LINE & BRAND EXTENSIONS

LINE EXTENSIONSThe product line is now far more

representative of customers’ varying quantity needs.

It suggests the presence of usage segmentation.

Customers differs in terms of their usage quantities.

The brand has to fill the whole spectrum with products as per the needs of various segments.

Example Bisleri is the pioneering brand in the

mineral water category.Originally, Bisleri used to come in a one

litre bottle.But recently, Bisleri has exhibited a spate

of innovations.The brand launched bottles of different

sizes and quantities. The Bisleri portfolio now includes one litre,

1.2 litre, 1.5 litre and 5 litre bottles.

Line Extension strategies

Product SizesBisleri 1.1 ltr

Bisleri5 ltr

Bisleri1.5 ltr

Bisleri1.2 ltr

Bisleri.5 ltr

Colour Etc.,PantenePink

PanteneBlack

PanteneWhite

Flavours

Ingredient

Rasna Orange

Rasna Mango

Rasa Rose , etc

Colgategel

ColgateHerbal

ColgateSalt etc.,

Form

Vim Liquid

VimPowder

VimBar

According to Gautam Singhania, Chairman and Managing Director, Raymond India: "Raymond aims to acquire a dominant position in the apparel sector in the country.

We believe that venturing into exclusive stores for our apparel brands will make our brands stronger and give the right impetus to our growth plans.

We have enhanced our offerings under all our apparel brands to provide a complete wardrobe solution."

"Men today want different solutions for different occasions - formalwear, relaxed work wear, evening wear, club wear, traditional wear, travel wear as well as sportswear.

Our brands Park Avenue, Parx and Manzoni, have different categories to cater to this need.

Thus, all our brands offer a solution to changing men's fashion needs at different price points," says Shreyas Joshi, President, Raymond Apparel.

Why Line Extensions?In most of the product categories including

fast moving consumer goods, consumer durables and services, line extension has been the name of the game.

It is an expansionist move.The firms seem to seek growth more

vigorously.

Nine prominent reasons………Customer SegmentationCustomer need for varietyPricing BreadthCapacity UtilizationQuick gainsCompetitive ReasonsTrade DemandsCounter CompetitionImage Benefits

Line Extension RisksThere are several dangers associated with

line extensions.Line Confusion - Marketers sometimes

add products to their line without sound logic and reasoning, without any clear role and goal. This may confuse the customers and the retailers and will affect the brand’s owner company in the long run.

Line Extension Risks…Encourage Variety seeking – Brand

loyalty is every marketers dream. By line extension, customers practice and become the habitant of variety seeking. Hence it influence brand switching behaviours. The loyalty is thus weakened.

Line Extension Risks…Success Myopia – An idea may be a grand

enough to be converted into a full-fledged independent brand. But the lure of extension seems to be so strong that the ideas are brought into the market as line extensions. This implies loss of a winning asset in the long-term.

Line Extension Risks…Strained relations - When the lines

expand, marketers tend to pressurize their trade partners such as wholesalers and retailers to carry the complete line in accordance with their wishes. The pressure appears to be applied more intensely at the retail level. The marketers seek adequate shelf space, promotion and information. But at the retailers end, it brings confusion and chaos.

The result is the strained relations between the marketer and the retailer.

Line Extension TrapWhy do firms jump on to line extension

bandwagon?When customers prefer a brand, they

would be just as willing to buy a different product carrying the same name.

What appears to be logical to the managers performing these adventures tends to be illogical in the perception of customers.

This is the reason why line extensions do not create mega successes.

Line Extension Trap…….Line extensions do not work because they

tend to go against the fundamental aspect of positioning.

The core brand holds a strong position inside the prospect’s mind.

Line extensions tend to educate customers that product and brand are two different things.

It is a fallacy that a brand is just a name that can be put on any product.

This is a great mistake. It undermines and destroys the brand in a prospect’s mind.

BRAND EXTENSIONS

Using an existing brand name to promote a product in a different category, is Brand Extension.

The key difference between line and brand extension is the product category.

In line extension the pdt. Category remains constant whereas in brand extensions product category is a variable.

EXAMPLEPonds - Cold cream, Toilet soap Shampoo,

Tooth paste, Moisturising lotion, Talc & Face wash.

LG – Television, Refridgerators, Computer monitors, Microwaves, Air Conditioners, Washing Machines & Mobile phones.

Park Avenue – Shirts, Shaving cream, Jeans, Belts, Perfumes, Soap & Razar.

Why Brand Extension?Cost of New launchesPromotional EfficiencyConsumer BenefitsFeedback effectsReturns

Types of ExtensionsProduct form extension – A product

launched in a different form usually means line extension, but if a different product form constitutes an entirely different product category.

Example:Amul milk Amul Condensed milkReal Juices Real Juice Concentrate

Types of Extensions

Companion Product – The idea here is to capitalise 0n product complementarity. The consumer may view both the products jointly.

Example :

Colgate Dental Cream

Colgate Tooth Brush

Gillette Razors

Gillette Shave forms

Gillette After Shave

Customer FranchiseA marketer may extend a product range in

order to meet the needs of a specific customer group.

J & JBaby Talc

J & JBaby

Oil

J & JBaby Cream

J & JBaby

Shampoo

J & JBaby

Diapers

Company ExpertiseBrand Extensions often come in the forms

of different product category introductions using a common name but emanating from a common expertise pool. This strategy is particularly seen in Japanese companies.

Honda Cars

Honda Lawn

movers

Honda scooters

Brand Distinction

Many brands achieve distinction in the form of a unique attribute, benefit or feature which gets uniquely associated with the brand.

For instance, Parachute may have expertise of ‘coconut nourishment’ in customers’ minds over time. This would give Marico Industries, the brand owner, the opportunity to launch a variety of products exploiting this distinction.

Parachute

HairOil

Shampoo Cream Cooking Oil

Baby Soap

Baby Oil

Brand Image or PrestigeA brand extension may involve a foray into

unrelated product categories based on a brand’s exclusive image or prestige value.

Steel, Automobile, Heavy Vehicles, Watches, S/W devpt. Training etc.,

Distinctive Taste, Ingredient or ComponentA brand may develop equity based on any

and / or combination of taste, ingredient or component. Then the marketers can make entries into unrelated product categories capitalising on these properties.

NescafeCoffee

NescafeChocolate

NescafeBiscuits

NescafeMilk

Supplement

NescafeCold

Coffee

Brand Extentability

Extensions involve transfer of associations from the parent brand to the extension.

The brand extendability depends on its character.

The brands can be classified into 5 types through extendability.

Five forms of brandsThe Product Brand - it is a situation where

there is very little difference between the brand and the product.

The brand is used as an identity of the product.

Example : vicks,

Form 2 – Formula BrandFormula means a set procedureA brand which comes in the formula

category simply implies that a standard procedure has been used to make the product.

Example : cooking oil, pickles etc.,

Form 3 – Know – how brandKnow – how is an expertise that a firm

develops in a specialized area of activity.

Example : nokia is known for user friendly.Amul has developed its brand as an

expertise in milk processing.

Form 4 – Interest brandA brand may be defined by its centre of

interest. It may reflect its core spirit.Example – Gillette maintains its focus on

men’s grooming in all its brands.Logo is ‘the best a man can get’ which

creates the interest among the target audience.

Whirlpool – home makerNike – winning – to be on the cutting edge.

Form 5 - PhilosophyThe brand at this level acquires more

intangible character and orientation.The philosophy transforms its products in a

realm altogether different from its physical reality.

Example : Parker pen, De beers diamond

Product Brand

Pillsburry Atta

Formula Brands

Mother’s Recipes

Pickles lime, mango, mixed

Know –how

brand

Bajaj

Irons, Fans, coolers,

mixers etc.,

InterestBrand

Disney

Toys, Theatre,

Theme park, movies, etc

PhilosophyBrand

Cartier

Watches, jewellery, Bags, pens

Forms of brand extendability

Extensions……………….Extensions are not simple as they appear

to a layman.Consumers reject extensions when they do

not make sense.Brand extension is not a physical act of

merging two products.It is a tough process involving marrying two

cognitive or perceptual concepts in order to create a consistent entity.

Therefore, it must begin with exploring the brand in a prospect’s mind.

Exploring the brand involves seeking answers to the following questions…….

What is a brand’s awareness level?What are its recall and recognition levels?What are different attributes associated with a

brand?What benefit associations are connected with a

brand?What are a brand’s personality associations?What are the symbols associated with the

brand?What are a brand’s user associations?What is the perceived essence of the brand?What is a brand’s philosophy?

Strength of Associations - PondsPONDS

TalcFeminine Floral

Body care

Cream

-Body Talc-Talc for Special occasions

Nail enamels

Lip coloursetc

Room Freshner,

soaps,Fragrance, shampoo,

etc

Body lotion,

Body oil, creams

Beauty cream,Conditioning

cream,cleansing cream, etc

Making an Extension successfulAaker & Keller proposed certain assumptions about

consumer behaviour which are fundamentally responsible for the success of a brand extension.

The parent brand enjoys positive beliefs and favourable attitude in customers memory.

It is these pre-existing beliefs and attitudes which help in the formation of positive beliefs and favourable attitude toward the brand extension.

The negative associations are not transferred to the brand extensions, also these are not created by the brand extension.

Questions for AssignmentHighlight atleast five brands of various

product category and find out the extension opportunities of those brands.

Find out which brand can be extended far from its present product, and which can move just above the extension boundary.