will be accepted for marking purposes. The deadline is 3:00 p.m. on 18 March 2014 for upload to the IMM GSM website. Late assignments will be accepted, but 25 marks will be deducted from the maximum mark, if received after 3:00 p.m. on 18 March 2014 and up to 5:00 p.m. the following day, after which no assignments will be accepted.

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Results will be available on the IMM GSM website, www.immgsm.ac.za, on Friday, 2 May 2014.

http://www.imm.co.za/

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Answer ALL the questions

References are to the prescribed textbook: Klopper, H.B. & North, E. (eds). 2011. Brand Management. 1st ed. South Africa: Pearson Publishing.

QUESTION 1 [15] Branding Tiger Brands is a corporate brand that houses myriads of product brands. Analyse the brand elements and brand themes that Tiger Brands (the organisational brand) has adopted.

QUESTION 2 [25] Brand equity 2.1 Brands are viewed as strategic assets.

Unilever sold Mrs Ball’s Chutney to Tiger Brands for R425 million in 2013. Critics believe that they paid too much. Determine the brand equity of Mrs Ball’s Chutney using Aaker’s model. (20)

2.2 If you were Tiger Brand’s group marketing executive, which brand valuation

methodology would you have employed to ascertain the value of the Mrs Ball’s Chutney brand? Substantiate your recommendation. (5)

QUESTION 3 [20] Brand identity system

3.1 Tiger Brands owns Koo, South Africa’s Overall Favourite Brand 2013 (Sunday

Times Markinor Survey), in their packaged food portfolio. Taking cognisance of the above-mentioned, in your capacity as the brand manager for the newly acquired Mrs Ball’s Chutney, discuss its existing brand identity system. (15)

3.2 What would you recommend to the Board be changed or retained in terms of the answer to 3.1 in light of Tiger Brand’s business strategy? Motivate briefly.

(5)

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QUESTION 4 [15] 4.1 Evaluate the different positioning or repositioning strategies in terms of Mrs

Ball’s Chutney. Which strategy would be recommended for Mrs Ball’s Chutney? (12)

4.2 Establish a brand mantra for the Mrs Ball’s Chutney brand. (3) QUESTION 5 [5] Considering the four (4) approaches to brand structures, which approach do you believe Tiger Brands has adopted globally? Motivate your answer.

QUESTION 6 [10] Brand marketing communication Explain how the influence of social media has impacted on the brand marketing of Mrs Ball’s Chutney.

PRESENTATION [10]

ASSIGNMENT TOTAL: 100

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Sale of Mrs H S Ball’s Chutney Unilever South Africa and Tiger Brands Limited today announced that they have concluded an agreement in terms of which Unilever will dispose of the Mrs Ball’s Chutney brand to Tiger Brands Limited. The transaction is subject to Competition Commission approval and is limited to intellectual property plus inventories on hand. Dickon Hall, the current manufacturing partner for the Mrs Ball’s retail products and a wholly-owned subsidiary of Libstar (Pty) Ltd, will continue to serve as Tiger’s manufacturing partner for the business. The purchase price in the event of approval by the Competition Authorities will be R475m, excluding inventories. Unilever South Africa Chairman, Marijn van Tiggelen stated that Unilever reviews its portfolio of brands on an ongoing basis and the decision to sell has been the result of a strategic review of the brand and the subsequent finding that Unilever cannot give the focus to Mrs Ball’s that this iconic South African brand deserves. Tiger Chief Executive Officer, Peter Matlare added: “Subject to the approval of the regulatory authorities, the acquisition of the Mrs Ball’s brand will give Tiger ownership of one of South Africa’s most treasured food brands and will complement our current shopper offering within the culinary business. We are truly excited about the deal and look forward to having this iconic brand in our prtfolio of products.” For media enquiries, please contact Unathi Mgobozi, External Affairs and Media Manager, Unilever SA (031) 570 2470 Source: Sale of Mrs H S Ball’s Chutney. 2012. [Online] Available at: http://www.unilever.co.za/aboutus/newsandmedia/pressrelease/2012/saleofmrsballschutney.aspx. [Accessed: 12 June 2013]

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Tiger Brands plans to make the most of valued ‘lady’ Jun 7, 2013 | Zeenat Moorad

SOUTH Africaʼs largest food company, Tiger Brands, has plans to innovate and

optimise the supply chain of local brand Mrs Ballʼs Chutney, which it acquired from Unilever for R475m in April. Tiger Brands CEO Peter Matlare said recently that for the company it was not just about acquiring an iconic brand.

"Weʼve been pursuing this ʻladyʼ for a very long time. Thank goodness Unilever relented eventually, but itʼs not just about getting her in. It really is about what we do with this brand. Over the next couple of years youʼll see this brand continue to evolve into areas that we believe she has some real equity," he said.

Mrs Ballʼs Chutney, one of South Africaʼs treasured food brands that generated turnover of R189m in 2011, is the original recipe of Amelia Ball, who made the product for her family and friends during the First World War. Unilever SA chairman Marijn van Tiggelen said at the time of the sale of the brand that the company had reviewed its brand portfolio and decided to sell after finding "that Unilever could not

give the focus to Mrs Ballʼs that this iconic South African brand deserved".

Tiger Brandsʼ portfolio includes All Gold, Tastic and Koo brands. "In the majority of the categories in which we operate, if we do not innovate at an even greater rate and invest even more behind our brands, we believe that the relevance of those brands will diminish with respect to our consumers," Mr Matlare said. Escalating utility, education and transport costs have put a strain on South African households, eroding their spending power. As disposable income comes under pressure, consumer-facing groups have to lift their game as they battle each other for

their share of consumersʼ wallets. "If you look at the last three years, with respect to nondurable goods, where we play in the main, you will see the decline, and we are quite clear that this slowdown in consumer spending is likely to continue," Mr Matlare said. "Given the debt cycle that individual consumers are in we are going to have to relook very carefully at pack sizes, pack formats, which we have been doing in many of our businesses for a while, but that has to intensify and increase." Pioneer Foods CEO Phil Roux said last month a heightened focus on revenue growth management supported by brand revitalisation and innovation, together with resetting the cost base and the repositioning of the operating model in the short to

medium term, would be key to enhancing the groupʼs profitability and overall competitiveness.

Source: Moorad, Z., 2013. Tiger Brands plans to make the most of valued ‘lady’. [Online] Available at: Unileverhttp://www.unilever.co.za/aboutus/newsandmedia/pressrelease/2012/saleofmrsballschutney.aspx. [Accessed: 12 June 2013]

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Mrs Ball's Chutney

Mrs Ball's Chutney is a South African brand of chutney. It was first created in 1918 and is now owned by Unilever Foods. Comments: No other chutney that compares If ever there was an iconic South African brand, this is it. There is simply no other chutney that compares and I do include international alternatives in my comparison. It has the ability to enhance the flavour of almost anything you'd care to dip into it, and a "boerewors roll" (SA hotdog and more) is not complete without a healthy dollop. Mmm...whoever thought I could get passionate about a condiment! Graham, South Africa - 15 October 2008 Mrs Balls' takes her place at our table My husband is from Johannesburg and when I went to visit his family in South Africa

for the first time 10 years ago, I had Mrs Ballsʼ Chutney for the first time. This is a staple in our household. Itʼs hard to get - you canʼt just stroll up to your local supermarket and buy a jar - but I will search high and low, and drive miles to buy Mrs

Ballsʼ in bulk. Some people prefer ketchup or HP sauce as their table condiment, but

for me and my family, Mrs Ballsʼ takes her place at our table all the time. Ashley, United States - 27 April 2007 A must have in every household Just a great range of Chutney's which you can use with basically any dish. From a simple plain cheese roll, a rice and curry dish, with your meat, chicken or fish, or as an ingredient for sauces, bastings and marinades. A must have in every household. Luckily also available in The Netherlands now. Dave, Netherlands - 22 December 2005 The finer things in life Well I am in the UK and found a supermarket selling Mrs Balls Chutney. Then they ran out of stock and has'nt seen it since, other than that I have to go to a SA shop to buy it and it cost an arm and a leg. £2.75 to be exact...Can't live without the finer things in life.

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Madame, United Kingdom - 23 October 2005 What can I say... What can I say...it is the best accompaniment and just about the best chutney I have ever tasted. After visiting South Africa, I associate the taste of the chutney with the brilliant sunny skies and vibrancy of the land. I even had to bring 4 bottles of this all the way from New Zealand to my wedding in Malaysia. That's how much I love it! Chen Yen, New Zealand - 23 July 2005 As wild as the Sahara A little known, divine, tart, yet mellow South African chutney inspiration that is great with japanese mayonnaise, pringles and beer! As wild as the Sahara and unequalled! Donna, New Zealand - 01 September 2004 Soon write home Essential to Cape Malay cooking, this condiment is happily married to every conceivable dish on the South African table - especially good on a Boerie Roll. South Africans living abroad soon write home asking for Mrs Ball's Blatjang. Lekker. Lionel, South Africa - 01 September 2004

Lovemarks. 2013. Mrs Ball's Chutney. [Online] Available at: http://www.lovemarks.com/index.php?pageID=20015&lovemarkid=758&print=1. [Accessed: 12 June 2013]

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Brenda Koornneef of Tiger Brands ... consumer insight is the foundation of marketing Written by our Editorial Team

Iconic brands make Tiger roar. Meet Brenda Koornneef, Group Executive: Marketing and Corporate Strategy of Tiger Brands, as we profile Africa's leading marketers, or individuals who have made an impact on the profession around the continent. As South African FMCG giant, Tiger Brands, continues to expand its footprint and increase its influence across the continent, marketing head Brenda Koornneef must monitor, nurture and invigorate a vast array of brands, including many that have attained iconic standing in the hearts and mind of consumers. Among those that have arguably achieved the status of brand royalty are the Koo range of tinned foods, Purity baby food, Jungle Oats and its spin-off products, All Gold sauces, and the Fattis & Monis range of Italian-based foods. All have a powerful brand history stretching back decades - and a century in one or two cases. Koornneef - a highly experienced marketer who cut her teeth at another brand giant, Unilever, and joined Tiger in 2001 as Category Director for the Main Meal category - has a passion for them all. In a 2009 interview she talked enthusiastically about being privileged to be the custodian of products that "belong to the consumers ... and live in the people's minds and hearts". It is "what's fantastic about working in this company", she told the interviewer. Her personal brand favourite, however, is Tastic Rice, partly because she ran that business unit for three years. "I love the brand, it's the epitome of how one can, purely through marketing, build a brand and create the kind of brand equity that commands nearly a 50% premium to any competitor," she told Strategic Marketing magazine. "In most of the world rice is just seen as a commodity, but we have managed to build Tastic into a really premium-branded proposition with a lot of innovations and range extensions." In more recent times, Tiger Brands has grow its range of home care and personal care products - including Ingram's skin care and Kair hair products - and entered into joint ventures or acquisitions with a number of non-SA based companies. "Our aim is to achieve a strong presence across Africa in FMCG markets as well as other selected emerging market territories," she said in a Biz-Community website article last year. "We have been focusing over the past number of years on expanding our footprint across the rest of Africa. This has been achieved through expanding our core brands into Africa, and we currently market a selected range of our core brands in more than 28 countries." Koornneef, who has also had stints away from the FMCG environment as General Manager of South African television channel SABC TV2 and MD of lottery company Games Africa, is almost evangelical on the subject of consumer insight, which she sees as the foundation of marketing. "I think you can do nothing if you don't have those insights, so we spend a lot of time and effort on gaining them."

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Health awareness and convenience, she believes are the two key trends which have emerged. "People are looking for greater convenience in everything; I think it's one of the key reasons the bread market is growing - consumers are looking for convenient carbohydrate solutions. Convenience is driving shopping habits and people are looking for daily quick shops. It's a factor in every single market we've looked at." The increased focus on health, she says, has seen Tiger launch numerous new innovations to meet this demand. "Even in our basic categories, we've reformulated to make the product healthier." Presumably there will be more innovations to come, as Tiger Brands and Koornneef seek to maintain a dominant position in consumer markets that continue to evolve at a rapid pace. As she said last year: "There is no more challenging job in business today than the role of Chief Marketing Officer. The wealth of many companies, especially FMCG, resides in their brands. Staying relevant and resonating with your consumers is paramount." Source: African Marketing Federation. 2013. Brenda Koornneef of Tiger Brands ... consumer insight is the foundation of marketing. [Online] Available at: http://www.africanmc.org/index.php/knowledge-portal/item/90-brenda-koornneef-of-tiger-brands- consumer-insight-is-the-foundation-of-marketing. [Accessed: 12 June 2013]

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http://www.tigerbrands.co.za

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Tiger brands targets emerging markets Branded consumer goods giant, Tiger Brands Limited, has focussed its growth strategy mainly on Africa to ensure sustainability. However, the company does not rule out other emerging markets and is already invested in Latin America. Tiger Brands Limited wants to generate one fifth of its revenue from outside South Africa within the next five years, up from the less than 10% that the company makes outside of its home country presently. Tiger Brands is targeting emerging markets, specifically high growth countries in Africa, in a bid to reach this goal. The branded fast-moving consumer packaged goods company is listed on the JSE Limited and operates mainly in South Africa and selected emerging markets. It is home to well-known brands such as Tastic, Beacon Sweets, Black Cat Peanut Butter, Purity baby products and Renown, among others. As the group grows it takes with it corporate social investment and sustainable development principles which benefit the surrounding communities. Bongiwe Njobe, Executive: Corporate Sustainability for Tiger Brands, says the company aims to earn 20% of its sales revenue from outside South Africa within the next three to fi ve years. Currently, the bulk of the company's income derives from South Africa, where its headquarters are situated. Of the R10.4 billion turnover achieved in the six months to March 2011, R9.5 billion came from South Africa, according to Tiger Brands' statement to shareholders. Njobe said the company's main growth focus area is Africa, where it has a phased expansion plan. However, Tiger Brands has not excluded other emerging markets and is already invested in Chile and Peru through a partnership with Empresas Carozzi. According to the latest annual report, for the year to September 2010, Tiger Brands aimed to expand its existing geographic and category platforms to "leverage our competencies and drive merger and acquisitive growth in Africa and continue to evaluate opportunities with our partners in Latin America". Priority zones In Africa, the company's priority zones are Angola, Mozambique, Botswana, Tanzania, Kenya, Zambia, Gabon, Ivory Coast, Nigeria, Ethiopia, Benin, Ghana, Cameroon, the Democratic Republic of Congo, Uganda, Zimbabwe, Swaziland, Lesotho and Namibia. Tiger Brands has "on shore" operations in South Africa, Nigeria, Cameroon, Ethiopia, Kenya and Zimbabwe and exports products to several other countries in southern, western and eastern Africa, as well as Mauritius. The group's listed Tiger Brands International division is responsible for exporting its branded goods into Africa, mostly to countries in the Southern African Development Community and East, Central and West Africa. Tiger Brands has stakes in several food and consumer goods companies that target the African market, including 66.7% of South African-based Langeberg & Ashton Foods (Pty) Ltd, 51% of Kenya-based Haco Industries Kenya Limited, and a 74.7% stake in Chocolaterie Confi serie Camerounaise (Chococam) in Cameroon. The annual report said Tanzania is a country that offers "significant opportunity to establish and deepen distribution". Meanwhile, Tiger Brands' activities in Angola had remained intermittent but its recent approach of using category specialist distributors was gaining momentum. The

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company expected to see the benefits of this approach in the financial year ending this September. Tiger Brands would seek acquisitions, joint ventures and green field opportunities to grow in Africa, while continuing to evaluate opportunities with its partners in Latin America, the report said. Expanding portfolio Neil Brimacombe, Executive: Tiger Brands International, said in a March presentation that Africa will become the world's largest market and growth levels in Africa are "attractive". He told investors that "international expansion remains a key priority" for Tiger Brands. Brimacombe said the company understands where there are opportunities and has developed real competencies in the market, built on three years of experience. However, there is a limited window as the top players have increased their share of the market since 2001, consolidating the available opportunities, he said. In addition, there are challenges such as currency instability, a lack of adequate infrastructure – in energy, water and transport in particular, and acute skills shortages in management and technical areas, Brimacombe said. He also pointed to low levels of per capita income, the prevalence of corruption, demand constraints due to a lack of access to credit as well as competition from low cost imports and the prevalence of counterfeit products. Tiger Brands will not expand at "any cost," said Brimacombe. Non Executive Chairman, Lex van Vught, said in the annual report that the year to September 2010 was characterised "by the company consolidating its position as a focussed, branded consumer goods company whilst also concentrating on its strategic objective of expanding, particularly into other parts of Africa". Opportunities Van Vught said that Tiger Brands had spent "significant time and effort" in finding expansion opportunities, especially in Africa. The group had signed several deals to acquire stakes in African- based companies. These were entered into after year-end. The company's interim results statement in May said it had finalised several of the acquisitions to enhance its African ambitions. Tiger Brands bought all of Deli Foods Nigeria Limited, which makes and markets biscuits, for R275.8 million in a deal that was wrapped up in April. In the same month, Tiger Brands completed a deal with the East African Group of companies of Ethiopia, East African Group (Ethiopia) PLC, to set up a joint venture food and home and personal care business. The new entity will be 51% owned by Tiger Brands and the balance of 49% by East African Group. The two deals will add R500 million in revenue to Tiger Brands' top line in their first full year of operation. Tiger Brands also bought all of South African- based Davita Trading (Pty) Ltd for about R1.5 billion, a deal that was approved by South Africa's competition authorities in May. Davita manufactures and exports powdered seasonings and beverage products. The company has a presence in 28 countries across Africa and the Middle East. It achieved sales of R600 million in the year to February. Tiger Brands is targeting emerging economies that display high growth rates. Its key focus is on expanding its food portfolio on the continent, although it will consider relevant opportunities in the home, personal and baby care segment, said Njobe. The amount that Tiger Brands will spend on expanding will "vary significantly based on the specific opportunity identified," said Njobe. Chris Gilmour, Investment Analyst at ABSA Investments, said Tiger Brands is expanding "strategically".

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He explained how the local space is becoming more challenging for food producers, especially as international companies such as Walmart, with access to global procurement sources at cheaper rates, are entering the market. "South Africa is generally not competitive, especially when it comes to price," said Gilmour. In a bid to protect margins, companies such as Tiger Brands are looking to international markets to expand, and Africa is very attractive because of its economic growth rate and growing middle class, he said. "The rest of Africa offers the best growth imaginable." Tiger Brands had been buying up other food manufacturers in places such as Kenya and Cameroon. "It's a clever strategy," Gilmour said. Tiger Brands started expanding on the continent about three years ago, he added. The company had proactively sought new markets. "Africa is the next big thing," Gilmour said. Sustainable growth Tiger Brands' Njobe explained that the company's primary purpose is to create value for shareholders and investors, but to do so in a way that contributes to growth, jobs and modernisation in the countries in which it invests. "The manner in which we build our business does result in skills transfer, however we also recruit and build local talent," Njobe said. "Over and above that, we aspire to reinvest in the communities within the geographies where we operate – in short, extend our corporate social investment contributions as appropriate where we have operations." Tiger Brands also looks to source raw products from surrounding communities where it is available and economically feasible to do so, Njobe said. Tiger Brands CEO, Peter Matlare, said in the annual report that although financial success is an essential component of stakeholder confidence, "we are equally concerned that the group's operations and activities are such so as to provide a sustainable basis for future growth". The focus on sustainability is as applicable to South African operations as it is to the company's African operations, Matlare added. As part of the sustainability drive, Tiger Brands took into account the environment, power consumption and packaging. See more at: http://www.africantrader.co/website/index.php/business/retail-in-africa/62-tiger-brands- targets-emerging-markets.html#sthash.vKoOChth.dpuf.

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