Pacific Brands: Segmenting Australian Brassiere Consumers
By Arvind Rangaswamy
1. Before beginning any case, students should familiarize themselves with the model being used. Marketing Engineering for Excel comes with tutorials that demonstrate the capability of each model. The tutorial can be found under each model within the ME►XL menu after starting Excel. These tutorials are designed to work with our OfficeStar examples which are located in the My Marketing Engineering directory, usually installed in Public Documents during software installation. There is no external data set associated with this case; all necessary data are included herein. “Thanks very much for the ride, George!” She waved goodbye to her driver as he pulled back into traffic onto Burwood Road. “Always a pleasure, Madam call me when you are ready to go home, or if your staff throws you out for being overdressed!” Sue Morphet could not help musing over her quick change in scenery from earlier today. As he pulled off, she saw the platinum satin gown she was still wearing from the formal luncheon she had attended earlier in the afternoon. The gown reflected perfectly in the onyx-tinted window of his limo. Looking around now, she was a long way from the glitter of Rosemount Australian Fashion Week in Sydney. She was a little bit relieved actually, happy to be back to the scrappier location of her own PBG headquarters, and she took stock of it now. She surveyed the 270-degree view blocked only by PBG’s building. The landscape was a motley collection of random industries: a regional petroleum company office, a law practice, and a large religious center. Yes, they were all where she had left them, and now they welcomed her back. George knew Fashion Week was draining for Sue – she was already feeling its effects. She appreciated the creativity of it all, but the truth was she cared more about her own organization and keeping it running smoothly for the sake of her own employees, than she did about the champagne-and-caviar of Sydney. George warned her that she looked too fancy to go back to the office, but Sue wanted to get back into a work routine her travel fatigue won out against the freshness Fashion Week still had in her mind.
In her last meeting with Pacific Brand Limited’s (PBG) Board of Directors, Sue Morphet, PBG’s Chief Executive Officer, had updated the Board about the Copyright © 2011 by DecisionPro, Inc. To order copies or request permission to reproduce materials, go to www.decisionpro.biz. No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means – electronic, mechanical, photocopying, recording or otherwise – without the permission of DecisionPro, Inc.
company’s half-year results for 2009 (see Exhibit 1). Results were lackluster: sales were down 5.2% from FY2008, and net profits after taxes were down 0.9%. Net sales for the Underwear & Hosiery operating group had fallen 1.4% from 2007 figures despite strong performances by the Bonds, Berlei, and Hosiery brands. There also continued to be significant uncertainty about PBG’s future earning potential, because consumers seemed to be trading down from department store-grade product line into discount store brands and private labels. On the supply side, unfavorable changes in the exchange rate between Australian and U.S. currency also made sourcing costlier, giving the company little flexibility on the price front. Sue was particularly worried about two of PBG’s new products, Infinity and Timeless, which had both just been launched under the Berlei umbrella. Both targeted fashion-conscious, female consumers seeking a high-end product. Sue had supported Berlei’s aggressive outreach to this consumer profile, largely because of the flexibility and price inelasticity associated with the customer. In addition, with such a...