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Brand Extension


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Published in: Business

Brand Extension

  1. 1. The world is full of Brands…
  2. 2. Some of them take a step forward …….. Oprah Winfrey Talk Show “O” Magazine Apple Macintosh PCs Apple iPod & reinforce the Brand Equity.. All over again and again and again
  3. 3. While some of them don’t… Harley Davidson Bikes Harley Davidson Cake Decoration Kits Hooters - A sleazy bar Hooters Airlines
  4. 4. How will you react ?????? MONGINIS …. Designer Wear
  5. 5. T – Series Vodka How will you react ??????
  6. 6. Ponds – chocolate biscuits How will you react ??????
  7. 7. Pepsi – Bathing soap How will you react ??????
  8. 8. Let’s get to know Brand Extensions...
  9. 9. What is Brand Extension? “Brand extension is using the leverage of a well known brand name in one category to launch a new product in a different category”
  10. 10. Brand Extension Components • It is a new product • Should be a well known brand • The brand should have leverage with customers of the new category – A strong reason why the consumer in the new category will prefer us to what they are buying now
  11. 11. Broad Classification • Line Extension: Extension of the parent brand to a new market segment within the existing product category Example: Head & Shoulders Dry Scalp Shampoo
  12. 12. Broad Classification • Brand Extension – Extension of the Parent Brand to a new product category Examples: Porsche Bicycles
  13. 13. • Line Extensions: The parent brand is used to brand a new product that targets a new segment within a product category currently served by the parent brand. Examples: Types of Brand Extensions Sunsilk in different colors of shampooColgate in different ingredients
  14. 14. • Category Extensions: The parent brand is used to enter a different product category from that currently served by the parent brand. Examples: Types of Brand Extensions Ponds (cold cream, talc, lotion, face wash) Amul (butter, cheese, chocolates, ice cream, condensed milk)
  15. 15. Types of Brand Extensions 1. Similar product in a different form from the parent product Example: Dettol The original Dettol liquid to Liquid Soap to a Regular soap all based on the same promise of killing germs.
  16. 16. Types of Brand Extensions 2. Distinctive flavor/ingredient/component in the new item Example: Amul Amul Milk to Amul Butter, Amul Cheese, Amul Chocolates,etc all based on Amul expertise in Milk. Types of Brand Extensions
  17. 17. Types of Brand Extensions 3. Benefit/attribute/feature owned Example: Rexona Rexona soaps conveyed the benefit of freshness which was extended to cover deodorants with a promise of 24x7 freshness. Types of Brand Extensions
  18. 18. Types of Brand Extensions 4. Expertise Over time, certain brands may gain a reputation for having an expertise in a given area which can be leveraged in other areas. Example: Kodak Kodak’s expertise in analog cameras & films made it easy for it to move to the digital imaging space. Types of Brand Extensions
  19. 19. Types of Brand Extensions 5. Companion products Some brand extensions are a “natural” companion to the products the company already makes Example 1: Colgate Example 1: FujiFilm Types of Brand Extensions
  20. 20. Types of Brand Extensions 6. Vertical extensions Some brand extensions are vertical extensions of what they currently offer. A brand can use their “ingredient/component” heritage to launch products in a more (or sometimes less) finished form. Example 1: Cadbury’s Example 1: Maggi Types of Brand Extensions
  21. 21. Types of Brand Extensions 7. Same customer base Many brand extensions represent a marketer’s effort to sell something else to its large and captive customer base. Example: VISA VISA launched travelers checks directed to its credit card customers. Types of Brand Extensions
  22. 22. Types of Brand Extensions 8. Designer image/status Certain brands convey status and hence create an image for the user Example: Gucci Some brands like Gucci promote a lifestyle that people would like to identify themselves with Types of Brand Extensions
  23. 23. Brand Extension Strategies Product Branding: The brand is promoted exclusively so that it acquires its own identity and image. The company brand name is not emphasized and the brand gains no benefit from the company name. Example:
  24. 24. Brand Extension Strategies Line Branding: It starts with one product to cater to a consumer group and later extends to other products to cater to the needs of the same consumer group. The products in the line draw their identity from the main brand. Example: (“Source of radiant beauty”)
  25. 25. Brand Extension Strategies Range Branding: Here the brand moves beyond product complimentaries unlike Line Branding. All product share a common promise which stems from the firms brand area of competence. Example:
  26. 26. Brand Extension Strategies Umbrella Branding: A single brand is used in all products, where investing in a single brand is less costly than trying to build a number of brands. Example:
  27. 27. Brand Extension Strategies Source / Double Branding: It combines the firm’s name with the product brand name. It is a hybrid of umbrella brand and product brand strategy. The product is given a brand name and is combined with the name of the firm. Example:
  28. 28. Brand Extension Strategies Endorsement Branding: It is a modified version of double branding, where the product brand name becomes more significant, and the company brand name becomes less significant. Example:
  29. 29. • Significantly decreases perceived customer risk and increases product / service acceptance • Generates incremental revenue and profit for the brand • Helps clarify and broaden brand meaning to consumers (eg. extending Hallmark into candy and flowers may help redefine the brand, expanding it from “greeting cards” to “ways to show you care.”) • Reinforcing and building upon key brand associations • Extending the brand’s reach and relevance to new consumers • Laying the groundwork for future extensions • Increase and leverage brand equity Benefits of Brand Extensions
  30. 30. • Marketers capitalize on brand awareness, they can also leverage the associations consumers have of the parent brand • Consumers who favorably evaluate a parent brand are more willing to try and adopt the brand extension than an unfamiliar brand in the same category. They trust a known brand name. • Consumer is already aware of the brand and the main task remaining is to communicate the specific benefits of the innovation • The existing well known brand represent a promise of quality, useful features etc. for the consumer. Thus, extension will benefit fame and good opinion of the brand. • Lower cost compared to launching a new brand. • Increases brand visibility by making it appear in various categories Benefits
  31. 31. •    Creating confusion regarding brand meaning •    Tarnishing the quality image •    Conflicting with or counteracting key brand associations •    Creating new, undesired brand associations •    If done in great excess with no focus, completely diluting brand meaning and overexposing the brand in the market place •    Creating confusion regarding brand meaning •    Creating new, undesired brand associations •    “Turning off” current key consumer segments Risks
  32. 32. •    If done in great excess with no focus, completely diluting brand meaning and overexposing the brand in the market place • Cannibalization of existing products of the brand • Dilution of existing brand image Risks
  33. 33. •    Have you identified what your brand owns in the consumer’s mind? •    Have you identified all areas in which the consumer gives your brand permission to operate? •    Do you have a clear understanding of whether your brand is over or under extended? •    Have you identified all the ways your brand and others in its category have made compromises with the consumer?  •    Have you identified new categories for growth?  Can you create new categories that meet previously unmet consumer needs? Checklist for Brand Extension
  34. 34. •    Have you targeted new market segments to which you would like your brand to appeal? •    Have you explored ways to make your brand more relevant to the next generation of consumers? •    Do you know what must be done to ensure the parent brand maintains a relationship with the consumer throughout his or her life (cradle-to-grave marketing)? •    Do you have a plan that specifies what categories your brand will enter next, in what order it will enter them and on what time frame? Checklist for Brand Extension
  35. 35. Consider General Motors. What’s the difference between a Chevrolet, a Pontiac and a Buick? In 2005 GM announced it would narrow its selection of cars. But this belated effort to bring the automaker’s brand schizophrenia under control is too late. Beware of Brand Schizophrenia Chevrolet Pontiac Buick
  36. 36. • General Motors mucked up its brands over decades of endless line extensions. But Mercedes Benz has done it in less than one decade. • Once upon a time, it was a high-quality, highly engineered, prestigious car. • But now, if you wander into a dealership in Europe, you’re faced with the following lineup: A-Class, B-Class, C-Class, E-Class, S-Class, CLK, CLS, CL, SLK, SL, M-Class and G-Class. • The prices range from 20,000 to 200,000 euros. • The result is that in Europe, Mercedes Benz is not listed as the top brand. The Audi A8, BMW, Maserati and Jaguar have taken over this position. Beware of Brand Schizophrenia
  37. 37. In 1985, Coca-Cola infamously introduced an identity-blurring new brand, New Coke. A massive consumer backlash ensued, and the company quickly reinstated its familiar Classic Coke. Beware of Brand Schizophrenia Once a company abandons its brands' distinctive personalities or positions, it's just a matter of time before confused customers start to drift away.
  38. 38. Product extensions, are versions of the same parent product that serve a segment of the target market and increase the variety of an offering. Examples: Coke vs. Diet Coke Brand Extension V/s Product Extension A successful brand helps a company enter new product categories more easily.
  39. 39. Successful Brand Extensions – Some Examples Kingfisher Beer Kingfisher Airlines Ferrari Car Ferrari Perfume
  40. 40. Unsuccessful Brand Extensions – Some Examples Coca Cola Vanilla Coke Cadbury Chocolates Cadbury Scheweppes
  41. 41. • Extending into a category in which the brand adds nothing but its identity (its products or services are not significantly different from current products or services in the category) • Extending through opportunistic brand licensing without regard to impact up on the brand • Extending into lower (and, sometimes higher) quality segments • Not fully understanding brand benefit ownership, transfer or importance Common Brand Extension Problems
  42. 42. Success Characteristics • The parent brand is seen as having favorable associations • There is a perception of fit between the parent brand and the extension product • The positive brand associations with the parent brand should not become negative with the extended product • A successful extension not only contributes to the parent brand but also enables a brand to be extended farther • Advertising strategy for the extension emphasizes information about the extension rather than reminders of the parent brand
  43. 43. Reliance Capital Reliance Communications Limited Reliance Infrastructure Limited Reliance Health Reliance Media & Entertainment
  44. 44. Reliance is the first and only private sector Company from India to feature in the 2004 Fortune Global 500 list of the World's Largest Corporations. Group's annual revenues are in excess of US$ 34 billion Backward vertical integration has been the cornerstone of the evolution and growth of Reliance The Group exports products in excess of US$ 20 billion to 108 countries in the world. Major Group Companies Reliance Industries Limited • Reliance Petroleum Limited • Reliance Retail Limited) • Reliance Industrial Infrastructure Limited
  45. 45. Mukesh Ambani plans to build his own airport Anil Ambani in race to buy out SpiceJet Reliance Industries Ltd (RIL), India’s largest private company by revenue, is in talks with the country’s largest private carrier, Jet Airways (India) Ltd, for picking up a small stake in the airline
  46. 46. Airline update ….. India to get mobile airports soon Such airports that can be transported in trucks and set up anywhere in 20 minutes in the Can take aircraft loads of 26-40 tonnes. Low-cost airlines could save on fuel, taxes and other things if they operate to smaller towns and airports where they get special discounts, including the airport use and reduced duty on aviation fuel.
  47. 47. Our recommendation ……
  48. 48. AIRLINES • Airlines •Cargo •Chartered
  49. 49. Objective • Increase penetration in the Indian market by linking metros and business oriented semi –metros (Hyderabad – Vijay Wada / Chandigarh – Ludhiana/ ) • Region wise sector allocation • Build customer loyalty by offering affordable fares • Develop urban & semi-urban markets • Get stakes in national carrier / merger / acquisition
  50. 50. TARGET SEGMENT: Business men from urban & semi urban towns POSITIONING : DUNIYA KI SAIR APNE MUTTHE MEIN Ab udne ki aazadi apne paasCOMMUNICATION:
  51. 51. Strategy : Region oriented ,Connecting smaller cities
  52. 52. Strategy : Tap semi urban customers Strategy : Charted flights for the elite
  53. 53. Bolne ki Aazadi Udne ki Aazadi
  54. 54. THANK YOU!!!