Brand extension can provide advantages such as reducing customer risk perception of new products, increasing promotional efficiency, and clarifying the parent brand image. However, disadvantages include potential customer confusion, retailer resistance, and risk of hurting the parent brand. For favorable customer evaluations of extensions, customers must have positive associations with the parent brand that transfer to the extension without creating negative associations. Creating strong brand extension equity depends on salient and favorable parent brand associations in customer minds. Contributing to parent brand equity requires compelling evidence linking relevant extension attributes to the parent brand.

1. BRAND EXTENSION

2. ADVANTAGES OF BRAND EXTENSION
a. Facilitates New Product Acceptance
 Reduces risk perceived by customers.
 Increases the probability of gaining distribution
& trial.
 Increases efficiency of promotional expenditures.
 Reduces cost of introductory & follow up mktg.
programs.
 Allows for packaging & labeling efficiencies.
 Permits consumer variety seeking.

3. b. Provides Feedback Benefits to the Parent
Brand & Company
 Clarifies Brand meaning.
 Enhances the parent Brand Image.
 Brings new customers & increase mkt. coverage.
 Revitalizes the Brand.
 Permits subsequent extensions.

4. DISADVANTAGES OF BRAND EXTENSIONS
 It can confuse or frustrate consumers.
 It can encounter retailer resistance.
 It can fail & hurt parent brand image.
 It can succeed but cannibalize sale of parent brand.
 It can succeed but hurt the image of the parent brand.
 It can dilute brand meaning.
 It can forgo the chance to develop a new brand.

5. Assumptions To Result in Favorable Consumer Evaluations
Of an Extension
 Consumers have some awareness of & positive Associations about the
parent brand in memory.
 At least some of these positive associations will be evoked by the brand
extension.
 -ve associations are not transferred from the parent brand.
 -ve associations are not created by the brand extension.

6. BRAND EXTENSION & BRAND EQUITY
CREATING EXTENSION EQUITY:
It depends primarily on three consumer – related factors:-
 How salient parent brand associations are in the minds of consumers
such as what information comes to mind about the parent brand,
when they think of the proposed extension & strength of associations.
 How favorable any inferred associations – whether good or bad.
 How unique any inferred associations ie in comparison to competing
brands.

7. CONTRIBUTING TO PARENT BRAND EQUITY:
It depends on consumer brand knowledge on:-
 How compelling the evidence is concerning the corresponding attribute
or benefit association for product performance or imagery.
 How relevant or diagnostic the extension evidence is concerning the
attribute or benefit for the parent brand or product performance or
imagery in other categories.
 How strongly existing attribute or benefit associations are held in
consumer memory for the parent brand.

8. WHAT IS CULT BRAND?
 These are special class of magnetic brands that command
super high customer loyalty & almost evangelical customers
or followers who are devoted to them.
 Successful brands embrace their customers by anticipating
basic & spiritual human needs.

9. DIFFERENCE BET. DESTRUCTIVE & BENIGN CULTS
 Destructive cults harm, hurt, manipulate & often brainwash
their members.
 Benign cults help fill the emotional needs& wants of their
follower in a positive way.
WHY CULT BRANDING WORKS?
 Cult brands aren’t just companies with products/ services to
sell.
 To many other followers, they are a living, breathing
surrogate family filled like minded individuals.
 They are a support group that just happens to sell products/
services.

10. WHAT MAKES A GREAT CULT BRAND?
There are seven rules:
Rule – 1
 Consumers want to be part of a group that is different.
Rule – 2
 Cult brand inventors show daring & determination.
Rule – 3
 Cult brands sell lifestyles.
Rule – 4
 Listen & create cult brand evangelists.
Rule – 5
 Cult brands always create customer communities.
Rule – 6
 Cult brands are inclusive.
Rule – 7
 Cult brands promote personal freedom & draw power from
from their enemies.