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Martha Stewart’s Lost Reputation. Case Analysis & Discussion EMBA20 January 2003. Martha Stewart’s Lost Reputation. Reputation issues Q1 Basis Q2 MSO’s stock price decline Q3 Target market Q4 Brand qualities & impact of insider trading * Projection issues Q5 Sales and profits *
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Martha Stewart’s Lost Reputation Case Analysis & Discussion EMBA20 January 2003
Martha Stewart’s Lost Reputation • Reputation issues • Q1 Basis • Q2 MSO’s stock price decline • Q3 Target market • Q4 Brand qualities & impact of insider trading * • Projection issues • Q5 Sales and profits * • Q6 Stock price range * • Crisis Management • Q7 Avoid the appearance* • Q8 Handle crisis better* • Insider trading • Q9 Harmful? * • Q10 Dealing with friends? * • Q11 U.S./Canadian differences * Break out, discussion to follow
What makes a good reputation? Credibility Reliability Corporate Reputation Trustworthiness Responsibility Formbrun, p. 72
Brand Image • Types of Brand Association • Attributes • Non-product elated – price, user & user imagery, brand personality, feelings and experience • Product related • Benefits • Functional • Experiential • Symbolic • Attitudes • Favourability of Brand Associations • Strength of Brand Associations • Uniqueness of Brand Associations Keller, 1998, 94
Brand Valuation • Discounted future net cash flows or brand earnings after charge for capital (excess earnings) • Brand strength – 7 factors • Leadership • Stability • Market • Geographic spread • Trend • Support • Protection Keller, 1998, 362,3
Projection Issues • Earnings estimate • Price/earnings ratio • Reasonable range • Market Factors • Stock price
Crisis Management • Appearance Issues • Better handling overall
Insider Trading • Nature of Concern • Why Harmful? • How to deal with friends? • U.S. / Canada differences