brand extensions by dr. rajesh
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BRAND EXTENSION
Dr. Rajesh Sharma
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Agenda
What is a brand extension?
Why do it?
How do it?
Old and new examples
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BRAND EXTENSIONS
A Brand Extension occurs when a firm uses an established brand name to
introduce a new product.
When a new brand is combined with an existing brand (approach 3), the brand
extension can also be called asub-brand.
An existing brand that gives birth to a brand extension is theparent brand.
If the parent brand is already associated with multiple products through brand
extensions, then it may also be called afamily brand.
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Category extension
Line extension
Vertical extension
Co-brand
But its not always clear how to categorize it as we will see
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The parent brand is used to enter a different product category from that currently
served by the parent brand.
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The parent brand is used to enter a different product category from that currently
served by the parent brand.
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Mini
Nano
Touch
Shuffle
Nano 2
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The parent brand is used to brand a new product that targets a new market segment with in a product category currently served by the
parent brand.
A line extension often adds a different flavor or ingredient variety, a different form or size, or a different application for the brand.
Eg: Head & Shoulders & Coke
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Line Extension strategies
Product Sizes
Bisleri
1.1 ltr
Bisleri
5 ltr
Bisleri
1.5 ltr
Bisleri
1.2 ltr
Bisleri
.5 ltr
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Colour Etc.,Pantene
Pink
Pantene
Black
Pantene
White
Flavours
Ingredient
Rasna
OrangeRasna
Mango
Rasa Rose ,
etc
Colgate
gel
Colgate
Herbal
Colgate
Salt etc.,
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Form
Vim
Liquid
Vim
Powder
Vim
Bar
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Line extension?
Volvo S60
Volvo S40& S80
CategoryExtension?
C30- compact cars
XC90, V70
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Low cost clothing Designer clothes and shoes
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Well functioning standard cars Well functioning premium cars
It depends on what associations you wantto transfer between the brands
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Quality
Reliability Environmental
Premiumness
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Boring
Ugly Bad brakes
Expensive
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Take advantage of marketopportunites
If you dont capitalize on anopportunity, someone else will
Leverage internal assets
Use internal strengths in bestpossible way
Stay relevant
The brand needs to be
continuosly energized to stayrelevant for target consumers
Protect the brand From competitors, changingbusiness climate etc.
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Core
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= Speed
The core of the relationship between McDonalds customers and thebrands magic is about the promise of speed
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= Speed
= Speed = Speed
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McDiner Successful growth areas forMcDonalds have been where they
have been able to capitalize on theircore- areas where speed is relevant
CoffeeMcDrive
= Speedshops
Wireless hot-spots Core
Successful launches
Golden Arch Hotel
Failures
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We offer tools for creative minds
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Weekday Formal dinner Coffee break
breakfast
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Coca Cola- masters of line extensions
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"Brands have to
evolve or die
(Former
Starbucksmarketing chief
Computer softwareVideo game hardware Scott Bedbury
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The appification has lead to a number of different extensions:
Old companies launch new products (category extensions)
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The appification has lead to a number of different extensions:
Old companies launch new products (category extension)
Old companies launch new versions of existing products (line extensions)
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The appification has lead to a number of different extensions:
Old companies launch new products (category extensions)
Old companies launch new versions of existing products (line extensions)
New companies launch new products
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Travel agency and airlines
Health club
Mobile phone operator
Music store
Financial services
Transportation
Etc.
We believe in making a
difference. Virgin stands for
value for money, quality,innovation, fun and a sense
of competitive challenge.
When we start a new venture, webase it on hard research and
analysis. Typically, we review the
industry and put ourselves in the
customer's shoes to see what couldmake it better.
Virgin has created more than 300 branded companies worldwide, employingapproximately 50,000 people, in 30 countries. Global branded revenues in 2009exceeded 11.5 billion (approx. US 18 billion).Klla: xxx
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Advantages Of Brand Extensions
Facilitate New Product Acceptance
Improve brand image
Reduce risk perceived by Customers
Permit consume variety-seeking
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Advantages Of Brand Extensions
Increase the probability of gaining distribution and trial Increase efficiency of promotional expenditures
Reduce costs of introductory & follow-up marketing programs
(save 40-80%)
E.g. Apple iPods
Avoid costs of developing a new brand
Allow for packaging & labeling efficiencies
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Advantages Of Brand Extensions
Provide Feedback Benefits to the Parent Brand
and Company
Clarify brand meaning
Enhance the parent brand image
Bring new customers into brand franchise and increase market
coverage
Revitalize the brand
Permit subsequent extensions
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Advantages Of Brand Extensions
Clarify brand meaning
Brand Original
Product
Extension
Products
New Brand
Meaning
WeightWatchers
Fitness Centre Low-caloriefoods
Weight loss &maintenance
Sunkist Oranges Vitamins,
juices
Good health
Kelloggs Cereal Nutri-grain
bars, Special K
bars
Health
snacking
Aunt Jemima Pancake mixes Syrups, frozen
waffles
Breakfast
foods
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Disadvantages Of Brand Extensions
Can confuse or frustrate consumers
Can encounter retailer resistance
Can fail & hurt parent brand image
Xerox Computers-synonymous with copiers & no one believed
they could make computers
Can succeed but cannibalize sales of parent brand
Amul Butter-reduced salt butter is slowly
eating up Amul normal butter
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Disadvantages Of Brand Extensions
Can succeed but diminish identification with any one
category
Can succeed but hurt the image of parent brand
Can dilute brand meaning Can cause the company to forgo the chance to develop a new
brand
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