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MARKETING MANAGEMENT BRANDING STRATEGIES Prof. Mustafa Boz By Roxana Istrate

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Line extension, Brand extension, Multi branding, New brand

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Branding strategies

MARKETING MANAGEMENTBranding strategiesProf. Mustafa Boz By Roxana IstrateThe importance of brandingBRANDING STRATEGIESLine extension strategyLine Extensions occur when a company introduces additional items in the same product category under the same brand name new flavors, forms, colors, added ingredients, package sizes. Line extension occurs when the company lengthens its product line beyond its current range. The objectiveis to serve different customer needs or market segmentswhile taking advantageof the widespread name recognition of the original brand.

ADVANTAGES OF LINE EXTENSIONIncreasing awarenessIt can reinvigorate a product line, bringing it back into the public awareness by drawing new customers and higher profits.

Low costsLine extensions allow companies to promote new products with reduced promotional costs because the new lines or brands benefit from being part of an established name.

DISADVANTAGES OF LINE EXTENSIONChanging the reputationnew brand or line, the company name could become tarnished if the product proves to be an immense failure.

Loosing customerIf the new line is not good the customers can stop consuming the other products as well

Intra-firm competitionwherein conflict arises among different divisions of a company.

Coca-Cola - Line extension

Brand ExtensionThis marketing strategy dates back from the 1960`s becomes popular since the 1980`s

This strategy consists in using a current brand name to launch a product in a category considered as new for the company-according This new product has different functions and a different nature in comparison with the product the brand used to do.Brand ExtensionDefensive strategy: an extension can prevent competitors from gaining or exploiting a foothold in the market and can beworthwhile even though it might struggleMicrosoft for instance has decided to operate in different areas with the aim of limiting the ability of competitors to encroach on core business areas.

Advantages of Brand extension:Consumer knowledge: The remaining strong brand used to promote a new product makes it less critical to create awareness. The association with the main brand is already done and the main task is communicating the specific benefits of the new innovationConsumers can now seek for a variety.

Advantages of Brand extension strategy:Consumer trust: The existing well-known-strong brands represent a promise of quality, useful features etc. - for the consumer. In addition, according to a Brandgym survey in 2003: 58% of UK consumers will be more likely to try a new product from a brand they knew, versus only 3% for a new brand

Advantages of Brand extension:Energizing the brand: the brand image-especially when the brand is a bit tired- is expected to be reinforced by the extensionit increases the frequency with which the brand is associated with good quality, innovations and large range of products. the customer sees the brand name more often and it can strengthen his idea that it is a good one.

Advantages of Brand extension :Lower cost: brand extension strategy is cheap because the new product uses the name of an already well-known brand. the advertisement budget for brand extension are smaller than for new brands. There are packaging and labeling efficiencies.The expense of introductory and follow up marketing programs is reduced.

Disadvantages of brand extension : Damage the brand image: Using the same brand name can be a huge risk for the existing brand because the brand image can be diluted. An accident occurring during the launch of the new product can affect the whole brand

14Disadvantages of brand extension:Cannibalization: the extensions can cannibalize the existing products of the brand when there are positioned in a close market.The new products ends up competing with the old products of the same brand

Disadvantages of brand extensionLoss of reliability:if a brand name is extended too far, to unrelated markets can lead to confusing for the customers The new products should be relatedAn organization must research the product categories in which the established brand name will work.

VIRGIN - Branding

Multi brandingThe company decides to further introduce more brands into an already existing category. Multi-branding can allow an organisation to maximise profits, but a company needs to be weary over their own brands competing with each other over market share.Multiple branding was originally pioneered by General Motors, Proctor & Gamble

Advantages of Multi branding1.The firm can distance products from other offerings it markets2.The image of one product is not associated with other products the company markets3.The products can be specifically targeted

Advantages of multibranding4.If the product fails, the effect on other products is minimized5. It can increase shelf presence and retailer dependence in the store 6. It can attract consumers seeking variety who may otherwise switch to another brand

Disadvantages of multi brandingDifficulty ManagingWhen you put your brand name on many different types of products, you eventually may have a hard time managing them all. Good: same category (soap, shampoo and conditioner) it is typically easier to manage them. Bad: dealing with products that are completely unrelated to one another (soap and automobiles) - a hard time effectively managing your resources.Expectations on New ProductsIf the new products do not meet the standards of the old ones, it can lead to a negative stigma surrounding the brand. Every new product must have all of the kinks worked out before meeting the market.

Disadvantages of multi brandingDilute Brand NameOne of the potential problems with using multi-product branding is that it can delete the effectiveness of the brand name. All Products Tied Togetherif the brand covers household products such as soap and cleaners but it also covers chainsaws, one chainsaw malfunction could lead to a bad perception associated with the other products in the lineup.

ex-Kraft food/ MONDELEZ

New Brands strategyAn organisation may decide to launch a new brand into a market. A new brand may be used to compete with existing rivals and may be marketed as something new and fresh.

New brandingADVANTAGESDISADVANTAGESBeginnings are exciting You can create the image you want and start the business fresh with no history behind

Beginnings are hard Since nobody knows the brand it has to be a powerful oneCreate your brand Determine how you would like to be perceived and then strategize as to how you might influence this.Dont follow the crowd This is the phase where the advertisement is strong and all stakeholders should be impressedDream big It is the time to create a remarkable brand and differentiate it from the market Plan Dreams have to be based on a well thought strategy and to follow important stepsMany of the famous brands started as a new brand.

Resume

Sources:Advantages and Disadvantages of brand extension strategy for companies, available at: http://hh.diva-portal.org/smash/get/diva2:238026/FULLTEXT01.pdfBrand Extension - Meaning, Advantages and Disadvantages, available at: http://www.managementstudyguide.com/brand-extension.htmProduct line extension, available at: http://en.wikipedia.org/wiki/Product_line_extension

Sources:Coca Cola Zero, available at: http://en.wikipedia.org/wiki/Coca-Cola_ZeroCoca Cola Green, available at: http://en.wikipedia.org/wiki/Coca-Cola_LifeVirgin history, available at: http://www.virgin.com/ Smart brand extension allows Virgin to keep up appearances, available at: http://www.theguardian.com/media-network/media-network-blog/2014/oct/23/virgin-success-brand-extension-easygroup

Sources:The Risks of Multi-Product Branding, available at: http://smallbusiness.chron.com/risks-multiproduct-branding-15484.htmlThe New Brand Advantage, available at: http://www.smallbusinessbranding.com/2800/the-new-brand-advantage/Line extension, definition, available at: http://www.businessdictionary.com/definition/line-extension.html

Thank you for your attention!