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Band Extension
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Band Extension






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    Band Extension Band Extension Presentation Transcript

    • Brand Extension “ A new product or service that is related to an existing brand, but that offers a different benefit and/or appeals to a different target segment”.
      • Presented By:
      • Varsha Rana PG – 06 - 095
      • Sannoj Jaiprakash PG – 06 - 102
      • Vishal wadekar PG – 06 - 119
    • Scope of the Presentation
      • New products and brand extensions
      • Advantages of extensions
      • Disadvantages of extensions
      • How consumers evaluate extension
    • New Products and Brand Extensions
    • Ansoff’s Growth Share Matrix Product Development Diversification New Markets Current Markets Current Products New Products Market Penetration Market Development
    • New Product – Branding Decisions
      • A new brand – individually chosen for the new product
      • An existing brand name applied in some way
      • A combination of a new brand with an existing brand
    • Brand Extensions
      • When a firm uses an established brand name to introduce a new product (Approaches 2 &3)
      • When a brand is combined with an existing brand (Approach 3)the brand extension can also be called a sub-brand
      • An existing brand that gives birth to a brand extension is referred to as the parent brand
      • If a parent brand is associated with multiple products through brand extensions then it is called a family brand
    • Types of Brand Extensions
    • Line Extensions
      • The 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
      • It often involves a different flavour or ingredient variety, a different form or size, or a different application for the brand
      • Dry Scalp Shampoo
      • Clean and Balanced Shampoo
      • Smooth and Silky Shampoo
      • Refreshing Menthol Shampoo
    • http://www.britsuperstore.com/acatalog/Fairy.html
    • Category Extensions
        • The parent brand is used to enter a different product category from that currently served by the parent brand
    • E.g.: Swiss Army Watch Search on this ??????????????????????
    • Success of Extensions
      • Most new products are line extensions
        • Typically 80% – 90% in any one year
      • Many of the most successful new products are rated by various sources, are extensions
      • Nevertheless, many new products are introduced every year as new brands
    • Strategies for Category Extensions - Tauber
      • Introduce the same product in a different form
        • E.g.: Liril Shower Gel
      • Introduce products that contain the brands distinctive taste, ingredient or component
        • E.g.: Haagen-Dazs Cream liqueur
      • Introduce companion products for the brand
        • E.g.: Duracell flashlights
      • Introduce products relevant to the customer franchise of the brand
        • E.g.: Visa travelers cheques
    • Strategies for Category Extensions - Tauber
      • Introduce products that capitalise on the firm’s perceived expertise
        • E.g.: Honda lawn mowers
      • Introduce products that reflect the brands distinctive benefit, attribute or feature
        • E.g.: Fa ‘ freshness’ soap
      • Introduce products that capitalise on the distinctive image or prestige of the brand
        • E.g.: Porsche sunglasses
    • Advantages of Extensions
    • Reasons for Failure of New Products
      • The market was too small
      • The product was a poor match for the company
      • Inadequate or ignored research result
      • Failure to capitalise on a market window
      • Poor profit margins and high costs
      • The product was not new or different
      • The product did not go hand in hand with familiarity
      • Credibility was not confirmed on deliveryConsumers could not recognise the product
    • Advantages of Brand Extensions
      • Facilitate new product acceptance
        • Improve brand image
        • Reduce risk perceived by customers
        • Increase the probability of gaining distribution and trial
        • Increase efficiency of promotional expenditures
        • Reduce costs of introductory and follow up marketing programs
        • Avoid cost of developing a new brand
        • Allow for packaging and labeling efficiencies
        • Permit consumer variety-seeking
    • Advantages of Brand Extensions
      • Provide feedback benefits to the parent brand and company
        • Clarify brand meaning
        • Enhance the parent brand image
        • Bring new customers into the market franchise and increase market coverage
        • Revitalise the brand
        • Permit subsequent extensions
    • Disadvantages of Extensions
      • Can confuse or frustrate the consumers
      • Can encounter retailer resistance
      • Can fail and hurt parent brand image
      • Can succeed and cannibalise sales of the parent brand
      • Can succeed but diminish identification with any one category
      • Can succeed but hurt the image of the parent brand
      • Can dilute the brand meaning
      • Can cause the company to forge the chance to develop a new brand
    • How Consumers Evaluate Extension
    • Managerial Assumptions
      • In analysing potential consumer response to a brand extension, it useful to assume that consumers are evaluating the brand extension based only on
        • What they already know about
          • The parent brand
          • The extension category
        • Before any advertising, promotion or detailed product information is made available
      • This helps in determining whether the extension should be gone ahead with at all
    • Essential Assumptions for Extensions
      • Consumers have some awareness of and positive associations about the parent brand in memory
      • At least some of these positive associations will be evoked by the brand extension
      • Negative associations are not transferred from the parent brand
      • Negative associations are not created by the brand extensions
    • Factors Influencing the Success of Extensions
      • In creating extension equity
        • How salient parent brand associations are in the minds of consumers in the extension context
          • What information comes to the mind about the parent brand when the consumers think about the proposed extension and the strength on these associations
    • Factors Influencing the Success of Extensions
        • How favourable any inferred extensions are in the extension context
          • Whether the information is seen as suggestive of the type of product or service that the brand extension would be
          • Would these associations be viewed as good or bad in the extension context
        • How unique any inferred associations are
          • How the perceptions compare with those of competitors
    • Factors Influencing the Success of Extensions
      • In contributing to parent equity
        • How compelling the evidence is concerning the corresponding attribute or benefit association in the extension context
          • How unambiguous is the information in concerning product performance and imagery
        • How relevant and consistent the extension evidence is concerning the attribute or benefit for the parent brand
        • How strong are the existing attributes and benefit associations about the parent brand in the consumer’s mind
    • Thank You!