Brand Extensions

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Presentation Transcript

LINE & BRAND EXTENSIONS : 

LINE & BRAND EXTENSIONS

LINE EXTENSIONS : 

LINE EXTENSIONS The product line is now far more representative of customers’ varying quantity needs. It suggests the presence of usage segmentation. Customers differs in terms of their usage quantities. The brand has to fill the whole spectrum with products as per the needs of various segments.

Example : 

Example Bisleri is the pioneering brand in the mineral water category. Originally, Bisleri used to come in a one litre bottle. But recently, Bisleri has exhibited a spate of innovations. The brand launched bottles of different sizes and quantities. The Bisleri portfolio now includes one litre, 1.2 litre, 1.5 litre and 5 litre bottles.

Line Extension strategies : 

Line Extension strategies Product Sizes Bisleri 1.1 ltr Bisleri 5 ltr Bisleri 1.5 ltr Bisleri 1.2 ltr Bisleri .5 ltr

Slide 5: 

Colour Etc., Pantene Pink Pantene Black Pantene White Flavours Ingredient Rasna Orange Rasna Mango Rasa Rose , etc Colgate gel Colgate Herbal Colgate Salt etc.,

Slide 6: 

Form Vim Liquid Vim Powder Vim Bar

Slide 7: 

According to Gautam Singhania, Chairman and Managing Director, Raymond India: "Raymond aims to acquire a dominant position in the apparel sector in the country. We believe that venturing into exclusive stores for our apparel brands will make our brands stronger and give the right impetus to our growth plans. We have enhanced our offerings under all our apparel brands to provide a complete wardrobe solution."

Slide 8: 

"Men today want different solutions for different occasions - formalwear, relaxed work wear, evening wear, club wear, traditional wear, travel wear as well as sportswear. Our brands Park Avenue, Parx and Manzoni, have different categories to cater to this need. Thus, all our brands offer a solution to changing men's fashion needs at different price points," says Shreyas Joshi, President, Raymond Apparel.

Why Line Extensions? : 

Why Line Extensions? In most of the product categories including fast moving consumer goods, consumer durables and services, line extension has been the name of the game. It is an expansionist move. The firms seem to seek growth more vigorously.

Nine prominent reasons……… : 

Nine prominent reasons……… Customer Segmentation Customer need for variety Pricing Breadth Capacity Utilization Quick gains Competitive Reasons Trade Demands Counter Competition Image Benefits

Line Extension Risks : 

Line Extension Risks There are several dangers associated with line extensions. Line Confusion - Marketers sometimes add products to their line without sound logic and reasoning, without any clear role and goal. This may confuse the customers and the retailers and will affect the brand’s owner company in the long run.

Line Extension Risks… : 

Line Extension Risks… Encourage Variety seeking – Brand loyalty is every marketers dream. By line extension, customers practice and become the habitant of variety seeking. Hence it influence brand switching behaviours. The loyalty is thus weakened.

Line Extension Risks… : 

Line Extension Risks… Success Myopia – An idea may be a grand enough to be converted into a full-fledged independent brand. But the lure of extension seems to be so strong that the ideas are brought into the market as line extensions. This implies loss of a winning asset in the long-term.

Line Extension Risks… : 

Line Extension Risks… Strained relations - When the lines expand, marketers tend to pressurize their trade partners such as wholesalers and retailers to carry the complete line in accordance with their wishes. The pressure appears to be applied more intensely at the retail level. The marketers seek adequate shelf space, promotion and information. But at the retailers end, it brings confusion and chaos. The result is the strained relations between the marketer and the retailer.

Line Extension Trap : 

Line Extension Trap Why do firms jump on to line extension bandwagon? When customers prefer a brand, they would be just as willing to buy a different product carrying the same name. What appears to be logical to the managers performing these adventures tends to be illogical in the perception of customers. This is the reason why line extensions do not create mega successes.

Line Extension Trap……. : 

Line Extension Trap……. Line extensions do not work because they tend to go against the fundamental aspect of positioning. The core brand holds a strong position inside the prospect’s mind. Line extensions tend to educate customers that product and brand are two different things. It is a fallacy that a brand is just a name that can be put on any product. This is a great mistake. It undermines and destroys the brand in a prospect’s mind.

BRAND EXTENSIONS : 

BRAND EXTENSIONS Using an existing brand name to promote a product in a different category, is Brand Extension. The key difference between line and brand extension is the product category. In line extension the pdt. Category remains constant whereas in brand extensions product category is a variable.

EXAMPLE : 

EXAMPLE Ponds - Cold cream, Toilet soap Shampoo, Tooth paste, Moisturising lotion, Talc & Face wash. LG – Television, Refridgerators, Computer monitors, Microwaves, Air Conditioners, Washing Machines & Mobile phones. Park Avenue – Shirts, Shaving cream, Jeans, Belts, Perfumes, Soap & Razar.

Why Brand Extension? : 

Why Brand Extension? Cost of New launches Promotional Efficiency Consumer Benefits Feedback effects Returns

Types of Extensions : 

Types of Extensions Product form extension – A product launched in a different form usually means line extension, but if a different product form constitutes an entirely different product category. Example: Amul milk Amul Condensed milk Real Juices Real Juice Concentrate

Types of Extensions : 

Types of Extensions Companion Product – The idea here is to capitalise 0n product complementarity. The consumer may view both the products jointly. Example : Colgate Dental Cream Colgate Tooth Brush Gillette Razors Gillette Shave forms Gillette After Shave

Customer Franchise : 

Customer Franchise A marketer may extend a product range in order to meet the needs of a specific customer group. J & J Baby Talc J & J Baby Oil J & J Baby Cream J & J Baby Shampoo J & J Baby Diapers

Company Expertise : 

Company Expertise Brand Extensions often come in the forms of different product category introductions using a common name but emanating from a common expertise pool. This strategy is particularly seen in Japanese companies. Honda Cars Honda Lawn movers Honda scooters

Brand Distinction : 

Brand Distinction Many brands achieve distinction in the form of a unique attribute, benefit or feature which gets uniquely associated with the brand. For instance, Parachute may have expertise of ‘coconut nourishment’ in customers’ minds over time. This would give Marico Industries, the brand owner, the opportunity to launch a variety of products exploiting this distinction. Parachute Hair Oil Shampoo Cream Cooking Oil Baby Soap Baby Oil

Brand Image or Prestige : 

Brand Image or Prestige A brand extension may involve a foray into unrelated product categories based on a brand’s exclusive image or prestige value. Steel, Automobile, Heavy Vehicles, Watches, S/W devpt. Training etc.,

Distinctive Taste, Ingredient or Component : 

Distinctive Taste, Ingredient or Component A brand may develop equity based on any and / or combination of taste, ingredient or component. Then the marketers can make entries into unrelated product categories capitalising on these properties. Nescafe Coffee Nescafe Chocolate Nescafe Biscuits Nescafe Milk Supplement Nescafe Cold Coffee

Brand Extentability : 

Brand Extentability

Slide 28: 

Extensions involve transfer of associations from the parent brand to the extension. The brand extendability depends on its character. The brands can be classified into 5 types through extendability.

Five forms of brands : 

Five forms of brands The Product Brand - it is a situation where there is very little difference between the brand and the product. The brand is used as an identity of the product. Example : vicks,

Form 2 – Formula Brand : 

Form 2 – Formula Brand Formula means a set procedure A brand which comes in the formula category simply implies that a standard procedure has been used to make the product. Example : cooking oil, pickles etc.,

Form 3 – Know – how brand : 

Form 3 – Know – how brand Know – how is an expertise that a firm develops in a specialized area of activity. Example : nokia is known for user friendly. Amul has developed its brand as an expertise in milk processing.

Form 4 – Interest brand : 

Form 4 – Interest brand A brand may be defined by its centre of interest. It may reflect its core spirit. Example – Gillette maintains its focus on men’s grooming in all its brands. Logo is ‘the best a man can get’ which creates the interest among the target audience. Whirlpool – home maker Nike – winning – to be on the cutting edge.

Form 5 - Philosophy : 

Form 5 - Philosophy The brand at this level acquires more intangible character and orientation. The philosophy transforms its products in a realm altogether different from its physical reality. Example : Parker pen, De beers diamond

Forms of brand extendability : 

Product Brand Pillsburry Atta Formula Brands Mother’s Recipes Pickles lime, mango, mixed Know –how brand Bajaj Irons, Fans, coolers, mixers etc., Interest Brand Disney Toys, Theatre, Theme park, movies, etc Philosophy Brand Cartier Watches, jewellery, Bags, pens Forms of brand extendability

Extensions………………. : 

Extensions………………. Extensions are not simple as they appear to a layman. Consumers reject extensions when they do not make sense. Brand extension is not a physical act of merging two products. It is a tough process involving marrying two cognitive or perceptual concepts in order to create a consistent entity. Therefore, it must begin with exploring the brand in a prospect’s mind.

Exploring the brand involves seeking answers to the following questions……. : 

Exploring the brand involves seeking answers to the following questions……. What is a brand’s awareness level? What are its recall and recognition levels? What are different attributes associated with a brand? What benefit associations are connected with a brand? What are a brand’s personality associations? What are the symbols associated with the brand? What are a brand’s user associations? What is the perceived essence of the brand? What is a brand’s philosophy?

Strength of Associations - Ponds : 

Strength of Associations - Ponds PONDS Talc Feminine Floral Body care Cream Body Talc Talc for Special occasions Nail enamels Lip colours etc Room Freshner, soaps, Fragrance, shampoo, etc Body lotion, Body oil, creams Beauty cream, Conditioning cream, cleansing cream, etc

Making an Extension successful : 

Making an Extension successful Aaker & Keller proposed certain assumptions about consumer behaviour which are fundamentally responsible for the success of a brand extension. The parent brand enjoys positive beliefs and favourable attitude in customers memory. It is these pre-existing beliefs and attitudes which help in the formation of positive beliefs and favourable attitude toward the brand extension. The negative associations are not transferred to the brand extensions, also these are not created by the brand extension.

Questions for Assignment : 

Questions for Assignment Highlight atleast five brands of various product category and find out the extension opportunities of those brands. Find out which brand can be extended far from its present product, and which can move just above the extension boundary.

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End

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