Transcript
• Introduction of a host of new products under their strongest brand names
What is a Brand Extension?
• Improved odds of new-product success• Positive feedback effects• Lesser cost of advertisements
Pros of a Brand Extension
• Brand dilution• Cannibalization of existing products• Loss of core customers
Cons of a Brand Extension
Chateau de Vallois
Gaspard- the owner, is dilemmatic,Whether to extend the brand, or preserve the luxury.
Preserving Luxury
Gaspard feels it is not right to upset his distributors(negociants) by introducing a new brand of wine, and sell it directly
Importance of Distribution Channels
There is a high risk of:• Brand dilution• Perceived brand value’s loss• Loss of core customers• Might annoy the distributors
Concluding…
• They don’t have enough grapes
• They don’t own a distribution channel
• The core customer base is extremely loyal
• Distributors enjoy a healthy relationship
•
Deciding factors
• India is a developing and densely populated country• Huge market segments• Most segments’ size increasing rapidly
The Key Factors
• Entered the Indian market in 1990• Initially positioned as a premium and fashionable menswear brand
How Van Heusen initiated?
• Launched in 2006, as a club wear brand• Offered denim collection with trendy designs• Differentiated its product from regular wear by promoting boldly
and attractively
How did it make its mark?
• In early 1990s, number of women entering workforce started increasing
• No formal wear brand for office going women in India
OPPORTUNITY!!
The Key Factors
• It registered a 10% increase in sales in 2012-13• Up to 20% growth in turnover in fiscal 2013• It maintained its focus on the new categories
How did it go for Van Heusen?
•Menswear continued to be the primary growth driver
•Womenswear- small but fast growing
The current players
• Parent brand’s equity• Optimal POPs & PODs• Implications on parent brand’s profitability• Earlier scenario of the to-be-introduced product line
What judges the potential success of an extension?
Savlon introduced itself as a product which:• Had a different smell• Didn’t turn cloudy in water• Didn’t give a stinging sensation
All differing with the existing leader, DETTOL
The Case of Dettol & Savlon
A case of Optimal POD selection
Savlon advertised the superior efficacy of the product and highlighted the “no-sting” property
• Brand extension can be rewarding, but may prove to be equally fatal simultaneously.• With proper concepts, market segment knowledge, and a little
research, one can increase the odds of a successful brand extension.• A luxurious brand, though, enjoys a higher level of brand loyalty. It
must take extra care before extending. The loyal customer base must never be played with.
Summary
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