The purpose of this report is to recommend solutions to overcome challenges of brand imaging at Shanghai Golden Wheel Fortune 100 Group. It aims specifically to solve the problems caused by our acquisition of five brand names and our lengthy and unmemorable corporate name.
As the biggest bicycle manufacturer in China, SGWFG has an unmanageable accumulation of brand names, namely:
This, combined with the long corporate name, has made it hard to streamline advertising, marketing and budgeting efforts. However, these brand names have helped keep a strong market position. This dilemma led Dennis Zhang, the Managing Director, to discuss with his managing team whether to keep the corporate name and/or to drop some brand names.
To understand perceptions of SGWFG's brand image, an online survey was sent out to all customers through our social media platforms, while dealers were telephoned with a standardized set of questions. The surveys and telephone calls were arranged in the week of 14th – 20th November 2016. Due to time constraints, two dealers from Beijing and Taiwan could not be interviewed.
The remaining of this report will provide conclusions followed by the recommendations, and then the findings.
Based on the findings below, we reached the following conclusions:
1.1 Consumers' major selection criteria is product quality and thus, SGWFG should be re-named as Fast Flight.
1.2 Flying Duck and White Horse should be dropped because maintaining them is not financially sustainable.
1.3 Product line extension helps diversify risk and reduce threats from competitors
With the problems of brand imaging, SGWFG should consider the following recommendations:
2.1 Change Corporate Name to Fast Flight
As our corporate name is not well-known, it should be changed to Fast Flight within the next month. This would entail:
Market Penetration of Fast Flight into all branch regions
Licensing of Taiwan's quality management strategies to other plants
A more focused advertising and marketing campaign
Better relations with Taiwanese and Korean factories who were concerned about adopting the corporate name
We house financial resources that will more than cover advertising and administrative paper costs. A corporate name change will extend our loyal customer base and bring short-term and long-term success like exemplary corporations.
2.2 Drop Flying Duck and White Horse
We should drop Flying Duck and White Horse to improve SGWFG's overall customer perception and appeal to our main customer base, i.e. Chinese people, by avoiding any racial discrimination associated with ‘White Horse'.
The strong association between brand names and our factories may lead to disagreements. However, it is important that we prioritize our long-term goals and save budget allocations to help the remaining three brand names grow and prosper. Moreover, dropping Flying Duck and White Horse would not negatively impact customers and dealers as there are other outlets in the major branches as substitutes.
2.3 Provide Services to existing Product Line
Expanding our offerings to services would boost revenue and overall customer satisfaction. Service recommendations would include:
Provision of complementary accessories, like attachable water bottles, bike locks and night lights
Customization services for customers to design their own bicycles
Diversification provides more sources of revenue and thus, gives our dealers more incentives to stay. Adding customization services attracts audiences with different preferences and income levels and thus, squeezes out our competitors from our service differentiation.
3.1 Quality Management
The China manufacturing plants failed to comply with numerous Quality Guidelines and thus, SGWFG saw its ranking drop from 7th to 12th in the last annual product quality survey. On the flip side, Fast Flight is en route to winning its 10th award for maintaining its high standards in bicycle manufacturing, while 65% of SGWFG's customers selected Fast Flight and Phoenix as their first and second choice respectively.
A recent study shows that amongst people that are loyal to their brands, 35.66% of men and 28.77% of women would switch to an alternative with better quality (Crowdtwist, 2016). Moreover, 52% of millennials are said to choose quality over price (IRI, 2015). This is supported by our internal survey showing that 20% of customers using Flying Duck were not satisfied with its quality and 80% of them would switch brands.
3.2 Budget and Cost Distribution
SGWFG's annual report shows that 50% of budgets and 60% of operating and maintenance costs are from both Flying Duck and White horse. However, only 20% of profits come from the two brand names, while Fast Flight is in the lead with 40% of SGWFG's total profits. Moreover, SGWFG spent money on five different stands for the China Show last year.
3.3 Name Change
Our internal survey results show that 74% of customers agree that Flying Duck should undergo a name-change and 95% of them said that they would not mind switching from Flying Duck to the other 3 outlets in Shanghai. However, our internal survey shows that 75% of SGWFG's dealers would be offended if only one brand name was used. Their two major concerns are the high switching-costs and high risks associated with the change.
An example of a successful corporate name change is IBM, which used to be called ‘Computing Tabulating Recording Corporation'. The shortened name helped revamp IBM's brand recognition and raise consumer awareness.
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