BRAND EXTENSIONPRESENTATION BY: TASNEEM VANAK, SANJANA BHARADWAJ

INTRODUCTION TO BRANDThe brand name is quite often used interchangeably with "brand“

In this context a "brand name" constitutes a type of trademark, if the brand 2 name exclusively identifies the brand owner as the commercial source of products or services

Identify not only a product but also its manufacturer or producer, such as Apple, Coca Cola, IBM, Mercedes, Shell, Sony, Toyota

A brand name may be used and protected as a trademark

IMPORTANCE OF BRANDDelivers the message clearly

Confirms your credibility

Connects your target prospectsemotionally

Motivates the buyer

Concretes User Loyalty

A brand name is the indicator of theattributes of the product.

BRAND EXTENSIONBrand extension is a marketing strategy inwhich a firm marketing a product with awell-developed image uses the samebrand name in a different productcategory.

Brand extension is a marketing strategy inwhich new products are introduced inrelation to a successful brand.

It increases awareness of the brand nameand increases profitability from offeringsin more than one product category.

TYPES OF BRAND

EXTENSION

LINE

EXTENSION

BRAND

EXTENSION

Line Extension StrategyWhen a brand is used to brand a new product that targets a new market segment within a product category currently served by the parent brand.

Examples:

• Coca-Cola diet

• Colgate for Kids

1.5 litre0.5 litre1.2 litre5 litre

Brand Extension StrategyUsing an existing brand name topromote a product in a differentcategory, is Brand Extension.

The key difference between lineand brand extension is theproduct category.

Need of Brand Extension

In times of intense competition, to cover every niche, the best strategy available to companies is to go for brand extension.

Customers use established brands as quality cues i.e. they use brand name as an indirect measure of quality.

The benefit of “spill over of advertising” works for those products which are affiliated with the brand.

Brand extension increases the visibility of brand.

Brand extension is helpful in catering lower or premium market segment.

When a company extends its brand name to another category, competitors react back; this creates a dynamic environment in market.

BRAND

EXTENSION

RISK

INTERNAL

RISK

EXTERNAL

RISK

INTERNAL

RISK

POOR

MANUFACTU

RING

QUALITY

POOR CUSTOMER SERVICE BECAUSE OF DISGRUNTED

EMPLOYEES

EXTERNAL

RISK

Behaviour by consumers—boycotting the products or services of the company due to change in perception brought about either

by a change in the brand differentiator communication or experience OR due to

changing social values

Retail space capturing, buying out of stocks, removing stocks on display etc tactics by

competition

Political or community opposition to the brand to do business within a geographical

region which limits its ability to develop.

FACTORS INFLUENCING THE SUCCESS OF BRAND EXTENSIONS

The higher the perceived reputations of the parent brand, the more favourable should be evaluations of the brand extensions

Extensions into categories perceived as more similar to the category of the parent brand are more likely to be accepted compared to extensions into less similar product categories

The higher the perceived risk associated with the extension category, the more positive will be evaluations of the brand extensions

Line extensions of strong brands are more successful than extensions of weak brands

Line extensions of symbolic brands enjoy greater market success than those of less symbolic brands

Line extensions that receive strong advertising and promotional support are more successful than those extensions that receive meagre support

Brand extension- advantagesIt makes acceptance of new product easy.

It increases brand image.

The risk perceived by the customers reduces.

The efficiency of promotional expenditure increases.

Advertising,

selling and promotional costs are reduced.

Cost of developing new brand is saved.

Consumers can now seek for a variety.

The expense of introductory and follow up marketing programs is reduced.

Brand extension- advantages (contd..)There are feedback benefits to the parent brand and the organization.

The image of parent brand is enhanced. It revives the brand.

It allows subsequent extension.

Brand meaning is clarified.

It increases market coverage as it brings new customers into brand franchise.

Customers associate original/core brand to new product, hence they also have quality associations.

Brand extension- disadvantagesBrand extension in unrelated markets may lead to loss of reliability if a brand name is extended too far.

There is a risk that the new product may generate implications that damage the image of the core/original brand.

There are chances of less awareness and trial because the management may not provide enough investment for the introduction of new product assuming that the spin-off effects from the original brand name will compensate.

If the brand extensions have no advantage over competitive brands in the new category, then it will fail.

TATA GROUP PROFILEThe Tata Group is one of India's largest and most respected business conglomerates,with revenues in 2005-06 of $21.9 billion (Rs 967,229 million), the equivalent of about2.8 per cent of the country's GDP, and a market capitalization of $55.1 billion.

The Tata Group has operations in more than 54 countries across six continents, and itscompanies export products and services to 120 nations.

Tata companies together employ some 2,46,000 people.

The Group's 28 publicly listed enterprises — among them stand out names such as TataSteel, Tata Consultancy Services, Tata Motors, Tata food and beverages, Tata Energy,etc. — have a combined market capitalization that is the highest among Indian businesshouses in the private sector, and a shareholder base of over 2 million.

The Tata family of companies shares a set of five core values: integrity, understanding,excellence, unity and responsibility.

MISSION AND VISIONAt the Tata Group their purpose is To improve the quality oflife of the communities they serve.

They do this through leadership in sectors of national economicsignificance, to which the Group brings a unique set of capabilities.

This requires them to grow aggressively in focused areas ofbusiness.

Their heritage of returning to society what they earn evokes trustamong consumers, employees, shareholders and the community.

The Tata name is a unique asset representing leadership with trust.

BRAND EXTENSION OF TATA GROUP

TATA

CHEMI

CALS

TATA products and Beverages

TATA POWERIn 1910, the first of the three Tata ElectricCompanies, The Tata Hydro-ElectricPower Supply Company, (now Tata Power)was set up.

The core business of the company is togenerate, transmit and distribute electricity.

With an installed electricity generationcapacity of about 8560 MW, it is India'ssecond largest private power producer.

TATA ENGINEERING

Tata Engineering andLocomotive Company(renamed Tata Motors in2003) is established tomanufacture locomotive andengineering products.

Voltas, a standoutengineering enterprise in theTata family, manufacturestop-notch air-conditioningand refrigeration productsfor homes

TATA Information and Communication

Tata Teleservices and VSNL, through their common brand Tata Indicom, offer a complete range of telecom solutions for business needs. Tata Indicom is the world leader in fixed wireless services.

TATA SERVICES

TATA STEELSTata Steel acquires Singapore-based steel company NatSteel bysubscribing to 100 per centequity of its subsidiary, NatSteelAsia .

Tata Steel acquired the UK-based steel maker Corus whichwas the largest internationalacquisition by an Indian companytill that date.

TATA CORE SCIENCES

The Tata Institute of Fundamental Research (TIFR) is a researchinstitution in Bombay, India, dedicated to basic research inmathematics and the sciences. It is a Deemed University and worksunder the umbrella of the Department of Atomic Energy of theGovernment of India.

TIFR conducts research primarily in the natural sciences,mathematics, the biological sciences and theoretical computer scienceand is considered to be one among India's outstanding researchcentres

CONCLUSIONBrand extensions have been around for as long as brandsthemselves.

There are just a few key requirements for successful brand extensioninto other areas — related or unrelated. The first is that the brandshould have a strong position in its original space. A brand that isweak in its original space cannot normally be expected to succeedwhen extended into another area.

The second is the qualities the brand stands for. A brand needs tostand for slightly “general” qualities if it is to be extendedsuccessfully.