Brand Extensions 09

Brand Extensions

Growth strategies Current Products New Products Current Market New Market Market Penetration Strategy Product Development Strategy Market Development Strategy Diversification Strategy

Brand Extensions
When a firm introduces a new product, it has three choices on branding
Develop a new brand
Apply one of its existing brands in some way
Use a combination of new and existing brand

Brand Extensions
Brand extension –when a firm uses an established brand to introduce a new product
When a new brand is combined with an existing brand, the brand extension can also be called a sub-brand
The existing brand is called the parent brand, and if associated with multiple product is called a family brand.

Brand Extensions
Brand extension can be classified as:
Line extensions : when the parent brand is used to brand a new product that targets a new market segment within the same product category
Category extensions : when the parent brand is used to enter a different product category

Advantages of Extensions
Well planned and well implemented extensions offer a number of advantages:
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

Improve brand image : a well-known and well-liked brand evokes consumer expectations on performance.
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.
These inferences may improve strength, favorability and uniqueness of the extension brand's association

Reduce risk perceived by consumer – due to familiarity
Increased probability of gaining distribution and consumer trial
Increase in efficiency of promotional expenditure
Reduced costs of introductory and follow-up marketing programs

Avoid costs of developing a new brand in terms of market research, brand elements development cost
Allow for packaging and labeling efficiencies –identical packaging elements lowers production cost
Permit Consumer variety seeking

Provide Feedback benefits to Parent brand
Clarify Brand meaning – e.g. Cadbury’s means ‘sweetness and celebration’
Enhance the Parent brand image – by adding new brand associations
Bring in new customers and increase market coverage.
Revitalise the brand
Permit subsequent extensions

Brand Extensions 09

by ravindra.tiwari87 on Apr 01, 2009

Accessibility

Categories

Upload Details

Usage Rights

1 Embed 15

Statistics

Brand Extensions 09 — Presentation Transcript