Topic
Brand Extension
Naveed Bashir MB-11-26
Nauman Sabir MB-11-32
Aftab Baloch MB-11-36
What is Brand Extension
Brand extension involve using the name of
existing brand to introduce the new
product category.
Ma...
Conti….
Brand extensions are one of the most heavily-researched
and influential areas in marketing. Brand extension direct...
 Brand extension is a popular Branding strategy to enter in the
new product category.
 Brand extension strategy is advan...
Brand Extension build and communicate strong brand
positioning, enhance awareness and
quality associations, and increase t...
Brand Extension Process
• Major Brand Extension Strategy Decisions:
Product Brand
Brand
Equity
Brand
Positioning
Brand
Dev...
Product
 Commodity offer for sale.
 Non familiar goods or services.
 An artifact that has been created by someone or
so...
Brand
 Familiar product
 Brand is the name, term, sign, symbol, design and combination of them
or other characteristic t...
To maintain competitive advantages two thing are important.
Sustain
Change
Product Brand
Brand vs. Product
 Companies Make Products and Consumers Make Brands
 Products Can Be Copied and Replaced but Brands Are...
Brand Equity
 A measure of the brand’s ability
to capture consumer preference
and loyalty.
 The difference between the
m...
Brand Positioning
The act of designing the company’s offering and image in
such a way that it occupies a distinctive place...
Brand Development Strategies
Line
Extension
Brand
Extension
Multi-brands New Brands
Product category
Existing New
BrandNam...
New Brands
 New brand name
 New product category
Example:
Olper’s milk introduced a new product category of juices
with ...
Multi-brands
 New brand name
 Existing product category
Example:
Unilever has multi-brands in the same product category ...
Line Extension
 Existing brand name
 Existing product category
Example:
Servis shoes has different range of shoes for di...
Brand Extension
 Existing brand name
 New product category
Example:
Servis shoes have extend their brand by adding a
new...
Conti….
 Brand Extension also called Brand Stretching is a marketing strategy in which
a firm marketing a product with a ...
Advantages
 Cost reduction in introduce new brand
 Customer are familiar with the parent brand
name.
 Low risk strategy...
Disadvantages
 Higher the risk to dilute the Parent Brand image
 Poor choices for brand extension may dilute and deterio...
Factors of Brand Extension
Factors which making ease in Brand Extension,
Situational Involvement
Consumer Mood
Brand Br...
Name Selection
 The brand name is a very important brand element, and may
heavily influence the way a brand perform.
 Br...
Conti…
According to the author there are two ways of selecting a name
for new product.
Full name brand extension.
Derive...
Full Brand Name Extension
Most brand extension studies to date assume that brand extensions use the full
Original Parent B...
Derived Name Brand Extension
 In this method company perform sub-branding process in which consumers
have the parent bran...
Full vs. Derived Brand Extension Name
firms use derived or partial brand extensions instead of full
brand extensions becau...
Brand Sponsorship
Parent Brand adopt Sponsorship way to provide the Financial resources to
make Brand Extension in best fo...
National Brand
“A brand sold out under its own unique brand name.”
Example:
(Lay’s Chips)
Licensed Brand
“A brand name or symbol licensed with a name which was previously
created by other manufacturers, or the na...
Co-branding
“Using the established brand names of two different companies on the
same product.”
Example:
Motorola Ferrari ...
Advertisement
 With the Brand Extension, parent company need to create the
awareness among the customers.
 companies may...
Conti…
Brand
Extension
Brand
Extension
Initial
Brand
Image
Initial
Brand
Image
Advertise
ment
Advertise
ment
Brand
Loyalty...
Appeals
There are two common appeals use in the Advertisement
 Informational Advertisement Appeals
 Transformational or ...
Informational
Informational advertising provides strictly information about the advertised
product and/or brand. This appe...
Transformational or emotional
Transformational appeals typically contain less information but picture positive
sensorial, ...
Success & Failure of Extension Brand
 Success and Failure of Brand Extension base on the application of
all these strateg...
Introduction
•Service Industries Limited (SIL) is one of large network working in Pakistan.
•SIL employees more then 6000 ...
Conti…
•Today the group is Pakistan’s largest footwear manufacturer and exporter in
German, Italy, UK and French markets.
...
Brand Development Strategies
Line
Extension
Brand
Extension
Multi-brands New
Brands
Product category
Existing New
BrandNam...
Servis Brands
The Company runs its footwear retail business under ‘Servis’ brand. It has also
established some of the most...
Brand Extension
• Existing Brand Name
• New Product Category
Example:
Servis shoes have extend their brand by adding a new...
Naveed Bashir 43
Lipton Yellow Label Tea
Lipton in Pakistan
• Lipton Alps mint and
Eucalyptus
• Forest Fruit
• Caramel Tea
• Ice Tea
• Black Kiss
• Peppermint
• Herbal Tea
• Green Tea Intense
Mint
• Tea & Honey
• Infusion Chamomile
• Blue fruits
• Decaffeinated
• Lemon & Ginger
• Chamomile
• Finest Earl Grey
• Rooibos
• English
Breakfast
And Others
Lipton’s other extensions
Nike
 NIKE, Inc. is the world’s leading innovator in athletic
footwear, apparel, equipment and accessories.
 Brand Value...
Nike
 Nike first products was track running shoes
 Now Nike produces a wide range of sports equipment
 wide range of sp...
Nike Air Max
• Nike Air Max is a line of shoes first released by Nike, Inc. in 1987.
Air Huarache
• Additional product lines were introduced later,
• such as Air Huarache, which debuted in 1992.
Nike 6.0
• The most recent additions to their line are the Nike 6.0,
Nike NYX
• Nike NYX
Nike Brands
 Nike markets its products under its own brand, as well as
Nike Golf
Nike 6.0
Nike Pro
Nike+
Air Jordan
...
Nike Jorden
Nike +
• Nike And Apple
• Monitor Performance with Radio Ferquency
Nike Pro
Nike Acquisitions
• First acquisition was a footwear company
“Cole Haan” in 1988
Bauer Hockey
• Buy Bauer Hockey in 1994
Hurley International
• Hurley International in 2003
Converse
• Paid $309 million to acquire Converse
Starter Clothing
• acquired Starter in 2004
Acquisitions
• In Order to focus on their Core
• Sold Starter in 2007 and Bauer Hockey in 2008.
• Nike sold Umbro in 2012 ...
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Brand extension

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Brand extension

  1. 1. Topic Brand Extension
  2. 2. Naveed Bashir MB-11-26 Nauman Sabir MB-11-32 Aftab Baloch MB-11-36
  3. 3. What is Brand Extension Brand extension involve using the name of existing brand to introduce the new product category. Martinez, Montaner & M. Pina (2009). Brand extension feedback, the role of advertising: Journal of Business Research
  4. 4. Conti…. Brand extensions are one of the most heavily-researched and influential areas in marketing. Brand extension directly related with Parent Brand. Volcker & Sattler (2006) found that fit between the parent brand and an extension product is the most important driver of brand extension success. Reddy.M, Terblanche, Pitt.L & Parent.M (2009). How far can luxury brands travel? Avoiding the pitfalls of luxury brand extension: Science Direct
  5. 5.  Brand extension is a popular Branding strategy to enter in the new product category.  Brand extension strategy is advantageous because it reduce the cost of new product introduction and enhanced the probability of new product. Swaminathan. V (2009). Sequential brand extensions and brand choice behavior: Journal of Business Research
  6. 6. Brand Extension build and communicate strong brand positioning, enhance awareness and quality associations, and increase the probability of trial by lessening new product risk for Consumers. Dens. N & Patrick De (2010). Attitudes toward the extension and parent brand in response to extension advertising: Journal of Business Research
  7. 7. Brand Extension Process • Major Brand Extension Strategy Decisions: Product Brand Brand Equity Brand Positioning Brand Development Brand Extension Name Selection Success/Failure of Extension Sponsor- ship Advertise- ment
  8. 8. Product  Commodity offer for sale.  Non familiar goods or services.  An artifact that has been created by someone or some process.  The set of elements common to two or more sets
  9. 9. Brand  Familiar product  Brand is the name, term, sign, symbol, design and combination of them or other characteristic that identify the product and distinguished it from other.  Brand could be tangible and intangible.
  10. 10. To maintain competitive advantages two thing are important. Sustain Change Product Brand
  11. 11. Brand vs. Product  Companies Make Products and Consumers Make Brands  Products Can Be Copied and Replaced but Brands Are Unique  Products Can Become Obsolete but Brands Can Be Timeless  Products Are Instantly Meaningful but Brands Become Meaningful over Time  Brand has different type of association as compare to the product.
  12. 12. Brand Equity  A measure of the brand’s ability to capture consumer preference and loyalty.  The difference between the market value of a Product and the claims held against it.
  13. 13. Brand Positioning The act of designing the company’s offering and image in such a way that it occupies a distinctive place in the minds of customers.” A brand can be positioned on the basis of:  Product attributes Benefits Beliefs and values
  14. 14. Brand Development Strategies Line Extension Brand Extension Multi-brands New Brands Product category Existing New BrandName Existing New
  15. 15. New Brands  New brand name  New product category Example: Olper’s milk introduced a new product category of juices with a new brand name of Olfrute
  16. 16. Multi-brands  New brand name  Existing product category Example: Unilever has multi-brands in the same product category of shampoos Such as Dove, Sunsilk, Lux etc.
  17. 17. Line Extension  Existing brand name  Existing product category Example: Servis shoes has different range of shoes for different people. This strategy is called line extension.
  18. 18. Brand Extension  Existing brand name  New product category Example: Servis shoes have extend their brand by adding a new product category of Servis Tyres & Tubes.
  19. 19. Conti….  Brand Extension also called Brand Stretching is a marketing strategy in which a firm marketing a product with a well-developed image uses the same brand name in a different product category. The new product is called a spin-off.  A brand's "extendibility" depends on how strong consumer's associations are to the brand's values and goals  In the 1990s, 81% of new products used brand extension to introduce new brands.  In the 2009s, 90% of new products used brand extension to introduce new brands.
  20. 20. Advantages  Cost reduction in introduce new brand  Customer are familiar with the parent brand name.  Low risk strategy to introduce the new product  Probability of success are higher  Increase Profitability
  21. 21. Disadvantages  Higher the risk to dilute the Parent Brand image  Poor choices for brand extension may dilute and deteriorate the core brand and damage the brand equity  The failures of brand extension are at higher rate than the successes  Negative association and wrong communication strategy do harm to the parent brand even brand family
  22. 22. Factors of Brand Extension Factors which making ease in Brand Extension, Situational Involvement Consumer Mood Brand Breadth Parent Brand Category Dominance Competitor Characteristics Perceived Fit or Congruency Between An Extension & The Parent Brand Dens. N & Patrick De (2010). Attitudes toward the extension and parent brand in response to extension advertising: Journal of Business Research
  23. 23. Name Selection  The brand name is a very important brand element, and may heavily influence the way a brand perform.  Brand Names are the key Brand Equity generators because they affect recall and recognition,  Selecting a brand name is crucial part of branding Olavarrieta. S, Torres & Barra.C (2009). Derived versus full name brand extensions: Journal of Business Research
  24. 24. Conti… According to the author there are two ways of selecting a name for new product. Full name brand extension. Derived name brand extension. Olavarrieta. S, Torres & Barra.C (2009). Derived versus full name brand extensions: Journal of Business Research
  25. 25. Full Brand Name Extension Most brand extension studies to date assume that brand extensions use the full Original Parent Brand Name. Example: Oral B tooth brush may extend to Oral B dental floss or to Oral B mouth wash. Reason: Use the equity of the Parent brand in a new product category To facilitate consumer acceptance and brand association transfer Olavarrieta. S, Torres & Barra.C (2009). Derived versus full name brand extensions: Journal of Business Research
  26. 26. Derived Name Brand Extension  In this method company perform sub-branding process in which consumers have the parent brand name as a cue, while companies introduce a new name.  There are Three different types of derived brand extensions way are, a) The use of a part of a name combined with an identifier of the extension product . ( Nestea, NesCafe & Kodacolor Film) a) The use of a part of the brand name combined with a general concept (Nesquick) a) The nickname derived brand extension (CAT vs. Caterpillar or TED air shuttle services of UNITED) Olavarrieta. S, Torres & Barra.C (2009). Derived versus full name brand extensions: Journal of Business Research
  27. 27. Full vs. Derived Brand Extension Name firms use derived or partial brand extensions instead of full brand extensions because, may be convenience and practicality like Customer cannot have ultra-long names. may be psychological appeal and effectiveness like probably partial names, abbreviations, or nick names such as CAT for Caterpillar. Olavarrieta. S, Torres & Barra.C (2009). Derived versus full name brand extensions: Journal of Business Research
  28. 28. Brand Sponsorship Parent Brand adopt Sponsorship way to provide the Financial resources to make Brand Extension in best form. 3 Sponsorship Options:  National brand  Licensed Brand  Co-brand product
  29. 29. National Brand “A brand sold out under its own unique brand name.” Example: (Lay’s Chips)
  30. 30. Licensed Brand “A brand name or symbol licensed with a name which was previously created by other manufacturers, or the names of celebrities, or characters from popular movies and books.” Example: Kellogg’s “Tony the Tiger”(1957) (Character Logo)
  31. 31. Co-branding “Using the established brand names of two different companies on the same product.” Example: Motorola Ferrari co-branding
  32. 32. Advertisement  With the Brand Extension, parent company need to create the awareness among the customers.  companies may apply different communication strategies to increase perceived fit and, consequently, consumer acceptance.  The best communication strategy is “Advertisement”.
  33. 33. Conti… Brand Extension Brand Extension Initial Brand Image Initial Brand Image Advertise ment Advertise ment Brand Loyalty Brand Loyalty Final Brand Image Final Brand Image Brand Awareness Brand Awareness Martinez, Montaner & M. Pina (2009). Brand extension feedback, the role of advertising: Journal of Business Research
  34. 34. Appeals There are two common appeals use in the Advertisement  Informational Advertisement Appeals  Transformational or emotional advertising appeals
  35. 35. Informational Informational advertising provides strictly information about the advertised product and/or brand. This appeal shows the perceived fit between parent brand and new brand name. Dens. N & Patrick De (2010). Attitudes toward the extension and parent brand in response to extension advertising: Journal of Business Research
  36. 36. Transformational or emotional Transformational appeals typically contain less information but picture positive sensorial, social, or emotional aspects of one's experience with the focal item being promoted. Dens. N & Patrick De (2010). Attitudes toward the extension and parent brand in response to extension advertising: Journal of Business Research
  37. 37. Success & Failure of Extension Brand  Success and Failure of Brand Extension base on the application of all these strategies. If Parent company able to apply these in successful way then extension been successful and vice versa.  According to the survey 90% new product in the in the market are in the result of Brand Extension. More then 50% are fail due to the bad strategy application.
  38. 38. Introduction •Service Industries Limited (SIL) is one of large network working in Pakistan. •SIL employees more then 6000 and manufactured world class Shoes, Tyres, Tubes and Rubber production facilities in Gujrat and Muridke. •Now SIL has over all PKR 12 Billion revenue per year. Naveed Bashir 38
  39. 39. Conti… •Today the group is Pakistan’s largest footwear manufacturer and exporter in German, Italy, UK and French markets. •With the growing portfolio of brands and nationwide network SIL touches the millions of life daily. Naveed Bashir 39
  40. 40. Brand Development Strategies Line Extension Brand Extension Multi-brands New Brands Product category Existing New BrandName Existing New Naveed Bashir 40
  41. 41. Servis Brands The Company runs its footwear retail business under ‘Servis’ brand. It has also established some of the most loved footwear brands includes Don Carlos, Cheetah, Calza, Liza, Skooz and Toz. Naveed Bashir 41
  42. 42. Brand Extension • Existing Brand Name • New Product Category Example: Servis shoes have extend their brand by adding a new product category of Servis Tyres & Tubes. Naveed Bashir 42
  43. 43. Naveed Bashir 43
  44. 44. Lipton Yellow Label Tea
  45. 45. Lipton in Pakistan
  46. 46. • Lipton Alps mint and Eucalyptus • Forest Fruit
  47. 47. • Caramel Tea • Ice Tea • Black Kiss
  48. 48. • Peppermint • Herbal Tea • Green Tea Intense Mint
  49. 49. • Tea & Honey • Infusion Chamomile • Blue fruits
  50. 50. • Decaffeinated • Lemon & Ginger • Chamomile
  51. 51. • Finest Earl Grey • Rooibos • English Breakfast
  52. 52. And Others
  53. 53. Lipton’s other extensions
  54. 54. Nike  NIKE, Inc. is the world’s leading innovator in athletic footwear, apparel, equipment and accessories.  Brand Valued $10.7 billion  headquartered near Beaverton, Oregon  Fortune 500 companies  employed more than 44,000 people worldwide
  55. 55. Nike  Nike first products was track running shoes  Now Nike produces a wide range of sports equipment  wide range of sports, including track and field Shoes  jerseys  Shorts  Cleats  base layers  baseball  ice hockey  Tennis  association football (soccer),  Lacrosse  Basketball  cricket.
  56. 56. Nike Air Max • Nike Air Max is a line of shoes first released by Nike, Inc. in 1987.
  57. 57. Air Huarache • Additional product lines were introduced later, • such as Air Huarache, which debuted in 1992.
  58. 58. Nike 6.0 • The most recent additions to their line are the Nike 6.0,
  59. 59. Nike NYX • Nike NYX
  60. 60. Nike Brands  Nike markets its products under its own brand, as well as Nike Golf Nike 6.0 Nike Pro Nike+ Air Jordan Nike Skateboarding  and With some subsidiaries
  61. 61. Nike Jorden
  62. 62. Nike + • Nike And Apple • Monitor Performance with Radio Ferquency
  63. 63. Nike Pro
  64. 64. Nike Acquisitions • First acquisition was a footwear company “Cole Haan” in 1988
  65. 65. Bauer Hockey • Buy Bauer Hockey in 1994
  66. 66. Hurley International • Hurley International in 2003
  67. 67. Converse • Paid $309 million to acquire Converse
  68. 68. Starter Clothing • acquired Starter in 2004
  69. 69. Acquisitions • In Order to focus on their Core • Sold Starter in 2007 and Bauer Hockey in 2008. • Nike sold Umbro in 2012 and Cole Haan in 2013 • As of 2013, Nike owns two key subsidiaries Converse Inc. and Hurley International.
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