Brand Extensions Ppt 0111


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Brand extension-advantages and disadvantages
line and category extension

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Brand Extensions Ppt 0111

  1. 1. NEW PRODUCTS AND BRAND EXTENSIONS<br />By<br />NavneetAgrawal<br />
  2. 2. Overview<br />New Product & Brand Extension<br />Advantages<br />Disadvantages<br />How Consumers Evaluate Extensions? <br />
  3. 3. the FASCINATING world of brands<br />
  4. 4. What Is A “Brand”<br />A BRAND is symbolic embodiment of all the information connected to a Company, Product or Service.<br />It serves to create associations and expectations from products made by a producer, in the mind of the consumer.<br />The key objective being “to create a Relationship of TRUST with its consumers”. <br />
  5. 5. New Product & Brand Extensions<br />
  6. 6. New Product –Branding Decisions<br /><ul><li>A new brand – individually chosen for the new product.
  7. 7. An existing brand name applied in some way.
  8. 8. A combination of a new brand with an existing brand.</li></li></ul><li>BRAND EXTENSIONS<br />A Brand Extension occurs when a firm uses an established brand name to introduce a new product (approaches 2 or 3)<br />When a new brand is combined with an existing brand (approach 3), the brand extension can also be a sub-brand.<br />
  9. 9. BRAND EXTENSIONS<br />An existing brand that gives birth to a brand extension is the parent brand.<br />If the parent brand is already associated with multiple products through brand extensions, then it may also be called a family brand.<br />
  10. 10. Types of Brand <br />Extension<br />
  11. 11. LINE EXTENSION<br />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.<br />A line extension often adds a different flavor or ingredient variety, a different form or size, or a different application for the brand.<br />
  12. 12. Coke’s Line Extension<br />
  13. 13. Head <br /> &<br />Shoulder’s <br /> Extension <br />
  14. 14. CATEGORY EXTENSION<br />The parent brand is used to enter a different product category from that currently served by the parent brand.<br />
  15. 15. ITC’s Category Extension<br />
  16. 16. Why Brand Extensions?<br /><ul><li>Leveraging brand equity/value by introduction of logical & complementary new product categories
  17. 17. E.g HP
  18. 18. Product Innovation to surpass consumer expectations
  19. 19. It increases awareness of the brand name
  20. 20. Increases profitability from offerings in more than one product category.(widening the net to catch new consumers.)
  21. 21. It’s a great way to reinforce a brand, reach out to new customers, create a BUZZ </li></li></ul><li>Advantages of<br />Brand extensions<br />
  22. 22. Advantages Of Brand Extensions<br /><ul><li>Improve brand image
  23. 23. Reduce risk perceived by </li></ul> Customers<br /><ul><li>Permit consume variety-seeking </li></li></ul><li>Advantages Of Brand Extensions<br />Clarify brand meaning<br />
  24. 24. Advantages Of Brand Extensions<br /><ul><li>Increase the probability of gaining distribution and trial
  25. 25. Increase efficiency of promotional expenditures
  26. 26. Reduce costs of introductory & follow-up marketing programs (save 40-80%)
  27. 27. E.g. Apple iPods
  28. 28. Avoid costs of developing a new brand
  29. 29. Allow for packaging & labeling efficiencies</li></li></ul><li>Advantages Of Brand Extensions<br /><ul><li>Enhance the parent brand image
  30. 30. Bring new customers into brand franchise and increase market coverage
  31. 31. Revitalize the brand
  32. 32. Permit subsequent extensions</li></li></ul><li>disAdvantages of<br />Brand extensions<br />
  33. 33. Disadvantages Of Brand Extensions<br /><ul><li>Can fail & hurt parent brand image
  34. 34. Xerox Computers-synonymous with copiers & no one believed they could make computers
  35. 35. Can succeed but cannibalize sales of parent brand
  36. 36. Amul Butter-”reduced salt butter”</li></ul> is slowly eating up Amul normal butter<br />
  37. 37. Disadvantages Of Brand Extensions<br /><ul><li>Can succeed but diminish identification with any one category
  38. 38. Can succeed but hurt the image of parent brand</li></li></ul><li>Disadvantages Of Brand Extensions<br /><ul><li>Can confuse or frustrate consumers
  39. 39. Can encounter retailer resistance
  40. 40. Can dilute brand meaning
  41. 41. Can cause the company to forgo the chance to develop a new brand </li></li></ul><li>When are Brand Extensions Appropriate?<br />When Prior Brand equity exists<br />Consumer must see some “connection” between the proposed extension and the parent brand.<br />The proposed extension contributes to and reinforces the overall brand equity of the parent brand.<br />
  42. 42. How Consumers <br />Evaluate Extensions<br />
  43. 43. Conditions For Evaluating Consumer’s Brand Extension<br />Consumers have some awareness & positive associations about the parent brand<br />At least some of these positive associations will be evoked by the brand extension<br />Negative association are not transferred from the parent brand<br />Negative associations are not created by the brand extension<br />
  44. 44. Define actual & desired consumer knowledge<br />Identify possible extension candidates<br />Evaluate potential of the extension candidate<br />Evaluate potential candidate feedback effects<br />Consider possible competitive advantages & reactions<br />Design marketing campaign<br />Evaluate extension success & effects on parent brand equity<br />Evaluating Brand Extension Opportunities<br />
  45. 45. Thank You<br />