“ Introducing & Naming New Products & Brand Extensions “
Presented By: SUHAS NOEL
Leverage the Brand:
Firms are seeking to build “power” or “mega”brands that establish a broad market footprint,appealing to multiple customer segments withmultiple products all underneath the brandumbrella.
Ansoff’s Growth Share Matrix:
Current Products New Products
Current MarketsMarket penetration
strategyProduct
development strategy
New Markets Market
development strategy
Diversification strategy
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
General Strategies for Establishing a Category Tauber’s Franchise—Extension:• Introduce the same product in a different form. Example: Ocean Spray Cranberry Juice Cocktail and Jell-O Pudding Pops• Introduce products that contain the brand’s distinctive taste, ingredient, orcomponent. Example: Philadelphia cream cheese salad dressing and Haagen-Dazs Cream Liqueur • Introduce products relevant to the customer franchise of the brand.Example: Gerber insurance and Visa Traveler's Checks
• Introduce products that reflect the brand’s distinctive benefit, attribute, orfeature. Example: Lysol’s “deodorizing” household cleaning Products and Ivory’s “mild” cleaning products• Introduce products that capitalize on the distinctive image or prestige of thebrand. Example: Calvin Klein clothes and accessories and Porsche sunglasses
Advantages of Extensions: Facilitate new product acceptance
1. Improve brand image2. Reduce risk perceived by customers3. Increase the probability of gaining distribution &
trial4. Increase efficiency of promotional expenditures5. Reduce costs of introductory and follow-up
marketing programs6. Avoid cost of developing a new brand7. Allow for packaging and labeling efficiencies8. Permit consumer variety seeking
Advantages of Extensions (Cont.) Provide feedback benefits to parent brand
1. Clarify brand meaning2. Enhance the parent brand image3. Bring new customers into brand franchise
and increase market coverage4. Revitalize the brand5. Permit subsequent extensions
Disadvantages of Extensions:1. Can confuse or frustrate consumers2. Can encounter retailer resistance3. Can fail and hurt parent brand image4. Can succeed but cannibalize sales of parent brand5. Can succeed but diminish identification with any
one category6. Can succeed but hurt the image of the parent brand7. Can dilute brand meaning8. Can cause the company to forgo the chance to
develop a new brand
Understanding How Customers Evaluate BrandExtensions:• Managerial assumptions :-
1. Consumers have some awareness of and positive associations about the brand in memory
2. At least some of these positive associations are evoked by the brand extension
3. Negative associations are not transferred from the parent brand
4. Negative associations are not created by the brand extension
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-differenceof parent brand Must maximize the advantages and minimizethe disadvantages of brand extensions
Successful Category Extensions:1) Ivory shampoo and conditioner2) Vaseline Intensive Care skin lotion3) Visa traveler’s checks4) Sunkist orange soda5) Colgate toothbrushes6) Mars ice cream bars7) Arm & Hammer toothpaste8) Dove shampoo and conditioner9) Hershey chocolate milk10) Porsche coffee makers11) Fendi watches12) Jeep strollers
Unsuccessful Category Extensions:1) Campbell’s tomato sauce2) LifeSavers chewing gum3) Cracker Jack cereal4) Bic perfumes5) Ben-Gay aspirin6) Kleenex diapers7) Levi’s Tailored Classics suits8) Nautilus athletic shoes9) Domino’s fruit-flavored bubble gum10) Smucker’s ketchup11) Cadbury soap12) Ben-Gay aspirin
Brand Extensions Example 1:
Levi’s Jean Segments
Brand Price RangeLevi Strauss Signature $19 - $23Levi Strauss Signature Authentics $24 - $25Levi’s Redtab $25 - $50Levi’s Silvertab $25 - $58Levi’s Red $49 - $68Levi’s Vintage $80 - $325
Example 2Brand Definitions Related Categories
Moisturizer Soap, Face cream, Skin cream
Lotion Sunburn, Aftershave, Baby
Medicinal Antiseptic, First-aid cream, Hemorrhoid cream
Vaseline Purity Cotton, Gauze, Sterile padsIntensiveCare Body care Emery boards, Muscle toner, Cotton swabs
Pump bottle Liquid hair net, Mustard, Glass cleaner
Baby care Diapers, Powder, Oil
Fragrance Perfume, Room deodorizer, Deodorant
Design Marketing Programs to Launch Extension:They are:-1. Choosing Brand Elements
a) Logob) Trademark
2. Designing Optimal Marketing Programa) Building Brand equityb) Consumer perceptions of value must guide pricing decisionsc) Firm must integrate marketing communications by mixing and
matching communication options
3. Leveraging Secondary Brand Associationsa) Additional fortification like linking to other entities