brand extensions

7/16/2019 Brand extensions

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Powerpoint Templates

Chapter 12:

Introducing and naming new products and brandextensions

Kevin Lane Keller

Tuck School of Business

Dartmouth College

12.1

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Leverage the Brand

• Firms are seeking to build “power” or “mega”

brands that establ ish a broad m arket footpr int ,

appeal ing to mult ip le customer segments w ith

mult ip le products al l underneath the brand umbrella.

12.2






Ansoff’s Growth Share Matrix

Current

Products

New

Products

Current

Markets

Market

penetration

strategy

Product

development

strategy

New

Markets

Marketdevelopment

strategy

Diversificationstrategy

12.3






Brand Extensions

• When a firm uses an established

brand name to introduce a new

product

• Brand extension classification

– Line extension

• Using a sub-brand to target a

new market segment within

the same product category

– Category extension

• Using the parent brand in a

different product category

12.4






Line Extens ion Strategies

Billeri1L

Bisleri1.2L

Bisleri.5 L

Bisleri1.5 L

Bisleri 5L

SunsilkPink

SunsilkBlack

SunsilkYellow

SunsilkOrange

Product

Size

Colour

RasnaOrange

RasnaMango

RasnaRose

RasnaLime

RasnaCola

RasnaPine

AppleFlavours






Line extensions

Good Night mosquito mat anda Good Night mosquito

Liquid. They fall under the

same core benefit, which is

eradicating mosquitoes, but

are different categories






Why Line Extensions

Customer

segmentation

Customer need for

variety

Pricing Breadth

Capacity

utilization

Quick gains

Counter competition

TradeDemands






General Strategies for Establishing a CategoryTauber’s Franchise—Extension

• Introd uce the same produ ct in a di f ferent form .

Example: Ocean Spray Cranberry Juice Cocktail

• Introduce products that contain the brand’s

dist inct ive taste, ing redient, or com ponent. Example:

Philadelphia cream cheese salad dressing

• In t roduce companion products for the brand.

Example: Coleman camping equipment

• Introd uce products relevant to the customer

franch ise of the brand. Example: Gerber insurance

Klein clothes

12.9






General Strategies for Establishing a Category

Tauber’s Franchise—Extension

• Introduce products that capitalize on the firm’sperceived expert ise. Example: Honda lawn mowers

• Introduce products that reflect the brand’s

dis t inct iv e benefi t , attr ibute, or feature. Example:Lysol’s “deodorizing” household cleaning products

• Introd uce produc ts that capi tal ize on the dist inct ive image or prest ige of the brand. Example: Calvin






Advantages of Extens ions

• Facilitate new product acceptance

– Improve brand image

– Reduce risk perceived by customers

– Increase the probability of gaining distribution and trial

– Increase efficiency of promotional expenditures – Reduce costs of introductory and follow-up marketing

programs

– Avoid cost of developing a new brand

– Allow for packaging and labeling efficiencies – Permit consumer variety seeking

12.11






Advantages o f Extens ions (Con t.)

• Provide feedback benefits to parent brand

– Clarify brand meaning

– Enhance the parent brand image

– Bring new customers into brand franchise and increase

market coverage

– Revitalize the brand

– Permit subsequent extensions

12.12






What is a flanker brand?

• A flanker brand is a new brand introduced into the market by a

company that already has an established brand in the same product

category. The new brand is designed to compete in the category

without damaging the existing item’s market share by targeting a

different group of consumers. This strategy, also called fighter

branding or multibranding, is used to achieve a larger total market

share than one product could garner alone. Companies with multiple

brands in a single product category generally have the following

types of products in their portfolios:

• A premium brand that offers high quality at a higher price.






Disadvantages o f Extens ions

• Can confuse or frustrate consumers• Can encounter retailer resistance

• Can fail and hurt parent brand image

• Can succeed but cannibalize sales of parent brand

• Can succeed but diminish identification with any onecategory

• Can succeed but hurt the image of the parent brand

• Can dilute brand meaning

• Can cause the company to forgo the chance to develop a

new brand

12.14






Understanding How Customers Evaluate Brand

Extensions

• Managerial assumptions – Consumers have some awareness of and

positive associations about the brand in

memory – At least some of these positive associations

are evoked by the brand extension

– Negative associations are not transferred

from the parent brand

– Negative associations are not created by the

brand extension

12.15






Creating Extension Equity

1. Salience of parent brand associations inthe minds of consumers in the extension

context

2. Favorability of any inferred associations inthe extension context

3. Uniqueness of any inferred associations

in the extension context

12.16






Contributing to Parent Brand Equity

• How compelling the evidence is concerning thecorresponding attribute or benefit association inthe extension context

• How relevant or diagnostic the extensionevidence is concerning the attribute or benefit for the parent brand

• How consistent the extension evidence is withthe corresponding parent brand associations

• How strong existing attribute or benefitassociations are held in consumer memory for the parent brand

12.17






Successful Extensions

• Must create points-of-parity and points-of-difference in extension category

– Must recognize competitive reactions

• Must enhance points-of-parity and points-of-difference of parent brand

• Must maximize the advantages and

minimize the disadvantages of brandextensions

12.18






Successful Category Extensions

• Ivory shampoo and conditioner • Vaseline Intensive Care skin lotion• Hershey chocolate milk• Jell-O pudding pops

• Visa traveler’s checks • Sunkist orange soda• Colgate toothbrushes• Mars ice cream bars

• Arm & Hammer toothpaste• Bic disposable lighters• Aunt Jemima pancake syrup• Honda lawn mowers

12.19






Unsuccessful Category Extensions

• Campbell’s tomato sauce • LifeSavers chewing gum• Cracker Jack cereal• Harley Davidson wine coolers

• Hidden Valley Ranch frozen entrees• Bic perfumes• Ben-Gay aspirin• Kleenex diapers

• Levi’s Tailored Classics suits • Nautilus athletic shoes• Domino’s fruit-flavored bubble gum• Smucker’s ketchup

• Fruit of the Loom laundry detergent 12.20







Evaluating Brand Extension

Opportunities

• Define actual and desired consumer

knowledge about the brand

• Identify possible extension candidates

• Evaluate the potential of the extension

candidate

– The likelihood that the extension will realize

the advantages and avoid the disadvantages

of brand extensions. As with any new product,

analysis of consumer, corporate, and

competitive factors can be useful. 12.21








Opportunities

• Design marketing programs to launch

extension

– Building brand equity for a brand extension

requires choosing brand elements, designingthe optimal marketing program to launch the

extension, and leveraging secondary

associations.

• Evaluate extension success and effects on

parent brand equity

12.22

Wh b d t i i t ?






When are brand extensions appropriate?

• If they see some basis of “fit” or similaritybetween the proposed extension andparent brand

• The major mistake in evaluating extensionopportunities is failing to take all of consumers’ brand knowledge structuresinto account.

• Often, marketers mistakenly focus on onlyone brand association and ignore other potentially important brand associations inthe process.

12.23







Opportunities

• Define actual and desired consumer knowledge about the brand

• Identify possible extension candidates

• Evaluate the potential of the extensioncandidate

• Design marketing programs to launch

extension• Evaluate extension success and effects

on parent brand equity

12.24



brand extensions

Documents

parent brand

brand firms

brand umbrella

powerpoint templatespage

powerpoint templates

new products

t roduce companion products

general strategies