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BRANDING STRATEGIES:

INDIVIDUAL VERSUS UMBRELLA BRAND BRAND EXTENSION WHY BRAND EXTENSION ADVANTAGES OF BRAND EXTENSION DISADVANTAGES OF BRAND EXTENSION WHATS IMPORTANT TO CONSUMERS

INDIVIDUAL BRAND VERSUS UMBRELLA BRAND


Individual brand has its own identity and the corporate or common name is not used to promote its equity. In case of umbrella brand there is a generic brand with association of some values. For instance, Hindustan unilever Ltd. follows individual branding strategy and has several brands in the same category such as Lux, Liril, Rexona soaps etc. Competitor Nirma has mainly followed the umbrella branding strategy such as Nirma Bath, Nirma Beauty, Nirma Super, Nirma Shikaki soap etc. Only recently, the company for the first time diverted from its strategy of umbrella branding with the launch of Nima.

ADVANTAGES OF INDIVIDUAL BRANDING STRATEGY:

Some of the products which flop in the market do not have a


negative spill over the impact on other brands. For example, Nirma is associated with popular end of product, which becomes a major deterrent for its expansion in the premium segment.

Consumers looking for a change are offered distinctly new brands by the same manufacturer.

But individual branding requires expensive advertisements and brand building exercises. Also each new brand does not benefit from the positive perceptions of earlier brands. In umbrella branding, manufacturers have advantage of: Establishing a new product quickly with association of quality/benefits of the mother brand( a classic case in Indian context has been Godrej)

No need foe name research, expensive advertisement for creating brand names, recognition and preference.

BRAND EXTENSION

A product line extension marketed under the same general brand as a previous item or itee ms. To distinguish the brand extension from the other item(s) under the primary brand, one can either add a secondary brand identification or add a generic. A brand extension is usually aimed at another segment of the general market for the overall brand.

Brand extension or brand stretching is a marketing strategy in which a firm marketing a product with a well-developed image uses the same brand name in a different product category

Brand extension are used for a group of products such as Clinic plus Shampoo, Clinic plus hair oil, Clinic All Clear shampoo or Close up renew ,Close up Oxyfresh, Close up Sensation etc .The brand has some unique USP and there are cosmetic/ functional variations in the extensions. The strategy is to build upon initial success of a brand .Band extensions may be used within product categories(In some products like shampoos, there can be natural variants such as shampoo for normal hair, dry hair, or for specific problem solving like anti-dandruff). It may also be used for different product segments (e.g. Sunsilk brand being extended to hair oil)

WHY BRAND EXTENSION

Brand extension occurs when a parent company or product extends its brand name to a child company or product. For example- AMUL extended its brand name to ice creams. Brand extension let a marketer take a brand with well-known quality perceptions and associations and put it on a brand in a new category. Not only can marketers capitalize on brand awareness, they can also leverage off the associations consumers know about the parent brand. Consumers who favorably evaluate a parent brand and more willingly to try and adopt the brand extension than an unfamiliar brand in the same category. They trust a known brand name. For this reason, brand extensions make new product introduction less expensive. Brand extension can also help a firms stock prices. Some academic research has found that people attend to brand extension announcements and that whether they like like them or not depends on how much they like parent brand. Extending a brand can be a smart strategy in the right situation. Brand extensions help to combat product proliferation and allow a company to realize the value of its brand identities. However, brand can only be extended so far, and overextending can undermine a carefully crafted brand building program. Brand extensions are a familiar way of capitalizing on a brands equity to sell new products or services, for example; Nike golfing clothing, Oakley shoes, Sony digital cameras and Evian clothing etc. But although there are obvious benefits of pursuing a brand extension strategy like utilizing brand equity, business growth and cementing core brand attributes, there are also significant downsides of a brand extension strategy. Specifically, if a brand extension does not fit with the core brand; the core brand may not add any value to the brand extension

product or service resulting in the failure of the brand extension, core brand attributes may well be diluted and negative attributes may be associated with the core brand. The key to successful brand extensions is to determine if the brand extension fits or is consistent/congruent with the core brand. However, more often than not, managers utilize their own perceptions of the core brand as the benchmark to determine if a brand extension has the potential to fit with the brand. These perceptions of the brand are frequently in contrast with those of consumers. To further complicate matters, managers do not fully appreciate or understand consumers brand extension fit judgments and therefore it is difficult for them to consider all the aspects consumers use to determine if a brand extension fits with a brand.

Advantages of brand extension strategy

Consumer knowledge: the remaining strong brand used to promote a new product makes it less critical to create awareness and imagery. The association with the main brand is already done and the main task is communicating the specific benefits of the new innovation. the existing well-known-strong brands represent a promise of quality, useful features etc. - for the consumer. Thus, the extension will benefit from this fame and this good opinion about the brand to create a compelling value proposition in a new segment or markets compared to launching a new brand, brand extension strategy is cheaper especially because the new product use the name of an already well-known brand.

Consumer trust:

Lower cost:

Enhancement of brand visibility:

when a brand appears in another field it can be a more effective and efficient brand-building approach than spending money on advertising In addition, he suggests that the relationship with loyal customers will be strengthen because they will use the brand in another context and it is expected as well that they will rather this brand to the competitors one. the brand image-especially when the brand is a bit tired- is expected to be reinforced by the extension. Indeed, this latter gives energy to the brand because it increases the frequency with which the brand is associated with good quality, innovations and large range of products. In addition, the customer sees the brand name more often and it can strengthen his idea that it is a good one.

Provide a source of energy for a brand:

Defensive strategy:

an extension can prevent competitors from gaining or exploiting a foothold in the market and can be worthwhile even though it might struggle

Disadvantages of brand extension


Dilution of the existing brand image:

The extensions are using the most important asset of the company that i.e. its brand name. It can be a major advantage for the extension but it represents as well a huge risk for the existing brand because the brand image can be diluted. the extensions can cannibalize the existing products of the brand when there are positioned in a close market. It means the extensions sales are increasing while those of the existing brands products are following the opposite curved.

Cannibalization:

The

downside to a brand extension is that you can:

Fail in the new product/service or market because the brand is not compelling in that area lose the tight focus of your existing brand, and therefore its intimacy (differentiation and relevance) damage your existing brand by introducing new conflicting/confusing attributes

When considering brand extension fit, there are four underlying constructs which consumers evaluate individually, to formulate an overall judgment as to whether or not the brand extension fits with the core brand. RELEVANCE is the extent to which the core brand attributes are relevant or important to the brand extension category. For example: (1) the core brand attributes of Starbucks are clearly relevant to the sale of coffee grinders, but not relevant to the sale of other kitchen equipment such as microwaves or fridges, (2) the core brand attributes of Coca Cola are relevant to the sale of other soft drinks and sodas but not the sale of fruit juice such as orange juice. RECOGNITION is the extent to which consumers understand the reasoning behind why the brand is conducting the brand extension as well as the logic of the brand extension. For example: (1) the core brand attributes of McDonalds make it easy to understand/logical in the eyes of consumers for McDonalds to extend its brand into another restaurant concept, however not easy to understand/ logical the eyes of consumers for McDonalds to open a chain of grocery stores, (2) the core brand attributes of Nike make it easy to understand/logical in the eyes of consumers for Nike to extend their brand to sell golfing clothing, but not easy to understand/logical in the eyes of consumers for Nike to sell highly fashionable clothing. CREDIBILITY is the extent to which the core brand has attributes which are credible and acceptable to conduct and sell the brand extension. For example: (1) the core brand attributes of Sony make it credible and acceptable for Sony to extend the Sony brand into laptops and digital cameras however they are not credible and acceptable to extend the Sony brand into sports clothing, (2) the core attributes of Budweiser make it credible and acceptable for Budweiser to extend the

Whats Important to Consumers?

Budweiser into new beers however they are not credible or acceptable to extend the Budweiser brand into wine or spirits. TRANSFER is the perceived ability of a brand to transfer their skills and experience to the brand extension. For example: (1) the skills and experience of British Airways are transferable into other areas of air transportation such as domestic flights and low cost flights, however British Airways skills and experience is not transferable into coach transportation, (2) the skills and experience of American Express is transferable into travel insurance and foreign exchange services, but not transferable into car rental. The most crucial component of consumers brand extension fit judgments is the relevance construct. However all the constructs are important and consumers must perceive all constructs to some degree to perceive a brand extension to fit.

How to Conduct Brand Extension:


The following five-stage process model is suggested for brand extensions: Initial Research: Research and map the core brand attributes by talking to the core target customers of the brand utilizing unstructured research techniques to elicit an understanding of the constructs and attributes of the core brand.
1.

Utilize Initial Research: Use this initial brand research to assist in brainstorming and the development of brand extension ideas, which managers think may or may not fit with the core brand based on the constructs of brand extension fit suggested above.
2.

Investigate Fit: Research core target customer's evaluations of the extent to which the potential brand extensions fit with the core brand. Ensure samples are representative of the consumers who are likely to purchase the brand extensions.
3.

Select Brand Extension: Select the brand extension which the research indicates has the highest level of fit with the core brand and as such is most likely to be successful. If you want to conduct a brand extension which has a lesser degree of fit with the core brand, identify which fit construct is lacking and then seek to alter (prime) consumer's evaluations of the brand via advertising or marketing to increase the degree to which the brand extension fits.
4.

Conduct Brand Extension: Ensure that the brand is carefully mapped after the brand extension to identify is there is any change in the core brand values as a result of the brand extension
5.