Download - Brand Strategies 2
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Brand Strategies
Professor Rishikesh Mody
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Line Extensions
The product line is far more representative of the
customers varying quantity needs.
It suggest the presence of usage segmentation.
Customers differ in terms of their usage quantities.
The brand has to fill the whole spectrum with
products as per the need of the various segments.
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Line Extension strategies
Product sizesShampoos-Sachets to
economy packs. tubes to
jars, bottles to cans: need
to differentiate users
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Line Extension strategies
FlavoursDiet coke , sun silk black ,
parachute lite , Parachute
therapie .. Hair type , skin
type user groups.. Need to
differentiate user needs.Colgate gel Maggie Chinese
noodles.
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Line Extension strategies
IngredientLux sunscreen , Ponds talc
with SAM: need to upgrade
user needs. Head &
Shoulders-ZPTO &
Menthol Liryl Menthol.Halls ginger & regular
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Line Extension strategies
Form
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Price variants
Line Extension strategies
Rin Shakti to Rin supreme ,
Taj luxury to Taj Business
hotels: need to differentiate
user groups
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Why line extensions ?
In most of the product categories including
fast moving consumer goods , consumer
durables and services line extensions have
been the name of the game.
Customer segmentation
Consumer need for variety Pricing breadth
Capacity utilization
Quick Gains
Competitive reasons
Trade demands Counter competition
Image benefits
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Marketing Challenges for line
Extensions
Proliferation of meaningless line extensions Easy to add on ..since investments are low,able to ride on the lead brand
Fits well with the brand image..since within the same product category
But Low Business potential..Niche markets require sufficient investments to be
developed which the line extension is not capable of..e.g..Close up whiteningtooth brush
High Competition.. Not differentiated from competition thus low volumes e.g..
Ponds all day deo Threat of cannibalization..when line extension is too close to lead brand
Success criteria Line extension should grow the category .e.g..Colgate gel ,Bingo Flavors
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Brand extensions
Using an existing brand name to promote a
product in a different category , is Brand
Extension.
The key difference between the two is the
product category
In line ext. the product category remainsconstant while in brand ext. it is variable
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Brand Extension strategies
Extend the brand name to a new product category :
Brand fit in a new business area
Supplimentary categories : BPL tvs to washing machines to cellularservices.Maggie soups and sauces.Lakme lipstics and perfumes.nirma washing
powder to toilet soaps to salt
Complementary categories : Colgate toothpaste and toothbrush. , Axe deo and
Axe body gel
Image asseceroies : Benetton t shirts to sun glasses , Nike sport shoes to sport
apparel Diverse categories : Similar core values. Brittania biscuts to dairy
products,Dabur lal dant manjan to chawanprash to vatika , cello from
thermoware to seating systems,toothbrushes,pens
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Why do we need brand extensions ?
For mature brands
To generate Growth
To provide fillip to stagnating sales(parachute
tin to plastic can and oil to therapy )
Threat of new entrants- protect market
share(Lux vs. Camay) Strength existing franchise: Reassure loyal
customers
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For mature brands
To enhance brand image
To strength brand Identity and re in force core
brand values ( MTv changing needs.Milkmaid
from milk whitener to desert ingredient)
To redifine brand identity & reposition corebrand values
Why do we need brand extensions ?
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For mature brands
To prevent market share erosion by
competition ( Colgate total)
To prevent repositioning of core brand
values by competition (dettol vs. lifebuoy )
Why do we need brand extensions ?
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Marketing challenge of brand
Extensions
Poor fit of the ext. with the lead brand
Brand ext. does not match the identity Lakme men's Cosmetics
Brand ext. ties to resolve an existing area of dissatisfaction but thebrand image does not allow for such an ext. to be accepted Dettolperfumed soap & Lux shampoo
Competitive pressures when the bran ext. does not have a competitiveadvantage Amul chocolates
Niche market ..when the brand name limits the size of the market
usually linked to the brand image Burnol , Mercedes Benz MaybackSuccess criteria : Brand ext. should build the brand identity & brand
business
Success story : Britannia Milkman Dairy products
Nivea Mens cosmetic , Visage / Vital
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New Brand strategies
New brand name for a same product category
Required when there is poor brand fit of new
category with existing brand name but there is ahigh business potential of the category
Huggies to Depend
Thums up to Gold Spot
Pepsi to Miranda
Toyota to Lexus
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Multiple brand strategy
New brand names in the same product category
market saturation
Expensive strategy....leading companiesoftenthrough acquisitionsto achieve economies of
scale
HLL soaps : Lux , breeze , Jai , Hamam , Lifebuoy ,
Dove , Pears Coca Cola : Thums Up
Nescafe & Sunrise
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Customer franchise
A marketer may extend a product range to
meet the needs of a specific consumer group
J & J baby talc ,
oil , cream ,
shampoo , diapers
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A good understanding of the brand mayor may not lead to a successful brand
extension
But , a poor understanding of a brand
will definitely lead to the failure of the
brand extension and may also damagethe existing brand
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Stretching the brand vertically Vertical stretch : Technically a line ext. since it is
the introduction of price variants of an existing
brand in the existing product class Stretch Up: Extending the brand to a higher priced
segment Surf Detergent 500g @ Rs. 43 to Surf
Excel Detergent 500g @ Rs 70
Stretching Down : Extending the brand to a lower
price segment From wheel washing powder to
wheel bar
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Need to stretch - up For a market leader Internal need to climb up the
ladder
Take advantage of economies of scale Attractive market segment to enter
Need to enhance brand image by premium price ext
Maruti : 800 to Zen to Esteem to SX4
Changing competitive scenario
Mercedes C 180 to SLK to M class
Threatened by new introductions from competing MNCs having
premium image
From Surf to Surf Excel
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Wisdom of stretching up Guard against failure of premium-price ext.
When the existing brand image is strong & the
premium ext has a credibility problem Nirma premium soap
When the business potential in limited & the
investments to protect the niche segment is high
Puma soccer shoes in India
When competition is strong and repositions the brand
image & limits its entry into the premium segment
Maruti
Success criteria = Market potential + Competitive advantage
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The Stretch Up strategy Create a sub brand to cater to the premium segment
Value engineer the product quality , features , benefits to enhance the
perceived quality of the sub brand
Gradually cut off the sub brand from the existing brand .. The sub
brand will start having a set of Image values distinct form the existing
brand
Cars : Honda to Accura
Limitations of introducing a new brand to cater to the premium
segment : segment size is limited , difficult to sustain necessary brandbuilding investments
Cosmetics : Orchids a premium product from Lakme difficult to sustain
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Need to Stretch DownOpening up of a lower priced segment entry for Low priced competitors
Competitors ken to gain market entry through price promotions Akai
T.V
Competitors have a cost advantage , able to offer lower price
Manufacturing cost advantage : Nirma washing powder
Distribution cost advantage : Amway , Dell computers
Competitors having economies of scale advantage Parle G
Competitors innovating new technology at lower price points
Reliance Cellular
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Stretch down strategies
Primary Question : How will it affect the
main brand ?
Need for price correction if the perceived
quality of the brand is threatened
Creating a sub brand at a lower price point
having a different set of value perceptions
Creating a new brand to cater to a lower price
point
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Brand extension horizons
Lead brand
Line extensions horizon
Brand extensions horizon 1
Brand extensions horizon 2
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Brand extension horizons
Chocolate
Diff shapes: bars , thins , slabs
Diff tastes : white/milky , dark/bitter
Chocolate Candies Toffees
Chocolate Drinks , Ice creams , Cakes , Biscuits , deserts
Diff forms : soft , hard , crunchyChoc with other ingredients like
biscuits , ice cream fruits etc
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Effect of extension on the lead brand When the brand succeeds
More good : When the ext. enhances the brand name Britannia form biscuits to dairy products ( adds a new dimension .. Health ,
Nutrition , Intelligence )
When the extension succeeds The good : When the brand name aids the extension
Wills lifestyle Clothing ( Premium , casual , togetherness , sporty values ofwills help the ext. )
When the extension fails The bad : When the brand name fails to help the extension
Dettol perfumed soap ( brand identity disregards brand image of the Dettol
Smell )
When the extension hurts the brand The ugly : When the brand name is damaged
Initial launch of diet coke ( questioned the real taste of coke )
More ugly : When the brand name is forgone Rare ..guess everyone wakes up before they reach this stage !!!!!!
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Brand Revitalization
Extension : Giving birth to new products /
brands
Revitalization : Injecting life to the same
brand , energizing a mature brand
A facelift.. recharging the brand batteries
Fuelling the engine
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Problems of Old Age
Fading awareness : High recognition but
Low recall
Sunmica laminates
Older has been image : Usage by the
earlier generationno new users.no
longer contemporary Ambassador : the car of the previous generation
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Reasons for downturn in sales: Continuous
process of Revitalization
Technological advancements
Shift of consumer tastes and preferences
Increased domestic competition
Entry of global competitors
Sales
Time
Revitalization
starts at an early
stage to preventthe brand from
growing
oldSTAY
YOUNG
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How to revitalize the brand
Brand
Increased usage
New uses
New Markets
Extensions
Planed obsolescence
Repositioning
Augmenting
product
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#1 . Increased usage Ensure brand recall. remind the consumer to use the brand consistently
& regularly
Drive usage preference
Increase usage frequency : give them a reason to use more of yourproduct
Arm and hammer baking soda
Heinz with all kinds of snacks
Monaco Biscuits
Reward & retain loyal customers : prevent switching
Mutual funds
Address consumer fears & inhibitions to use the product morefrequently
Aspirin as Good for the Heart
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#1 . Increased usage Remind of use : reminder communication to increase recall
NECC egg campaign Sunday ho ya Monday ..from a routine diet to a
delightful diet
Preferred usage : Increased salience / knowledge / understanding
Bharat petroleum Pure for sure ..from a generic undifferentiated product wherepurchase is driven by convenience of location or availability ..To a competitive
market place.. setting benchmark/standards of Quality & Purity
Use More : Increased frequency / regular use
The dettol campaign ..Dettol Suraksha
Colgate ..driving consumers to brush twice a day to after every meal
Reward & retain users : Incentives / Promotions Air India offering holiday packages to promote Indian tourism
Remove usage barriers :Address consumer fears of frequent use
Clinic all clear addressing fears of harmful effects on dandruff shampoos from
the effective dandruff shampoo ..Dho dala to Treats Dandruff , but also gives you
beautiful hair Get out , Get going
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#2 . New Uses New occasions to Use : Festive occasions
Asian paints ..regional festivals of India , bullock horn paints ..frompainting only when required to choice driven by the shade range topainting as an expression of Joy
New Reasons to Use :Instigating behavioral shifts
Bengue ..from Muscle aches to Arthritis relief
What Iodex did not do MOOV did ..create a new reason to use ..notsprains but back aches
Microwave ovens in India form reheat to Cook and Heat
Different reasons to use : Multiple functional uses Nestle milkmaid condensed milk recipesfrom the tastiest milk to asubstitute for fresh milk during the time of short supply . To ..for desertrecipes ..you can do wonders with Milk Maid
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#3 . New Markets Fight market saturation : Re-define target segment
Cadburys dairy milk chocolate.the Real taste of Life
..from Chocolates for Fun to Special Moments ..fromYoung users to Family
Tap evolving market : Growth in new segments
Changes in the computer industry from office use /
office work ( Microsoft office tools ) to House
hold personal use ( Educational / Games for children )
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#4 . Re-positioning the Brand New Benefit / Offering : Communicate improvement in product
Surf to combat pressures from Ariel ..from value for moneySurf
ki Samajdari to Product efficiencyDhoondte rahe Jaonge
Colgate ..post the entry and threat from Close Upfrom freshbreath & ring of confidence to strong teeth & ring of protection
New Identity : To change earlier image and build new associations
Philips ..in the face of global competition.a new corporate
identity Lets make tings better
New uses / new users : to focus on user benefits / new uses From the complete health drink to fight deficiencies in a milk diet
to a health drink specifically for Growing children
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#5 . Augmenting the product Improved product features and benefits
Sunsilk repeated improvement in product ..from shampoo +
conditioner to shampoo + conditioner + beauty capsules to shampoo +
conditioner + herbal extractsfrom beautiful , shiny bouncy hair ..tobeautiful & healthy hair .
Improved packaging
Sunsilk ..from bottles to bottles with flip tops.from Sachets to capsules
New look for Crocin , Aspro , Disprin
Bisleri with tamper proof cap
Increased customer involvement
Sunsilk.the expert in hair care service at beauty parlors
Similarly .. Surf & Laundry serviceAsian paints & Painting Interiors
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#6 . Planned Obsolescence To keep up with the fashion
Color cosmetic products .Lakme , Revlon..introduction of new
fashion collection for every seasoncoffee collection , spice collection.
To meet changes in technology Music industry ..from long playing records to cassettes to CDs to MP3
Windows 95..96XP
Pentium 3..4Core2duo
Mobile phone series
To meet changing consumer needs Ponds : From facial snows ..to vanishing creams ..to Oil Control creams
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#7 . Brand extensions If the new changes do not suit the existing brand then
consider it an extension
Britannia : Entry into dairy products to strengthen brand identity
with Britannia Milk maid
Colgate : Launch of Colgate gel for fresh breath to revitalize brand
equity
Dabur : Launch of herbal hair oilVatika following new
consumer trends ..an age old brand able to woo back the younger
generation
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#7 . Brand extensions If the new changes do not suit the existing brand then
consider it an extension
Britannia : Entry into dairy products to strengthen brand identity
with Britannia Milk maid
Colgate : Launch of Colgate gel for fresh breath to revitalize brand
equity
Dabur : Launch of herbal hair oilVatika following new
consumer trends ..an age old brand able to woo back the younger
generation
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Remember ..If you dont , some one
else will !
WhatIodex did not do ,Moov did.
WhatHMTdid not do , Titan did.
WhatIndian Airlines did not do ,Jet Airways did.
WhatRobin Blue did not do , Ujala Supreme did .
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Thank you for your time and
attention