Brand Extension Pbm

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LINE & BRAND EXTENSIONS



Leveraging Brand Equity

One of the most importantchanges in the market is theproliferation of extensions.



Managerial Questions

When considering entering a new productcategory, two important questions:

1. Should the firm use a brand extensionstrategy or a new brand strategy?

2. If the firm chooses to use a brandextension strategy, under what conditionswill extensions be successful in capturingsufficient market share?



Why Extensions?

Managers use extension strategies underthe assumption that brand associations(e.g., quality, reliability, status) and affect(attitudes) will transfer to the extension.



Line Extension Strategy

When a brand is used to brand a new product

that targets a new market segment within aproduct category currently served by the parentbrand.

Examples:

Coca-Cola diet Colgate for Kids

Watt´s pear juice



Example

Bisleri is the pioneering brand in themineral 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 Sizes

Bisleri1.1 ltr

Bisleri5 ltr

Bisleri1.5 ltr

Bisleri1.2 ltr

Bisleri.5 ltr



Colour Etc.,Pantene

Pink

Pantene

Black

Pantene

White

Flavours

Ingredient

RasnaOrange

RasnaMango

Rasa Rose ,etc

Colgategel

ColgateHerbal

ColgateSalt etc.,



Form

VimLiquid

VimPowder

Vim

Bar



According to Gautam Singhania,Chairman and Managing Director,

Raymond India: "Raymond aims toacquire a dominant position in theapparel sector in the country.

We believe that venturing into exclusivestores for our apparel brands will makeour brands stronger and give the rightimpetus to our growth plans.

We have enhanced our offerings underall our apparel brands to provide acomplete wardrobe solution."



"Men today want different solutionsfor different occasions - formalwear,

relaxed work wear, evening wear,club wear, traditional wear, travelwear as well as sportswear.

Our brands Park Avenue, Parx and

Manzoni, have different categories tocater to this need.

Thus, all our brands offer a solution tochanging men's fashion needs atdifferent price points," says ShreyasJoshi, President, Raymond Apparel.



Why Line Extensions?

In most of the product categoriesincluding fast moving consumergoods, consumer durables andservices, line extension has been thename of the game.

It is an expansionist move.

The firms seem to seek growth morevigorously.



Nine prominent reasons……… Customer Segmentation Customer need for variety

Pricing Breadth

Capacity Utilization Quick gains

Competitive Reasons

Trade Demands

Counter Competition

Image Benefits



Line Extension Risks

There are several dangers associatedwith line extensions.

Line Confusion - Marketers

sometimes add products to their linewithout sound logic and reasoning,without any clear role and goal. Thismay confuse the customers and theretailers and will affect the brand’s owner company in the long run.



Line Extension Risks…

Encourage Variety seeking – Brand loyalty is every marketersdream. By line extension, customerspractice and become the habitant of variety seeking. Hence it influencebrand switching behaviours. The

loyalty is thus weakened.




Success Myopia – An idea may be agrand enough to be converted into afull-fledged independent brand. Butthe lure of extension seems to be sostrong that the ideas are brought intothe market as line extensions. This

implies loss of a winning asset in thelong-term.




Strained relations - When the linesexpand, marketers tend to pressurize theirtrade partners such as wholesalers andretailers to carry the complete line in

accordance with their wishes. The pressureappears to be applied more intensely at theretail level. The marketers seek adequateshelf space, promotion and information. Butat the retailers end, it brings confusion and

chaos. The result is the strained relations

between the marketer and the retailer.



Effort to use a successful brand name to

introduce a new product into a

different product category.

Examples:

Nike MP4 player

Colgate toothbrush

Sony digital camera

Brand Category Extension Strategy



BRAND EXTENSIONS

Using an existing brand name to promote aproduct in a different category, is BrandExtension.

The key difference between line and brandextension is the product category.

In line extension the pdt. Category remainsconstant whereas in brand extensions

product category is a variable.



EXAMPLE

Ponds - Cold cream, Toilet soapShampoo, Tooth paste, Moisturisinglotion, Talc & Face wash.

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

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



Sub-Branding Strategy

Using a new brand name in conjunctionwith a family brand name to introduce

new products.

Examples:

Courtyard by Marriott Technics by Panasonic Levi’s Dockers Milo de Nestle



Co-Branding/Brand Alliance Strategies

When two or more brand names are

attached to a product.

Examples:

Compaq - Intel (“Intel inside”)

Lan Chile-Mastercard-Banco Stgo



Example of Strategies

Parent Brand: Salomon (ski-equipment)

Line Extension: New type of skis

Brand (Category) Extension: Salomon tennisracquet

Sub-Brand: Avenger by Salomon

Co-Brand: ingredient brand for grip, frame, or

strings (Wilson and Goodyear rubber on soles of ProStaff Classic tennis shoes)



Why Brand Extension?

Cost of New launches

Promotional Efficiency

Consumer Benefits Feedback effects

Returns



Types of Extensions

Product form extension – A productlaunched in a different form usuallymeans line extension, but if adifferent product form constitutes anentirely different product category.

Example:

Amul milk Amul Condensed milk Real Juices Real Juice Concentrate



Types of Extensions

Companion Product – The idea here isto capitalise 0n productcomplementarity. The consumer mayview both the products jointly.

Example :

Colgate Dental

Cream

Colgate

Tooth Brush

GilletteRazors

GilletteShave forms

GilletteAfter Shave



Customer Franchise

A marketer may extend a productrange in order to meet the needs of aspecific customer group.

J & J

BabyTalc

J & JBaby

Oil

J & JBabyCream

J & JBaby

Shampoo

J & JBaby

Diapers



Company Expertise

Brand Extensions often come in the formsof different product category introductionsusing a common name but emanating from

a common expertise pool. This strategy isparticularly seen in Japanese companies.

HondaCars

Honda

Lawnmovers

Hondascooters



Brand Distinction

Many brands achieve distinction in the form of aunique attribute, benefit or feature which getsuniquely associated with the brand.

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

Parachute

HairOil

Shampoo CreamCooking

OilBabySoap

BabyOil



Brand Image or Prestige

A brand extension may involve aforay into unrelated productcategories based on a brand’s

exclusive image or prestige value.

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



Distinctive Taste, Ingredient orComponent

A brand may develop equity based on anyand / or combination of taste, ingredient orcomponent. Then the marketers can make

entries into unrelated product categoriescapitalising on these properties.

NescafeCoffee NescafeChocolate NescafeBiscuits

Nescafe

MilkSupplement

Nescafe

ColdCoffee



Brand Extentability



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

The brand extendability depends onits character.

The brands can be classified into 5

types through extendability.



Five forms of brands

The Product Brand - it is a situationwhere there is very little differencebetween the brand and the product.

The brand is used as an identity of the product.

Example : vicks,



Form 2 – Formula Brand

Formula means a set procedure

A brand which comes in the formulacategory simply implies that astandard procedure has been used tomake the product.

Example : cooking oil, pickles etc.,



Form 3 – Know – how brand

Know – how is an expertise that afirm develops in a specialized area of activity.

Example : nokia is known for userfriendly.

Amul has developed its brand as anexpertise in milk processing.



Form 4 – Interest brand

A 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 targetaudience.

Whirlpool – home maker

Nike – winning – to be on the cutting edge.



Form 5 - Philosophy

The brand at this level acquires moreintangible character and orientation.

The philosophy transforms itsproducts in a realm altogetherdifferent from its physical reality.

Example : Parker pen, De beersdiamond



Product

Brand

PillsburryAtta

FormulaBrands

Mother’sRecipes

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 toa layman.

Consumers reject extensions when they donot make sense.

Brand extension is not a physical act of merging two products.

It is a tough process involving marrying twocognitive or perceptual concepts in order tocreate a consistent entity.

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



Exploring the brand involves seekinganswers 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 abrand?

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 - Ponds

PONDS

TalcFeminine Floral Body

careCream

-Body Talc-Talc forSpecialoccasions

Nailenamels

Lip coloursetc

RoomFreshner,soaps,

Fragrance,shampoo,

etc

Bodylotion,

Body oil,creams

Beauty cream,Conditioning

cream,cleansingcream, etc



Making an Extension successful

Aaker & Keller proposed certain assumptions aboutconsumer behaviour which are fundamentallyresponsible for the success of a brand extension.

The parent brand enjoys positive beliefs andfavourable attitude in customers memory.

It is these pre-existing beliefs and attitudes whichhelp in the formation of positive beliefs andfavourable attitude toward the brand extension.

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



Hypothetical Brand Extensions

Nikon filmNestle beer

Disney daycare centersHaagen-Dazs chocolate syrupMilo sports clothes

Colgate chewing gumFisher-Price baby shampoo

Bacardi chocolates



Possible Extensions for the Lubriderm Brand

NiveaCream

BRAND DEFINITIONS RELATED CATEGORIESmoisturizer

lotion

medicinal

purity

body care

pump bottle

fragrance

Soap - face cream - skin cream

sunburn - after-shave - baby

antiseptic - first-aid - hemorrhoid cream

cotton - gauze - sterile pads

emery boards - muscle toner - cotton swabs

liquid hair net - mustard - glass cleaner

perfume - room deodorizer - deodorant



Category Extension Strategies

1. Introduce the same product in a different form

examples: Jello Pudding Pops, Starbucks coffee ice-cream

2. Introduce products containing the brand’s distinctive taste, etc. examples: Haagen-Dazs Cream liqueur, Philadelphia Cream Cheese salad dressing

3. Introduce companion products for the brand

examples: Nikon Film, Duracell Durabeam flashlights, Colgate toothbrush

4. Introduce products relevant to customer franchise of the brandexamples: Visa Traveler’s Checks, Gerber baby bottles



Category Extension Strategies

5. Introduce products capitalizing on the firm’s perceived expertise examples: Honda motorcycles, Canon photocopy machines, Canon Scanner

6. Introduce products that reflect the brand’s distinctive benefit,

attribute or feature owned: examples: Nestle chocolates, Nestle chocolate milk

Dove cream, Dove deodorant (Mild and Pure)

7. Introduce products capitalizing on image or prestige of the brandexamples: Calvin Klein clothes, Porsche sunglasses



Expanding Brand Meaning Through

Extensions

Nesquik Flavoring Cereals, yogurt, Fun Foodfor milk chocolate sauce, for Kids

(children) postre de leche.

Crayola Crayons Markers, pens Colorful Craftspaints, pencils for Kidsclay, etc.

Nestlé Condensed Baby food, Nutritious and

and powered cereales, choco- High Qualitymilk lates, ice-cream, etc. Food.

Gillette Razor Blades Shaving Set, Personal Caredeodorant. For Men and

Women

BrandOriginalProduct

ExtensionProducts

New BrandMeaning



Questions for Assignment

Highlight atleast five brands of various product category and find outthe extension opportunities of those

brands.

Find out which brand can be extendedfar from its present product, andwhich can move just above theextension boundary.

Brand Extension Pbm

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