Case Facts

Hidesign manufacturer of leather goods based

in Pondicherry , India
Affordable luxury merchandise
3 decade leather product portfolio
Premium pricing for the products
2 manufacturing plants , 3000 employees
69 EBOs ( 56 in India) & 2000 stores in 23
countries by mid 2011
60 percent of turnover from India
In 2010 , plans of brand extensions into non
leather categories announced

Timeline
1978
Start of
operations
1985
UK store John
Lewis stocked
its products
1990
Establishment
of
Manufacturing
plant
1997
First exclusive
store
established in
Moscow
1999
Own retail
operations
begin in India
2004
Partnership
with Italian
designers for
product design
2006
First airport
retail outlet
established in
Sweden
2007
Louis Vuitton
acquired 20%
stake
Brand extension as growth strategy
A brand extension will tend to be the optimal route when the
following conditions are present:

Strong brand associations provide a point of differentiation and
advantage for the extension. When the brand name provides only
name recognition and a perceived quality umbrella, the extension
will often be vulnerable to competition.

The extension helps the core brand by reinforcing key associations,
avoiding negative associations, and enhancing name recognition.

The category cannot provide the resources needed to establish a
new name, or a new name will not provide useful associations or a
platform for future growth.

POP & POD
Points of Parity Points of Difference
Quality craftsmanship History & Heritage of leather
Premium Price Distribution
Upmarket Clientele

Eco friendly Process
Quality Manufacturing
Design Target segments
Advantages of Brand Extension for
Hidesign
Lower product introduction expenses
The risk perceived by the customers would
reduce because of Hidesigns 3 decade presence
The likelihood of gaining distribution and trial
would increase as it can use existing platforms of
EBOs
Awareness and Presence of Hidesign would
increase
Accessing New Markets market size of
sunglasses estimated at 6 billion INR , 5%
belonged to organized sector

Disadvantages of Brand extension for
Hidesign
There is a risk that the sunglasses , pens may
generate implications that damage the image of
the leather heritage brand.
The Brand Franchise might be cannibalized-If
sales of a non leather products come at the
expense of the original customer base of leather
items
Existing Associations Are Weakened Leather
associations would not fit the category. Existing
campaigns would lose their meanings
Undesirable Associations Are Created Hidesign
promoted as eco friendly brand and now
manufacturing would be outsourced in China