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“Extendonomics” 
Managing 
BRAND 
EXTENSIONS 
Prof. Sameer Mathur, 
Ph.D. 
© Sameer Mathur 1
Contents 
i) A definition of a Brand Extension 
ii) Why bother studying Brand Extensions? 
iii) A Classification of Brand ...
Sameer Mathur 
BuddingMarkets.com 
Indian Institute of Management, 
Lucknow 
Marketing Professor 2013 – 
Marketing Profess...
Let’s begin with a 
simple definition.. 
http://www.BuddingMarkets.com 
© Sameer Mathur 4
Brand Extension - Definition 
5 
“Using the 
leverage of a well-known 
brand 
name to launch a 
new brand” 
© Sameer Mathu...
Brands are Assets 
Brands 
are 
Assets 
Know 
when to 
protect 
and defend 
Know 
when to 
extend and 
exploit 
© Sameer M...
New Products and Brand Extensions 
Product Category 
Existing New 
? ? 
? 
New 
Product 
Existing 
Brand Name 
New 
© Same...
Why bother 
studying 
Brand Extensions? 
http://www.BuddingMarkets.com 
© Sameer Mathur 8
Motivation 
According to a 
study, 81% of new 
products launched 
in the US in the 
1990s were Brand 
Extensions 
© Sameer...
New Product 
Management 
Brand 
Management 
Brand 
Extensions
How could we 
classify 
Brand Extensions? 
http://www.BuddingMarkets.com 
© Sameer Mathur 11
Classification 
Line Extension 
Extension within the same category 
Category Extension 
Extension in a different category ...
Line Extension 
1886 1982 
(Within the Same Category) 
© Sameer Mathur 13
Category Extension 
1957 2002 
(In A Different Category) 
© Sameer Mathur 14
4 Ways of doing 
Category 
Extensions 
http://www.BuddingMarkets.com 
© Sameer Mathur 15
4 Ways of doing 
Category Extensions 
Shift The Form 
http://www.BuddingMarkets.com 
© Sameer Mathur 16
“Shift The Form” 
© Sameer Mathur 17
“Shift The Form” 
© Sameer Mathur 18
“Shift The Form” 
Change the form of a product by 
changing its.. 
Method of Delivery 
Method of Preservation 
In-Store Pl...
“Shift The Form” 
Delivery Method 
© Sameer Mathur 20
“Shift The Form” 
Preservation Method 
© Sameer Mathur 21
“Shift The Form” 
Preservation Method 
Many products can be preserved 
in more than one way, opening up 
the products to n...
“Shift The Form” 
In-Store Placement 
© Sameer Mathur 23
“Shift The Form” 
In-Store Placement 
Change the products form 
enough to sell it in multiple spots 
in the same store. 
©...
“Shift The Form” 
In-Store Placement 
Jell-O pudding mix made the leap 
into the refrigerator section with 
Pudding Cups a...
4 Ways of doing 
Category Extensions 
Leverage 
Special 
Expertise 
http://www.BuddingMarkets.com 
© Sameer Mathur 26
“Leverage a special expertise” 
If consumers view a brand as an 
expert, it could leverage that 
expertise to launch a suc...
“Leverage a special expertise” 
© Sameer Mathur 28
“Leverage a special expertise” 
© Sameer Mathur 29
“Leverage a special expertise” 
© Sameer Mathur 30
“Leverage a special expertise” 
Expertise in cheap plastic 
© Sameer Mathur 31
4 Ways of doing 
Category Extensions 
Sell 
Companion 
Products 
http://www.BuddingMarkets.com 
© Sameer Mathur 32
“Sell Companion Products” 
Offer products that are frequently 
used with a parent product to 
create a brand extension in ...
“Sell Companion Products” 
“Brand Extensions: The Good, the Bad, and the Ugly” David Aaker 1990 34
“Sell Companion Products” 
Source: Parham Santana 35
“Sell Companion Products” 
Source: Parham Santana 36
“Sell Companion Products” 
Source: Parham Santana 37
“Sell Companion Products” 
Source: Parham Santana 38
“Sell Companion Products” 
“Brand Extensions: The Good, the Bad, and the Ugly” David Aaker 1990 39
4 Ways of doing 
Category Extensions 
Leverage 
Customer Base 
http://www.BuddingMarkets.com 
© Sameer Mathur 40
“Leverage Customer Base” 
Sell something to the core 
customer base, where the primary 
leverage is the brand’s recognitio...
“Leverage Customer Base” 
Source: Parham Santana 42
Recap: 
Classifying 
Brand Extensions 
http://www.BuddingMarkets.com 
© Sameer Mathur 43
Product Category 
Existing New 
? ? 
? New 
Product 
Existing 
Brand Name 
New 
© Sameer Mathur 44
Product Category 
Existing New 
Line 
Extension 
Category 
Extension 
Flanker 
Brand 
New 
Product 
Existing 
Brand Name 
...
Why Do It? 
What are the two 
biggest reasons firms 
extend brands? 
http://www.BuddingMarkets.com 
© Sameer Mathur 46
Why Brand Extensions? 
Mitigate Risks and Cost 
Risks 
Over 90% of New Products Fail 
Cost 
Introducing a New Product is v...
Benefits Of Doing 
It.. 
http://www.BuddingMarkets.com 
© Sameer Mathur 48
Benefits 
Brand Extensions Benefit all 
Supply-Chain Members 
Consumers 
Signal Superior Quality 
Increases Likelihood of ...
Benefits 
Brand Extensions Benefit all 
Supply-Chain Members 
Retailers 
Increases their willingness 
to stock new product...
Benefits 
Brand Extensions Benefit all 
Supply-Chain Members 
Manufacturers 
Reduces Promotional 
Expenses 
© Sameer Mathu...
3 More Benefits Of 
Doing It.. 
http://www.BuddingMarkets.com 
© Sameer Mathur 52
More Benefits… 
Brand Associations 
“The Mentos brand is 
associated with good 
breathe mints, 
therefore Mentos 
should a...
More Benefits… 
Brand Awareness 
“I recognize the 
Cadbury brand, 
therefore these 
raisins must be 
good” 
© Sameer Mathu...
More Benefits… 
Enhance Core Brand 
“I see Crest also 
makes good white-strips, 
therefore their 
reputation for oral 
hyg...
2 points on how 
Consumers evaluate 
Brand Extensions 
http://www.BuddingMarkets.com 
© Sameer Mathur 56
Consumers 
How Do Consumers Evaluate 
Brand Extensions? 
Perception of Fit 
between the Parent 
Brand and the 
Extension 
...
Perception of Fit 
Good 
Fit 
Bad 
Fit 
© Sameer Mathur 58
State of Mind 
59 
“Abstract” State of Mind 
“Is Starbucks Ice-cream a good idea?” 
More skeptical of brand extensions 
“A...
State of Mind 
“Will I buy 
“Starbucks Ice-cream”? 
Often prefer brand 
extension to store 
brand 
60 
“Concrete” State of...
Summary 
i) A definition of a Brand Extension 
ii) Why bother studying Brand Extensions? 
iii) A Classification of Brand E...
Over 1 Million views 
from more than 100 countries 
Prof. Sameer 
Mathur 
Top 1% most viewed 
Over 250 presentations on 
M...
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Managing Brand Extensions

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  • http://www.brandextension.org/definition.html
  • http://www.brandextension.org/definition.html
  • http://www.brandextension.org/definition.html
  • http://www.brandextension.org/definition.html
  • http://www.brandextension.org/definition.html
  • http://www.brandextension.org/definition.html
  • http://www.brandextension.org/definition.html
  • http://www.brandextension.org/definition.html
  • http://www.brandextension.org/definition.html
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  • Transcript of "Managing Brand Extensions"

    1. 1. “Extendonomics” Managing BRAND EXTENSIONS Prof. Sameer Mathur, Ph.D. © Sameer Mathur 1
    2. 2. Contents i) A definition of a Brand Extension ii) Why bother studying Brand Extensions? iii) A Classification of Brand Extensions iv) 4 types of Category Extensions v) Benefits of Brand Extensions vi) How consumers evaluate Brand Extensions © Sameer Mathur 2
    3. 3. Sameer Mathur BuddingMarkets.com Indian Institute of Management, Lucknow Marketing Professor 2013 – Marketing Professor 2009 – 2013 Ph.D. and M.S. (Marketing) 2003 – 2009 © Sameer Mathur 3
    4. 4. Let’s begin with a simple definition.. http://www.BuddingMarkets.com © Sameer Mathur 4
    5. 5. Brand Extension - Definition 5 “Using the leverage of a well-known brand name to launch a new brand” © Sameer Mathur 5
    6. 6. Brands are Assets Brands are Assets Know when to protect and defend Know when to extend and exploit © Sameer Mathur 6
    7. 7. New Products and Brand Extensions Product Category Existing New ? ? ? New Product Existing Brand Name New © Sameer Mathur 7
    8. 8. Why bother studying Brand Extensions? http://www.BuddingMarkets.com © Sameer Mathur 8
    9. 9. Motivation According to a study, 81% of new products launched in the US in the 1990s were Brand Extensions © Sameer Mathur 9
    10. 10. New Product Management Brand Management Brand Extensions
    11. 11. How could we classify Brand Extensions? http://www.BuddingMarkets.com © Sameer Mathur 11
    12. 12. Classification Line Extension Extension within the same category Category Extension Extension in a different category © Sameer Mathur 12
    13. 13. Line Extension 1886 1982 (Within the Same Category) © Sameer Mathur 13
    14. 14. Category Extension 1957 2002 (In A Different Category) © Sameer Mathur 14
    15. 15. 4 Ways of doing Category Extensions http://www.BuddingMarkets.com © Sameer Mathur 15
    16. 16. 4 Ways of doing Category Extensions Shift The Form http://www.BuddingMarkets.com © Sameer Mathur 16
    17. 17. “Shift The Form” © Sameer Mathur 17
    18. 18. “Shift The Form” © Sameer Mathur 18
    19. 19. “Shift The Form” Change the form of a product by changing its.. Method of Delivery Method of Preservation In-Store Placement Retail Outlet © Sameer Mathur 19
    20. 20. “Shift The Form” Delivery Method © Sameer Mathur 20
    21. 21. “Shift The Form” Preservation Method © Sameer Mathur 21
    22. 22. “Shift The Form” Preservation Method Many products can be preserved in more than one way, opening up the products to new categories and customers. © Sameer Mathur 22
    23. 23. “Shift The Form” In-Store Placement © Sameer Mathur 23
    24. 24. “Shift The Form” In-Store Placement Change the products form enough to sell it in multiple spots in the same store. © Sameer Mathur 24
    25. 25. “Shift The Form” In-Store Placement Jell-O pudding mix made the leap into the refrigerator section with Pudding Cups and the freezer section with Pudding Pops © Sameer Mathur 25
    26. 26. 4 Ways of doing Category Extensions Leverage Special Expertise http://www.BuddingMarkets.com © Sameer Mathur 26
    27. 27. “Leverage a special expertise” If consumers view a brand as an expert, it could leverage that expertise to launch a successful brand extension © Sameer Mathur 27
    28. 28. “Leverage a special expertise” © Sameer Mathur 28
    29. 29. “Leverage a special expertise” © Sameer Mathur 29
    30. 30. “Leverage a special expertise” © Sameer Mathur 30
    31. 31. “Leverage a special expertise” Expertise in cheap plastic © Sameer Mathur 31
    32. 32. 4 Ways of doing Category Extensions Sell Companion Products http://www.BuddingMarkets.com © Sameer Mathur 32
    33. 33. “Sell Companion Products” Offer products that are frequently used with a parent product to create a brand extension in the companion category © Sameer Mathur 33
    34. 34. “Sell Companion Products” “Brand Extensions: The Good, the Bad, and the Ugly” David Aaker 1990 34
    35. 35. “Sell Companion Products” Source: Parham Santana 35
    36. 36. “Sell Companion Products” Source: Parham Santana 36
    37. 37. “Sell Companion Products” Source: Parham Santana 37
    38. 38. “Sell Companion Products” Source: Parham Santana 38
    39. 39. “Sell Companion Products” “Brand Extensions: The Good, the Bad, and the Ugly” David Aaker 1990 39
    40. 40. 4 Ways of doing Category Extensions Leverage Customer Base http://www.BuddingMarkets.com © Sameer Mathur 40
    41. 41. “Leverage Customer Base” Sell something to the core customer base, where the primary leverage is the brand’s recognition and reputation. Relationships Matter! Leverage the trust and rapport built with the customers © Sameer Mathur 41
    42. 42. “Leverage Customer Base” Source: Parham Santana 42
    43. 43. Recap: Classifying Brand Extensions http://www.BuddingMarkets.com © Sameer Mathur 43
    44. 44. Product Category Existing New ? ? ? New Product Existing Brand Name New © Sameer Mathur 44
    45. 45. Product Category Existing New Line Extension Category Extension Flanker Brand New Product Existing Brand Name New © Sameer Mathur 45
    46. 46. Why Do It? What are the two biggest reasons firms extend brands? http://www.BuddingMarkets.com © Sameer Mathur 46
    47. 47. Why Brand Extensions? Mitigate Risks and Cost Risks Over 90% of New Products Fail Cost Introducing a New Product is very Expensive © Sameer Mathur 47
    48. 48. Benefits Of Doing It.. http://www.BuddingMarkets.com © Sameer Mathur 48
    49. 49. Benefits Brand Extensions Benefit all Supply-Chain Members Consumers Signal Superior Quality Increases Likelihood of New Product Trial © Sameer Mathur 49
    50. 50. Benefits Brand Extensions Benefit all Supply-Chain Members Retailers Increases their willingness to stock new products © Sameer Mathur 50
    51. 51. Benefits Brand Extensions Benefit all Supply-Chain Members Manufacturers Reduces Promotional Expenses © Sameer Mathur 51
    52. 52. 3 More Benefits Of Doing It.. http://www.BuddingMarkets.com © Sameer Mathur 52
    53. 53. More Benefits… Brand Associations “The Mentos brand is associated with good breathe mints, therefore Mentos should also make good gum” © Sameer Mathur 53
    54. 54. More Benefits… Brand Awareness “I recognize the Cadbury brand, therefore these raisins must be good” © Sameer Mathur 54
    55. 55. More Benefits… Enhance Core Brand “I see Crest also makes good white-strips, therefore their reputation for oral hygiene is now stronger in my mind” © Sameer Mathur 55
    56. 56. 2 points on how Consumers evaluate Brand Extensions http://www.BuddingMarkets.com © Sameer Mathur 56
    57. 57. Consumers How Do Consumers Evaluate Brand Extensions? Perception of Fit between the Parent Brand and the Extension Consumer State of Mind © Sameer Mathur 57
    58. 58. Perception of Fit Good Fit Bad Fit © Sameer Mathur 58
    59. 59. State of Mind 59 “Abstract” State of Mind “Is Starbucks Ice-cream a good idea?” More skeptical of brand extensions “A Mind for Brand Extensions” Larry Yu 2008 MIT 59
    60. 60. State of Mind “Will I buy “Starbucks Ice-cream”? Often prefer brand extension to store brand 60 “Concrete” State of Mind “A Mind for Brand Extensions” Larry Yu 2008 MIT 60
    61. 61. Summary i) A definition of a Brand Extension ii) Why bother studying Brand Extensions? iii) A Classification of Brand Extensions iv) 4 types of Category Extensions v) Benefits of Brand Extensions vi) How consumers evaluate Brand Extensions © Sameer Mathur 61
    62. 62. Over 1 Million views from more than 100 countries Prof. Sameer Mathur Top 1% most viewed Over 250 presentations on Marketing www.BuddingMarkets.com

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