Case Detail

Case Summary

El Cerrito: Driving Growth

Case Number: 5-414-756, Year Published: 2015

HBS Number: KEL929

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Key Concepts

Branding, Consumer Marketing, General Management, Marketing, Marketing Strategy, Product Management, Strategic Positioning

Abstract

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.

Learning Objectives

After reading and analyzing the case, students will be able to: appreciate why growth is such a priority for companies and brands; analyze different growth alternatives, such as building penetration and increasing buying rate; examine the power of brand extensions, and the risk of stretching a brand too far; and balance the opposing forces involved in both successfully broadening a brand, in order to attract new customers and increase revenue, while at the same time maintaining the strength of a brand’s core equity.

Number of Pages: 6

Extended Case Information

Teaching Areas: Marketing

Teaching Note Available: Yes

Geographic: United States

Industry: Apparel & Accessories

Organization Name: El Cerrito (disguised)

Organization Department: Marketing

Organization Size: Large

Decision Maker Position: Vice President

Decision Maker Gender: Male

Year of Case: 2000