Download - Brand extension
The fascinating world of brands
ByLaise Mon K.A
NEW PRODUCTS AND
BRAND EXTENSIONS
Overview
New Product & Brand ExtensionBrand ExtensionTypes of Brand ExtensionAdvantagesDisadvantagesHow Consumers Evaluate Extensions?
What Is A “Brand”Brand is a name, term, sign, symbol, design, or a
combination of them, intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of competitors.
A BRAND is symbolic embodiment of all the information connected to a Company, Product or Service.
It serves to create associations and expectations from products made by a producer, in the mind of the consumer.
The key objective being “to create a Relationship of TRUST with its consumers”.
New Product & Brand ExtensionsAnsoff’s Growth Share Matrix
Line Extension
Brand Extension
Multi Brands
New Brands
Existing New Exis
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Cont……
The three choices of a firm when they are introducing a new product
• New brand for new product• Use of existing brand for the new product• Combination of the new brand with the existing
brand(Second and the third options are related to brand extension)
Introduction of new products
BRAND EXTENSIONSA Brand Extension occurs when a firm uses an
established brand name to introduce a new product (approaches 2 or 3)
When a new brand is combined with an existing brand (approach 3), the brand extension can also be called a sub-brand.
An existing brand that gives birth to a brand extension is the parent brand.
If the parent brand is already associated with multiple products through brand extensions, then it may also be called a family brand.
TYPES OF BRAND EXTENSION
LINE EXTENSION
The parent brand is used to brand a new product that targets a new market segment with in a product category currently served by the parent brand.
A line extension often adds a different flavor or ingredient variety, a different form or size, or a different application for the brand.Eg: Head & Shoulders
Head &
Shoulder’sExtension
Coke’s Line Extension
CATEGORY EXTENSION
The parent brand is used to enter a different product category from that currently served by the parent brand.
Eg: ITC
ITC’s Category Extension
Strategies For Establishing a Category
1. Introduce the same product in a different form2. Introduce product that contain the brand’s
distinctive taste, ingredient or component.3. Introduce companion product for the brand.4. Introduce products relevant to the customer
franchise of the brand.5. Introduce products that capitalize on the firm’s
perceived expertise.6. Introduce products that reflect the brands
distinctive benefit, attribute or feature.7. Introduce products that capitalize on distinctive
image or prestige of the brand.
Why Brand Extensions?Leveraging brand equity/value by introduction of
logical & complementary new product categoriesE.g HP
Product Innovation to surpass consumer expectations
It increases awareness of the brand nameIncreases profitability from offerings in more
than one product category.It’s a great way to reinforce a brand, reach out to
new customers, create a BUZZ
ADVANTAGES OFBRAND EXTENSIONS
Reasons For Product Failure
Products Showcase and Learning Center in Ithaca, New
York identifies this. The market was too small (insufficient demand for
type of product). The product was a poor match for the company. The product was justified on inadequate or
inaccurate marketing research, or the company ignore research result.
The company was too early or too late in researching the market.
The product provided insufficient return on investment.
Reasons For Product Failure
The product was not new or different (a poor idea that really offered nothing new).
The Product did not go hand in hand with familiarity. Credibility was not confirmed on delivery Consumers could not recognize the product
Advantages Of Brand Extensions
Facilitate New Product Acceptance
Improve brand image Reduce risk perceived by Customers Permit consume variety-seeking
Advantages Of Brand Extensions
Increase the probability of gaining distribution and trial
Increase efficiency of promotional expenditures Reduce costs of introductory & follow-up marketing
programs (save 40-80%)
E.g. Apple iPods Avoid costs of developing a new brand Allow for packaging & labeling efficiencies
Advantages Of Brand Extensions
Provide Feedback Benefits to the Parent Brand and Company
Clarify brand meaning Enhance the parent brand image Bring new customers into brand franchise and
increase market coverage Revitalize the brand Permit subsequent extensions
Advantages Of Brand Extensions
Clarify brand meaning
Brand Original Product
Extension Products
New Brand
Meaning
Weight Watchers
Fitness Centre
Low-calorie foods
Weight loss &
maintenance
Sunkist Oranges Vitamins, juices
Good health
Kellogg’s Cereal Nutri-grain bars,
Special K bars
Health snacking
Aunt Jemima
Pancake mixes
Syrups, frozen waffles
Breakfast foods
Disadvantages ofBrand Extensions
Disadvantages Of Brand Extensions
Can confuse or frustrate consumers Can encounter retailer resistance Can fail & hurt parent brand image
Xerox Computers-synonymous with copiers & no one believed they could make computers
Can succeed but cannibalize sales of parent brandAmul Butter-”reduced salt butter” is slowlyeating up Amul normal butter
Disadvantages Of Brand Extensions
Can succeed but diminish identification with any one category
Can succeed but hurt the image of parent brand Can dilute brand meaning Can cause the company to forgo the chance to
develop a new brand
When are Brand Extensions Appropriate?
When Prior Brand equity existsConsumer must see some “connection”
between the proposed extension and the parent brand.
The proposed extension contributes to and reinforces the overall brand equity of the parent brand.
How Consumers Evaluate Extensions
Conditions For Evaluating Consumer’s Brand Extension
Consumers have some awareness & positive associations about the parent brand
At least some of these positive associations will be evoked by the brand extension
Negative association are not transferred from the parent brand
Negative associations are not created by the brand extension
Evaluating Brand Extension Opportunities
Define actual & desired consumer knowledge
Identify possible extension candidates
Evaluate potential of the extension candidate
Evaluate potential candidate feedback effects
Consider possible competitive advantages & reactions
Design marketing campaign
Evaluate extension success & effects on parent brand equity
Reference
Strategic Brand Management by
Kelvin Lane Keller
Marketing Management by
Philip KotlerKelvin Lane KellerAbraham KoshyMathileshwar Jha
Thank You