The fascinating world of brands

Overview
New Product & Brand Extension
Brand Extension
Types of Brand Extension
Advantages
Disadvantages
How Consumers Evaluate
Extensions?
 What Is A Brand
Brand is a name, term, sign, symbol, design,
or a combination of them, intended to
identify the goods or services of one seller or
group of sellers and to differentiate them
from those of competitors.
A BRAND is symbolic embodiment of all the
information connected to a Company,
Product or Service.
It serves to create associations and
expectations from products made by a
producer, in the mind of the consumer.
The key objective being to create a
Relationship of TRUST with its consumers.
 BRAND EXTENSIONS
A Brand Extension occurs when a firm uses
an established brand name to introduce a
new product (approaches 2 or 3)
When a new brand is combined with an
existing brand (approach 3), the brand
extension can also be called a sub-brand.
An existing brand that gives birth to a brand
extension is the parent brand.
If the parent brand is already associated with
multiple products through brand extensions,
then it may also be called a family brand.
TYPES OF BRAND
EXTENSION
LINE EXTENSION
The parent brand is used to brand a
new product that targets a new
market segment with in a product
category currently served by the
parent brand.

A line extension often adds a different

flavor or ingredient variety, a different
form or size, or a different application
for the brand.
Eg: Head & Shoulders
 Head
&
Shoulde
rs
Extensi
on
Cokes Line Extension
CATEGORY EXTENSION
The parent brand is used to enter a
different product category from that
currently served by the parent brand.

Eg: ITC
ITCs Category
Extension
 Why Brand Extensions?
Leveraging brand equity/value by
introduction of logical & complementary
new product categories
E.g HP
Product Innovation to surpass consumer
expectations
It increases awareness of the brand name
Increases profitability from offerings in
more than one product category.
Its a great way to reinforce a brand,
reach out to new customers, create a
BUZZ
 ADVANTAGES OF
BRAND EXTENSIONS
Reasons For Product Failure
Products Showcase and Learning Center in
Ithaca, New
York identifies this.
The market was too small (insufficient
demand for type of product).
The product was a poor match for the
company.
The product was justified on inadequate or
inaccurate marketing research, or the
company ignore research result.
The company was too early or too late in
researching the market.
The product provided insufficient return on
Reasons For Product Failure
The product was not new or different (a poor
idea that really offered nothing new).
The Product did not go hand in hand with
familiarity.
Credibility was not confirmed on delivery
Consumers could not recognize the product
 Advantages Of Brand Extensions

Facilitate New Product Acceptance

Improve brand image

Reduce risk perceived by Customers
Permit consume variety-seeking
Advantages Of Brand
Extensions
Increase the probability of gaining distribution
and trial
Increase efficiency of promotional
expenditures
Reduce costs of introductory & follow-up
marketing programs (save 40-80%)
E.g. Apple iPods
Avoid costs of developing a new brand
Allow for packaging & labeling efficiencies
Advantages Of Brand
Extensions
Provide Feedback Benefits to the
Parent Brand
and Company
Clarify brand meaning
Enhance the parent brand image
Bring new customers into brand franchise
and increase market coverage
Revitalize the brand
Permit subsequent extensions
Advantages Of Brand
Extensions
Clarify brand meaning
Brand Original Extension New
Product Products Brand
Meaning
Weight Fitness Low-calorie Weight loss
Watchers Centre foods &
maintenanc
e
Sunkist Oranges Vitamins, Good
juices health
Kelloggs Cereal Nutri-grain Health
bars, snacking
Special K
bars
Disadvantages of
Brand Extensions
Disadvantages Of Brand
Extensions
Can confuse or frustrate consumers
Can encounter retailer resistance
Can fail & hurt parent brand image
Xerox Computers-synonymous with copiers
& no one believed they could make
computers
Can succeed but cannibalize sales of
parent brand
Amul Butter-reduced salt butter is slowly
eating up Amul normal butter
Disadvantages Of Brand
Extensions
Can succeed but diminish identification
with any one category
Can succeed but hurt the image of parent
brand
Can dilute brand meaning
Can cause the company to forgo the
chance to develop a new brand
When are Brand Extensions
Appropriate?
When Prior Brand equity exists
Consumer must see some connection
between the proposed extension and
the parent brand.
The proposed extension contributes to
and reinforces the overall brand equity
of the parent brand.
 How Consumers
Evaluate Extensions
 Conditions For Evaluating
Consumers Brand Extension
Consumers have some awareness & positive
associations about the parent brand
At least some of these positive associations
will be evoked by the brand extension
Negative association are not transferred from
the parent brand
Negative associations are not created by the
brand extension
 Evaluating Brand Extension
Opportunities
Define actual & desired consumer knowledge

Identify possible extension candidates

Evaluate potential of the extension candidate

Evaluate potential candidate feedback effects

Consider possible competitive advantages & reactions

Design marketing campaign

Evaluate extension success & effects on parent brand

equity
Reference

Strategic Brand Management by

Kelvin Lane Keller
Marketing Management by
Philip Kotler
Kelvin Lane Keller
Abraham Koshy
Mathileshwar Jha
Thank You