Brand Extension by Bhawani Nandan Prasad - MBA, IIM Calcutta Brand extension is a marketing strategy in which a firm marketing a product with a well-developed image uses the same brand name in a different product category. Organisations use this strategy to increase and leverage brand equity Two FMCG companies P&G (Procter & Gamble) and Unilever are concentrating on big brands that generate sales of more than $1 billion. P&G recently launched two new products using brand extension: new biodegradable wipes named Kandoo, launched under Pampers parent brand, and a new product for washing cars under Mr. Clean parent brand. Brand Extension is the use of a successful brand name to launch a new or modified product or service. Explain this strategy with suitable examples. Park Avenue is one of the many brands offered by the Raymond Group. It provides stylish and innovative wardrobe solutions and is famous for its good fittings. The brand provides formal clothing for various occasions like regular office wear, high powered corporate meetings and festivals. Park Avenue started off as a men’s wear brand. In 2007 ‘Park Avenue Woman’, a range of business wear for women was launched. It is designed for the working women professionals of today. Brand Proposition of the original product- Park Avenue Men’s Wear The rationale for using the name Park Avenue for Raymond India’s ready to wear men’s clothing was to give a western name which was synchronous with great fabric and great fit.

The brand has over the years undergone many changes as it tries to reach out to the urban young corporate consumer. While it started off as a brand that was fashionable and meant for slightly older customers who trusted the Raymond heritage, the brand repositioned itself later to tap the new managers, who wanted to be different, that emerged in the 90s.

In 2000 the brand came up with the new positioning tagline- ‘Start Something New’. The brand launched a new print and television campaign in order to shed its old image and target the young entrepreneurs who were emerging in the booming IT era. It realized that these young consumers wanted to be different and break away from the traditional ways to start something new.

Analysis of the Brand “Park Avenue” Target Audience: The brand targets young middle class corporate employee who are fashion conscious but need to wear formal clothes on a daily basis. The brand also has a secondary audience in the form of older men which is primarily due to the strong heritage that this brand has.

Brand Personality: Park Avenue symbolizes a person (male) who likes to explore the unknown, do something different. He has an entrepreneurial spirit and wants to be a leader in everything he does. He is a person who wants to express himself and his style through his clothes.

Key Brand Values: The key brand values are- Smart, innovative, different, exciting, premium, trusted. We also believe that the brand also stood for masculinity before venturing into female clothing.

Example of Brand Extensionsby Park Avenue The brand has extended into:

Accessories: Ties, belts, shoes, cufflinks Men’s Toiletries: Soaps, deodorants, aftershave, shaving cream, talcum powder, gels

Analysis on the basis of Criteria for Brand Extensions:- Extension Category: The new category into which a brand extends should be in line with the nature of the parent brand and sometimes even the expertise it represents.

Accessories: While extending into accessories, Park Avenue leveraged its expertise in clothing and the association that consumers make with looking good in a corporate/formal environment. This is a natural extension for the brand to give consumers the full range of formal dressing-right from clothes to belts and shoes.

Men’s Toiletries: Men’s toiletries are an extended part of a man’s looks. The products in this category which fit in line with the brand Park Avenue

The value perception A successful brand extension has to ensure that there is consistency in the value perception of the brand in the new category as compared to in the original category

Accessories: The accessories that Park Avenue sells are premium and elegant due to which they fit in with the values that the brand stands for.

The description for accessories as follows:

Shoes: Crafted from fine European leather and finished with a lustrous shine. Ties: Complete your ensemble with the perfect tie from Park Avenue. These exquisite woven

and printed ties come in various designs. These silk ties give a new meaning to the term power dressing. From these descriptions, it is clear that Park Avenue continues to maintain the premium, classy, new age, youthful image that it has built in clothing.

Men’s Toiletries: The deodorants and perfumes that they sell have a label which reads as follows-“Genuine French Eau De Parfum” with information on the pulse points which act as mini fragrance pumps. The French fragrance again adds uniqueness to the perfume which is in line with the brand values. The logic behind entering perfumes and deodorants was that research showed that there was no major perfume brand in the men’s market.

On analyzing the distribution strategy of Park Avenue’s toiletries, we saw that the company’s distribution strategy is in line with its pricing strategy. Park Avenue soaps and deodorants are available at normal general stores. Perfumes are available at supermarkets unlike big brands which are available only in shopping malls. The perfumes, which are priced at around Rs. 450, need to be made available easily to the middle class consumer. We felt that the pricing strategy in toiletries was in line with the pricing in clothing which is to appeal to the middle class consumer. On the whole we felt that Park Avenue’s brand extensions maintained the original values of the parent brand. Competitive Edge The last criterion we used for analyzing the brand extensions was to see the competitive edge. A great brand in one category need not always offer a competitive difference over other brands in another category. It is necessary for the brand to offer consumers some advantage in order for them to adopt the product in the new category.

What are the pitfalls in brand extension strategy? a) Dilution of the existing brand image: underlines that the extensions are using the most

important asset of the company that i.e. its brand name. It can be a major advantage for the extension but it represents as well a huge risk for the existing brand because the brand image can be diluted. Park, McCarthy & Milberg, (1993, p60) said that those positive and negative consequences are “reciprocity effects” and defined as “a change in the initial customer’s behavior regarding the brand, after an extension”. She explains that a brand extension can damage the brand. A dilution of the brand capital can happen by the occurrence of undesirable associations or by the weakening of the existing associations. This latter can be a consequence of new associations transferred from the extension.

b) an accident occurring with a product can lead to tarnish the image of the all brand. In addition, it is sometimes difficult to associate one brand to two products without weakening the brand position in the customer’s mind.

c) Cannibalization: The extensions can cannibalize the existing products of the brand when there are positioned in a close market. It means the extensions sales are increasing while those of the existing brand’s products are following the opposite curved.

Example of Brand Extension failure

Following are example of brand extension failure in India:-

i. Rasna Ltd. - Is among the famous soft drink companies in India. But when it tried to move away from its niche, it hasn’t had much success. When it experimented with fizzy fruit drink “Oranjolt”, the brand bombed even before it could take off. Oranjolt was a fruit drink in which carbonates were used as preservative. It didn’t work out because it was out of synchronization with retail practices. Oranjolt need to be refrigerated and it also faced quality problems. It has a shelf life of three-four weeks, while other soft- drinks assured life of five months.

ii. Ponds toothpaste is a classic case of product failure by extension. Brands need to be careful to choose the territory in which they tread. Brands need to be cautious while choosing the territory in which they tread. Lack of proper research before entry into a new market or segment can lead to catastrophic results which include wasting of big sum of money on product development and marketing.

HUL brand Ponds successfully moved from cold cream to other extensions such as Age defying creams, soap, shampoo & talc, because the basic premise of protection for the skin and freedom from wear and tear remained the same, while as in case of Ponds toothpaste its failed even though both the product are also to be used for cleanness and freshness.

With toothpaste we clean & then spit it out, whereas with cream, soap or shampoo we apply it externally. Thus perception of cleanness and freshness is taken so differently in different products. Even-though the attributes are same, soap & toothpaste yet the market does not perceive it to be same.

How does brand extension strategy could augment a core product and value proposition that set it apart from competitors?

Presence: Initially consumers become aware that such a brand exists. It’s very important for a brand to have a solid base as it builds on this (i.e. only those who are aware of the brand are likely to consider it for further evaluation). Success of this stage primarily depends on effective communication & word of mouth (which in turn depends on performance, the third stage of this pyramid).

Relevance: Out of those who are aware of the brand, some find its proposition relevant to their needs. This is the stage where a brand gets into the consideration set of prospective consumers.

Performance: If the first two stages of the brand has invoked enough interest in the consumers’ mind then they experiment with the brand. Those who find its performance satisfactory at this stage put the brand into their repeat consideration set.

Advantage: Those consumers who are satisfied at the 3rd stage of pyramid, start repeating the brand & their interaction with the brand starts. At this stage they start experiencing the ‘extra advantages’ that the brand offers to them.

Bonding: Out of those who have found extra advantages about the brand, some interact very frequently & intensely with the brand & form an emotional bond with the brand.

Example

Look at how various extensions have strengthened ‘Park Avenue’ overall as a brand: Presence: As ‘Park Avenue’ did advertisement (especially Print ads) of accessories & some

toiletries (especially soap), it strengthened base (presence) of the ‘Park Avenue’ brand. Relevance: By evolving as a “complete grooming solution”, they have increased their

relevance to the consumer. Performance & Advantage: Here the brand values of ‘Park Avenue’ which were transferred

to extensions boosted these two levels of the brand pyramid.

Bonding: Consumers’ bonding with the brand increased as it gave them ‘a complete grooming solution’.