The document discusses the benefits and risks of a "House of Brands" strategy where a company extends its existing brands into new product categories. The key benefits are improved brand image and reputation, reduced perceived risk for consumers, higher acceptance and trial rates of new products, and cost savings through economies of scale in marketing. However, the risks include retailer resistance if extensions do not sell well, potentially confusing customers, hurting the parent brand image if an extension fails, and diluting the brand meaning if extensions are in unrelated categories. The document advocates carefully planning brand extensions with due diligence to realize the benefits while mitigating risks of failure or overexploiting the brand.

6. House OF Brands

8. Branded House

9. Improved Image
• Consumers build
perceptions
• Likely to expect same
performance
Reduced Risk
• Less perceived risk
with a known brand
family
• Credibility through
experience
Higher Acceptance
• Higher probability of
trial and distribution
• Brand Reputation a
key selection criterion
in supermarkets

10. Higher Promotional
Efficiency
• Ad-to-Sales ratio 10% for
extension as compared to
19% for new Brand
• Awareness of brand not
required; efforts concentrate
on product
Packaging and labeling
efficiencies
• Create a billboard effect
• Cost saved by using similar
designs effectively
Introductory and follow-
up efforts reduced
• Brands can save upto 30-
40% of launch cost
• Association with multiple
brands allows for less follow-
up efforts

11. Increased Market
• New customers in
Brand Franchise
• Diversified revenue
sources
Revitalized Brand
• Extensions renew
interest in a brand
• Spillover Effects help
mature products to
earn more
Easy Extensions
• A Branded House
philosophy helps in
easy future extensions
• Higher recognition and
acceptance

13. • Suitability issues with related extensions
• New extensions may not get shelf space
Confused
Customers
• Only top-selling brands preferred
• Might require additional shelf cost
Retailer
Resistance
• Extension might prove to be a failure
• Immediate effect on the parent brand
Hurt Parent
Brand Image

14. • The extension might be a success
• Overlap of customers may lead to cannibalisation
Cannibalize
Parent Sales
• The extension may be a success in a non-related industry
• Might weaken the belongingness with original industry
Diminish
Identification
• Premium image in one industry
• The extension might be low end product and dilute brand
Dilute Brand
Meaning

20. Brand Extension
with due
diligence and
thought-out
action plan
Failure due to
over
exploitation of
brand
extension

21. • Created by Shubham Vijay during Brand Management course under
the guidance of Prof. Sameer Mathur (IIM Lucknow)