Brandextensionsppt0111 100120101005-phpapp02


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Brandextensionsppt0111 100120101005-phpapp02

  2. 2. Overview New Product & Brand Extension Advantages Disadvantages How Consumers Evaluate Extensions?
  3. 3. What Is A “Brand” A BRAND is symbolic embodiment of all the information connected to a Company, Product or Service. It serves to create associations and expectations from products made by a producer, in the mind of the consumer. The key objective being “to create a Relationship of TRUST with its consumers”.
  4. 4. New Product & BrandExtensions
  5. 5. New Product –BrandingDecisions  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. 6. BRAND EXTENSIONS A Brand Extension occurs when a firm uses an established brand name to introduce a new product (approaches 2 or 3) When a new brand is combined with an existing brand (approach 3), the brand extension can also be a sub- brand.
  7. 7. BRAND EXTENSIONS An existing brand that gives birth to a brand extension is the parent brand. If the parent brand is already associated with multiple products through brand extensions, then it may also be called a family brand.
  8. 8. LINE EXTENSION The parent brand is used to brand a new product that targets a new market segment with in a product category currently served by the parent brand. A line extension often adds a different flavor or ingredient variety, a different form or size, or a different application for the brand.
  9. 9. Coke’s Line Extension
  10. 10. Head &Shoulder ’s Extensi on
  11. 11. CATEGORY EXTENSION The parent brand is used to enter a different product category from that currently served by the parent brand.
  12. 12. ITC’s Category Extension
  13. 13. Why Brand Extensions? Leveraging brand equity/value by introduction of logical & complementary new product categories E.g HP Product Innovation to surpass consumer expectations It increases awareness of the brand name Increases profitability from offerings in more than one product category.(widening the net to catch new consumers.) It’s a great way to reinforce a brand, reach out to new customers, create a BUZZ
  14. 14. Advantages Of Brand Extensions Improve brand image Reduce risk perceived by Customers Permit consume variety-seeking
  15. 15. Advantages Of BrandExtensions  Clarify brand meaning Brand Original Extension New Brand Product Products Meaning Weight Fitness Low-calorie Weight loss Watchers Centre foods & maintenance Sunkist Oranges Vitamins, Good health juices Kellogg’s Cereal Nutri-grain Health bars, Special snacking K barsAunt Jemima Pancake Syrups, Breakfast mixes frozen foods
  16. 16. Advantages Of BrandExtensions Increase the probability of gaining distribution and trial Increase efficiency of promotional expenditures Reduce costs of introductory & follow-up marketing programs (save 40-80%) E.g. Apple iPods Avoid costs of developing a new brand Allow for packaging & labeling efficiencies
  17. 17. Advantages Of BrandExtensions Enhance the parent brand image Bring new customers into brand franchise and increase market coverage Revitalize the brand Permit subsequent extensions
  18. 18. Disadvantages Of Brand Extensions Can fail & hurt parent brand image Xerox Computers-synonymous with copiers & no one believed they could make computers Can succeed but cannibalize sales of parent brand Amul Butter-”reduced salt butter” is slowly eating up Amul normal butter
  19. 19. Disadvantages Of BrandExtensions Can succeed but diminish identification with any one category Can succeed but hurt the image of parent brand
  20. 20. Disadvantages Of BrandExtensions Can confuse or frustrate consumers Can encounter retailer resistance Can dilute brand meaning Can cause the company to forgo the chance to develop a new brand
  21. 21. When are Brand ExtensionsAppropriate? When Prior Brand equity exists Consumer must see some “connection” between the proposed extension and the parent brand. The proposed extension contributes to and reinforces the overall brand equity of the parent brand.
  22. 22. Conditions For EvaluatingConsumer’s Brand Extension  Consumers have some awareness & positive associations about the parent brand  At least some of these positive associations will be evoked by the brand extension  Negative association are not transferred from the parent brand  Negative associations are not created by the brand extension
  23. 23. Evaluating Brand ExtensionOpportunities Define actual & desired consumer knowledge Identify possible extension candidates Evaluate potential of the extension candidate Evaluate potential candidate feedback effects Consider possible competitive advantages & reactions Design marketing campaign Evaluate extension success & effects on parent brand equity