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Brand Extensions

Brand Extensions. Why? When? How?. What is a Brand Extension?. Established brands are assets Marketers try and leverage these assets The process of using the brand name on another product is known as extension Line Extensions (Lifebuoy Liquid Soap) Category Extensions (Nokia Laptops)

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Brand Extensions

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  1. Brand Extensions Why? When? How?

  2. What is a Brand Extension? • Established brands are assets • Marketers try and leverage these assets • The process of using the brand name on another product is known as extension • Line Extensions (Lifebuoy Liquid Soap) • Category Extensions (Nokia Laptops) • Stretch Extensions (Intel Celeron)

  3. 1 Brand = 1 Product • New products a driver of growth for a company • Developing and launching requires millions • Yet 9 out of 10 new products FAIL • Brand not launching new products are also at times perceived as old and staid • Overdependence on any one brand could be dangerous • Parent brand may only appeal to a segment • Brand is seen as boring and lacking variety • Allows the competition to flank

  4. Why Brand Extensions? • Brand extensions helps cut down costs • Also increases the chances of success as the consumer already has a favourable image • Rejuvenates parent brand • Reduces overdependence on a single product • Category/Stretch extensions help bring in new users • Line extensions cater to different needs of segments or provide variety to existing users • Can also be a tool for blocking competition

  5. How do consumers evaluate? • Fit between Parent & Extension • Fit in terms of ‘Core Differentiation’ • FIT: Coke & Diet Coke (Taste) • MISFIT: Pepsi & Crystal Pepsi (Colour) • Extension must remain true to the core values of the parent brand

  6. How much to extend? • Extend to the extent where there is an equal borrow & build with the parent brand • Harley: Clothing, Tatoos but not Energy Drink • FAL: FAL for Men but not Perfect Radiance • Pepsodent: Cavity, Plaque but not Fresh Breath • Drivers • Frame of Reference (McDonald’s – Fast Food) • POD (Wal-Mart Discount Store) • RTB (Gits – Indian)

  7. Stretch Extension (Down) • Why? • Competition • Private Labels • Challenge • Protecting the Equity of Parent Brand • Distinguish the Extension (Cannibalisation) • Sub-Branding • Product

  8. Stretch Extension (Up) • Why? • Potential User Base • Higher Margins • Enhance equity of downstream brand • Challenge • Managing Credibility • Sub-Brand with a Descriptor (Kodak GOLD)

  9. Line Extension (Sideways) • Why? • Desire for Variety in flavours, forms • Address related needs • Expand User Base • Block Competition • Challenge • Overchoice / Confusion • Managing the range (Cost vs. Volume)

  10. Extensions in Portfolio • Cannibalisation • Distinct Role • Incremental Share • Different Needs

  11. Key Questions • Positioning of Parent Brand? • What am I using from the positioning? • Is that valued by the consumer in the new category in which I am extending? • Does the consumer see a connect with the parent? • What will be the impact on the parent?

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