Introducing and

Naming New Products

and Brand Extensions
http://www.colgate.co.in/app/Colgate/IN/Corp/Products.cvsp

Leveraging the Brand

To build power or mega brands that
establish a broad market footprint, by
appealing to multiple customer
segments, with multiple products all
under the brand umbrella (brand
extensions)

Ansoffs Growth Share

Matrix
Current
Products

New
Products

Current
Markets

Market
penetration
strategy

Product
development
strategy

New
Markets

Market
development
strategy

Diversificatio
n strategy

New Products and Brand

Extensions
When a new product is introduced the Firm has
3 choices - branding strategy options
A new brand individually chosen for the product
Fastrack - a new brand from Titan
Or
A sub-brand / brand extension strategy
2.
Combines new brand with an existing brand
Tata Nano, Samsung Galaxy
3.
Applies in some way one of its existing brands
Maggi Sweet and Sour Sauce
Most successful brands are brand extensions
Most new products in the market are line extensions
1.

Brand Extension Classifications

Brand Extension - an established brand name is
used to introduce a new product
Brand extension classification 2 types

Line extension

Targets a new market segment within the same product

category - different flavors, ingredients, form, size,
application Lux bar / liquid, with fruit extracts, etc.

Category extension

Parent Brand (Corporate or Family brand) enters

different product categories Maggi Noodles, Maggi
Sauces, Maggi Soups

New Products and Brand

Extensions
Brand extension / sub-brands come in all forms
1.
2.

3.

4.
5.
6.
7.

Same product in a different form

Products that contain the brands distinctive taste,
ingredient, components
Products that reflect the brands distinctive benefit
attribute or feature
Companion products for the brand - accessories
Products relevant to customer franchise of the brand
Products that capitalize on the brands expertise
Brands that capitalize on the distinctive image or
prestige of the brand

Advantages of Extensions
The parent brand potentially provides the following

Facilitates new product acceptance because its equity is being

leveraged by.

Reducing perceived risk as (Parent brand) presence creates Credibility

expertise, likability, trustworthiness

Permits consumers variety seeking tendency

Permits use of brand to a greater extent, and in different ways

Reduces cost of marketing programs - introductory, follow-up

Increased probability of gaining Distribution and Trial

Increases efficiency of promotional expenditure - focus is only on the new product

being introduced as the extension

Allows for packing and labeling efficiencies - lower production costs

Avoids cost of developing a new brand

consumer research, skilled personnel, building the brand

Advantages of Extensions
Feedback effect on Parent Brand benefits

Clarifies brand meaning more broadly

Clarifies core benefit proposition and business definition of

the company (how it completely satisfies consumer needs
in a certain area - Johnson and Johnson in baby skin care

Enhances the brand image

Improves strength, favorability of an associations, and or

Adds new associations

Improves perceptions of company credibility

Revitalizes the brand

Permits subsequent extensions

Expands market coverage

Disadvantages of Extensions

Consumers can get

Retail resistance may be encountered

Confused and frustrated - which version of the product is the right

one when there are too many varients
Disappointment if advertised extension is not stocked by retailer
Question the integrity and competence of brand if the extension is
deemed inappropriate
Too much shelf space to stock all variants
Belief that they are me-too and need not be stocked / eliminated

Extension failure damages the Parent brand image, and

all or some of the products in brand Family

Negative product performance is very damaging

Failure for a lack of distribution etc. may not be as damaging

Disadvantages of Extensions
Success of Extension can also potentially result in the following
costs :

Damage to parent brand image - if extension attributes are inconsistent /

conflicting with Parent brand

Diminished identification with any one category - Dettol after its introduction
of liquid dish washing soap

Reduced brand awareness because of over extensions.

(But abstract values associated (quality / innovation) may reduce this risk

Dilute brand meaning - with too many vertical extensions

Cannibalize sales of the parent brand

Line extensions are likely to.

(But may be considered preemptive cannibalization

Forego the chance to develop a new brand name or market the parent brand
differently

Opportunity cost

Loss of brand positioning flexibility trying to live up to parent brand image

Evaluation of Brand Extensions

Consumers evaluation and response to

brand extension - is based on ..

Knowledge about the parent brand

Knowledge about the category

Brand extensions are favorably evaluated when there is some basis of fit or similarity
between the proposed extension and parent
brand

Evaluation of Brand Extensions

Managerial evaluation of brand extension
Positive evaluation of extension - 4 favorable
assumptions must hold true

Awareness and positive associations about Parent /

Umbrella brand exists in the extensions category context

Parent brand associations that could be negatively

perceived in the category context will not be transferred to
the extension

Positive associations will be evoked by the brand extension

for the Parent brand

Negative associations will not be created by the brand

extension for the parent brand

When are Brand Extensions

Appropriate?

Brand extensions are evaluated as appropriate

When there is some basis of fit or similarity

between the proposed extension and parent brand

But failing to take all of consumers brand

knowledge structures into account can lead to
mistakes in identifying and evaluating extension
opportunities

Focusing on one or so brand associations, and

ignoring other potentially important brand associations
in the process is counter productive

When are Brand Extensions

Appropriate?
Evaluating the potential of the extension
candidate on the likelihood of it realizing the
following a) extension equity effected by the Parent brand
associations on the extension (3-factor model)
b) extension feedback effects on the parent brand of
the extension (4-factor model).
c) competitive advantages perceived by consumers,
and possible reactions initiated by competitors.

When are Brand Extensions

Appropriate?

Extensions success - depend on its ability to

create Extension-Equity
a.

Extension Equity of Parent Brand associations

in the extensions context is based on
The 3 factor model

Salience of parent brands associations sufficiently high level of awareness of relevant

associations in the category context of the proposed
extension
Favorability of parent-brand associations in
the extensions product category
Uniqueness of these parent-brand associations
in the competitive context of the extension

When are Brand Extensions

Appropriate?
The
extensions success depend on
b.

Feedback effects (positive or negative) of

an extension on parent brand equity
The 4 the factor model:
1.

2.
3.
4.

How compelling the evidence is concerning the

corresponding attribute or benefit association in the
extension context
How relevant or diagnostic the extension evidence is
concerning the attribute or benefit for the parent brand
How consistent the extension evidence is with the
corresponding parent brand associations.
How strongly the existing attribute or benefit
associations are held in consumer memory for the
parent brand

When are Brand Extensions

Appropriate?
c. Competitive advantage of the Extensions

For the extension - the parent brand must be able

to create strong POPs and PODs in the category
of the extension
For the parent brand - it must enhance POPs and
PODs of the parent brand
Recognize competitive reactions and act to
minimise impact

Maximize the advantages and minimize the

disadvantages of the brand extensions

Identifying
Brand Extension Opportunities
The process of identifying extension opportunities
1.
Create mental map of parent brand and identify key
sources of equity
2.
Identify possible extension candidates on the basis of
parent brand associations - overall similarity or fit of
extension to parent brand
3.
Evaluate candidates potential an likelihood of
realizing advantages and avoiding disadvantages of
brand extensions.
Analyze the corporate, consumer, competitive factors

Baseline test - consumers asked to evaluate extensions

based on the extension itself and with no other
information

Evaluating
Brand Extension Opportunities
1. Create the mental map
Define consumer knowledge about parent brand
- actual and desired. Check for -

The depth and breadth of awareness

Basis of Positioning - core benefits satisfied by brand
Strength, favorability, uniqueness of the associations

Ensure all associations are investigated

Consumers tend to focus more on tangible attributes

and less on abstract attributes

Evaluating
Brand Extension Opportunities
2. Identify possible extension candidates in
product categories on the basis of fit with the
parent brand image and associations (based on
parent brand positioning and core benefits)
This can be done by

Managerial brainstorming and

Consumer research (consumer factors)

Evaluating Brand Extension

Opportunities
3. Evaluate candidates potential to realize advantages
and avoid disadvantages of brand extensions

Corporate factors - How relevant are.

Potential Feedback-Effects on Parent Brand

Parent brands attributes, perceived benefits, target

customers in the extensions context
How effectively can current marketing programs and
corporate assets be leveraged

Use Extension Feedback Effects - 4 factor model to evaluate

the extent of likely positive and negative feedback effects

Competitive factors

Use 3 factors model to evaluate competitive advantage of

parent brand (as perceived by consumers) in the extensions
category context.
Competitors possible reaction

Launch the Extension

Build Equity for Brand
Extension
Determine the Positioning

Choose the brand elements

Design the optimal marketing program to
launch the extension
Leverage secondary associations if necessary
Evaluate

Extent of extensions success

Nature of feedback effects on parent brand equity

Launch Brand Extensions

Design optimal marketing programs
Positioning

Category extensions - focus on category POP

Establish POPs first (Dove is now a Shampoo)

Particularly important when the extension is less similar
to the parent brand.
PODs follow from the parent brand and are easily
perceived Dove id the POD for Dove Conditioner

Line extensions - focus on product difference

Explain the product difference between Parent Brand

and Extension, as well as the relationship, to minimize
cannibalization and confusion

Launch Brand Extensions

Choose brand elements

Retain one or more elements from parent-brand in

packaging, advertising, etc.
Adopt new brand element to distinguish it from the
parent brand. Build its awareness and image

Guidelines for the new elements consider

Memorability, Meaningfulness, Likability, Protectability,

Adaptability, Transferability

Determine relative prominence of parent brand

elements to indicate

Desired strength of transfer from the parent equity

Desired extent of feedback from extension to parent brand

Launch Brand Extensions

Design optimal marketing programs

Create

Product and non-product (imagery) related associations

Pricing based on consumer perception of value
Distribution - blend of push and pull considerations
Integrated Marketing communications - mix and match
different communication options

Leverage secondary brand associations

If Parent brand associations are not providing adequate

equity
Leverage additional equity from other entities
endorsers, etc.

Evaluate Extension Success and

Effects on Parent Brand Equity

Assess the extent to which extension has

Achieved its own equity

Contributed to the equity of the parent brand

Use Brand Tracking Studies (use CBBE model

as the research guidelines) centered on both
extension and parent brand as a whole

Extension Guidelines
Based on Academic Research

Successful brands occur when the parent band is

seen as having favorable associations and there
is a perception of fit between the parent brand and
the extension product
There are many basis of fit (brand concept
consistency)

Product related attributes and benefits

Non-product related attributes and benefits

Common usage situations

User types

Function oriented brands / prestige oriented brands

Extension Guidelines
Based on Academic
Depending
on
consumer
knowledge
of
the
Research
product category, perceptions may be based on

technical /manufacturing commonalities, or more

surface considerations such as necessary for
situational complementarity
High quality brands stretch farther than average
quality brands, although both types of brands
have boundaries
Concrete attribute extensions are more difficult to
extend than abstract extensions
Brand that is seen as prototypical of a product
category is difficult to extend outside the category

Extension Guidelines
Based on Academic
Research
Consumers may infer associations that are

positive in the original product class but become

negative in the extension context
Consumers may associate negative association
about an extensions, perhaps even based on
other positive associations
It can be difficult to extend into a product class
that is difficult to make

Extension Guidelines
Based on Academic
A successful extension can not only contribute to the
Research
parent brand image but also enable the brand to be

extended even farther

An unsuccessful extension hurts the parent brand only
when there is a fit between the two
An unsuccessful extension does not prevent the firm
form back tracking and introducing a more similar
extension
Vertical extensions are difficult and often require subbranding strategies
The most effective advertising strategy for an extension
is one that emphasizes information about the extension