There are many factors that influence the success of new products. Understanding how consumers view a company's brand is often the most important factor. Companies have two options when branding new products - launch under an existing parent brand or create a new brand. Launching under a parent brand can provide benefits but risks diluting the parent brand. Consumer research is key to understanding brand associations and whether consumers will accept a brand in a new product category. Getting this right is important to the success of a new product launch.

1. NEW PRODUCT
BRANDING

2. What is a brand ?
Branding is a combined effort of the company which is projected to
the consumer.
Company
Brand
Consumer
Marketing
Design

3. THERE ARE MANY FACTORS THAT
INFLUENCE THE SUCCESS OF A NEW
PRODUCT.
• Does the product fill a compelling need?
• Is it unique?
• Is it designed, formulated, priced, packaged, distributed and promoted
effectively?
• Any of these considerations can make or break a new product launch.
• With all of these potential pitfalls, it’s not surprising that at least 40% of all
new products will fail within two years of their launch.

4. • If all of this isn’t challenging enough, there is one other
consideration that is often overlooked: the role of your
brand. Many experts agree that understanding how
consumers view your brand can often be the most
important factor influencing new product success.

5. STRATEGIC ALTERNATIVES
• Companies have two major alternatives when branding new products.
• The first is to launch the new product under an existing parent brand.
• This alternative can reduce the consumer’s perception of risk, helps gain
distribution, increases the efficiency of promotional programs and reduces
the cost of marketing programs.

7. • Yet, the second alternative, developing a new brand, may be the bigger
opportunity in the long-run.
• Over extending a parent brand can confuse consumers, dilute the meaning
of the brand and can even hurt the image of the parent brand.
• Virgin is a good example of a brand that has been extended in so many
directions (Airlines, Colas, Music Stores, Mobile Phones, etc.) that the brand
meaning has been significantly diluted.

9. • Sub-branding (also known as mixed branding) is a hybrid of the two
alternatives discussed above.
• Nabisco is a parent brand that serves as an umbrella with sub-brands such
as Ritz, Snack-Wells and Oreos.
• Sub- branding can offer the benefits of leveraging a parent brand while
establishing a new brand that can provide much success over the long run.
• But companies must be careful with sub-branding. Sub-branding can still
dilute the meaning of the parent brand and can be confusing to consumers.

11. IT STARTS WITH THE CONSUMER
• The first step in understanding how your brand will impact the success of a
new product is to become familiar with how consumers view the brand.
• Understanding your brand is all about knowing what associations, both
positive and negative, consumers link to your brand.
• These associations can include things like quality, value, innovation and
reliability.
• But brands can also be very strongly associated with specific product
categories. Because of these category associations, consumers can either
grant or deny permission for a brand to enter new product arenas.

12. • It’s important to remember that the consumers’ view of your
brand may not be the same as your company’s view.
• In the early 1980’s Levi Straus wanted to get into the market for
dressier clothing. Their entry was called Levi’s Tailored Classics
and offered men nice, off-the-rack suites. They knew that the
Levi brand would be critical to the success of their new
offering and concluded that their brand stood for quality
clothing – a good fit with the new product line. But the Levi
name was so strongly associated with blue jeans that the
product failed. The company underestimated the importance
of that one key brand association.

13. A FORMULA FOR SUCCESS
• Understanding where the consumer will give the brand permission to go is
critically important.
• Is the brand strongly associated with a particular product category? If so, be
sure you are clear about exactly what the product category is.
• For example, do consumers think of Campbell’s as a canned foods brand or
a soup brand? Given the failure of canned spaghetti sauce and canned
tomato sauce launched under the Campbell’s brand, it seems that
consumers think of Campbell’s as a soup brand. The recent success of
Campbell’s Soup at Hand (a ready-to-eat, microwavable soup) would tend
to support this conclusion.

15. • Companies must also understand whether or not core brand
associations help strengthen the new product.
• A brand like Alka-Seltzer had many positive associations when
they were considering line extensions in the 1960s. One of Alka-
Seltzer’s key brand associations was relieving an upset stomach.
So when the company launched Alka-Seltzer Plus (a cold
remedy), consumers were confused. What does a cold medicine
have to do with upset stomach relief? In response to this
confusion, the label has changed over the years. The word Alka-
Seltzer has gotten smaller and smaller while the word Plus has
gotten larger.

17. IMPACT OF AWARENESS
• Launching a new product under a well known parent brand can
generate consumer awareness with much less money. Given the
high cost of establishing new consumer brands, this can be a big
benefit. By launching new products under an established parent
brand, the cost of marketing programs can be reduced by 40%
to 80%. But, remember, high awareness won’t be helpful unless
the parent brand has the right associations.

18. • Many years ago, when Kimberly Clark first entered the
disposable diaper market, they named their product Kleenex
Diapers. But since the Kleenex brand was so closely associated
with the facial tissue category, the product was a flop. The high
awareness of the Kleenex brand didn’t do the trick. When they
re-launched the product under the Huggies name, it was a big
success.

20. USING RESEARCH
• So how do companies understand these critical brand associations before
making new product branding decisions? Not surprisingly, the best way to
understand consumers’ is through consumer research. Many companies
conduct on-going brand tracking and brand equity studies.
• When information doesn’t exist or when you need information that is more
specific to your new product launch, qualitative research is a good place to
start. By talking to your consumers in focus groups, in-depth interviews and so
forth, it is possible to develop a good sense of how consumers view your
brands

21. • . Qualitative research can help you develop a very useful sense of your
brand’s image and associations. Qualitative research can also give you
an opportunity to explore consumers’ reactions to your new products and
can help you optimize your offering.
• Quantitative research may be an appropriate next step – especially if your
new product launch involves large amounts of money and risk.
Quantitative research can help you validate findings from qualitative
research and attaches specific, projectable numbers to your findings.
• Regardless of the research approach that you select, it is important to
remember that you should always view your brand from the consumer’s
point of view. With that perspective, your new products are one giant step
closer to a successful launch.