Marketing Assignment 2

MM555- Brand Extension in Today Market
1.0 Competing in today’s market.
The escalating cost of establishing brands in a competitive market as consumers

become increasingly resistant to promotional activities creates greater pressure to
leverage existing brands into new product categories (Barrett 1999). Barrett
describes the cash flow premium enjoyed by a successful brand ultimately
depends on the purchase behaviour of the consumers and the ability to stretch
consumers acceptance of a brand across the categories (1999, p.2). The concept of
brand extension can be successful if the relationship between the parent brand and
the extended brand has the right “fit” (Aaker and Keller 1990). Brand extension is
the “…use of an established brand name to enter a product category” (Aaker and
Keller 1990, p. 27). Aaker & Keller (1990) define the use of an existing brand
name to launch a new product (e.g. Apple computers to enter the mobile phone
market), the extension in this case uses a well established brand name to enter a
new product category.
Brand names are among a company’s most valuable assets (Volckner and Sattler
2006, p. 4). Brand name values are reflected, among others in customer loyalty,
unique and positive associations, the ability to attract new customers, the ease of
new market entrance and the blocking of the entrance of outside competitors
(Aaker and Keller 1990). For fast moving consumer goods (fmcg) often more than
85% of new products introduced are brand extensions (Volckner and Sattler
2006). Brand extensions are considered profitable because brands that are already
known and recognised are generally assumed to require lower new-product
introduction expenses such as advertising, trade deals or price promotions (Tauber
1988).
Brand extension relies on the parent brand, Volckner & Sattler (2006). This makes
it important to protect the parent brand when introducing a brand extension. There
is a risk that the extended brand, if it fails, would injure the reputation of the
original or parent brand (Ries & Trout 2000).
Jeff Spencer 1 of 18
Student Number: 14053807
2.0 Lifesavers case.
Tabuber (1988) explains a consumer is exposed to hundreds of brand names every

day. Being a well-known brand is not sufficient to be a good brand extension.
This can be illustrated with the sweets brand, LifeSavers that are popular for
rolled candy with approximately 3 million rolls produced per day (Other famous
brand extension failures 2006). However the company produced a soft drink
called LifeSavers Soda, the product was not a success and failed even though it
had fared well in the taste tests. According to one critic the “LifeSavers” name
gave consumers the impression they would be drinking liquid candy (Other
famous brand extension failures 2006).
LifeSavers is a well known brand name, in this case the brand extension product
which is a soda product did not have the fit or leverage and ultimately lead to this
brand extension to fail.
Tabuber (1988, p.3) describes that a brand can be successfully extended to a new
category when it has both fit and leverage.
• Fit is when the consumer accepts the new product as logical and would
expect it from the brand.
• Leverage is when the consumer, by simply knowing the brand, can think
of important ways that they perceive the new brand extension would be
better than competing products in the category (Tauber 1988).
For example Nike is an athletic brand with numerous products including athletic
wear, athletic shoes and sports audio (Huifang and Krishnan 2006). Huifang and
Krishnan (2006) then explore if Nike were to introduce two new products into the
market- kneepads and car audio. The logical fit would be the knee pads to be
successful as a perceived superiority just from the brand itself being associated
with athletics. Car stereo’s does not have the right fit or leverage and may lead to
failure if brought to the market as there is no association with athletic and Nike to
car stereos.
3.0 Criteria for Brand Extension
As outlined earlier Tabuber (1988, p.3) describes that a brand can be successfully
extended to a new category when it has both fit and leverage.
Aaker & Keller (1990) proposed an attitude-based brand extension model where
influencing the success of the extension was the:
• “..attitude toward the original brand”, labelled QUALITY (p.29);

Aaker & Keller (1990) describe attitude as conceptualised in terms of
consumer’s perception of the overall quality of the brand. They continue
by stating the impact of the perceived quality on the attitude toward the
extension should be unambiguously positive. If the brand is associated
with high quality, the extension should benefit; if is associated with
inferior quality, the extension should be harmed (Aaker and Keller 1990,
p.29).
• “..fit between the original and extension product classes” (p.29);

One of the reasons that fit is important to extension is that the perceived
quality of a brand will be enhanced when the two product classes in some
way fit together. For example a Honda lawn mowers with a claim of
superior engine technology coincides with Honda car manufactures and
their association with engine technology (Tauber 2004).
• “..perceived difficulty of making the extension”, labelled as

DIFFICULTY.
When consumers perceive the extended product class to be “trivial” or
very easy to make (DIFFICULTY is low). The consumers may view the
combination of a quality parent brand and a trivial extension as
inconsistent (Aaker and Keller 1990). The inconsistency itself may trigger
a rejection or it might lead to a judgment that the quality name will add a
price higher than justified.
Ries and Trout (2000) are against such extensions, they describe it as the
extension trap. Ries and Trout (2000) give two arguments.
• Firstly a highly successful brand almost owns the category. To make your
brand name stand for the generic. An example of this type can be seen as
“do you have any Panadol”, meaning a pain relief tablet. This is when a
brand name owns the category (Ries & Trout 2000). This advantage is
lost if the brand name is extended to other categories, for example
Panadol decongestants.
• Secondly, when a brand has etched a clear position in the prospect’s
mind, extension of the brand name to some other product dilutes that
position. This would be extending Panadol to a non-pain relief product or
tablet (Ries & Trout 2000).
It can be said that, (Barone 2005; Czellar 2003; Huifang and Krishnan 2006;
McCarthy, Heath, and Milberg 2001; Tauber 1988; Volckner and Sattler 2006;
Yeung and Wyer Jr 2005) do not agree with the first argument and conditionally
agree with the second. Rise & Trout (2000) believe brand extension is a trap and
should not be used, whereas Aaker & Keller (1990) focus on a successful
extension of a brand must have the right fit and attitude. Huifang and Krishnan
(2006) also describe the success of brand extension, the extension must agree with
the parent brand with regards to fit and leverage.
Tabuber (1988, p.3) proposed “fit” & “leverage” to be the criteria for successful
brand extension. Aaker & Keller later refined leverage into “value perception”
and “edge”.
Aaker & Keller’s criteria for brand extension can be simplified to;
i) The “Fit”
ii) The value perception
iii) The edge
4.0 Model for Success.
4.1 The “Fit”

The category chosen for the brand extension must be seen as compatible with the
nature of the parent brand and the expertise it represents. There must be a “fit”
(Czellar 2003) as this helps management with the first screening process. Will the
brand Ajax be accepted as a Bathroom gel, a mould remover or a spray and wipe
cleaner by the consumer?
Figure 1 : displays multiple products using the Ajax brand name.

Source:http://www.colgate.com.au/app/Colgate/AU/HouseholdCare/ProductReco
mmender/BathroomCleaners.cvsp
As displayed in figure 1 Ajax have a range of household cleaning products that

have been accepted by consumers as there is evidence of a fit between Ajax and
household cleaning products.
Will Ajax be equally accepted as a cooking oil, as a branded spice, as a sauce or
noodles (Rai 2000)? Ajax has proven to be accepted as a cleaning product and
may not show consistency changing into the food category as there is a conflict of
“fit” between the two categories.
Furthermore Aaker & Keller (1990, p.30)studied and investigated how far a brand
name could be stretched. They checked consumer perception to aid management
judgement. Aaker & Keller achieved this by labelling a variety of different
products and check consumers response. The results are shown in the following
table.
Figure 2: source (Aaker and Keller 1990, p.33)
The results in figure 2 reflect the experiment performed by Aaker & Keller.
A low result equals a low attitude toward the extension, the higher result (max
result is 7) the higher the attitude towards the brand extension the following were
some of their findings;
• McDonald’s reputation for fast, efficient service did not carry over to
photo-processing services.
• Heineken wine would not be successful. The study found that the
consumer would expect it to taste like beer.
• Heineken popcorn was not seen as needing Heineken’s brand name also
Heineken is associated with having a beer taste which has a negative
association with popcorn (Aaker and Keller 1990; Rai 2000) .
.
C Merle Crawford (1981) describes how consumer research techniques called
brand elasticity analysis can measure the elasticity of a brand and ability to
stretch to other product categories and still carry its consumer franchise.
How far can a brand be stretched is the question the Telegraph in the United
Kingdom are asking consumers about the new Burger King $200 ‘Bling
Burger’(Neate 2008). Neate (2008) states that the VP of the marketing chain of
Burger King claims the sandwich “reinforces our quality credentials”. This
display’s a brands ability to extend a product into a different category which
Burger King identifies with “quality”. The burger extension may ‘fit’ Aaker &
Keller definition but will it have the perceived association that Burger King
represents to the consumer?
Figure 3: The $200 burger from Burger King (UK). Source (Neate 2008).
4.2 The value perception.

The second criterion for a successful brand extension is to ensure that there is
consistency in the value perception of the brand in the new category as compared
to its parent brand (Aaker and Keller 1990; Ahluwalia 2008; Czellar 2003). This
can be seen in the above example where Aaker & Keller (1990) found an
association for brand extension included a fast food brand McDonald’s.
McDonald’s and Burger King are competing Brands with similar consumer
associations or perceptions. These perceptions are document in Aaker & Keller’s
(1990) experiment, the associations reflected that consumers perceived the brand
to have low quality, be fast to prepare and also to be cheap. In the Burger King
example described above where the new ‘Bling Burger’ may ‘fit’ as an extension,
it may not match the perceived consumer association. Burger King, according to
the ‘The Telegraph’, proposed that the ‘Bling Burger’ represented quality which
conflicts with Aaker & Keller’s findings with regards to fast food being perceived
as having low quality.
When a brand has a associations such as Ajax with household cleaning products,
Mercedes with wealthy and Toyota with Japan (Aaker and Keller 1990), it can be
difficult to be perceived as something beyond the association. For example the
parent brand Bic perceives value for low cost, utility and disposability, the Bic
brand name extends from disposable ball point pens to disposable lighters and
razors. For this very perception to find Bic’s brand name on high class electric
shaver would fit but may not agree with its perceived value.
In the Bic case, Trout and Ries (2000) raise an important point of the extension
‘trap’.
This appears to be an extension ‘trap’ if the extension is out of line with the basic
position which the parent brand occupies in the consumers mind (Rai 2000, p.48).
Raymond’s is the brand name for an expensive, highly regarded as a prestigious
suiting fabric (Rai 2000). Rai explains what would be logical for the fabric
manufacturer is to extend this brand name to a ready-to-wear trouser. Raymond’s
trousers, branded as Raymond’s Double Barrels, promised ‘no hassle with tailors’
and ‘great fit’ which was a highly desirable benefit in ready made trousers.
Consumers had a lukewarm response (Rai 2000) to this extension. When Lintas
took over Raymond, they found that consumers perceived foreign brands like
Levi’s or Wrangler with being associated with ‘good fit’ clothing. Lintas then
went through a re-branding process and created a brand name that stood for
sophistication, class and a hint of foreign expertise that complimented the ready
made trouser. The product name was Park Avenue. Raymond’s perceived value
was ‘great fabric’, not ‘great fit’. This re-branding to Park Avenue provide to be a
success (Rai 2000).
4.3 The Edge

The third criterion for a successful brand extension, closely related to value
perception, is the competitive edge or expertise (Rai 2000). Tauber (1988)
explains that a brand offering extensions in a category where consumers believe
that the brand have special knowledge or experience is the most effective type of
leverage.
A form of expertise can be a distinctive taste, ingredient, benefit, attribute or a
feature. Some brands ‘own’ a benefit or property (Tauber 1988). An example of
an ingredient or a component of a brand can be seen in the Dole brand (Tauber
2004). The Dole brand consisted largely of canned pineapple slices, pieces, juice
and other commodities such as bananas, mushrooms and melons. The consumer
equated Dole with pineapples, this can be seen that Dole had an edge or expertise
in the canned pineapple category. The objective of the company was to move
beyond commodity items and pineapple and move into value-added foods and
beverages (Tauber 2004). Tauber’s study revealed Dole had a strong connection
to pineapple with consumers. However, Tauber, found that consumers associated,
the product they had specialised in the pineapple, with fresh, clean, bright, sunny
and imagery of a wholesome outdoor lifestyle. From this data it could be said that
Dole represented “Sunshine Lifestyle”, which translated to sunshine fruits and the
products would contain these associated images. As a result, a variety of brand
extensions emerged from these findings;
Dole frozen Fruit ‘N Juice Bars

Dole Fruit Sorbet
Dole Fruit ‘N Cream Bars
Dole 100% refrigerated Pineapple Breakfast Juice
Dole Whole Fruit Coolers
Although all of these product lines originally included a pineapple flavour, the
dominant seller was often some other flavour like strawberry or orange. This
shows that Dole used their expertise in pineapples with associated imagery and
consumer perceptions of “sunshine lifestyle” to successfully extend into other
categories, this can be seen in figure 4 (Tauber 2004).
Figure 4 shows the successful brand extension displaying the Dole logo with the
image of the sun shining through the “O” in Dole name giving the “Sunshine
lifestyle” image as discussed above.
As there are successes with having an ‘edge’, Ries & Trout, re-enforce the
extension trap, this can be seen when Glaxo extended into the talcum powder
market (Rai 2000). Glaxo was founded in Bunnythorpe, New Zealand. Glaxo
originally was a baby food manufacturer processing local milk into baby food by
the same name, which was sold in the 1930s under the slogan "Glaxo builds
bonny babies". Glaxo was to become a successful multinational (GlaxoSmith
Kline 2008).
Logically, what could be a better fit than for Glaxo a trusted baby food to mothers
now to offer a talcum powder for babies. Glaxo appeared to have the correct fit
the right value perception and also it seemed to have an expertise in baby food
(Rai 2000). This was the reasoning that prompted Glaxo to launch a talcum
powder positioned against the market leader, Johnson’s Baby Powder. The value
perception seemed right, Glaxo understands what is good for babies tender skin.
Glaxo then launched Tender Talc (Rai 2000). Ria mentions Glaxo had good
packaging a good brand name and a good product. But not better than Johnson &
Johnson’s also trusted name when it came to the baby products (Rai 2000, p.3). It
was investigated that the edge that came from Glaxo was the name itself, the
name did not have the advantage to the Johnson brand that mothers had been
using for years, and the extension did not survive.
Figure 5: Johnson and Johnson range of brand extensions that have fit, perception
and expertise or edge, source http://www.clubtarang.com/pics-
kids/johnsonbabyset-bg.jpg
From Glaxo verses Johnson’s talcum powder both brands had the right fit,
perceived association and an edge or expertise, what the final outcome showed
was that there was an already well established leader in the category that Glaxo
was extending into and competing against. Johnson & Johnson are masters of
brand extension when it comes to baby care products (Rai 2000). Their corporate
brand name has supported each of their extensions, from baby powder to baby
soap, shampoo, oil lotion and cream. The theme in there is:
For a hundred years now, we at Johnson & Johnson have been caring for your
babies-skin…That is why you cannot entrust their skin to just anyone (Rai 2000).
This displays Johnson’s clear expertise in the market category.
5.0 Success and Failure
Taulber (1988) enforces the importance of a company to study the elasticity and
boundaries of a brand when it comes to stretching or extending to new categories.
One of the most important factors of extension success is its “fit” to the parent
brand name (Ahluwalia 2008, p. 4). Fit has been conceptualised as the extensions
perceived similarity to the parent brand primarily on dimensions such as product
category and attributes (Aaker and Keller 1990; Ahluwalia 2008). Ahluwalia
(2008) supports that the higher perceived fit of the extension with its parent brand,
the more positive the extension evaluation and the greater the gain from
introducing the new product as a brand extension versus under a new brand name.
However, Ries & Trout, propose that anonymity is not so bad and rather a
resource. When the product eventually catches the attention of the media, it will
have the advantage of being seen without any previous bias. Consider the
following case to reflect what Ries & Trout (2000) suggest. Lifesaver sweets, as
describe in a previous example, is synonymous with the hard round candy with a
hole in the centre. The company introduced a chewing gum using the LifeSaver
brand. The use of the LifeSaver name was not consistent with the consumer’s
view of being the right fit (Ries & Trout 2000) and this lead to the chewing gum
Lifesaver brand failing. The company later introduced the first brand of soft
bubble gum and gave it a new name “Bubble Yum”. This product was very
successful because it not only had a name different from the hard candy, it also
had the advantage of being the first soft bubble gum (Ries & Trout 2000). This
example shows both failure and success of the same product by not having the
right fit (Aaker and Keller 1990) or association with the parent brand. The
consumers perceived it to be a hard candy rather than a soft bubble gum, re-
naming the bubble gum to differentiate itself from the original parent brand name
proved to be a success.
Czellar (2003) research indicates when a new extension is launched, consumers

evaluate it on the basis of their attitude towards the parent brand and the extension
category. Czellar also explains if a consumer does not know the parent brand and
its products at all, the consumer will evaluate the new extension solely on the
basis of their experience with the extension category. Conversely, if the extension
product category is new to the consumer, an attitude towards the extension will be
formed only on the basis of their attitude towards to parent brand (Czellar 2003,
p.6). Czellar goes on to display, if the consumer knows the parent brand and the
extension category, a third effect arises, the perception of fit between the parent
brand and the extension category.
6.0 East meets West
Xerox is one of the branding success stories of the 20th century (Xerox Data
Systems 2006). As with many other similar successes, the company did not just
create a product, it invented a whole new category agreeing with Trout and Ries
(2000) generic association. Indeed, such is Xerox’s achievement that its brand
name has become a part of everyday speech. In most parts of the world, Xerox is a
verb, used when people are copying paper (Xerox Data Systems 2006).
Chester Carlson war the inventor and created the Xerox. In 1928, he invented
plain paper copying, a process he referred to as ‘xerography’ (a term based on the
Greek words for ‘dry’ and ‘writing’) (Ament 2006). But it was not until 1947 that
‘xerography’ became a business, as well as a technological, venture. That was
when the New York-based Haloid Company met with Carlson and acquired the
licence to develop a xerographic machine. One year later the words ‘Xerox’ and
‘xerography’ had been patented.
1949 saw the launch of the first ever Xerox machine, called simply Model A. A
few years later the Haloid Company had changed its name to Haloid Xerox and in
1959 it introduced the product which was to put Xerox on the map (Ament 2006).
The Xerox 914 was the first automatic plain-paper copier and, as such, attracted
considerable media attention. Within months of its launch Fortune magazine was
writing enthusiastically about this machine, which could make over seven copies a
minute, and referred to it as ‘the most successful product ever marketed in
America’ (Xerox Data Systems 2006).
Word spread about this amazing product, and very soon it was becoming an office
essential. Xerox Corporation in 1961 was now listed on the New York Stock
Exchange. By 1968, company sales rose to the US $1 billion mark. In 1969,
Xerox became a majority shareholder of the European operation, Rank Xerox, and
so the Xerox name was now a truly global brand (Ament 2006).
Ament (2006) describes the start of Xerox’s want to diversify and extend into
other categories. The company strengthened its reputation as a technological
innovator by setting up the Xerox Palo Alto Research Center, abbreviated as
Xerox PARC. However, the research centre was also a testimony to Xerox’s
broader ambitions. From 1970, the company expressed its desire to stretch beyond
copying into the field of computer technology and data processing (Xerox Data
Systems 2006; Ament 2006; Shine, Park, and Wyer 2007). In 1975 this desire
became a reality with the launch of a computer product, Xerox Data Systems,
which had been researched at Xerox PARC. It failed disastrously and Xerox lost
US $85 million (Ament 2006). Four years later though, the company was still
determined to extend its brand beyond the copier market, this time with an early
version of a fax machine called a Telecopier. This also resulted in another
disastrous failure.
Ries and Trout (2000) extension trap has been created with a brand name
becoming a generic name. The problem was not that Xerox’s brand name was too
weak. On the contrary, the problem was that Xerox was a very strong brand name,
but one associated almost exclusively with copier machines. Xerox was not just a
company that made photocopiers, it was photocopiers. It did not matter if the
machine was made by Canon or Kodak, people still referred to it as a Xerox
machine. Indeed, this was an impression enforced through Xerox’s own marketing
efforts. Through much of the 1970s and 1980s Xerox ads used to pose the
question: ‘How to tell the real Xerox from a Xerox copy?’ The implication was
that if it was not Xerox, it was not the real thing. While this strategy helped to sell
copiers, it meant that it was tied to that product category. After all, no one brand
can claim to be the only genuine article in more than one category.
For years, Xerox had competed on the superior quality of its copier products.
Then, when the company’s rivals had caught up, it competed on the superior
quality of its brand. Ament (2006) conveys that as soon as a company makes the
transition from a simple product manufacturer, to a global brand, it has to live
with the consequences. It can not just create a strong perception and then
undermine that perception by extending into another category. As Al Ries (2000)
described it, ‘the difference between brands is not in the products, but in the
product names, or rather the perception of the name (Aaker and Keller 1990).
However, Xerox continued to pursue a brand extension. For instance, in a

magazine ad for Xerox Computer Services, the strap line read: ‘This is not about
copiers’ (Haig 2003, p.99). This only confirmed the impression that Xerox was
about copiers.
During the 1980s, Xerox tried to reposition itself as a provider of all technology-
based office products. At the start of the decade, the company launched a personal
computer, or (as Xerox preferred to term it) an ‘information processor’(Haig
2003). Again, there was nothing wrong with the product, at least for the time. But
as history would repeat it self, the product failed. Similar failures occurred when
Xerox tried to launch office networks such as the XTEN network and the Ethernet
office network, which were designed to compete with IBM’s Satellite Business
network. Both the Xerox networks failed to make an impression (Xerox Data
Systems 2006; Haig 2003).
Despite its best efforts to be associated with office technology, the consumers
remained unwilling to think of Xerox in any terms other than office copier
technology. Although the company had heavily invested in creating office
information systems, this was an area linked to another technology brand – IBM.
As seen in the Glaxo verse Johnson case the same expertise was ultimately going
to result in Xerox failure in competing against IBM.
Haig further investigated the reason why Xerox continued in trying to reposition
its brand during the 1980s. Part of the answer may lie in the company’s Japanese
models of business. Xerox had a unique insight into the Japanese management
style(Xerox Data Systems 2006). Haig (2003) explains that in Japan, brand
extension was, and indeed remains, the norm, especially for technology
companies. For instance, there are few areas of home entertainment where the
Sony brand does not dominate.
Yamaha is another example of successful brand extension. Although the company

started producing pianos, it has not been contained to musical instruments. After
60 years of piano-making, the Japanese company moved into various other
product categories with very little difficulty such as Pianos, Organs, motor bikes
and home entertainment.
Other Western companies have also been influenced by the Japanese approach to
branding such as Virgin.
Haig refers to the simple fact is that most large brands are associated with one
product or service offering. With Coca-Cola, it is cola. With Levi’s, it is blue
jeans. With McDonald’s, it is fast food. And with Xerox, it is copiers. Trout
(2000) suggests that Xerox was never going to be a Virgin or a Yamaha, but it
still kept trying. Recognising this fact, brand expert Jack Trout, president of Trout
and Partners, advised Xerox to concentrate on what it did best. Trout realised that
Xerox could remain within the copier market and still be at the forefront of
technology. Trout realised that Xerox believed the future lay in another direction
(Haig 2003) due to the Japanese management style.
Although the company now seems to accept its fate as a ‘copier brand’, it spent
years exploring other, profitless avenues. As a result, competitors such as Canon
and IBM have made serious inroads into the copier market, with their high-speed
machines. However, providing Xerox can keep its focus on copiers and direct its
technological ambitions towards this narrow, but still lucrative market, it could
still dominate in the future.
• It is vital to know who you are. Xerox’s major mistake lay in trying
to transform itself into an IBM-style ‘information business’. The rest of
the world kept on viewing Xerox as a company which made photocopying
machines.
• Nobody knows the future. Likewise, future business and
technological predictions rarely come true. For instance, no-one predicted
the rise of SMS text messaging on mobile phones. Xerox spent too much
time and energy looking into a future which did not exist.
• Brands are bigger than products. ‘The most valuable asset of the
US $19.5 billion Xerox Corporation is the Xerox name itself,’ says Al
Ries. That name, however, is exclusively and historically associated with
copier machines. It does not matter that Xerox PARC has come up with
some of the most significant technological developments in computing,
such as the invention of the mouse. All that matters is the association of
the brand name in the consumer’s mind.
7.0 Discussion
Success factors of brand extension can be complex and may require research if
exploring this type of release. In today’s marketplace extending or stretching a
brand is not only a potential avenue for growth and return on investment, but may
also be a venture that the brand name can not be stretched too. This paper goes
through essential factors to take into account to reduce the risk of brand extension
failure. Also it was explored that brand extension is not recommended and if the
extension does not i) fit, ii) have value perception/ association, iii) or have
edge/expertise. Due to the large amount of information available on the selected
topic the discussed criteria, for brand extension, were selected for its simplicity
and its direct relationship to the examples given.
It can be seen that the first screening process in determining if a brand can be
extended into a new category, the extension should have a fit with the parent
brand as seen in the Ajax (household cleaning) brand having a good fit with most
household cleaning products in which an extension in this category would be
classed as a good fit.
The second criterion discussed was value perception. Once a fit has been
established like Burger King’s new ‘Bling Burger’ which has the right fit may not
have the right perceived value. If consumers have confusion of perceived value
rejection may occur, the confusion in the Burger King case is that consumers
perceive fast food with being low quality, low cost and fast to prepare. The ‘Bling
Burger’ is the opposite of these traditional perceptions and may cause confusion.
Thirdly, Edge or Expertise was explored. If the extension has both fit and positive
perceived value the next criterion is to be investigated. The Glaxo example proved
that the brand had both the right fit and perceived value but the extended brand
was competing against an expert that had the edge in the Talcum Power for baby’s
market. This proved that having an edge on your brand is an important feature that
may not be represent in an extension.
Brand extension or Brand stretching can be viewed as a ‘trap’ and on the other
hand can be necessary in today’s growing market. Extending brands beyond the
original product category is deemed to be profitable because it is assumed that
brands are already known and recognised and requires a lower new product
introduction expense, such as advertising, trade deals, or price promotions.
Nevertheless, the success of brand extensions is uncertain. With research this
uncertainty can be reduced and brand extension success increase.
8.0 Reference

Marketing Assignment 2

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MM555- Brand Extension in Today Market

1.0 Competing in today’s market.

The escalating cost of establishing brands in a competitive market as consumers

2.0 Lifesavers case.

Tabuber (1988) explains a consumer is exposed to hundreds of brand names every

3.0 Criteria for Brand Extension

• “..attitude toward the original brand”, labelled QUALITY (p.29);

• “..fit between the original and extension product classes” (p.29);

• “..perceived difficulty of making the extension”, labelled as

4.0 Model for Success.

4.1 The “Fit”

Figure 1 : displays multiple products using the Ajax brand name.

As displayed in figure 1 Ajax have a range of household cleaning products that

Figure 2: source (Aaker and Keller 1990, p.33)

4.2 The value perception.

4.3 The Edge

Dole frozen Fruit ‘N Juice Bars

5.0 Success and Failure

Czellar (2003) research indicates when a new extension is launched, consumers

6.0 East meets West

However, Xerox continued to pursue a brand extension. For instance, in a

Yamaha is another example of successful brand extension. Although the company

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