20496299 Brand Extension


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  • 20496299 Brand Extension

    1. 1. Brand and Line extensions
    2. 2. Brand Explosion Brand Consolidation Brand variants
    3. 3. Brand Extensions: How does a firm grow? <ul><li>A firm can: </li></ul><ul><ul><li>Focus on current products and markets </li></ul></ul><ul><ul><ul><li>Market penetration strategy </li></ul></ul></ul><ul><ul><li>Put existing products into new markets </li></ul></ul><ul><ul><ul><li>Market development strategy </li></ul></ul></ul><ul><ul><li>Put new products into existing markets </li></ul></ul><ul><ul><ul><li>Product development strategy </li></ul></ul></ul><ul><ul><li>Put new products into new markets </li></ul></ul><ul><ul><ul><li>Diversification strategy </li></ul></ul></ul>
    4. 4. Brand Extensions <ul><li>Brand extension </li></ul><ul><ul><li>Involves using an existing brand name to launch a product in a different category. </li></ul></ul><ul><li>Category extension </li></ul><ul><ul><li>Parent brand is used to enter a different product category from that currently served by the parent brand </li></ul></ul><ul><ul><ul><li>Swiss army watches, Porsche bicycles </li></ul></ul></ul>
    5. 5. Ponds LG Park Avenue
    6. 7. Line Extensions <ul><li>Line extension </li></ul><ul><ul><li>Parent brand is used to brand a new product that targets a new market segment within a product category currently served by the parent brand </li></ul></ul><ul><ul><ul><li>H&S dry scalp shampoo </li></ul></ul></ul><ul><li>Line extension </li></ul><ul><ul><li>Involves making entries in brand’s exiting product category by using same brand name. These entries can come in the form of varying product sizes, flavors, colors, and ingredients and forms </li></ul></ul>
    7. 9. Advantages of Extensions <ul><ul><li>Reduce risk perceived by customers & distributors </li></ul></ul><ul><ul><li>Decrease cost of gaining distribution & trial </li></ul></ul><ul><ul><li>Increase efficiency of promotional expenditures </li></ul></ul><ul><ul><li>Avoid cost (and risk) of developing new names </li></ul></ul><ul><ul><li>Allow for packaging and labeling efficiencies </li></ul></ul><ul><ul><li>Variety-seeking </li></ul></ul>
    8. 10. Advantages of Extensions <ul><li>Enhance the parent brand image </li></ul><ul><ul><li>Improve strength, favorability, and uniqueness of brand associations </li></ul></ul><ul><ul><li>Improve perceptions of company credibility </li></ul></ul><ul><li>Convey broader brand meaning to consumers </li></ul><ul><ul><li>Clarify core benefit proposition and business definition of the company </li></ul></ul><ul><li>Bring new customers into the franchise and increase market coverage </li></ul>
    9. 11. Disadvantages of Extensions <ul><li>Extensions have risks, too. </li></ul><ul><ul><li>They can fail. </li></ul></ul><ul><li>Moreover, extensions can potentially result in the following costs: </li></ul><ul><ul><li>Cannibalize sales of the parent brand </li></ul></ul><ul><ul><li>Hurt the image of the parent brand </li></ul></ul><ul><li>Forego the chance to develop a new brand name or market the parent brand differently (opportunity cost) </li></ul>
    10. 12. <ul><ul><li>Consumers have some awareness of and positive associations about the brand in memory </li></ul></ul><ul><ul><li>Some of these positive associations are evoked by the brand extension </li></ul></ul><ul><ul><li>Negative associations are not transferred from the parent brand </li></ul></ul><ul><ul><li>Negative associations are not created by the brand extension </li></ul></ul>Brand Extension Assumptions
    11. 13. Product Form Extension Real Juice Concentrate Real Juices Amul Condensed Milk Amul Milk
    12. 14. Companion Product Gillette Shave Foam Gillette After Shave Gillette Razors Colgate Tooth Brush Colgate Dental Cream
    13. 15. Customer Franchise J & J Baby Talc J & J Baby Oil J & J Baby Diapers J & J Baby Shampoo
    14. 16. Company Expertise Honda Gensets Honda Scooters Honda Lawnmovers Honda Cars
    15. 17. Types of Brand Extensions <ul><li>Brand Distinction </li></ul>*hypothetical Parachute Cream Parachute Hair Oil Parachute Shampoo Parachute Cooking Oil* Parachute Coconut Expertise
    16. 18. Types of Brand Extensions <ul><li>Distinctive Taste, Ingredient or Component </li></ul>Cartier Watches Cartier Purses Cartier Pens Cartier Jewellery
    17. 19. <ul><li>The Product Brand </li></ul><ul><li>Formula Brand </li></ul><ul><li>Know-how Brand </li></ul><ul><li>Interest Brand </li></ul><ul><li>Philosophy </li></ul>
    18. 20. Brand Extendibility The brand at this level acquires more intangible character and orientation. This generally happens in case of designers and artists. The Armani signature on the product provides a higher philosophical meaning – a meaning proudly expresses in Armani’s creatively styled products Philosophy It’s the centre of interest or the core spirit of the brand. Gillette brand maintains its focus on men’s grooming in all its brands. Nike’s focal point is winning. Whirlpool’s centre of interest is the home (‘homemaker’) Interest Brand Know-how is an expertise that a firm develops in a specialized area of activity. Sony is know to have expertise in miniaturization and robotics. Honda has know-how in engines. Amul has developed expertise in milk processing Know-how Brand Formula means a set procedure (used to make the product). This type of brand may be find in categories like cooking oil, food, and pickles Formula Brand It is a situation where there is very little difference between the brand and the product. Brand is a close approximation of the product. Passively, the brand is used to identify the product, maybe for internal purposes. The brand does not play any role from the customer’s point of view Product Brand
    19. 21. Extendibility of a Brand Product dissimilarity Philosophy Brand Cartier Interest Brand Disney ( Entertainment) Know-how Brand Bajaj ( Electronics) Formula Brand Mother’s Recipes Product Brand Rose Brand Flour Pickles Lemon Pickles Mango Pickles Mixed OTG Irons Fans Coolers Mixers Toasters Toys Theatre Movies Theme Parks Music Clothes Acces- sories Games Watches Jewellery Bags Pens
    20. 22. Brand Extendibility Amul Milk Amul Milk Type I II III Amul Expertise In milk processing: Milk, Ghee, Butter, Condensed Milk Amul Symbol Personality: Lovable Indianness Taste Fun Trustworthy Value Good Ice Cream Cheese Mil Additive Chocoloate “ Amulishness” Drinks? Energy Bar? Energy Tabs? Mil Cakes? Biscuits? Product Formula/ Expertise/ Brand Recipe Know-how Interest Philosophy Time / Brand’s Evolution Products are manifestations of Brand Brands identifies the product