PRESENTATION ON GROWTH OF BRANDS /EXTENSION OF BRANDS Presented by :SANJEEV PANDEY DEO KUMAR

Brand extension
It is a marketing strategy in which a company marketing a product with a well-developed image uses the same brand name in a various product category. Brands use this as a strategy to increase and leverage equity.
Ex: Tesco is extending its Finest brand into the home ware
market and other non-food products such as crockery, cutlery, cotton bed linen and towels, gifts, vases and glassware.

Brand Extensions: How does a firm grow?

A firm can:
Focus on current products and markets
Market penetration strategy

Put existing products into new markets

Market development strategy

Put new products into existing markets

Product development strategy

Put new products into new markets

Diversification strategy

Some Terminology
Brand Extension - A firm uses an established Brand name to introduce a new product
Harley-Davidson clothing

Sub-Brand - A new Brand is combined with an existing Brand

Nestle Kit Kat, Cadbury Dairy Milk, Sony PlayStation

Parent Brand The pre-existing Brand that gives birth to the sub-Brand Family Brand Parent Brand of multiple extensions

Categories of Brand Extensions

Line extension
Parent brand is used to brand a new product that targets a new market segment within a product category currently served by the parent brand
H&S dry scalp shampoo

Category extension
Parent brand is used to enter a different product category from that currently served by the parent brand
Swiss army watches, Porsche bicycles

Advantages of Extensions
Extensions can potentially provide the following benefits to facilitate new product acceptance:
Facilitate new product acceptance Improve brand image Increase efficiency of promotional expenditures Avoid cost (and risk) of developing new names Allow for packaging and labeling efficiencies Variety-seeking Provide feedback benefits to the parent brand

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Revitalize the brand Bring new customers into brand franchise & increase market coverage Clarify the brand meaning Enhance the parent brand image Improve strength, favorability, and uniqueness of brand associations Improve perceptions of company credibility

Disadvantages of Extensions
Brand extension in unrelated markets may lead to loss of reliability if a brand name is extended too far. An organization must research the product categories in which the established brand name will work.

There is a risk that the new product may generate implications that damage the image of the core/original brand.

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There are chances of less awareness and trial because the management may not provide enough investment for the introduction of new product assuming that the spin-off effects from the original brand name will compensate.

If the brand extensions have no advantage over competitive brands in the new category, then it will fail.

Brand Extension Assumptions

In introducing a brand extension, it is typically assumed that:
Consumers have some awareness of and positive associations about the brand in memory Some of these positive associations are evoked by the brand extension Negative associations are not transferred from the parent brand Negative associations are not created by the brand extension

Some examples of Extension Failures

Kellogg's Breakfast Mates The idea behind Kellogg's Breakfast Mates was fairly simple -- pack a box of cereal with milk and a spoon, and you have a tasty meal on the go! Hey, it worked for Lunchables, right? Unfortunately, Kellogg's failed to take two things into account. First of all, though the milk included in the Cereal Mate did not require refrigeration, no one likes the idea of warm milk. And second, the ads showed parents sleeping while children helped themselves to Cereal Mates -- but the packaging was not child-friendly. The confusion associated with Breakfast Mates led to its ultimate failure.

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DeLorean Car

Auto pioneer John DeLorean quit General Motors in 1973 to start his own company. His company's car was an unusual car featuring an unpainted, stainless-steel exterior and gull-wing doors. The car debuted in 1981, but when the company failed less than two years later it had produced fewer than 9,000 vehicles. Despite horrific sales, the car gained a cult following after the release of the 1985 movie 'Back to the Future' which featured the car as a time-travel machine. Last year it was announced that the car would be returning with very limited production.