3. Managerial Questions
When considering entering a new product
category, two important questions:
1. Should the firm use a brand extension
strategy or a new brand strategy?
2. If the firm chooses to use a brand
extension strategy, under what conditions
will extensions be successful in capturing
sufficient market share?
4. Why Extensions?
Managers use extension strategies under
the assumption that brand associations
(e.g., quality, reliability, status) and affect
(attitudes) will transfer to the extension.
5. Line Extension Strategy
When a brand is used to brand a new product that targets a
new market segment within a product category currently
served by the parent brand.
Examples:
• Coca-Cola diet
• Colgate for Kids
• Watt´s pear juice
6. 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.
8. Colour Pantene Pantene Pantene Etc.,
White Black Pink
Flavours Rasna Rasna Rasa Rose ,
Orange Mango etc
Ingredient Colgate Colgate Colgate
gel Herbal Salt etc.,
10. • 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."
11. • "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.
12. 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.
14. 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.
15. 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.
16. 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.
17. 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.
18. Brand Category Extension
Strategy
Effort to use a successful brand name to introduce a new product into
a different product category.
Examples:
Nike MP4 player
Colgate toothbrush
Sony digital camera
19. 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.
20. 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.
21. Sub-Branding Strategy
Using a new brand name in conjunction with a family brand name to
introduce new products.
Examples:
• Courtyard by Marriott
• Technics by Panasonic
• Levi’s Dockers
• Milo de Nestle
22. Co-Branding/Brand Alliance
Strategies
When two or more brand names are attached
to a product.
Examples:
• Compaq - Intel (“Intel inside”)
• Lan Chile-Mastercard-Banco Stgo
23. Example of Strategies
• Parent Brand: Salomon (ski-equipment)
• Line Extension: New type of skis
• Brand (Category) Extension: Salomon tennis racquet
• Sub-Brand: Avenger by Salomon
• Co-Brand: ingredient brand for grip, frame, or strings (Wilson
and Goodyear rubber on soles of ProStaff Classic tennis shoes)
24. Why Brand Extension?
• Cost of New launches
• Promotional Efficiency
• Consumer Benefits
• Feedback effects
• Returns
25. 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
26. 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 Colgate
Cream Tooth Brush
Gillette Gillette Gillette
Razors Shave forms After Shave
27. Customer Franchise
• A marketer may extend a product range in order to meet the
needs of a specific customer group.
J&J J&J J&J J&J
J&J Baby Baby Baby Baby
Baby Oil Cream Shampoo Diapers
Talc
28. 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
Honda
Honda Lawn
scooters
Cars movers
29. 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 Cooking Baby Baby
Shampoo Cream
Oil Oil Soap Oil
30. 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 .,
31. 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 Nescafe
Nescafe Nescafe Nescafe
Milk Cold
Coffee Chocolate Biscuits Supplement Coffee
33. • 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.
34. 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,
35. 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.,
36. 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.
37. 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.
38. 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
39. Forms of brand extendability
Product
Brand Formula
Brands
Know –how
Pillsburry
Mother’s
Atta brand Interest
Recipes
Pickles lime, Brand
mango, Bajaj Philosophy
mixed Disney Brand
Irons, Fans,
coolers, Toys, Cartier
mixers etc., Theatre,
Theme park, Watches,
movies, etc
jewellery,
Bags, pens
40. 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.
41. 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?
42. Strength of Associations - Ponds
PONDS
Talc Body Cream
Feminine Floral
care
Room
Nail Freshner, Body Beauty cream,
-Body Talc Conditioning
enamels soaps, lotion,
-Talc for cream,
Lip colours Fragrance, Body oil, cleansing
Special
etc shampoo, creams cream, etc
occasions
etc
43. 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.
45. Possible Extensions for the Lubriderm Brand
BRAND DEFINITIONS RELATED CATEGORIES
moisturizer Soap - face cream - skin cream
lotion sunburn - after-shave - baby
Nivea medicinal antiseptic - first-aid - hemorrhoid cream
Cream
purity cotton - gauze - sterile pads
body care emery boards - muscle toner - cotton swabs
pump bottle liquid hair net - mustard - glass cleaner
fragrance perfume - room deodorizer - deodorant
46. Category Extension Strategies
1. Introduce the same product in a different form
examples: Jello Pudding Pops, Starbucks coffee ice-cream
2. Introduce products containing the brand’s distinctive taste, etc.
examples: Haagen-Dazs Cream liqueur, Philadelphia Cream Cheese salad dressing
3. Introduce companion products for the brand
examples: Nikon Film, Duracell Durabeam flashlights, Colgate toothbrush
4. Introduce products relevant to customer franchise of the brand
examples: Visa Traveler’s Checks, Gerber baby bottles
47. Category Extension Strategies
5. Introduce products capitalizing on the firm’s perceived expertise
examples: Honda motorcycles, Canon photocopy machines, Canon Scanner
6. Introduce products that reflect the brand’s distinctive benefit,
attribute or feature owned: examples: Nestle chocolates, Nestle chocolate milk
Dove cream, Dove deodorant (Mild and Pure)
7. Introduce products capitalizing on image or prestige of the brand
examples: Calvin Klein clothes, Porsche sunglasses
48. Expanding Brand Meaning Through
Extensions
Original Extension New Brand
Brand
Product Products Meaning
Nesquik Flavoring Cereals, yogurt, Fun Food
for milk chocolate sauce, for Kids
(children) postre de leche.
Crayola Crayons Markers, pens Colorful Crafts
paints, pencils for Kids
clay, etc.
Nestlé Condensed Baby food, Nutritious and
and powered cereales, choco- High Quality
milk lates, ice-cream, etc. Food.
Gillette Razor Blades Shaving Set, Personal Care
deodorant. For Men and
Women
49. 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.
