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BRAND

EXTENSION
PREPARED BY:-
PREETI CHIB
ANJALI GUPTA
What is a Brand?
Brand is a name, term, sign, symbol, design, or a
combination of them, intended to identify the goods
or services of one seller or group of sellers and to
differentiate them from those of competitors.
A BRAND is symbolic embodiment of all the
information connected to a Company, Product or
Service.
It serves to create associations and expectations from products
made by a producer, in the mind of the
consumer.
The key objective being to create a Relationship of
TRUST with its consumers.
Introduction of new products
The three choices of a firm when they are
introducing a new product :-
New brand for new product
Use of existing brand for the new product
Combination of the new brand with the
existing brand.
BRAND EXTENSIONS
A Brand Extension occurs when a firm uses an
established brand name to introduce a new product
(approaches 2 or 3)
When a new brand is combined with an existing
brand(approach 3), the brand extension can also be called a
sub-brand.
An existing brand that gives birth to a brand extension is
the parent brand.
If the parent brand is already associated with multiple
products through brand extensions, then it may also be called
a family brand.
TYPES OF
BRAND
EXTENSIONS
1. LINE EXTENSION
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
Head & Shoulders line
extension
Cokes Line Extension
2. CATEGORY EXTENSION
The parent brand is used to enter a different
product category from that currently served
by the parent brand.

Eg: ITC
ITCS CATEGORY EXTENSION
Strategies for establishing a
category
1. Introduce the same product in a different form
2. Introduce product that contain the brands
distinctive taste, ingredient or component.
3. Introduce companion product for the brand.
4. Introduce products relevant to the customer
franchise of the brand.
5. Introduce products that capitalize on the firms
perceived expertise.
6. Introduce products that reflect the brands
distinctive benefit, attribute or feature.
7. Introduce products that capitalize on distinctive
image or prestige of the brand.
Why Brand Extension?
Leveraging brand equity/value by introduction of
Logical & complementary new product categories
E.g HP
Product Innovation to surpass consumer
expectations
It increases awareness of the brand name
Increases profitability from offerings in more
than one product category.
Its a great way to reinforce a brand, reach out to
new customers, create a BUZZ
ADVANTAGES OF BRAND
EXTENSION
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
Facilitate new product acceptance.
Reduce risk perceived by customers.
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
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
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
When are Brand Extensions
Appropriate?
When Prior Brand equity exists
Consumer must see some connection between the
proposed extension and the parent brand.
The proposed extension contributes to and
reinforces the overall brand equity of the parent brand.
THANKYOU

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