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Band Extension

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  • 1. 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
  • 2. Scope of the Presentation
    • New products and brand extensions
    • Advantages of extensions
    • Disadvantages of extensions
    • How consumers evaluate extension
  • 3. New Products and Brand Extensions
  • 4. Ansoff’s Growth Share Matrix Product Development Diversification New Markets Current Markets Current Products New Products Market Penetration Market Development
  • 5. 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
  • 6. 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
  • 7. Types of Brand Extensions
  • 8. 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
  • 9.
    • Dry Scalp Shampoo
    • Clean and Balanced Shampoo
    • Smooth and Silky Shampoo
    • Refreshing Menthol Shampoo
  • 10. http://www.britsuperstore.com/acatalog/Fairy.html
  • 11. Category Extensions
      • The parent brand is used to enter a different product category from that currently served by the parent brand
  • 12. E.g.: Swiss Army Watch Search on this ??????????????????????
  • 13. 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
  • 14. 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
  • 15. 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
  • 16. Advantages of Extensions
  • 17. 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
  • 18. 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
  • 19. 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
  • 20. 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
  • 21. How Consumers Evaluate Extension
  • 22. 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
  • 23. 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
  • 24. 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
  • 25. 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
  • 26. 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
  • 27. Thank You!