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Brand Extensions 09
Brand Extensions 09
Brand Extensions 09
Brand Extensions 09
Brand Extensions 09
Brand Extensions 09
Brand Extensions 09
Brand Extensions 09
Brand Extensions 09
Brand Extensions 09
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Brand Extensions 09

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  • 1. Brand Extensions
  • 2. Growth strategies Current Products New Products Current Market New Market Market Penetration Strategy Product Development Strategy Market Development Strategy Diversification Strategy
  • 3. Brand Extensions <ul><li>When a firm introduces a new product, it has three choices on branding </li></ul><ul><li>Develop a new brand </li></ul><ul><li>Apply one of its existing brands in some way </li></ul><ul><li>Use a combination of new and existing brand </li></ul>
  • 4. Brand Extensions <ul><li>Brand extension –when a firm uses an established brand to introduce a new product </li></ul><ul><li>When a new brand is combined with an existing brand, the brand extension can also be called a sub-brand </li></ul><ul><li>The existing brand is called the parent brand, and if associated with multiple product is called a family brand. </li></ul>
  • 5. Brand Extensions <ul><li>Brand extension can be classified as: </li></ul><ul><li>Line extensions : when the parent brand is used to brand a new product that targets a new market segment within the same product category </li></ul><ul><li>Category extensions : when the parent brand is used to enter a different product category </li></ul>
  • 6. Advantages of Extensions <ul><li>Well planned and well implemented extensions offer a number of advantages: </li></ul><ul><li>Facilitate New Product acceptance : high failure rate of new products. A familiar brand name reduces the risk and as a brand extension is more likely to succeed </li></ul>
  • 7. Advantages of Extensions <ul><li>Improve brand image : a well-known and well-liked brand evokes consumer expectations on performance. </li></ul><ul><ul><li>Brand extensions also evoke consumer expectations based on prior associations/knowledge of the brand and the extent to which these are relevant to the new product. </li></ul></ul><ul><ul><li>These inferences may improve strength, favorability and uniqueness of the extension brand's association </li></ul></ul>
  • 8. Advantages of Extensions <ul><li>Reduce risk perceived by consumer – due to familiarity </li></ul><ul><li>Increased probability of gaining distribution and consumer trial </li></ul><ul><li>Increase in efficiency of promotional expenditure </li></ul><ul><li>Reduced costs of introductory and follow-up marketing programs </li></ul>
  • 9. Advantages of Extensions <ul><li>Avoid costs of developing a new brand in terms of market research, brand elements development cost </li></ul><ul><li>Allow for packaging and labeling efficiencies –identical packaging elements lowers production cost </li></ul><ul><li>Permit Consumer variety seeking </li></ul>
  • 10. Advantages of Extensions <ul><li>Provide Feedback benefits to Parent brand </li></ul><ul><li>Clarify Brand meaning – e.g. Cadbury’s means ‘sweetness and celebration’ </li></ul><ul><li>Enhance the Parent brand image – by adding new brand associations </li></ul><ul><li>Bring in new customers and increase market coverage. </li></ul><ul><li>Revitalise the brand </li></ul><ul><li>Permit subsequent extensions </li></ul>

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