Brand Extensions

Brands Growth
1. Increasing the volume of purchase per capita of

present customers of the present product

2. New product development and line extensions to
increase the brands relevance and address the
needs of more specific targets or situations
3. By the globalization of business in countries
offering high growth opportunities
4. By innovating to modify the competitive
situation
Creating new advantages
2. Open new markets
1.

Brands Growth
1. Increasing the volume of purchase per capita of

present customers of the present product

2. New product development and line extensions to
increase the brands relevance and address the
needs of more specific targets or situations
3. By the globalization of business in countries
offering high growth opportunities
4. By innovating to modify the competitive
situation
Creating new advantages
2. Open new markets
1.

Brand Extension
Existing brand born in a new category
Not a new phenomenon was always the case with

luxury brands
An essential way to keep the brand alive
Leveraging the transferable assets
If the name is considered a real perceived advantage over

competition

Efficiency and productivity factors

Unused capacity
Avoiding disappearing
To sell liquor through soda
And definitely the most respectable offense and defense

Perimeters of Brand
Extension

Latent
potential
Inner
Core

Outer
Core

No-go area

Economics of Extension
Brand
Extension

Rate of
success

Years since
launch

Upside and Downside

Can reinforce and enhance a brands image
Increasing overall sales
Brand extensions can sometimes create

negative cash flows

Increased production cost
Complexity and heightened competition for

facilities, materials and human resources

Cannibalization of existing products

Brand Leveraging Power

Consumer regard for the brand
And familiarity with the brand

Critical
Determinant
s

Basis Brand Leveraging

Power
Troopers
Diamonds
Developers

Troopers
Both familiar and appealing
Good extension brands
High and balanced ratings signals a broad

market base
High chances of new

Create more financial benefits than costs

Internationally, Tropicana is a great success

Diamonds
Most valuable brands
Ranking highest with consumers in familiarity &
appeal
High leverage power
Appeal is exportable
Beyond dilution
Precarious but resilient & strong
forever
Coca-Cola, Cambell, Hershey

Developers
Rank relatively low on appeal & familiarity
Rather than brand bolstering the extension

its the reverse thats true

Iphone & itune changed the fortune of Apple

Imbalanced Brands
Limited Leveraging Power
Tarnished Treasures
Greatest risk of failed extensions
Marketing mix that appeals to some and turns

off others
High familiarity but low appeal
Dettol Utensil cleaners
Marlboro Lights

Cost cutter brands

Inferior goods
Marico vs. Emami

Imbalanced Brands
Limited Leveraging Power
Coveted Icons
High appeal but low familiarity
Goal only a special niche
Superior product / service ingredients
Restricted distribution
Emphasis on cult creation
Harley

Stock Market Assessment of

Brand Leverage Power
200
150
100
50
0
-50
-100
-150
-200

Series 3
Series 2
Series 1

Brand Extension Decision

A Three Step Approach
Step 1: Determine consumer familiarity &

regard for the brand

Step 2:Assess the Brands expected Leverage
power
Step 3:Consider Alternatives
Extend selectively
Sub-branding Vichy, La Roche-Posey, Garnier,

Maybelline

Recognize the brands limits

Consumer Regard Ranking

Brand Leverage Power

Assessor
Coveted
Icons

Diamonds

Troopers

Developers

Consumer Familiarity Ranking

Tarnished
Treasures