brand extensions good
TRANSCRIPT
-
8/3/2019 Brand Extensions Good
1/23
Brand BuildingBrand Building
Session XIII
Introducing and Naming NewBrands and Extensions
Lectures 1 - 2 of 2
-
8/3/2019 Brand Extensions Good
2/23
Scope of the PresentationScope of the Presentation
New products and brand extensions
Advantages of extensions
Disadvantages of extensions
How consumers evaluate extension
-
8/3/2019 Brand Extensions Good
3/23
New Products and BrandNew Products and Brand
ExtensionsExtensions
-
8/3/2019 Brand Extensions Good
4/23
Ansoffs Growth Share MatrixAnsoffs Growth Share Matrix
Product
Development
Diversification
New Markets
Current Markets
Current Products New Products
Market
Penetration
Market
Development
-
8/3/2019 Brand Extensions Good
5/23
New Product BrandingNew Product Branding
DecisionsDecisionsA new brand individually chosen for
the new product
An existing brand name applied in someway
A combination of a new brand with an
existing brand
-
8/3/2019 Brand Extensions Good
6/23
Brand ExtensionsBrand Extensions
When a firm uses an established brand name tointroduce a new product (Approaches 2 &3)
When a brand is combined with an existingbrand (Approach 3)the brand extension canalso be called a sub-brand
An existing brand that gives birth to a brand
extension is referred to as the parent brand If a parent brand is associated with multiple
products through brand extensions then it iscalled a family brand
-
8/3/2019 Brand Extensions Good
7/23
Types of Brand ExtensionsTypes of Brand Extensions
Line Extensions The 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 It often involves a different flavour or ingredient
variety, a different form or size, or a differentapplication for the brand
E.g.: Head & Shoulders Dry Scalp Shampoo
Category Extensions The parent brand is used to enter a different product
category from that currently served by the parentbrand
E.g.: Swiss Army Watch
-
8/3/2019 Brand Extensions Good
8/23
Success of ExtensionsSuccess of Extensions
Most new products are line extensions
Typically 80% 90% in any one year
Many of the most successful newproducts are rated by various sources,are extensions
Nevertheless, many new products areintroduced every year as new brands
-
8/3/2019 Brand Extensions Good
9/23
Strategies for CategoryStrategies for Category
Extensions - TauberExtensions - Tauber Introduce the same product in a different
form E.g.: Liril Shower Gel
Introduce products that contain the brandsdistinctive taste, ingredient or component E.g.: Haagen-Dazs Cream liqueur
Introduce companion products for the brand E.g.: Duracell flashlights
Introduce products relevant to the customerfranchise of the brand
E.g.: Visa travelers cheques
-
8/3/2019 Brand Extensions Good
10/23
Strategies for CategoryStrategies for Category
Extensions - TauberExtensions - Tauber Introduce products that capitalise on the
firms perceived expertise E.g.: Honda lawn mowers
Introduce products that reflect the brandsdistinctive benefit, attribute or feature E.g.: Fa freshnesssoap
Introduce products that capitalise on thedistinctive image or prestige of the brand E.g.: Porsche sunglasses
-
8/3/2019 Brand Extensions Good
11/23
Advantages of ExtensionsAdvantages of Extensions
-
8/3/2019 Brand Extensions Good
12/23
Reasons for Failure of NewReasons for Failure of New
ProductsProducts The market was too small
The product was a poor match for the company
Inadequate or ignored research result Failure to capitalise on a market window
Poor profit margins and high costs
The product was not new or different
The product did not go hand in hand with familiarity Credibility was not confirmed on delivery\Consumers
could not recognise the product
-
8/3/2019 Brand Extensions Good
13/23
Advantages of BrandAdvantages of Brand
ExtensionsExtensionsFacilitate new product acceptance
Improve brand image
Reduce risk perceived by customers
Increase the probability of gaining distribution andtrial
Increase efficiency of promotional expenditures
Reduce costs of introductory and follow upmarketing programs
Avoid cost of developing a new brand
Allow for packaging and labeling efficiencies
Permit consumer variety-seeking
-
8/3/2019 Brand Extensions Good
14/23
Advantages of BrandAdvantages of Brand
ExtensionsExtensionsProvide feedback benefits to the parent
brand and company
Clarify brand meaning
Enhance the parent brand image
Bring new customers into the market
franchise and increase market coverage Revitalise the brand
Permit subsequent extensions
-
8/3/2019 Brand Extensions Good
15/23
Disadvantages of ExtensionsDisadvantages of Extensions
-
8/3/2019 Brand Extensions Good
16/23
Disadvantages of ExtensionsDisadvantages of Extensions
Can confuse or frustrate the consumers Can encounter retailer resistance Can fail and hurt parent brand image Can succeed and cannibalise sales of the parent
brand Can succeed but diminish identification with any
one category Can succeed but hurt the image of the parent
brand Can dilute the brand meaning Can cause the company to forge the chance to
develop a new brand
-
8/3/2019 Brand Extensions Good
17/23
How Consumers EvaluateHow Consumers Evaluate
ExtensionExtension
-
8/3/2019 Brand Extensions Good
18/23
Managerial AssumptionsManagerial Assumptions
In analysing potential consumer response to abrand extension, it useful to assume thatconsumers are evaluating the brand extensionbased only on What they already know about
The parent brand The extension category
Before any advertising, promotion or detailedproduct information is made available
This helps in determining whether theextension should be gone ahead with at all
-
8/3/2019 Brand Extensions Good
19/23
Essential Assumptions forEssential Assumptions for
ExtensionsExtensionsConsumers have some awareness of and
positive associations about the parent brandin memory
At least some of these positive associationswill be evoked by the brand extension
Negative associations are not transferred
from the parent brandNegative associations are not created by the
brand extensions
-
8/3/2019 Brand Extensions Good
20/23
Factors Influencing theFactors Influencing the
Success of ExtensionsSuccess of ExtensionsIn creating extension equity
How salient parent brand associations are
in the minds of consumers in the extensioncontextWhat information comes to the mind about the
parent brand when the consumers think about
the proposed extension and the strength onthese associations
-
8/3/2019 Brand Extensions Good
21/23
Factors Influencing theFactors Influencing the
Success of ExtensionsSuccess of Extensions How favourable any inferred extensions are
in the extension contextWhether the information is seen as suggestive
of the type of product or service that the brandextension would be
Would these associations be viewed as good orbad in the extension context
How unique any inferred associations areHow the perceptions compare with those of
competitors
-
8/3/2019 Brand Extensions Good
22/23
Factors Influencing theFactors Influencing the
Success of ExtensionsSuccess of Extensions In contributing to parent equity
How compelling the evidence is concerning thecorresponding attribute or benefit association in the
extension context How unambiguous is the information in concerning
product performance and imagery
How relevant and consistent the extensionevidence is concerning the attribute or benefit forthe parent brand
How strong are the existing attributes and benefitassociations about the parent brand in theconsumers mind
-
8/3/2019 Brand Extensions Good
23/23
Thank You!Thank You!