drivers of brand extensions success dr. k. shyama sundar, b.jeya

EXCEL International Journal of Multidisciplinary Management Studies

Vol.2 Issue 2, February 2012, ISSN 2249 8834

Online available at http://zenithresearch.org.in/

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DRIVERS OF BRAND EXTENSIONS SUCCESS

DR. K. SHYAMA SUNDAR*; B.JEYA PRABHA**

*Director,

Mohamed Sathak College of Arts and Science,

Chennai.

*Assistant Professor,

Department of Management Studies,

Jaya Arts and Science College, Chennai.

_______________________________________________________________________________

ABSTRACT

The brand extension involves using an existing brand name to launch a product in a

different category. It is otherwise known as category extension. Here brand name is

constant whereas product category is a variable. The new product category needs to be

different from the category presently served by brand. Extending the brand beyond the

parent product category is profitable because the products that are already known and

recognized in the market needs little introductory expenses. But the success rates of such

extensions are very less. Therefore the potential determinants of success like core value of

parent brand, similarity fit, quality of extended products and brand reputation becomes

very important focus of study. This paper aims to bring out the factors responsible for the

success of Dettol brand extensions.

KEYWORDS: Parent brand, core value, similarity fit, brand reputation.

_________________________________________________________________________

1.1 INTRODUCTION

New products are launched in the market with an objective to attract more and more

customers and thereby, increase market share. With increasing competition, customers are

being provided with various options. Successful organizations all over the world recognize

the importance of new product launches as a means of organic growth and as a means to

differentiate themselves from others. At the same time, it must be remembered that it is not

an easy task to create winning products in an increasingly competitive environment.

Considering the high failure rate of new products, launching a new product is a risky

proposition (Panwar and Bapat, 2007). Under this circumstance brand extension might

receive success if consumers accept the extended brand product category.

“Brand extension is using the leverage of a well known brand name in one category to

launch a new product in a different category.” Brand extension is a marketing strategy in

which a firm that markets a product with a well-developed image uses the same brand

name but in a different product category. Brands use this as a strategy to increase and

leverage equity. A successful brand helps a company enter new product categories more

easily.

1.2 BRAND EXTENSION BENEFITS

1. Brand extensions let a marketer take a brand with well-known quality perceptions

and associations and put it on a brand in a new category.




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2. Consumers who favorably evaluate a parent brand are more willing to try and

adopt the brand extension than an unfamiliar brand in the same category.

3. A brand extension helps to identify logical new product possibilities.

4. It enables a company to enter new categories at significantly lower cost.

5. It reduces the risk of failure since the brand enjoys already established awareness

and trust.

6. It creates a positive synergistic effect with the efficiencies of umbrella branding

and advertising.

7. Brand extensions can also help consumers understand the core meaning of the

brand name.

8. It reinforces the consumers‟ perceptions of the parent brand name.

1.3 MAIN REQUIREMENTS FOR SUCCESS OF BRAND EXTENSION

The following basic requirements covering the parent brand and the extensions must be

met for brand extension to be successful:

a) Extension should be in the brands area of expertise so that there is scope for leverage.

b) Benefit Transfer: The users of extended product will expect the same kind of

gratification as they have received from the parent brand. For example, the users of Dettol

soap will expect the same kind of gratification as they have received from the Dettol

antiseptic lotion.

c) There must be consistency between the parent brand and the extensions in customers‟

perception.

1.4 FACTORS RESPONSIBLE FOR SUCCESS AND FAILURE OF A

EXTENSION OF A PRODUCT

i. Characteristics of the Parent Brand

Dettol‟s fragrant bath soap was a failure. The consumer associated Dettol and its

„antiseptic‟ smell with cleanliness and being germ-free and when this was missing

from the newly launched soap, they did not accept it.

ii. Experience with the Parent Brand

Being positioned as hygiene product, the consumers expect the same experience

from the extensions.

iii. Characteristics of Extension Product




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The quality and uniqueness of the extended products leads to success.

iv. Relationship between parent brand and extension product

There should be fit between parent brand and extension product, kind of

information which is extended by the parent brand.

v. Characteristics of the firm

If the company has good reputation and strong marketing competence, the chances

of success are more.

2.1 ABOUT THE DETTOL COMPANY

Reckitt Benckiser (India) Limited (RBIL), formerly known as Reckitt & Colman (India)

Ltd is one of the fastest growing consumer goods companies in South Asia. It has major

presence in home and personal care, surface care, fabric care, pest control and healthcare.

Dettol is an iconic brand of Reckitt Benckiser launched in 1933 in India. Dettol as a brand

has immense trust and loyalty from the consumers. Since the 1930s when Dettol was

introduced in India, it has occupied a distinct position in the mind of its consumers. To

achieve fast growth and leverage the strong brand equity of Dettol, the company rolled out

a number of brand extensions. When its competitors like HUL (Lifebuoy and Hamam)

have been losing their market share, Dettol has managed to maintain a steady growth

amidst the competition. This can be mainly attributed to its focused brand positioning of

germ protection. Smart strategic moves involve its stable pricing, well thought brand

extensions and accessibility through smaller packs. The brand‟s endorsement from the

Indian Medical Association has only added to their advantage.

2.2 ABOUT DETTOL ANTISEPTIC LIQUID

Dettol antiseptic liquid is a product, which has many uses for protecting against germs. It

is a amour gold color which attracts the customer. It has a remember able smell. It gives a

white foaming effect when put in water. It is used with mopping water to disinfect floors

completely. It is used in washing laundry to disinfect clothes. It is essential for first aid and

personal care uses. It is available in a wide range of sizes from 50 ml to 5 Litre.

2.3 DETTOL TARGETS RS 1000 CR WITH EXTENSIONS

Dettol has successfully extended to soaps, hand washes, floor cleaner and shaving cream,

too. The packaging of all its products is distinct in their own way. The green and white

colours and the sword have become symbols for fighting germs and infections, reinforcing

the brand‟s positioning as a bodyguard which protects people from the unhygienic world

outside.

Dettol Antiseptic Liquid in its personal care segment has been extended in the following

categories:

Soaps

Liquid Hand wash




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Body Wash

Shaving Cream

Medicated Plaster

Surface cleanser

Soaps, launched in 1981, have been the biggest growth driver accounting for around 75 per

cent of the total revenue. Dettol bar soap has got 4.9% market share and four variants in

the market are available nationally - Dettol Original, Dettol Skincare, and Dettol Fresh. Its

competitors are Lux, Savlon, Lifebuoy and Santoor in the market.

Soaps have seen a growth of 8 to 9 percent in value and 2 to 3 percent in volumes in a

Rs.7,500 Crore market that is growing.

The health platform has worked in other brand extensions as well. For example, liquid

hands wash. Despite retailing at a higher price than competitors such as Fem and Lifebuoy,

Dettol has maintained a lead in this segment with a 60 percent market share in the Rs 100

Crore market. It is available in three variants in a wide range of sizes from 250 ml to 1

Litre. The refill pouches of 200 ml are also available. Fem, Lifebuoy, Palmolive, Santoor,

Savlon are its competitors.

In shaving cream, it has 30 percent share in a Rs.200 Crore market. Similarly, the shaving

cream market was small (about Rs 50 crore at the time), but Dettol had strong compulsions

to get into that category. A study commissioned by Reckitt in 1996 revealed that about 40

per cent of regular shavers used some kind of antiseptic lotion after shaving, and 30 per

cent used Dettol liquid. The same study also showed that those who used Dettol didn't feel

the need to use any after-shave lotion. Moreover, the average frequency of purchase of

Dettol liquid was once every 10 months. That sent Reckitt looking for a product extension

that could satisfy the same need and be picked up more often. Shaving creams and gels are

part-utility and part-cosmetic products, and Dettol's two-in-one proposition didn't address

the latter need at all.

Dettol Body wash, offers Dettol's trusted protection in a new, modern format. It has got

4% of market share and its market value is 16 Crores. Lux body wash, Dove and

Palmolive are its competitors.

Dettol Wash proof Medicated Plaster provides antiseptic protection to broken skin. Its

non-stick pad gives additional comfort and does not stick to the wound. This special skin

colour band blends with your skin and does not peel in water. It is proven to be safe and

provides expert protection against germs.

The Dettol surface cleanser is said to safely kill harmful bacteria such as Salmonella,

Listeria and E-Coli.

3.1 NEED FOR THE STUDY:

The Antiseptic liquid market in India is estimated at Rs. 120 Crores in 2008. The market is

dominated by Dettol Antiseptic Liquid, which has close to 85% share. Johnson &

Johnson‟s Savlon is the other significant player with a market share of 13%. A few years




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back, this market saw introduction of Suthol brand antiseptic liquid from G.D. Pharma

(makers of Boroline). Antiseptic Liquid is a well penetrated market and is sold in over 16

Lakhs outlets in the country. So the demand is more with a larger market share. The

brand‟s revenues were pegged at Rs.900 Crore in July 2009, according to AC Nielsen data.

Dettol, the 76-year old iconic brand from Reckitt Benckiser, is well on its way to

achieving a turnover of Rs 1,000 Crore with its brand extensions. Sometimes the

unsuccessful brand extensions create undesirable associations, which put the company at a

serious risk (Aaker 1990: Lane and Jacobson 1995). The more products a company

markets under one umbrella brand, the higher the risk that if a disaster occurs to one of

them, the effect will spill over to the rest (Sullivan 1990). Opportunities to create a new

brand are also foregone (Aaker 1990). Therefore the company needs to understand the

significance of the factors determining the success of brand extensions to develop a right

brand extensions strategy.

3.2 OBJECTIVES

a) To examine the customer‟s awareness on brand extensions of Dettol.

b) To analyze the factors determining the success of brand extensions.

c) To examine the effectiveness of advertisement for the success of brand extensions.

3.2 RESEARCH DESIGN

The study covers both the primary and secondary data. Descriptive research design is most

suitable. The primary data was collected by interview method by using a structured

questionnaire. For the purpose of the study, the data has been collected in Chennai city.

100 respondents were selected for the study as sample using convenience sampling. The

secondary data was collected from the published records, journals, magazines and web

portals. The primary data was collected by administrating questionnaire cum interview

schedules to consumers.

Sampling unit : Users and non-users of Dettol products in Chennai city.

Sample size : 100

Sampling design : Non-probability convenience sampling

The collected data was analyzed by using the tools Simple percentage analysis and chi-

square.

3.3 LIMITATIONS OF THE STUDY

The study was restricted to certain areas of Chennai due to time and cost constraints and

hence the findings cannot be extrapolated for other cities or regions. There may be changes

in the environment in the future which in turn may influence consumer behaviour.

4. DATA ANALYSIS

4.1 DEMOGRAPHIC PROFILE OF RESPONDENTS




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5

10

24

26

24

16

AGE GROUP

16 – 20

21-25

26-30

5050

GENDER

Male

Female

0 0

10

30

60

0

EDUCATION LEVEL

Primary School

Middle School

High School

Graduation

52

0

20

28

OCCUPATION

Private

Government

Business

Others

20

2654

0

INCOME LEVEL

2L-3L

3L – 4L

4L-5L

Above 5L

25

75

FAMILY TYPE

Joint

Nuclear

38

62

MARITAL STATUS

Married

Unmarried




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The respondents fall under age group 16- above 35 years of both male and female.

Majority are working in private organisation and married.

From the above Pie Diagram it can be inferred that Dettol is the market leader and it is

mostly associated with hygiene as positioned by the company.

From the above Pie Diagram it can be inferred that we clearly see that the Dettol hand

wash and soap are the clear winners with the customers having more awareness.

62

28

010

MARKET SHARE OF

DETTOL

Dettol

Savlon

Suthol

None 87

08 5

BRAND ASSOCIATION

Hygiene

Cosmetic

Masculine

All

95

5

AWARENESS LEVEL OF

DETTOL SOAP

AWARE

UNAWARE

95

5

AWARENESS LEVEL OF

DETTOL HAND WASH

AWARE

UNAWARE

70

30

AWARENESS LEVEL OF

DETTOL BODY WASH

AWARE

UNAWARE45

55

AWARENESS LEVEL OF

DETTOL SHAVING

CREAM

AWARE

UNAWARE




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However other products such as plaster (adhesive bandage), body wash, shaving cream

and surface cleaner do not capture a share of the consumers mind to that good extent.

From the above Diagram it can be inferred that we clearly see that Television

advertisement plays very important role in creating awareness.

4.2 CONSUMER ATTITUDE TOWARDS DETTOL BRAND

From the above Diagram it can be inferred that overall consumer attitude in terms of

likability, fit, quality, positioning, willingness to purchase and value for money is positive

towards Dettol brand.

43

57

AWARENESS LEVEL OF

DETTOL PLASTER

AWARE

UNAWARE

43

75

AWARENESS LEVEL OF

DETTOL SURFACE

CLEANER

AWARE

UNAWARE

0 20 40 60 80

Dettol SoapDettol Liquid Hand wash

Dettol Body WashDettol Shaving Cream

Dettol Medicated PlasterDettol Surface cleanser

AWARENESS THROUGH TELEVISION

AWARENESS THROUGH TELEVISION

01020304050607080

STRONGLY AGREE

AGREE

NEUTRAL

DISAGREE

STRONGLY DISAGREE




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4.3 CONSUMER ATTITUDE TOWARDS DETTOL SOAP


similarity fit, association, relevancy, quality, value addtion is positive towards extended

product Dettol soap.

4.4 CONSUMER ATTITUDE TOWARDS DETTOL HADN WASH



product Dettol hand wash.

0

10

20

30

40

50

60

70

80

STRONGLY AGREE

AGREE

NEUTRAL

DISAGREE

STRONGLY DISAGREE

010203040506070

The e

xten

sion fi

ts w

ith th

...

The e

xten

sion fi

ts cons

u...

The e

xten

sion is

releva

nt ...

Exte

nsions

give

value

add...

The b

rand e

xtens

ions a

dd...

The o

vera

ll qual

ity of b

ra..

I am

like

ly to

try bra

nd e

x...

STRONGLY AGREE

AGREE

NEUTRAL

DISAGREE

STRONGLY DISAGREE




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4.5 CONSUMER ATTITUDE TOWARDS DETTOL BODY WASH



product Dettol body wash.

4.6 CONSUM ER ATTITUDE TOWARDS DETTOL PLASTER

From the above Diagram it can be inferred that majority consumer attitude in terms of


product Dettol plaster.

0

10

20

30

40

50

60

The

extension fits

with the core

values of the

parent

brand.

The

extension fits

consumer

associations

with the

parent

brand.

The

extension is

relevant with

the

consumers.

Extensions

give value

addition over

competitors’

brand.

The brand

extensions

add value to

the parent

brand.

The overall

quality of

brand

extensions is

good.

STRONGLY AGREE

AGREE

NEUTRAL

DISAGREE

STRONGLY DISAGREE

0

10

20

30

40

50

60

The

extension fits

with the core

values of the

parent

brand.

The

extension fits

consumer

associations

with the

parent

brand.

The

extension is

relevant with

the

consumers.

Extensions

give value

addition over

competitors’

brand.

The brand

extensions

add value to

the parent

brand.

The overall

quality of

brand

extensions is

good.

STRONGLY AGREE

AGREE

NEUTRAL

DISAGREE

STRONGLY DISAGREE




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0

4.7 CONSUMER ATTITUDE TOWARDS DETTOL SHAVING CREAM



product Dettol shaving cream.

4.8 CONSUM ER ATTITUDE TOWARDS DETTOL SURFACE CLEANER



product Dettol shaving cream.

0

10

20

30

40

50

60

The

extension fits

with the core

values of the

parent

brand.

The

extension fits

consumer

associations

with the

parent

brand.

The

extension is

relevant with

the

consumers.

Extensions

give value

addition over

competitors’

brand.

The brand

extensions

add value to

the parent

brand.

The overall

quality of

brand

extensions is

good.

I am likely to

try brand

extensions in

future.

STRONGLY AGREE

AGREE

NEUTRAL

DISAGREE

STRONGLY DISAGREE

0

20

40

60

80

100

The ex

tensio

n fits

with

th...

The ex

tensio

n fits

cons

u...

The ex

tensio

n is re

levan

t ...

Exte

nsions

give

valu

e add...

The br

and ex

tens

ions a

dd...

The ov

erall q

uality

of b

ra..

STRONGLY DISAGREE

DISAGREE

NEUTRAL

AGREE

STRONGLY AGREE




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4.9 CONSUMER ATTITUDE TOWARDS ADVERTISEMENT

Majority consumers strongly agree that advertisment enhances brand awareness, brand

image, differentiate brands and brings emotional attachment of consumers.

5. FINDINGS

1. The respondents fall under age group 16 above 35 years of both male and female

and majority are working in private organisation and are married.

2. Dettol antiseptic liquid is the market leader and it is mostly associated with hygiene

by the consumers as positioned by the company.

3. Dettol hand wash and soap are the clear winners with the customers having more

awareness. However other products such as plaster (adhesive bandage), body wash,

shaving cream and surface cleaner do not capture a share of the consumers mind to

that good extent.

4. Television advertisement plays very important role in creating awareness.

5. The overall consumer attitude in terms of likability, fit, quality, positioning,

willingness to purchase and value for money is positive towards Dettol brand.

6. The overall consumer attitude in terms of similarity fit, association, relevancy,

quality, value addtion is positive towards extended product Dettol soap, Dettol

hand wash and body wash.

7. The majority consumer attitude in terms of similarity fit, association, relevancy,

quality, value addtion is positive towards extended product plaster, Dettol shaving

cream and Dettol surface cleaner. However, some of the consumers show negative

attitude towards these products.

0

10

20

30

40

50

60

70

Enhance the

brand

awareness

Increases the

sales

Enhances the

brand image

Helps to

differentiate

brands

Provides

market

information of

brand

extension

Enhances

product

category

familiarity

Increases

emotional

attachment of

consumers

STRONGLY AGREE

AGREE

NEUTRAL

DISAGREE

STRONGLY DISAGREE




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8. Majority consumers strongly agree that advertisment enhances brand awareness,

brand image, differentiate brands and brings emotional attachment of consumers.

6. INFERENCES AND RECOMMENDATIONS

1. From the above findings, it is understood that for success of extension consumers

associations and fit with the parent brand is very significant. It is obvious in case of

Dettol soap, hand wash and body wash. In the case of soap, where the extension

worked well, the product maintained the core value of protection against germs

without cosmetic appeal. That is why when Reckitt tried to add cosmetic appeal for

its soap by adding moisturiser in Dettol Extra, it didn't work. Dettol liquid soap

was positioned as a germ fighting antiseptic soap which was congruent with the

image of the parent brand.

2. Shaving cream and gel are part-utility and part-cosmetic products, and Dettol two-

in-one proposition did not address the latter need at all (after all, no one would

have wanted to smell of Dettol after a shave). The extended products should fit

with the core value of parent brand. At the same time the business fit also taken

into consideration for its success. In case of shaving cream, there is no business fit.

In 2000, Reckitt made the same mistake when it entered the talc market with Dettol

prickly heat talc. The size of the talcum powder market is roughly Rs.750 Crore,

but the prickly heat segment accounts for less than 15 per cent of that. Finally,

Dettol talc was phased out.

3. Although there is fit with parent brand, the reason for negative attitude of floor

cleaner is same for body use & floor cleaning use could have been unacceptable

from consumers point of view. The consumers psychology should be studied for

launching any product. The consumer survey is to be taken to know interest over

certain products.

4. Since advertisment plays important role in creating awareness and image, it should

be improved to make the consumers understand their emotional attachment with

the brand.

5. The pioneer brands are always successful as in the case of Johnson band-aid and

Dettol could not take away their market share in spite of proper image fit.

7. CONCLUSION

This study advances knowledge of brand extensions in several ways. First, we found that

perceived similarity is a crucial factor in the evaluation of services brand extensions. This

finding concurs with the hypothesis in the brand extension literature that any brand which

is extended into similar categories should receive high consumer evaluations (see, e.g.,

Aaker and Keller 1990). Second, the reputation of the parent brand is a crucial factor

influencing the likelihood of a successful brand extension.




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8. REFERENCES

1. Aaker, David A. (1996), “Building Strong Brands”, New York: The Free Press,

380 p.

2. Aaker, David A. and Keller, Kevin Lane (1990), “Consumer Evaluations of Brand

Extensions”, Journal of Marketing, 54, (January), pp. 27-41.

3. Völckner, F and Sattler, H. 2006, “Drivers of brand extension success”, Journal of

Marketing, vol. 70, no. 2, pp. 18-34.

4. Hem, Leif E., Leslie de Chernatony, and Nina M. Iversen (2001), “Factors

Influencing Successful Brand Extensions,” working paper, Birmingham University

Business School, Birmingham,UK.

5. Nijssen, E. J. 1999, “Success factors of line extensions of fast-moving consumer

goods”,European Journal of Marketing, vol. 33, no. 5, pp. 450-469.

6. De Chernatony, L., Dall‟Olmo, R. F. and Harris, F. 1998, “Criteria to assess brand

success”,Journal of Marketing Management, vol. 14, no. 7, pp. 765-781.

7. Reddy, Srinivas K., Susan L. Holak, and Subodh Bhat (1994), “To Extend or Not

to Extend: Success Determinants of Line Extensions,” Journal of Marketing

Research, 31 (May), 243–62.

8. Baker, W., Hutchinson, J. Wesley, Moore, D. and Nedungadi, P. (1986), “Brand

Familiarity and Advertising: Effects on the Evoked Set and Brand Preferences”. In:

Advances inConsumer Research, 13. (Ed.) Lutz, R. J. (UT), Association for

Consumer Research,pp. 146-147.

9. Business Standard 7th

Sep 2009 “Dettol finds Wealth in Health” Page No 14

drivers of brand extensions success dr. k. shyama sundar, b.jeya

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