Brand Extension

• MEHREEN SALEEM• SHAKEEL SAFDAR ALI• SANAM IFTIKHAR• HAMMAD MUZZAFAR• FATIMA HASSAN• RIDA SAMEEN• KHURRAM MAJID• FAHAD HUSSAIN

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 ?

A A BRAND EXTENSION is the BRAND EXTENSION is the use of successful brand use of successful brand name to launch new or name to launch new or

modified products in new modified products in new categories.categories.

BRAND EXTENSION

THERE ARE TWO KEY SCHOOLS OF THOUGHTS:

1. CLASSICAL CONCEPT OF BRANDING

2. MODERN CONCEPT OF BRANDING

Classical Concept Of Classical Concept Of BrandingBranding

1 Brand = 1 Product = 1 Promise

P & G have 4 brands of Shampoos Catering for separate promises and target markets.

Modern Concept Of Branding

Extend Brand into various other categories.

Remote & 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

Considerations for Brand Extensions

Factors to consider before extending a brand:

1. FIT :Take the Brand vision, picture,

association & positioning into consideration. These pose a great impact on the Brand Extension.

2. Adding Value A brand should involve innovations and new ideas

in extensions. This assists the brand associations that will be valued by the customers. PHILLIPS

‘Lets make

Things Better’

3. Enhancing Brand Equity Through Associations

The Equity Should Enhanced by the Brand`s Presence In another context, by increased visibility & Brand Associations.

*Child Care:Baby Food, Dairy Products, Breakfast

*Cooking :Prepared Foods

*Wellness:Bottled Water, chocolates, Ice-cream

* Pet Care: Pet Food

Why Extend the Brands?

• 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

Influence 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

Stress 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

Stress 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

LineExtension

Line

Extension

Spontaneous Associations

Latent Potential

Threat Of Brand`s Capital Assets

Perimeters OF Brand Extensions

Stress 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

Few 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. Channel T-shirt being worn by people with non-Channel look!

•Complementary is not guarantee, e.g. Campbell failed miserably in spaghetti sauces

Brand Relationship Spectrum

The Brand relationship spectrum indicates the degree of Brand

Extension by various companies

• House Of Brands• Endorsed Brands• Sub-Brands• Co-Brands• Branded House

House Of BrandsNo link shown to corporate or parent brand

1. A brand that can stand on its own2. Different persona, markets, values

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

1 brand = 1 product = 1 promisePRINGLES

House Of Brands

LEXUS

• Branded House* No brands, Company is the only Brand* All the products are referenced by the company name

• BMW Diversifies into:AutomobilesMotorcyclesGas-TurbinesLeather accessoriesEquipment

(ALL WITH JUST ONE BRAND NAME)

BMW

Branded House KHAADI

The Brand name has become so strong that it is

crossing International Boundaries…

Branded HouseVOLKS WAGON

Branded HouseVolks Wagon Diversities:1. Automobiles2. Shirts3. Caps4. Jackets5. Gear6. Kids stuff7. Trek stuff

Endorsed Brands Brand is stronger than the endorser,

but the link remains. * Customer Acknowledges the brand

irrespective of the endorser

Endorsed Brands Why Endorsed Branding?

1. Flexibility in repositioning2. Adverse effect of corporate name

Sub-BrandsEndorser is much stronger and drives and dominates the sub-

brand UBL :

Sub - Brands

TAPALDANEDAR & FAMILY

MIXTURE

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

•Generate more value for the customer and hence reap maximum profits.•Brand is to give convenience•Both the endorser and endorsee are equally strong

Co - Brands

Co - Brands

CITI BANK: 1. CITI VISA

2. CITI MASTERCARD

Co - Brands

Gillette :Gillette SensorExcelGillette Mach 3

CO-BRANDS

THANKYOU