Brand Extensions by Dr. Rajesh

8/12/2019 Brand Extensions by Dr. Rajesh

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BRAND EXTENSION

Dr. Rajesh Sharma


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Agenda

What is a brand extension?

Why do it?

How do it?

Old and new examples


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BRAND EXTENSIONS

A Brand Extension occurs when a firm uses an established brand name to

introduce a new product.

When a new brand is combined with an existing brand (approach 3), the brand

extension can also be called asub-brand.

An existing brand that gives birth to a brand extension is theparent brand.

If the parent brand is already associated with multiple products through brand

extensions, then it may also be called afamily brand.


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Category extension

Line extension

Vertical extension

Co-brand

But its not always clear how to categorize it as we will see


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The parent brand is used to enter a different product category from that currently

served by the parent brand.


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The parent brand is used to enter a different product category from that currently

served by the parent brand.


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Mini

Nano

Touch

Shuffle

Nano 2


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The parent brand is used to brand a new product that targets a new market segment with in a product category currently served by the

parent brand.

A line extension often adds a different flavor or ingredient variety, a different form or size, or a different application for the brand.

Eg: Head & Shoulders & Coke


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Line Extension strategies

Product Sizes

Bisleri

1.1 ltr

Bisleri

5 ltr

Bisleri

1.5 ltr

Bisleri

1.2 ltr

Bisleri

.5 ltr


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Colour Etc.,Pantene

Pink

Pantene

Black

Pantene

White

Flavours

Ingredient

Rasna

OrangeRasna

Mango

Rasa Rose ,

etc

Colgate

gel

Colgate

Herbal

Colgate

Salt etc.,


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Form

Vim

Liquid

Vim

Powder

Vim

Bar


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Line extension?

Volvo S60

Volvo S40& S80

CategoryExtension?

C30- compact cars

XC90, V70


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Low cost clothing Designer clothes and shoes


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Well functioning standard cars Well functioning premium cars

It depends on what associations you wantto transfer between the brands


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Quality

Reliability Environmental

Premiumness


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Boring

Ugly Bad brakes

Expensive


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Take advantage of marketopportunites

If you dont capitalize on anopportunity, someone else will

Leverage internal assets

Use internal strengths in bestpossible way

Stay relevant

The brand needs to be

continuosly energized to stayrelevant for target consumers

Protect the brand From competitors, changingbusiness climate etc.


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Core


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= Speed

The core of the relationship between McDonalds customers and thebrands magic is about the promise of speed


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= Speed

= Speed = Speed


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McDiner Successful growth areas forMcDonalds have been where they

have been able to capitalize on theircore- areas where speed is relevant

CoffeeMcDrive

= Speedshops

Wireless hot-spots Core

Successful launches

Golden Arch Hotel

Failures


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We offer tools for creative minds


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Weekday Formal dinner Coffee break

breakfast


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Coca Cola- masters of line extensions


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"Brands have to

evolve or die

(Former

Starbucksmarketing chief

Computer softwareVideo game hardware Scott Bedbury


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The appification has lead to a number of different extensions:

Old companies launch new products (category extensions)


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Old companies launch new products (category extension)

Old companies launch new versions of existing products (line extensions)


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Old companies launch new products (category extensions)

Old companies launch new versions of existing products (line extensions)

New companies launch new products


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Travel agency and airlines

Health club

Mobile phone operator

Music store

Financial services

Transportation

Etc.

We believe in making a

difference. Virgin stands for

value for money, quality,innovation, fun and a sense

of competitive challenge.

When we start a new venture, webase it on hard research and

analysis. Typically, we review the

industry and put ourselves in the

customer's shoes to see what couldmake it better.

Virgin has created more than 300 branded companies worldwide, employingapproximately 50,000 people, in 30 countries. Global branded revenues in 2009exceeded 11.5 billion (approx. US 18 billion).Klla: xxx


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Advantages Of Brand Extensions

Facilitate New Product Acceptance

Improve brand image

Reduce risk perceived by Customers

Permit consume variety-seeking


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Increase the probability of gaining distribution and trial Increase efficiency of promotional expenditures

Reduce costs of introductory & follow-up marketing programs

(save 40-80%)

E.g. Apple iPods

Avoid costs of developing a new brand

Allow for packaging & labeling efficiencies


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Provide Feedback Benefits to the Parent Brand

and Company

Clarify brand meaning

Enhance the parent brand image

Bring new customers into brand franchise and increase market

coverage

Revitalize the brand

Permit subsequent extensions


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Clarify brand meaning

Brand Original

Product

Extension

Products

New Brand

Meaning

WeightWatchers

Fitness Centre Low-caloriefoods

Weight loss &maintenance

Sunkist Oranges Vitamins,

juices

Good health

Kelloggs Cereal Nutri-grain

bars, Special K

bars

Health

snacking

Aunt Jemima Pancake mixes Syrups, frozen

waffles

Breakfast

foods


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Disadvantages Of Brand Extensions

Can confuse or frustrate consumers

Can encounter retailer resistance

Can fail & hurt parent brand image

Xerox Computers-synonymous with copiers & no one believed

they could make computers

Can succeed but cannibalize sales of parent brand

Amul Butter-reduced salt butter is slowly

eating up Amul normal butter


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Disadvantages Of Brand Extensions

Can succeed but diminish identification with any one

category

Can succeed but hurt the image of parent brand

Can dilute brand meaning Can cause the company to forgo the chance to develop a new

brand

Documents

Brand Extensions by Dr. Rajesh