brand strategies 2

8/8/2019 Brand Strategies 2

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Brand Strategies

Professor Rishikesh Mody


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Line Extensions

The product line is far more representative of the

customers varying quantity needs.

It suggest the presence of usage segmentation.

Customers differ in terms of their usage quantities.

The brand has to fill the whole spectrum with

products as per the need of the various segments.


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Line Extension strategies

Product sizesShampoos-Sachets to

economy packs. tubes to

jars, bottles to cans: need

to differentiate users


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FlavoursDiet coke , sun silk black ,

parachute lite , Parachute

therapie .. Hair type , skin

type user groups.. Need to

differentiate user needs.Colgate gel Maggie Chinese

noodles.


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IngredientLux sunscreen , Ponds talc

with SAM: need to upgrade

user needs. Head &

Shoulders-ZPTO &

Menthol Liryl Menthol.Halls ginger & regular


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Form


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Price variants


Rin Shakti to Rin supreme ,

Taj luxury to Taj Business

hotels: need to differentiate

user groups


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Why line extensions ?

In most of the product categories including

fast moving consumer goods , consumer

durables and services line extensions have

been the name of the game.

Customer segmentation

Consumer need for variety Pricing breadth

Capacity utilization

Quick Gains

Competitive reasons

Trade demands Counter competition

Image benefits


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Marketing Challenges for line

Extensions

Proliferation of meaningless line extensions Easy to add on ..since investments are low,able to ride on the lead brand

Fits well with the brand image..since within the same product category

But Low Business potential..Niche markets require sufficient investments to be

developed which the line extension is not capable of..e.g..Close up whiteningtooth brush

High Competition.. Not differentiated from competition thus low volumes e.g..

Ponds all day deo Threat of cannibalization..when line extension is too close to lead brand

Success criteria Line extension should grow the category .e.g..Colgate gel ,Bingo Flavors


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Brand extensions

Using an existing brand name to promote a

product in a different category , is Brand

Extension.

The key difference between the two is the

product category

In line ext. the product category remainsconstant while in brand ext. it is variable


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Brand Extension strategies

Extend the brand name to a new product category :

Brand fit in a new business area

Supplimentary categories : BPL tvs to washing machines to cellularservices.Maggie soups and sauces.Lakme lipstics and perfumes.nirma washing

powder to toilet soaps to salt

Complementary categories : Colgate toothpaste and toothbrush. , Axe deo and

Axe body gel

Image asseceroies : Benetton t shirts to sun glasses , Nike sport shoes to sport

apparel Diverse categories : Similar core values. Brittania biscuts to dairy

products,Dabur lal dant manjan to chawanprash to vatika , cello from

thermoware to seating systems,toothbrushes,pens


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Why do we need brand extensions ?

For mature brands

To generate Growth

To provide fillip to stagnating sales(parachute

tin to plastic can and oil to therapy )

Threat of new entrants- protect market

share(Lux vs. Camay) Strength existing franchise: Reassure loyal

customers


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For mature brands

To enhance brand image

To strength brand Identity and re in force core

brand values ( MTv changing needs.Milkmaid

from milk whitener to desert ingredient)

To redifine brand identity & reposition corebrand values



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For mature brands

To prevent market share erosion by

competition ( Colgate total)

To prevent repositioning of core brand

values by competition (dettol vs. lifebuoy )



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Marketing challenge of brand

Extensions

Poor fit of the ext. with the lead brand

Brand ext. does not match the identity Lakme men's Cosmetics

Brand ext. ties to resolve an existing area of dissatisfaction but thebrand image does not allow for such an ext. to be accepted Dettolperfumed soap & Lux shampoo

Competitive pressures when the bran ext. does not have a competitiveadvantage Amul chocolates

Niche market ..when the brand name limits the size of the market

usually linked to the brand image Burnol , Mercedes Benz MaybackSuccess criteria : Brand ext. should build the brand identity & brand

business

Success story : Britannia Milkman Dairy products

Nivea Mens cosmetic , Visage / Vital


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New Brand strategies

New brand name for a same product category

Required when there is poor brand fit of new

category with existing brand name but there is ahigh business potential of the category

Huggies to Depend

Thums up to Gold Spot

Pepsi to Miranda

Toyota to Lexus


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Multiple brand strategy

New brand names in the same product category

market saturation

Expensive strategy....leading companiesoftenthrough acquisitionsto achieve economies of

scale

HLL soaps : Lux , breeze , Jai , Hamam , Lifebuoy ,

Dove , Pears Coca Cola : Thums Up

Nescafe & Sunrise


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Customer franchise

A marketer may extend a product range to

meet the needs of a specific consumer group

J & J baby talc ,

oil , cream ,

shampoo , diapers


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A good understanding of the brand mayor may not lead to a successful brand

extension

But , a poor understanding of a brand

will definitely lead to the failure of the

brand extension and may also damagethe existing brand


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Stretching the brand vertically Vertical stretch : Technically a line ext. since it is

the introduction of price variants of an existing

brand in the existing product class Stretch Up: Extending the brand to a higher priced

segment Surf Detergent 500g @ Rs. 43 to Surf

Excel Detergent 500g @ Rs 70

Stretching Down : Extending the brand to a lower

price segment From wheel washing powder to

wheel bar


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Need to stretch - up For a market leader Internal need to climb up the

ladder

Take advantage of economies of scale Attractive market segment to enter

Need to enhance brand image by premium price ext

Maruti : 800 to Zen to Esteem to SX4

Changing competitive scenario

Mercedes C 180 to SLK to M class

Threatened by new introductions from competing MNCs having

premium image

From Surf to Surf Excel


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Wisdom of stretching up Guard against failure of premium-price ext.

When the existing brand image is strong & the

premium ext has a credibility problem Nirma premium soap

When the business potential in limited & the

investments to protect the niche segment is high

Puma soccer shoes in India

When competition is strong and repositions the brand

image & limits its entry into the premium segment

Maruti

Success criteria = Market potential + Competitive advantage


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The Stretch Up strategy Create a sub brand to cater to the premium segment

Value engineer the product quality , features , benefits to enhance the

perceived quality of the sub brand

Gradually cut off the sub brand from the existing brand .. The sub

brand will start having a set of Image values distinct form the existing

brand

Cars : Honda to Accura

Limitations of introducing a new brand to cater to the premium

segment : segment size is limited , difficult to sustain necessary brandbuilding investments

Cosmetics : Orchids a premium product from Lakme difficult to sustain


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Need to Stretch DownOpening up of a lower priced segment entry for Low priced competitors

Competitors ken to gain market entry through price promotions Akai

T.V

Competitors have a cost advantage , able to offer lower price

Manufacturing cost advantage : Nirma washing powder

Distribution cost advantage : Amway , Dell computers

Competitors having economies of scale advantage Parle G

Competitors innovating new technology at lower price points

Reliance Cellular


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Stretch down strategies

Primary Question : How will it affect the

main brand ?

Need for price correction if the perceived

quality of the brand is threatened

Creating a sub brand at a lower price point

having a different set of value perceptions

Creating a new brand to cater to a lower price

point


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Brand extension horizons

Lead brand

Line extensions horizon

Brand extensions horizon 1

Brand extensions horizon 2


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Brand extension horizons

Chocolate

Diff shapes: bars , thins , slabs

Diff tastes : white/milky , dark/bitter

Chocolate Candies Toffees

Chocolate Drinks , Ice creams , Cakes , Biscuits , deserts

Diff forms : soft , hard , crunchyChoc with other ingredients like

biscuits , ice cream fruits etc


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Effect of extension on the lead brand When the brand succeeds

More good : When the ext. enhances the brand name Britannia form biscuits to dairy products ( adds a new dimension .. Health ,

Nutrition , Intelligence )

When the extension succeeds The good : When the brand name aids the extension

Wills lifestyle Clothing ( Premium , casual , togetherness , sporty values ofwills help the ext. )

When the extension fails The bad : When the brand name fails to help the extension

Dettol perfumed soap ( brand identity disregards brand image of the Dettol

Smell )

When the extension hurts the brand The ugly : When the brand name is damaged

Initial launch of diet coke ( questioned the real taste of coke )

More ugly : When the brand name is forgone Rare ..guess everyone wakes up before they reach this stage !!!!!!


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Brand Revitalization

Extension : Giving birth to new products /

brands

Revitalization : Injecting life to the same

brand , energizing a mature brand

A facelift.. recharging the brand batteries

Fuelling the engine


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Problems of Old Age

Fading awareness : High recognition but

Low recall

Sunmica laminates

Older has been image : Usage by the

earlier generationno new users.no

longer contemporary Ambassador : the car of the previous generation


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Reasons for downturn in sales: Continuous

process of Revitalization

Technological advancements

Shift of consumer tastes and preferences

Increased domestic competition

Entry of global competitors

Sales

Time

Revitalization

starts at an early

stage to preventthe brand from

growing

oldSTAY

YOUNG


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How to revitalize the brand

Brand

Increased usage

New uses

New Markets

Extensions

Planed obsolescence

Repositioning

Augmenting

product


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#1 . Increased usage Ensure brand recall. remind the consumer to use the brand consistently

& regularly

Drive usage preference

Increase usage frequency : give them a reason to use more of yourproduct

Arm and hammer baking soda

Heinz with all kinds of snacks

Monaco Biscuits

Reward & retain loyal customers : prevent switching

Mutual funds

Address consumer fears & inhibitions to use the product morefrequently

Aspirin as Good for the Heart


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#1 . Increased usage Remind of use : reminder communication to increase recall

NECC egg campaign Sunday ho ya Monday ..from a routine diet to a

delightful diet

Preferred usage : Increased salience / knowledge / understanding

Bharat petroleum Pure for sure ..from a generic undifferentiated product wherepurchase is driven by convenience of location or availability ..To a competitive

market place.. setting benchmark/standards of Quality & Purity

Use More : Increased frequency / regular use

The dettol campaign ..Dettol Suraksha

Colgate ..driving consumers to brush twice a day to after every meal

Reward & retain users : Incentives / Promotions Air India offering holiday packages to promote Indian tourism

Remove usage barriers :Address consumer fears of frequent use

Clinic all clear addressing fears of harmful effects on dandruff shampoos from

the effective dandruff shampoo ..Dho dala to Treats Dandruff , but also gives you

beautiful hair Get out , Get going


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#2 . New Uses New occasions to Use : Festive occasions

Asian paints ..regional festivals of India , bullock horn paints ..frompainting only when required to choice driven by the shade range topainting as an expression of Joy

New Reasons to Use :Instigating behavioral shifts

Bengue ..from Muscle aches to Arthritis relief

What Iodex did not do MOOV did ..create a new reason to use ..notsprains but back aches

Microwave ovens in India form reheat to Cook and Heat

Different reasons to use : Multiple functional uses Nestle milkmaid condensed milk recipesfrom the tastiest milk to asubstitute for fresh milk during the time of short supply . To ..for desertrecipes ..you can do wonders with Milk Maid


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#3 . New Markets Fight market saturation : Re-define target segment

Cadburys dairy milk chocolate.the Real taste of Life

..from Chocolates for Fun to Special Moments ..fromYoung users to Family

Tap evolving market : Growth in new segments

Changes in the computer industry from office use /

office work ( Microsoft office tools ) to House

hold personal use ( Educational / Games for children )


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#4 . Re-positioning the Brand New Benefit / Offering : Communicate improvement in product

Surf to combat pressures from Ariel ..from value for moneySurf

ki Samajdari to Product efficiencyDhoondte rahe Jaonge

Colgate ..post the entry and threat from Close Upfrom freshbreath & ring of confidence to strong teeth & ring of protection

New Identity : To change earlier image and build new associations

Philips ..in the face of global competition.a new corporate

identity Lets make tings better

New uses / new users : to focus on user benefits / new uses From the complete health drink to fight deficiencies in a milk diet

to a health drink specifically for Growing children


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#5 . Augmenting the product Improved product features and benefits

Sunsilk repeated improvement in product ..from shampoo +

conditioner to shampoo + conditioner + beauty capsules to shampoo +

conditioner + herbal extractsfrom beautiful , shiny bouncy hair ..tobeautiful & healthy hair .

Improved packaging

Sunsilk ..from bottles to bottles with flip tops.from Sachets to capsules

New look for Crocin , Aspro , Disprin

Bisleri with tamper proof cap

Increased customer involvement

Sunsilk.the expert in hair care service at beauty parlors

Similarly .. Surf & Laundry serviceAsian paints & Painting Interiors


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#6 . Planned Obsolescence To keep up with the fashion

Color cosmetic products .Lakme , Revlon..introduction of new

fashion collection for every seasoncoffee collection , spice collection.

To meet changes in technology Music industry ..from long playing records to cassettes to CDs to MP3

Windows 95..96XP

Pentium 3..4Core2duo

Mobile phone series

To meet changing consumer needs Ponds : From facial snows ..to vanishing creams ..to Oil Control creams


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#7 . Brand extensions If the new changes do not suit the existing brand then

consider it an extension

Britannia : Entry into dairy products to strengthen brand identity

with Britannia Milk maid

Colgate : Launch of Colgate gel for fresh breath to revitalize brand

equity

Dabur : Launch of herbal hair oilVatika following new

consumer trends ..an age old brand able to woo back the younger

generation


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#7 . Brand extensions If the new changes do not suit the existing brand then

consider it an extension

Britannia : Entry into dairy products to strengthen brand identity

with Britannia Milk maid

Colgate : Launch of Colgate gel for fresh breath to revitalize brand

equity

Dabur : Launch of herbal hair oilVatika following new

consumer trends ..an age old brand able to woo back the younger

generation


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Remember ..If you dont , some one

else will !

WhatIodex did not do ,Moov did.

WhatHMTdid not do , Titan did.

WhatIndian Airlines did not do ,Jet Airways did.

WhatRobin Blue did not do , Ujala Supreme did .


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Thank you for your time and

attention

brand strategies 2

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