introducing new products and brand extension

8/10/2019 Introducing New Products and Brand Extension

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INTRODUCING NEW PRODUCTS

AND BRAND EXTENSION

Presented by:Mohammad Ismail Asif


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Brand Extensions

A brand extension occurs when a firm uses anestablished brand name to introduce a newproduct.

When a brand is combined with an existing brandthe brand extension can be also called sub-brand.

An existing brand that gives birth to a brandextension is the parent brand.

If the parent brand is already associated withmultiple products through brand extension thenit may also be called a family brand.


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Brand Extensions

Brand extension classification

Line extension

Using a new product to target a new market segment

within the same product category, the parent brandcurrently serve. A line extension often adds a different

flavour, or ingredient variety, different form or size.


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Brand Extensions

Category extension

Using the parent brand to enter in a different product

category from the one it currently serves.


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Caterpillar Moved into Shoes and

Clothing


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McDonalds Example

Market Penetration

- better, not bigger

Market Development

- Global expansion and adaptation of culturalpreferences and regional taste.

Product Development

- Offering healthier options, Go Active Campaign Diversification

- McCafe,McTreat


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General Strategies for Establishing a Category

TaubersFranchiseExtension

Introduce the same product in a different form. This is where a company changes the form of the product

from the original parent product.

Example:NestlesEveryday (Powder and liquid)


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Introduce products that contain the brands distinctive taste,

ingredient, or component.

When a brand owns a flavor, ingredient or component, there may be

other categories where consumers want that property.


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Introduce companion products for the brand.

Some brand extensions are a natural companion to the products

the company already makes.


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Introduce products that capitalize on the firms perceived

expertise.

Over time, certain brands may gain a reputation for having an

expertise in a given area. Leverage can be achieved when extending

into areas where this special expertise is deemed important.


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Introduce products that reflect the brands distinctivebenefit, attribute, or feature.

Many brands own a benefit, attribute or feature that canbe extended.

Example:Dettols antiseptic or 100% Germ Protectionproducts


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Introduce products that capitalize on the

distinctive image or prestige of the brand.

Certain brands convey status and hence create an

image for the user. Some brands promote a lifestyle and can extend

to items that people wear, as a badge of

identifying themselves with that lifestyle.

Example:Harley Davidson, their extensivecollection of licensed lifestyle items goes waybeyond any expertise inherent in the brand.


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Advantages of Extensions

Facilitate new product acceptance

Improve brand image

Reduce risk perceived by customers

Increase the probability of gaining distribution and

trial Increase efficiency of promotional expenditures

Reduce costs of introductory and follow-upmarketing programs

Avoid cost of developing a new brand

Allow for packaging and labeling efficiencies

Permit consumer variety seeking


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Advantages of Extensions (Cont.)

Provide feedback benefits to parent brand

Clarify brand meaning

Enhance the parent brand image

Bring new customers into brand franchise andincrease market coverage

Revitalize the brand

Permit subsequent extensions


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Disadvantages of Extensions

Can confuse or frustrate consumers Can encounter retailer resistance

Can fail and hurt parent brand image

Can succeed but cannibalize sales of parent brand Can succeed but diminish identification with any one

category

Can succeed but hurt the image of the parent brand

Can dilute brand meaning

Can cause the company to forgo the chance to develop

a new brand


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THE END

introducing new products and brand extension

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