(MBASklls.IN) Managing Brand Extensions
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These slides are prepared by Prof. Sameer Mathur, IIM Lucknow.
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(MBASklls.IN) Managing Brand Extensions
- 2. Contents i) A definition of a Brand Extension ii) Why bother studying Brand Extensions? iii) A Classification of Brand Extensions iv) 4 types of Category Extensions v) Benefits of Brand Extensions vi) How consumers evaluate Brand Extensions 2© Sameer Mathur
- 3. Sameer Mathur MBASkills.IN Marketing Professor 2009 – 2013 Ph.D. and M.S. (Marketing) 2003 – 2009 Marketing Professor 2013 – Indian Institute of Management, Lucknow 3© Sameer Mathur
- 4. Brands are Assets Brands are Assets Know when to protect and defend Know when to extend and exploit 4© Sameer Mathur
- 5. © Sameer Mathur 5 Let’s begin with a simple definition.. http://www.BuddingMarkets.com
- 6. 6 Brand Extension - Definition Using the leverage of a well- known brand name to launch a new brand 6© Sameer Mathur
- 7. ? ? ? New Product Product Category Existing New Existing New Brand Name New Products and Brand Extensions 7© Sameer Mathur
- 8. © Sameer Mathur 8 Why bother studying Brand Extensions? http://www.BuddingMarkets.com
- 9. 81% of new products launched in the US in the 1990s were Brand Extensions Motivation 9© Sameer Mathur
- 10. © Sameer Mathur 10 How could we classify Brand Extensions? http://www.BuddingMarkets.com
- 11. Classification Line Extension Extension within the same category Category Extension Extension in a different category 11© Sameer Mathur
- 12. Line Extension 19821886 (Within the Same Category) 12© Sameer Mathur
- 13. 20021957 (In A Different Category) Category Extension 13© Sameer Mathur
- 14. © Sameer Mathur 14 4 Types of Category Extensions http://www.BuddingMarkets.com
- 15. Category Extension #1 Complementary products “Brand Extensions: The Good, the Bad, and the Ugly” David Aaker 1990 15
- 16. Category Extension #2 Complementary product New form “Brand Extensions: The Good, the Bad, and the Ugly” David Aaker 1990 16
- 17. Category Extension #3 Complementary product New form Same target segment “Brand Extensions: The Good, the Bad, and the Ugly” David Aaker 1990 17
- 18. Category Extension #4 Complementary product New form Same target segment Same corporate expertise “Brand Extensions: The Good, the Bad, and the Ugly” David Aaker 1990 Expertise in cheap plastic 18
- 19. © Sameer Mathur 19 Recap: Classifying Brand Extensions http://www.BuddingMarkets.com
- 20. ? ? ? New Product Product Category Existing New Existing New Brand Name 20© Sameer Mathur
- 21. Line Extension Category Extension Flanker Brand New Product Product Category Existing New Existing New Brand Name 21© Sameer Mathur
- 22. © Sameer Mathur 22 Why Do It? What are the two biggest reasons firms extend brands? http://www.BuddingMarkets.com
- 23. Why Brand Extensions? Mitigate Risks and Cost Risks Over 90% of New Products Fail Cost Introducing a New Product is very Expensive 23© Sameer Mathur
- 24. © Sameer Mathur 24 Benefits Of Doing It.. http://www.BuddingMarkets.com
- 25. Benefits Consumers Signal Superior Quality Increases Likelihood of New Product Trial Brand Extensions Benefit all Supply-Chain Members 25© Sameer Mathur
- 26. Benefits Retailers Increases their willingness to stock new products Brand Extensions Benefit all Supply-Chain Members 26© Sameer Mathur
- 27. Benefits Manufacturers Reduces Promotional Expenses Brand Extensions Benefit all Supply-Chain Members 27© Sameer Mathur
- 28. © Sameer Mathur 28 3 More Benefits Of Doing It.. http://www.BuddingMarkets.com
- 29. More Benefits… Brand Associations “The Mentos brand is associated with good breathe mints, therefore Mentos should also make good gum” 29© Sameer Mathur
- 30. More Benefits… Brand Awareness “I recognize the Cadbury brand, therefore these raisins must be good” 30© Sameer Mathur
- 31. More Benefits… Enhance Core Brand “I see Crest also makes good white- strips, therefore their reputation for oral hygiene is now stronger in my mind” 31© Sameer Mathur
- 32. © Sameer Mathur 32 2 points on how Consumers evaluate Brand Extensions http://www.BuddingMarkets.com
- 33. Consumers Perception of Fit between the Parent Brand and the Extension How Do Consumers Evaluate Brand Extensions? Consumer State of Mind 33© Sameer Mathur
- 34. Perception of Fit Good Fit Bad Fit 34© Sameer Mathur
- 35. 35 State of Mind “Is Starbucks Ice-cream a good idea?” More skeptical of brand extensions “A Mind for Brand Extensions” Larry Yu 2008 MIT “Abstract” State of Mind 35
- 36. 36 State of Mind “Concrete” State of Mind “A Mind for Brand Extensions” Larry Yu 2008 MIT “Will I buy “Starbucks Ice- cream”? Often prefer brand extension to store brand 36
- 37. Summary i) A definition of a Brand Extension ii) Why bother studying Brand Extensions? iii) A Classification of Brand Extensions iv) 4 types of Category Extensions v) Benefits of Brand Extensions vi) How consumers evaluate Brand Extensions 37© Sameer Mathur
- 38. Sameer Mathur MBASkills.IN Marketing Professor 2009 – 2013 Ph.D. and M.S. (Marketing) 2003 – 2009 Marketing Professor 2013 – Indian Institute of Management, Lucknow 38© Sameer Mathur