Brand and Line extensions

1

Brand Explosion Brand Consolidation Brand variants

2

Brand Extensions: How does a firm grow?A

firm can:Focus on current products and markets Market

penetration strategy development strategy development strategy strategy

Put existing products into new markets Market

Put new products into existing markets Product

Put new products into new markets Diversification

Brand Extensions Brand

extension

Involves using an existing brand name to launch a product in a different category.

Category

extension

Parent brand is used to enter a different product category from that currently served by the parent brand Swiss

army watches, Porsche bicycles

Ponds

LG

Park Avenue

Line Extensions Line

extension

Parent brand is used to brand a new product that targets a new market segment within a product category currently served by the parent brand H&S

dry scalp shampoo

Line

extension

Involves making entries in brands exiting product category by using same brand name. These entries can come in the form of varying product sizes, flavors, colors, and ingredients and forms

Advantages of Extensions

Reduce risk perceived by customers & distributors Decrease cost of gaining distribution & trial Increase efficiency of promotional expenditures Avoid cost (and risk) of developing new names Allow for packaging and labeling efficiencies Variety-seeking

Advantages of Extensions

Enhance the parent brand image

Improve strength, favorability, and uniqueness of brand associations Improve perceptions of company credibility

Convey broader brand meaning to consumers

Clarify core benefit proposition and business definition of the company

Bring new customers into the franchise and increase market coverage

Disadvantages of Extensions

Extensions have risks, too.

They can fail.

Moreover, extensions can potentially result in the following costs: Cannibalize sales of the parent brand Hurt the image of the parent brand Forego the chance to develop a new brand name or market the parent brand differently (opportunity cost)

Brand Extension Assumptions

Consumers have some awareness of and positive associations about the brand in memory Some of these positive associations are evoked by the brand extension Negative associations are not transferred from the parent brand Negative associations are not created by the brand extension

Product Form Extension

Amul Milk

Amul Condensed Milk

Real Juices

Real Juice Concentrate

Companion Product

Colgate Dental Cream

Colgate Tooth Brush

Gillette Razors

Gillette Shave Foam

Gillette After Shave

Customer Franchise

J&J Baby Shampoo

J&J Baby Talc

J&J Baby Oil

J&J Baby Diapers

Company Expertise

Honda Cars

Honda Gensets

Honda Scooters

Lawnmovers

Honda

Types of Brand Extensions Brand Distinction

Parachute Coconut Expertise

Parachute Hair Oil

Parachute Shampoo

Parachute Cream

Parachute Cooking Oil*

*hypothetical

Types of Brand Extensions Distinctive Taste, Ingredient or Component

Cartier Jewellery

Cartier Watches

Cartier Purses

Cartier Pens

The Product Brand Formula Brand Know-how Brand Interest Brand Philosophy

Brand ExtendibilityProduct BrandIt 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 customers point of view 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 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

Formula Brand Know-how Brand Interest Brand Philosophy

Its the centre of interest or the core spirit of the brand. Gillette brand maintains its focus on mens grooming in all its brands. Nikes focal point is winning. Whirlpools centre of interest is the home (homemaker) 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 Armanis creatively styled products

Extendibility of a BrandPhilosophy Brand CartierWatches

Jewellery Bags Pens Movies Theme Parks Music Clothes Accessories Games Mixers Toasters

Interest Brand Toys Theatre Disney (Entertainment) Know-how Brand Bajaj (Electronics) Formula Brand Mothers Recipes Product Brand Rose BrandOTG

Irons Fans Pickles Lemon

Coolers Pickles Mango Pickles Mixed

Flour

Product dissimilarity

Brand ExtendibilityAmul Symbol Personality: Amul Expertise In milk processing: Amul Milk Type I II IIIMilk, Ghee, Butter, Condensed Milk Lovable Indianness Taste Fun Trustworthy Value Good Ice Cream Cheese Mil Additive Chocoloate

Amulishness Drinks? Energy Bar? Energy Tabs? Mil Cakes? Biscuits?

Amul Milk

Time / Brands

Product Brand

Formula/ Recipe

Expertise/ Know-how

Evolution

Interest

Philosophy

Brands identifies the product

Products are manifestations of Brand