Transcript
BRAND EXTENSIONSBRAND EXTENSIONS
BRANDS - BRAND EXTENSION AND STRETCHINGBRANDS - BRAND EXTENSION AND STRETCHING
Marketers have long recognized Marketers have long recognized that that strong brand names that strong brand names that deliver higher sales and profitsdeliver higher sales and profits (i.e. those that have brand (i.e. those that have brand equity) have the potential to work equity) have the potential to work their magic on other products. their magic on other products. The two options for doing this The two options for doing this are usually called are usually called “Brand “Brand extension” & “Brand stretching”.extension” & “Brand stretching”.
BRANDS - BRAND EXTENSION AND STRETCHINGBRANDS - BRAND EXTENSION AND STRETCHING
Brand extensionBrand extensionBrand extension refers to the use of a Brand extension refers to the use of a successful brand name successful brand name to launch a to launch a new or new or modified modified product in a product in a samesame broad market. broad market. A successful brand helps a company enter A successful brand helps a company enter new product categories more easily.new product categories more easily.For example, Fairy (owned by Unilever) was For example, Fairy (owned by Unilever) was extended from a washing up liquid brand to extended from a washing up liquid brand to become a washing powder brand too.become a washing powder brand too.The Lucozade brand has undergone a very The Lucozade brand has undergone a very successful brand extension from children’s successful brand extension from children’s health drink to an energy drink and sports health drink to an energy drink and sports drink.drink.
BRANDS - BRAND EXTENSION AND STRETCHINGBRANDS - BRAND EXTENSION AND STRETCHING
Brand stretchingBrand stretchingBrand stretching refers to the Brand stretching refers to the use of an use of an established brand established brand name for products in name for products in unrelated unrelated marketsmarkets.. E.g. Virgin E.g. VirginFor example the move by For example the move by Yamaha (originally a Japanese Yamaha (originally a Japanese manufacturer of motorbikes) manufacturer of motorbikes) into branded hi-fi equipment, into branded hi-fi equipment, pianos and sports equipment.pianos and sports equipment.
ADVANTAGES ADVANTAGES OF BRAND OF BRAND EXTENSIONEXTENSION
BRANDS - BRAND EXTENSION AND STRETCHINGBRANDS - BRAND EXTENSION AND STRETCHING
When done successfully, brand When done successfully, brand extension can have several extension can have several advantages:advantages:
Distributors may perceive there Distributors may perceive there is less risk with a new product if is less risk with a new product if it carries a familiar brand name. it carries a familiar brand name. If a new food product carries If a new food product carries the Heinz brand, it is likely that the Heinz brand, it is likely that customers will buy itcustomers will buy it
BRANDS - BRAND EXTENSION AND STRETCHINGBRANDS - BRAND EXTENSION AND STRETCHING
When done successfully, brand When done successfully, brand extension can have several extension can have several advantages:advantages:
Customers will Customers will associate associate the qualitythe quality of the of the established brand name established brand name with the new product. with the new product. They will be more likely They will be more likely to to trust the new product.trust the new product.
When done successfully, brand When done successfully, brand extension can have several extension can have several advantages:advantages:
The new product will The new product will attract quicker attract quicker customer awareness customer awareness and willingness to trial and willingness to trial or sample the product.or sample the product.
When done successfully, brand When done successfully, brand extension can have several extension can have several advantages:advantages:
Promotional launch Promotional launch costs (particularly costs (particularly advertising) are likely advertising) are likely to be substantially to be substantially lower.lower.
• Parent brand (Cinthol) • Different product (Cinthol talcum powder) • Comparable benefit (both cosmetic)
BRAND EXTENSIONBRAND EXTENSION
• Parent brand (Cinthol) • Same product (toilet soaps) • New variant (Cinthol cologne)
• Extension different (Tata steel) • Product different (Tata Tea) • Benefit (products unrelated
TYPES OF BRAND EXTENSIONS TYPES OF BRAND EXTENSIONS AA brand name can be extended in three ways: brand name can be extended in three ways:
1)Extended to other items in the same product line 1)Extended to other items in the same product line
(LINE EXTENSION )(LINE EXTENSION ): :
Sunrise Sunrise coffee coffee was extended to otherwas extended to other
offers offers Sunrise PremiumSunrise Premium & & Sunrise Sunrise
Extra Extra coffee, catering to coffee, catering to different different
segmentssegments..
All are products in the All are products in the same line Coffeesame line Coffee..
TYPES OF BRAND EXTENSIONS TYPES OF BRAND EXTENSIONS A brand name can be extended in three ways: A brand name can be extended in three ways:
2) Extended to items in a related product line2) Extended to items in a related product line((RELATED BRAND EXTENSION OR CATEGORY EXTENSIONRELATED BRAND EXTENSION OR CATEGORY EXTENSION.) .)
Maggi initially was a brand of noodles. Maggi initially was a brand of noodles.
Later, the brand name was extended to Later, the brand name was extended to
other product lines in the related other product lines in the related
category food-Maggi Ketchup, Maggi category food-Maggi Ketchup, Maggi
Soup, etc. It is a case of Soup, etc. It is a case of related brand related brand
Extension.Extension.
TYPES OF BRAND EXTENSIONS TYPES OF BRAND EXTENSIONS A brand name can be extended in three ways: A brand name can be extended in three ways:
2)Extended to items in a related product line 2)Extended to items in a related product line
Maggi's 'instant culinary' Maggi's 'instant culinary'
expertise was extended to expertise was extended to
related food items. related food items.
This is called This is called
related brand extension related brand extension or or
category extension.category extension.
TYPES OF BRAND EXTENSIONS TYPES OF BRAND EXTENSIONS 3) Extended to items in an unrelated product line3) Extended to items in an unrelated product line
((unrelated brand extensionunrelated brand extension, , or or outside the outside the
category extensioncategory extension.) .)
The brand name Enfield, initially used The brand name Enfield, initially used
for motorcycles, was later extended to for motorcycles, was later extended to
television and gen sets. television and gen sets. Here, the Here, the
products belong to different & products belong to different & unrelated unrelated
categories,categories, It is a case of It is a case of unrelated unrelated
brand extensionbrand extension, , or or outside the outside the
category extensioncategory extension. .
NEED FORNEED FORTHREE FOLD THREE FOLD
CLASSIFICATIONCLASSIFICATION
NEED FOR THREE FOLD CLASSIFICATIONNEED FOR THREE FOLD CLASSIFICATION
One problem that necessitated One problem that necessitated
the classification of extensions the classification of extensions
into into category-relatedcategory-related, , image-image-
RelatedRelated & & unrelated extensions unrelated extensions
is the lack of clarity in theis the lack of clarity in the
definitions available. definitions available.
NEED FORTHREE FOLD CLASSIFICATIONNEED FORTHREE FOLD CLASSIFICATION
Jean-Noel Kapferer does not Jean-Noel Kapferer does not
include the following as include the following as brand brand
extensions: extensions:
(i) (i) AA brand prescribed differently brand prescribed differently
(e.g. a shoe polish with a sponge (e.g. a shoe polish with a sponge
applicator is a more modernapplicator is a more modern
version of its normal tin)version of its normal tin)
NEED FOR THREE FOLD CLASSIFICATIONNEED FOR THREE FOLD CLASSIFICATION
(ii) (ii) Different sizes Different sizes
(iii) (iii) Different tastes or flavoursDifferent tastes or flavours. .
According to him, there will be noAccording to him, there will be no
category-related extensions category-related extensions
because he would not accept because he would not accept
Cinthol Cologne Fresh as a brand Cinthol Cologne Fresh as a brand
extension of Cinthol (Old).extension of Cinthol (Old).
He prefers to call them variants.He prefers to call them variants.
NEED FOR THREE FOLD CLASSIFICATIONNEED FOR THREE FOLD CLASSIFICATION
Even by our classification, Even by our classification,
the following will not bethe following will not be
brand extensions: brand extensions:
(i) (i) Different sizes Different sizes
(ii) (ii) Different packagingDifferent packaging. .
NEED FOR THREE FOLD CLASSIFICATIONNEED FOR THREE FOLD CLASSIFICATION
Differences in sizes Differences in sizes
cannot be considered as cannot be considered as
Extension of brands Extension of brands
because the because the brand name brand name
remains the sameremains the same..
NEED FOR THREE FOLD CLASSIFICATIONNEED FOR THREE FOLD CLASSIFICATION
Eg. Eg. Velvette sachet shampoo Velvette sachet shampoo
cannot be considered cannot be considered as an as an
extension of extension of Velvette bottle Velvette bottle
because because neither the neither the brand brand
namename nor nor the contents the contents have have
changedchanged..
NEED FORTHREE FOLD CLASSIFICATIONNEED FORTHREE FOLD CLASSIFICATION
Therefore, Therefore, variants of flavours variants of flavours & &
ttastesastes are considered as are considered as
category- related extensions category- related extensions
While While changeschanges in in packaging & packaging &
sizessizes are are not according not according to our to our
scheme of scheme of classificationclassification..
The relationship between the parent & the three The relationship between the parent & the three types of brand extensions are as follows:types of brand extensions are as follows:
The relationship between the parent & the three The relationship between the parent & the three types of brand extensions are as follows:types of brand extensions are as follows:
SUCCESS SUCCESS OF BRAND OF BRAND
EXTENSIONSEXTENSIONS
SUCCESS OF BRAND EXTENSIONSSUCCESS OF BRAND EXTENSIONSThe most important thing for The most important thing for
the the success of a brand success of a brand
extension extension is that the is that the
consumer should see consumer should see
Something good in it and Something good in it and
something commonsomething common with its with its
parent.parent.
SUCCESS OF BRAND EXTENSIONSSUCCESS OF BRAND EXTENSIONS
Edward M. Tauber studied Edward M. Tauber studied
276 brand extensions 276 brand extensions andand
concluded that most of concluded that most of
them fit into one of the them fit into one of the
following following 7 categories 7 categories . .
SUCCESS OF BRAND EXTENSIONSSUCCESS OF BRAND EXTENSIONS
Even in totally unrelated businesses, Even in totally unrelated businesses,
Brand Extensions Brand Extensions can be can be
successful if the organisation issuccessful if the organisation is
committedcommitted to the to the success of the success of the extensionextension. .
Unrelated brand extensions Unrelated brand extensions will will
build image for the brand name build image for the brand name
e.g. e.g. WiproWipro & & 'Tata.''Tata.'
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