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Chapter 13: Problem 6

Some companies have done a poor job protecting the images of their products. For example, Hormel's Spam brand name is widely ridiculed and is associated with annoying commercial messages received via e-mail. Think of other cases of companies failing to protect their brand names. What can companies do about the situation? Should the companies rebrand their products?

Short Answer

Expert verified
Examples of poor brand image management vary and could include firms like BP after the oil spill disaster. Companies can handle such situations by being transparent, taking responsibility, engaging with stakeholders and initiating brand recovery strategies. However, rebranding should be a last resort considering the baggage it carries and the risks involved, it isn't always the most feasible solution.

Step by step solution

01

Identify cases of poor brand image

To understand this topic better, you need to first identify instances where companies have failed to maintain a positive brand image. Think about cases in which a company's brand name has been ridiculed or associated with negative things. You could do this by researching real-world examples, or rely on your existing knowledge. This is an important step to relate to the problem.
02

Suggest solutions for damaged brand image

Given that you are familiar with cases of damaged brand image, the next step is to suggest what these companies can do about the situation. You can think about brand management strategies such as public engagements, reforming business practices, or taking legal action. Keep in mind that the solution must be realistic and effective for the company's situation.
03

Deliberate on rebranding as a solution

Lastly, we need to discuss whether rebranding is a viable solution. This involves considering the advantages and disadvantages of rebranding. Look at how effective it might be, the cost involved, the potential to lose or gain customers, etc. You should make a balanced argument based on these factors.

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Most popular questions from this chapter

In 2008 , Gogo became the first company to offer Wi-Fi service on commercial aircraft. It provides the service primarily through ground-based cellular towers. Many air travelers find the \(\$ 30\) price Gogo charges on a cross- country flight to be very high because the speeds offered are too slow to stream movies or other content. Gogo faces competition from newer services that use satellites rather than ground-based towers, which enables them to offer much higher speeds at half the price Gogo charges. According to an article in the Wall Street Journal, in late 2016 , Gogo was "rolling out an advanced satellite-based network" that would allow it to offer higher speeds at a lower price. A number of airlines, though, were considering switching to competing services. a. Will copying its competitors by offering a faster, lower-priced service likely allow Gogo to recapture its market share? b. Unlike its competitors, Gogo had to spend substantial amounts to build a network of ground-based cellular towers. It has to abandon those towers as it switches to a satellite-based network. Is the cost of those towers a disadvantage to Gogo as it competes with the new firms entering the industry? Briefly explain.

Draw a graph that shows the effect on a firm's profit when it increases spending on advertising but the increased advertising has no effect on the demand for the firm's product.

What effect does the entry of new firms have on the demand curve of an existing firm in a monopolistically competitive market?

(Related to the Don't Let This Happen to You on page 458) A student remarks: If firms in a monopolistically competitive industry are earning an economic profit, new firms will enter the industry. Eventually, a representative firm will find that its demand curve has shifted to the left until it is just tangent to its average total cost curve and the firm is earning zero profit. Because firms are earning zero profit at that point, some firms will leave the industry, and the representative firm will find that its demand curve will shift to the right. In long-run equilibrium, price will be above average total cost by just enough so that each firm is just breaking even. Briefly explain whether you agree with this analysis.

What is the difference between zero accounting profit and zero economic profit?
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