This document discusses brand extensions, including definitions of a brand and brand extension. It provides examples of line extensions (new products within a category) and category extensions (new categories). The benefits of brand extensions are increased new product acceptance and promotional efficiency. However, risks include confusing consumers or damaging the parent brand. Brand extensions are most appropriate when the extension connects to and reinforces the parent brand's equity. The document also covers evaluating brand extension opportunities and reasons why new products fail.

1. BRANDEXTENSIONS
OMER MAROOF
MBA 4TH
SEMESTER
EN.ROLL: 110130

2. What Is A “Brand”
• Brand is a name, term, sign, symbol, design, or a
combination of them, intended to identify the goods
or services of one seller or group of sellers and to
differentiate them from those of competitors.
• 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”.

3. How does a firm grow?
• Ansoff’s Growth Share Matrix

4. Line
Extension
Brand
Extension
Multi
Brands
New Brands
Existing New
ExistingNew
Brand
Name
Product
Cont……Cont……

5. • The three choices of a firm when they are
introducing a new product
– New brand for new product
– Use of existing brand for the new product
– Combination of the new brand with the existing
brand
– (Second and the third options are related to brand
extension)
Introduction of new products

6. • 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 called a sub-brand.
• 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.
BRAND EXTENSIONS

7. Reseach finding in favour of BE
• 30% new brands survive longer than 4-
years.50% Brand extensions survive the same
period.
• Trial rate of BEs is 23% higher.
• Conversion rate is 17% vs. 13% for new
brands
•
• Loyality rate is 61% higher.

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.
• Eg: Head & Shoulders

9. Head
&
Shoulder’s
Extension
Coke’s Line ExtensionCoke’s Line Extension

11. CATEGORY EXTENSION
• The parent brand is used to enter a different
product category from that currently served
by the parent brand.
• Eg: ITC

13. Strategies For Establishing a Category
• Introduce the same product in a different form
• Introduce product that contain the brand’s distinctive
taste, ingredient or component.
• Introduce companion product for the brand.
• Introduce products relevant to the customer franchise
of the brand.
• Introduce products that capitalize on the firm’s
perceived expertise.
• Introduce products that reflect the brands distinctive
benefit, attribute or feature.
• Introduce products that capitalize on distinctive
image or prestige of the brand.

14. Product Form Extension
Amul Milk
Amul
Condensed Milk
Real Juices Real
Juice Concentrate

15. Image-related extension
Colgate Dental
Cream
Colgate Tooth
Brush
Gillette Razors Gillette
Shave Foam
Gillette After
Shave

16. Customer Franchise
J & J
Baby
Shampoo
J & J
Baby
Talc
J & J
Baby
Oil
J & J
Baby
Diapers

17. Unrelated extension
Honda
Cars
Honda
Gensets
Honda
Scooters
Honda
Lawnmovers

18. Brand Extendibility
Product Brand It is a situation where there is very little difference between the brand and the product.
Brand is a close approximation of the product. Passively, the brand is used to identify
the product, maybe for internal purposes. The brand does not play any role from the
customer’s point of view
Formula Brand Formula means a set procedure (used to make the product). This type of brand may be
find in categories like cooking oil, food, and pickles
Know-how
Brand
Know-how is an expertise that a firm develops in a specialized area of activity. Sony is
know to have expertise in miniaturization and robotics. Honda has know-how in
engines. Amul has developed expertise in milk processing
Interest Brand It’s the centre of interest or the core spirit of the brand. Gillette brand maintains its
focus on men’s grooming in all its brands. Nike’s focal point is winning. Whirlpool’s
centre of interest is the home (‘homemaker’)
Philosophy The brand at this level acquires more intangible character and orientation. This
generally happens in case of designers and artists. The Armani signature on the
product provides a higher philosophical meaning – a meaning proudly expresses in
Armani’s creatively styled products

19. Product dissimilarity
Philosophy Brand
Cartier
Interest Brand
Disney (Entertainment)
Know-how Brand
Bajaj (Electronics)
Formula Brand
Mother’s Recipes
Product Brand
Rose Brand Flour
Pickles
Lemon
Pickles
Mango
Pickles
Mixed
OTG
Irons
Fans
Coolers
Mixers
Toasters
Toys
Theatre
Movies
Theme
Parks
Music
Clothes
Acces-
sories
Games
Watches
Jewellery
Bags
Pens
Extendibility of a Brand

20. Advantages Of Brand Extensions
• Facilitate New Product Acceptance
– Improve brand image
– Reduce risk perceived by Customers
– Permit consume variety-seeking

21. Advantages Of Brand Extensions
• 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

22. 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 brand franchise and
increase market coverage
– Revitalize the brand
– Permit subsequent extensions

23. Disadvantages Of Brand Extensions
• Can confuse or frustrate consumers
• Can encounter retailer resistance
• 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
•

24. Disadvantages Of Brand Extensions
• Can succeed but diminish identification with
any one category
• Can succeed but hurt the image of parent
brand
• Can dilute brand meaning
• Can cause the company to forgo the chance to
develop a new brand

25. When are Brand Extensions Appropriate?
• 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.

26. Reasons For Product Failure
• Products Showcase and Learning Center in
Ithaca, New
• York identifies this.
– The market was too small (insufficient demand
for type of product).
– The product was a poor match for the company.
– The product was justified on inadequate or
inaccurate marketing research, or the company
ignore research result.
– The company was too early or too late in
researching the market.
– The product provided insufficient return on
investment.

27. Reasons For Product Failure
• The product was not new or different (a poor
idea that really offered nothing new).
• The Product did not go hand in hand with
familiarity.
• Credibility was not confirmed on delivery
• Consumers could not recognize the product

28. Conditions For Evaluating Consumer’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

29. Evaluating Brand Extension Opportunities
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