Brand Extension

Brand and Line extensions

1

Brand Explosion Brand Consolidation Brand variants

2

Brand Extensions: How does a firm grow? A –

firm can: Focus on current products and markets  Market

–

Put existing products into new markets  Market

–

penetration strategy development strategy

Put new products into existing markets  Product

–

development strategy

Put new products into new markets  Diversification

strategy

Brand Extensions  Brand –

extension

Involves using an existing brand name to launch a product in a different category.

 Category –

extension

Parent brand is used to enter a different product category from that currently served by the parent brand  Swiss

army watches, Porsche bicycles

Ponds

LG

Park Avenue

Line Extensions  Line –

extension

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  H&S

 Line –

dry scalp shampoo

extension

Involves making entries in brand’s exiting product category by using same brand name. These entries can come in the form of varying product sizes, flavors, colors, and ingredients and forms

Advantages of Extensions –

Reduce risk perceived by customers & distributors

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Decrease cost of gaining distribution & trial

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Increase efficiency of promotional expenditures

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Avoid cost (and risk) of developing new names

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Allow for packaging and labeling efficiencies

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Variety-seeking

Advantages of Extensions 

Enhance the parent brand image – –



Convey broader brand meaning to consumers –



Improve strength, favorability, and uniqueness of brand associations Improve perceptions of company credibility

Clarify core benefit proposition and business definition of the company

Bring new customers into the franchise and increase market coverage

Disadvantages of Extensions 

Extensions have risks, too. –

They can fail.



Moreover, extensions can potentially result in the following costs: – Cannibalize sales of the parent brand – Hurt the image of the parent brand



Forego the chance to develop a new brand name or market the parent brand differently (opportunity cost)

Brand Extension Assumptions –

Consumers have some awareness of and positive associations about the brand in memory

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Some of these positive associations are evoked by the brand extension

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Negative associations are not transferred from the parent brand

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Negative associations are not created by the brand extension

Product Form Extension

Amul Milk

Amul Condensed Milk

Real Juices

Real Juice Concentrate

Companion Product

Colgate Dental Cream

Gillette Razors

Colgate Tooth Brush

Gillette Shave Foam

Gillette After Shave

Customer Franchise

J&J Baby Shampoo

J&J Baby Talc

J&J Baby Oil

J&J Baby Diapers

Company Expertise

Honda Cars

Honda Gensets

Honda Scooters

Honda

Lawnmovers

Types of Brand Extensions  Brand Distinction

Parachute Coconut Expertise

Parachute Hair Oil

Parachute Shampoo

Parachute Cream

Parachute Cooking Oil*

*hypothetical

Types of Brand Extensions  Distinctive Taste, Ingredient or Component

Cartier Jewellery

Cartier Watches

Cartier Purses

Cartier Pens

    

The Product Brand Formula Brand Know-how Brand Interest Brand Philosophy

Brand Extendibility Product Brand

It is a situation where there is very little difference between the brand and the product. Brand is a close approximation of the product. Passively, the brand is used to identify the product, maybe for internal purposes. The brand does not play any role from the customer’s point of view

Formula Brand

Formula means a set procedure (used to make the product). This type of brand may be find in categories like cooking oil, food, and pickles

Know-how Brand

Know-how is an expertise that a firm develops in a specialized area of activity. Sony is know to have expertise in miniaturization and robotics. Honda has know-how in engines. Amul has developed expertise in milk processing

Interest Brand

It’s the centre of interest or the core spirit of the brand. Gillette brand maintains its focus on men’s grooming in all its brands. Nike’s focal point is winning. Whirlpool’s centre of interest is the home (‘homemaker’)

Philosophy

The brand at this level acquires more intangible character and orientation. This generally happens in case of designers and artists. The Armani signature on the product provides a higher philosophical meaning – a meaning proudly expresses in Armani’s creatively styled products

Extendibility of a Brand Philosophy Brand Cartier

Watches

Jewellery

Interest Brand Toys Theatre Disney (Entertainment) Know-how Brand Bajaj (Electronics) Formula Brand Mother’s Recipes Product Brand Rose Brand

Bags Pens Movies

OTG Irons Fans Pickles Lemon

Flour

Theme Parks Music

Coolers Pickles Mango Pickles Mixed

Clothes

Mixers Toasters

Accessories Games

Product dissimilarity

Brand Extendibility Amul Symbol Personality: Amul Expertise In milk processing:

Amul Milk

Amul Milk Type I II III

Milk, Ghee, Butter, Condensed Milk

Lovable Indianness Taste Fun Trustworthy Value Good Ice Cream Cheese Mil Additive Chocoloate

“Amulishness” Drinks? Energy Bar? Energy Tabs? Mil Cakes? Biscuits?

Time / Brand’s

Product Brand

Formula/ Recipe

Expertise/ Know-how

Brands identifies the product

Evolution

Interest

Philosophy

Products are manifestations of Brand