El Cerrito: Driving Growth
Michael Belden, longtime manager of the El Cerrito brand of high-end leather products and accessories, had just concluded a presentation to the senior executive team on his plan to increase profits by 4 percent over the next year. His new boss, Sara Jensen, was not pleased and instructed him to go back to the drawing board: "You and I both know that a 4 percent profit increase just isn't sufficient. I was hoping to see an increase of 20 percent or more." Belden was deeply concerned. El Cerrito was a mature brand that catered to exclusive, high-end clientele. Would it be possible to generate the kind of growth Jensen wanted without damaging the brand's equity?
This is the real story of a well-known luxury brand that has been disguised for purposes of this case. Students sometimes will correctly guess at the brand's true identity, but this does not impact the discussion. The disguised brand gives the case an entertaining twist when the brand's true identity is revealed.
Calkins, Timothy. El Cerrito: Driving Growth. Case 5-414-756 (KEL929).