Brand Extensions

Brand Extension

Presented by:

Sana HaqSana Iqbal

Waqas AhmadRaheem Tejani

Nadia Azher Khan Mohd. Salman Jamil

Brand ExtensionsOne of the most controversial areas of product concepts is the brand extension. A new product gets to share the name of an older, established brand. Early theorizing suggested that brand extensions would sap market clout from the established product, but these fears proved groundless.Today brand extensions occur not only within the company, but companies are licensing their brand names to all kinds of products in the hope of increasing brand awareness.

What is Brand Extension ?

Lets here what brand managers say about it !!!!

Tazeen Kaazi Asst. Brand Tazeen Kaazi Asst. Brand Mgr Energile and Rafhan Best Mgr Energile and Rafhan Best

FoodsFoods

Amir Habib Brand Manager Tapal

Faizan Jamal Asst. Marketing Manager UBL

Brand ExtensionsBrand positioning as the key to Brand Extension

• Extending your Target Market: Gillette’s Sensor for women

• Extending the Definition of your Business: IBM Consulting, ‘Technology’ ‘Technology Based Solutions’

• Extending your Point of Difference: Haleeb’s thick milk, now in plastic bottles’

• Extending the Entire Positioning: Caterpillar’s venture into Footwear

Brand ExtensionsKey Brand Extension Questions

• Consistency with Brand Vision?• Uphold and strengthen Brand Picture?• Consistency with overall Positioning?• Extension failure may cause major or minor setback

for the parent brand?

Brand ExtensionsHow to pick the Right Brand Extensions:

A 4 Step Process

• Step 1: Develop the Brand Extension Strategy

• Step 2: Explore the Problem and Opportunity Areas

• Step 3: Generate Brand Based New Product Ideas

• Step 4: Develop Brand-Based Concepts and conduct Business Analysis

Brand ExtensionsWhy Extend the Brand?

• To be in tune with the developments in user habits and practices

• Cost of Advertising• Defending a brand at risk in a Basic Market• Access to Accumulated Image Capital, Brand

Survival, avoid obsolescence• Reinforcement of the Image Capital

Brand ExtensionsEvaluation of Extension

• Perceived typicality of the extension• Perceived fit with the brand• Credibility of the brand extension• Perceived added value of the extension

Brand ExtensionsInfluence of Extension on the Brand and its Capital

• some extensions take advantage • some destroy the capital• some have a neutral effect• some influence the meaning of the brand e.g. Tefal

modernized itself by going into technology• some regenerate, revive the brand and re-express its

base values in a new and stronger manner• some are just there to defend the brand

Brand ExtensionsStress on the brand through extensions

1.Type of the brand and ability to extend

A B C D E

Values

Interest

Know How

Formula

Product

Degree of Dissimilarity

Type of Brand

Brand ExtensionsStress on the brand through extensions

2.Under and over exploitation of a brand capital

A B E

Values

Interest

Know How

Formula

Product

Degree of Dissimilarity

Type of Brand

Y

X

Brand ExtensionsStress on the brand through extensions

All purpose cream, round blue

Nivea

Nivea showergelDeodorant

Shampoo

N’Soft

N’Sun

N’ Beaute

N’Baby

N’Vital

3.Perimeters of the brand extension using Nivea’s example

Brand ExtensionsRemote & Close Extensions

• Close: when extension is close to the core value • Remote: when extension is close to the core value

Naming a brand

• If close to the core, Should NOT receive a new brand name

• When remote, Should BE helped by a specific or sub brand name

Brand ExtensionsFew Classical errors

• Restricted vision of the Brand e.g. H&S• Keeping the Brand Locked up e.g. Nivea went beyond the blue circle

casing• When the Past determines the future e.g. New Lifebuoy • Harmful extensions e.g. Lipton’s failure in Soups affected the brand name• Opportunism and identity incoherence e.g. teen magazine prints articles

for working females • Prototypical brands e.g. Coca Cola enjoys excellent reputation but will not

use this capital for new products for the fear of losing its legitimacy• Trap of Mundane Products: No qualitative difference e.g. Lux goes into

pencils!• Case of Luxury goods: Licenses and accessories, e.g. Chanel T-shirt

being worn by people with non-Chanel look!• Complementary is not guarantee, e.g. Campbell failed miserably in

spaghetti sauces

Brand Relationship Spectrum

Branded House

• No brands, Company is the only Brand

• All the products are referenced by the company name

• E.g. Khaadi

Branded House - KHAADI

Khaadi As A Branded House

Imran Khan – Marketing Manager Khaadi

Khaadi moving towards Sub Branding

The Brand name has become so strong that it is crossing

International Boundaries…

Dettol – Branded House

Saira Munir Asst. Brand Manager

Dettol

Dettol was able to line extend because …

• Used NPD’s to discover new ideas

• Extension to the soap category was easy

• The core USP remained the same – antibacterial

• High equity value of dettol

Moving from Harsh antibacterial Moisturizing

• Maintaining core USP but adding a feature

Introducing Sensitive

•Focus on skin care more than germicidal

•To capture changing market needs

Perhaps Confused Positioning …

Ponds- Branded House

Sabeen Fazle Brand Manager Ponds

Ponds Brand Extension

• Started off with creams• The evolution of skin care market gave them an

opportunity to stretch into:– Talcum powder– Lotion– Face wash – Black head remover strips

All in line with USP- skin care

• Fair and Lovely could not so easily extend the brand

Extensions

• Lotion – greatest potential with 15-20% growth

• Face wash – 40% penetration

• Talcum Powder- high growth because of climate

• Black head removing strips

Ponds fair and young …Sub brand?

A whole new category of age

management and fairness gave

rise to the need of a proper brand

name

Brand Relationship Spectrum

Sub-Branding

Endorser is much stronger and drives and dominates the

sub-brand

Faizan Jamal Asst. Marketing Manger UBL

Why UBL has extended

• Brand Equity has FOUR pillars– Awareness– Perceived Quality– Differentiation– Loyalty

• Sub Branding was easy because of High brand awareness

• UBL Wallet, Drive, Address, Cashline• Future- endorsed brand

Advantage of House of Brands

Brand gets multiple engines to build its profitability and value

Dettol Water Pure

Rania Brand Manager Veet & Dettol Water Pure

Why Extend Dettol? Under the

Reckitt Benkiser Corporate name

•As a choice for a mass market product dettol was the best option for Reckitt

•Water purifier made the most sense in a Pakistani market

Dettol Water Pure…Sub or Endorsed?

• P&G gained first mover advantage-category became known as “PURE”

• People asked for “TABLETS”- DETTOL

• So what’s the conclusion?...

Brand Relationship Spectrum

Endorsed Branding

•Brand is stronger than the Parent brand, but the link remains

•Customer Acknowledges the brand irrespective of the endorser

TAPAL

•Danedar and Family mixture are SUB

•Chenak & Mezbaan are Endorsed

Why Endorsed Branding

• E.g. on tobacco Indus

• Flexibility in repositioning

• Adverse effect of corporate name

Why Endorsed Branding

Walls

• Innovative and strong brand name BUT . . .

- Endorsed Brand

Mona Hussain Brand Manager Walls

NOW… Sub-brand

• Give WALLS much more mileage• 30% outdoors go to Walls• Limited budget• Drive the consumer to the WHOLE

cabinet rather than a specific brand• Easier to support range than a brand

Walls- Sub Brand

So in conclusion

Brand Relationship Spectrum

House of Brands

No link to the parent brand

House of brands

• P&G believes in the classic concept of branding i.e.

1 brand = 1 product = 1 promise

Shadow brands

Amjad Ali Asst. Brand Manager

Braun, Duracell, & Oral B Gillette Pakistan Ltd.

Why Shadow branding?

• A brand that can stand on its own

• Different persona, markets, values

• Gillette essence cannot fit into these individual brands

Sun Sip- Shadow Brand

• Hilal sweets launched into the powder drink category under the name Sunsip

• The 3 drinks being Limo Pani, Thunda Orange and lastly the Body Charger.

• Limo Pani was tremendously successful

Shadow branding; Very low awareness of Sunsip

The later brands Thunda Orange and Body Charger very much relied on the

image capital built by Limo Pani.

Brand Relationship SpectrumCo-Branding

•When Two independent brands are sold together to reach new territories,

•Generate more value for the customer and hence reap maximum profits.

Co Branding

Tazeen Kaazi Asst. Brand Manager

Energile and Rafhan Best Foods

Co Branding• Brand is to give convenience• One product satisfying more than one

need• Knorr- Fair & Lovely

– Same market- mother is the customer– Co branding gives price discount which

attracts consumer

• Creativity in combining products– LIPTON tea party

Brand Extensions

Limitations

• Must realize the opportunity cost of the brand that was NOT created!

• Could have allowed better coverage• Deeper penetration of the new, young and emergent

markets• Could have attained more growth

QUESTIONS ????