Victoria’s Secret : a case study of maintaining brand relevance

Victoria’s Secret, which belongs to L Brands group, is the leading lingerie brand in its home market, US and globally, which has substantially shaped the industry of underwear in the last decades and successfully expanded into other product categories, such as swimwear, sportswear, apparel and beauty. It has been performing well financially in the resent years under the management of its CEO, Sharen Turney, who has left the brand in the beginning of 2016 and delegated to Leslie Wexner, the CEO of L Brands. However, in the last two years some questionable aspects of Victoria’s Secret marketing have been raised by media, competitors and consumers – the brand has gained a significant amount of negative publicity regarding its brand values, based on its reluctance to cater to plus-size segment and the accusations of promoting wrong body ideals and sexist stereotypes among women. From brand management prospective, these negatives could become reasons not to buy Victoria’s Secret products among consumers, which may make further brand relevance problematic. In order to facilitate brand relevance maintenance, the case protagonist, Victoria’s Secret CEO, Leslie Wexner is faced with a dilemma – either to make Victoria’s Secret enter a plus-size segment or introduce new corporate social initiatives to the brand. The students are supposed to analyze and discuss the case study, using company background and market conditions and, on the basis of pros and cons for each strategy, solve the particular dilemma.Victoria’s Secret pertence ao grupo L Brands é a marca de lingerie que lidera tanto nos EUA como globalmente. Moldou substancialmente a indústria de roupa interior nas últimas décadas e também teve sucesso na expansão para outras categorias, como fatos-de-banho, roupas de desporto, vestuário e cosmética. Tem sido bem-sucedida financeiramente nos últimos anos sob a chefia de Sharem Turney, CEO, que deixou a marca no início do ano de 2016, passando as responsabilidades para Leslie Wexner, a CEO da L Brands. No entanto, nestes últimos anos alguns aspectos questionáveis relativamente ao marketing da Victoria’s Secret surgiram junto dos media, concorrentes e consumidores – a marca foi ganhando má fama relativamente aos valores que transmite, devido à sua relutância em comercializar tamanhos maiores e às acusações relativamente à promoção de ideais errados de beleza e estereótipos sexuais no sexo feminino. Na perspectiva da gestão da marca, estes pontos negativos poderão tornar-se razões suficientes para os consumidores não comprarem produtos da Victoria’s Secret, o que pode tornar-se um grande problema no futuro. De maneira a manter a relevância da marca, a protagonista do caso Leslie Wexner, CEO da marca, enfrenta um grande dilema: ou introduz o segmento de tamanhos maiores na marca Victoria’s Secret; ou cria iniciativas de responsabilidade social na marca. Os estudantes têm de ser capazes de analisar e discutir o Caso de Estudo, tendo em conta o passado da marca e as condições de mercado, baseando-se nos prós e contras de cada estratégia, para resolver o dilema em questão

Market Effects of New Product Introduction: Evidence from the Brew-at-home Coffee Market

The introduction of new products has always been an important source of economic development and improvement in consumer welfare. With retail coffee data spanning five years after the single-cup brew coffee pods were introduced to grocery chains, this paper empirically studies the market effects of new product introduction in the brew-at-home coffee market. We use a structural model of demand and supply to capture the changes in consumers’ preference for this new product over time. The demand estimates suggest that consumers’ relative preference and willingness-to-pay for the new product grew substantially over the sample periods. The analysis reveals the extent to which the introduction and growing presence of the new product simultaneously expanded the relevant market and cannibalized the sales of pre-existing substitute products (traditional auto-drip brew coffee products). Furthermore, we quantify the annually expanding welfare gains of the average consumer attributable to the new product

Aggregate Impact of Different Brand Development Strategies

Current branding literature investigates the spillover effects and extension effects due to the introduction of product extensions. However, no study so far has evaluated the aggregate market impact of these effects across different brand development strategies or accounted for the strategic decision to introduce the extension. It is important to examine the above given the significant investments and the high failure rates associated with the introduction of new product extensions. In this study, we develop an analytical framework that derives revenue outcome due to an extension introduction as a function of spillover and extension effects. We empirically estimate the above effects through a Bayesian Endogenous Switching Model that jointly models market shares of the extension and its parent brand along with the strategic decision to introduce the extension and the endogeneity in prices. By using a data set that covers 155 extensions introduced across 20 U.S. geographic markets, we obtain several new generalizable empirical insights. Our results show that while spillover effects are higher for brand extensions, line extensions benefit through larger extension effects. We find that vertically differentiating a line extension in terms of increased quality mitigates its negative spillover effects. While the addition of a new brand name (i.e., sub-branding) lowers spillover effects for line extensions, it increases the market performance for brand extensions. Our findings provide several strategic implications for manufacturers to successfully introduce and manage product extensions