Cases

Developing a Brand Strategy for a Large Textile Machinery Manufacturer

Background and Challenge

The client is a large textile machinery manufacturer, with a strong presence in India. It planned to acquire an international competitor and set a global foot print for itself. The international competitor has a strong presence in the domestic market and was considered as the No.1 brand. The customer segment catered to by the 2 brands, has a strong overlap. However the preference for the 2 brands varies across different customer clusters. The international competitor enjoys a reasonable price premium over the client’s brand, although the premium has come down from the past. The two brands jointly have about 70 – 80 percent market share in the domestic market and post-acquisition, the client intends to consolidate the market share further.

The client requested UC to provide assistance in defining the brand strategy post acquisition for the domestic market keeping a time line of next 3 years, considering top management intentions and anticipating customers’ reactions and possible competitor actions. The client also wanted the communication strategy to be defined for its various stakeholders.

Approach and Recommendations

UC formed a brand strategy for post-acquisition and a communication strategy, following the below processes:

  • Initiated the engagement conducting primary research (55 respondents) across various regions and groups – customers, competitors and influencers like textile consultants/ architects
  • The objective of the primary research was to get a detailed understanding of the 2 brands

    1) Brand association and customer segment overlap – uniformity in preference across all regions

    2) Evaluation criteria for selecting a particular brand

    3) Assessment of the brands on

    Technology and product quality

    Automation and performance consistency

    Cost and value perception

    Service and spares support

    Operational cost

     

    4) Difference in the skills required to sell and service the two brands

    5) Relative brand strength

  • We evaluated the following options for branding

    1) Genesis – create a new brand

    2) Retain one brand

    3) As is – both brands exist independently, with independent teams for sales and service

    4) Co-brand – retention of both the brand names jointly to create a new brand

    5) Co-exist – both brands exist independently, with a common team

  • We also analysed case studies (similar acquisition scenario) for industrial products and derived learnings from them
  • After considering the industry dynamics and screening the two brands, we recommended an emergent strategy, that is adaptive and evolves in response to market signals
  • The communication strategy detailed the following -

    1) Do’s and don’ts for various stakeholders (Customers, Employees and Stockholders)

    2) Guidelines on the contents of the communication

    3) Timeline for communication

    4) Mode of communication

Results

The client received defined strategies to follow.