A study of variation of value perceived by the customer and the cost sacrifice is of utmost importance for any company. The value price battle may be graphically presented to have four outcomes. The outcomes are represented in four blocks – the intensity of the success of the four blocks would vary on the exact coordinates of the brand in the matrix.
When a MNC acquires a brand and re-offers it to the customers retaining its brand name, it attempts to differentiate the re-launched offering from its past image and competitors. This results in the states of Shinning Sun, Shooting Star, Black Hole and Poisonous Gas
A shinning sun is a natural proposition the customers look forward to. A perfect combination of competitive price and high “perceived benefits.” The value delivery to the customer comes from the distribution synergies and economies of scale that are available to an MNC.
The shooting star is high on both the parameters. This is an ideal nature of luxury products. In India they have been associated with status and buying power. They’ve been used more often or not by super rich to flaunt on their social circuit.
A black hole sucks in resources but does not bring positive results to light
A Poisonous Gas may be fatal for the company. The latter perhaps is the consequence of an overly optimistic and costly brand acquisition, while the former is the result of a confused brand acquisition.