1. Martha Stewart’s Lost Reputation
Case Analysis & Discussion
EMBA20
January 2003

2. 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

3. What makes a good reputation?
Credibility
Reliability
Corporate
Reputation
Trustworthiness
Responsibility
Formbrun, p. 72

4. 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

5. 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

6. Projection Issues Earnings estimate Price/earnings ratio
Reasonable range
Market Factors
Stock price

7. Crisis Management
Appearance Issues
Better handling overall

8. Insider Trading Nature of Concern Why Harmful?
How to deal with friends?
U.S. / Canada differences