BRAND EXTENSION

LINE EXTENSIONS The product line is now far more representative

of customers’ varying quantity needs.

It suggests the presence of usage segmentation.

Customers differs in terms of their usage quantities.

The brand has to fill the whole spectrum with products as per the needs of various segments.

Example

Bisleri is the pioneering brand in the mineral water category.

Originally, Bisleri used to come in a one litre bottle.

But recently, Bisleri has exhibited a spate of innovations.

The brand launched bottles of different sizes and quantities.

The Bisleri portfolio now includes .5 litre, 1 litre, 2 litre and 5 litre bottles.

Line Extension strategies

Product Sizes

Bisleri 1 ltr

Bisleri5 ltr

Bisleri2 ltr

Bisleri.5 ltr

Colour Head & shoulderPink

Head & shoulderBlack

Head & shoulderWhite

Flavours

Ingredient

Rasna Orange

Rasna Mango

Rasa Rose

Colgategel

ColgateHerbal

ColgateSalt

FormVimBar

Vim Liquid

VimPowder

"Men today want different solutions for different occasions - formalwear, relaxed work wear, evening wear, club wear, traditional wear, travel wear as well as sportswear.

Our brands Park Avenue, Parx and Manzoni, color plus have different categories to cater to this need.

Thus, all our brands offer a solution to changing men's fashion needs at different price points," says Shreyas Joshi, President, Raymond Apparel.

Why Line Extensions?

In most of the product categories including fast moving consumer goods, consumer durables and services, line extension has been the name of the game.

It is an expansionist move.

The firms seem to seek growth more vigorously.

Most prominent reasons of line extension Customer Segmentation Customer need for variety Pricing Breadth Capacity Utilization Competitive Reasons Trade Demands Counter Competition Image Benefits

Line Extension Risks

Line Confusion - Marketers sometimes add products to their line without sound logic and reasoning, without any clear role and goal. This may confuse the customers and the retailers and will affect the brand’s owner company in the long run.

Encourage Variety seeking – Brand loyalty is every marketers dream. By line extension, customers practice and become the habitant of variety seeking. Hence it influence brand switching behaviors. The loyalty is thus weakened.

Success Myopia – An idea may be a grand enough to be converted into a full-fledged independent brand. But the lure of extension seems to be so strong that the ideas are brought into the market as line extensions. This implies loss of a winning asset in the long-term.

Line Extension Risks…

Strained relations - When the lines expand, marketers tend to pressurize their trade partners such as wholesalers and retailers to carry the complete line in accordance with their wishes. The pressure appears to be applied more intensely at the retail level. The marketers seek adequate shelf space, promotion and information. But at the retailers end, it brings confusion and chaos.

The result is the strained relations between the marketer and the retailer.

Line Extension Trap

Line extensions do not work because they tend to go against the fundamental aspect of positioning.

The core brand holds a strong position inside the prospect’s mind.

Line extensions tend to educate customers that product and brand are two different things.

It is a fallacy that a brand is just a name that can be put on any product.

This is a great mistake. It undermines and destroys the brand in a prospect’s mind.

BRAND EXTENSIONS

Using an existing brand name to promote a product in a different category, is Brand Extension.

The key difference between line and brand extension is the product category.

In line extension the Product Category remains constant whereas in brand extensions product category is a variable.

EXAMPLE

LG – Television, Refrigerators, Computer monitors, Microwaves, Air Conditioners, Washing Machines & Mobile phones.

Park Avenue – Shirts, Shaving cream, Jeans, Belts, Perfumes, Soap.

Why Brand Extension?

Cost of New launches

Promotional Efficiency

Consumer Benefits

Feedback effects

Returns

Types of Extensions Product form extension – A product launched in a

different form usually means line extension, but if a different product form constitutes an entirely different product category.

Example:

Amul milk Amul ice cream

Types of Extensions

Companion Product – The idea here is to capitalize on product complementarity. The consumer may view both the products jointly.

Example :Colgate Dental

CreamColgate

Tooth Brush

Gillette Razors

Gillette Shave forms

Gillette After Shave

Company Expertise

Brand Extensions often come in the forms of different product category introductions using a common name but emanating from a common expertise pool. This strategy is particularly seen in Japanese companies.

Honda Cars

Honda Lawn

mowers

Honda scooters

Brand Distinction

Many brands achieve distinction in the form of a unique attribute, benefit or feature which gets uniquely associated with the brand.

For instance, Parachute may have expertise of ‘coconut nourishment’ in customers’ minds over time. This would give Marico Industries, the brand owner, the opportunity to launch a variety of products exploiting this distinction.

Brand Image or Prestige

A brand extension may involve a foray into unrelated product categories based on a brand’s exclusive image or prestige value.

Steel, Automobile, Heavy Vehicles, Watches, S/W devlpt. Training etc.

Distinctive Taste, Ingredient or Component A brand may develop equity based on any and / or

combination of taste, ingredient or component. Then the marketers can make entries into unrelated product categories capitalizing on these properties.

Brand Extendibility

• Extensions involve transfer of associations from the parent brand to the extension.

• The brand extendibility depends on its character.

• The brands can be classified into 5 types through extendibility.

Five forms of brands

The Product Brand - it is a situation where there is very little difference between the brand and the product.

The brand is used as an identity of the product.

Example : Vicks

Form 2 – Formula Brand

Formula means a set procedure

A brand which comes in the formula category simply implies that a standard procedure has been used to make the product.

Example : cooking oil, pickles etc.,

Form 3 – Know – how brand

Know – how is an expertise that a firm develops in a specialized area of activity.

Example : Nokia is known for user friendly.

Amul has developed its brand as an expertise in milk processing.

Form 4 – Interest brand

A brand may be defined by its center of interest. It may reflect its core spirit.

Example – Gillette maintains its focus on men’s grooming in all its brands.

Logo is ‘the best a man can get’ which creates the interest among the target audience.

Whirlpool – home maker

Nike – winning – to be on the cutting edge.

Form 5 - Philosophy

The brand at this level acquires more intangible character and orientation.

The philosophy transforms its products in a realm altogether different from its physical reality.

Example : Parker pen, De beers diamond

Product Brand

Pillsburry Atta

Formula Brands

Mother’s Recipes

Pickles lime, mango, mixed

Know –how

brand

Bajaj

Irons, Fans, coolers,

mixers etc.,

InterestBrand

Disney

Toys, Theatre,

Theme park, movies, etc

PhilosophyBrand

Cartier

Watches, jewellery, Bags, pens

Forms of brand extendibility

Exploring the brand involves seeking answers to the following questions…….

What is a brand’s awareness level? What are its recall and recognition levels? What are different attributes associated with a

brand? What benefit associations are connected with a

brand? What are a brand’s personality associations? What are the symbols associated with the brand? What are a brand’s user associations? What is the perceived essence of the brand? What is a brand’s philosophy?

Making an Extension successful

Aaker & Keller proposed certain assumptions about consumer behavior which are fundamentally responsible for the success of a brand extension.

The parent brand enjoys positive beliefs and favorable attitude in customers memory.

It is these pre-existing beliefs and attitudes which help in the formation of positive beliefs and favorable attitude toward the brand extension.

The negative associations are not transferred to the brand extensions, also these are not created by the brand extension.

THANK YOU