Brand and Line extensions

1
 Brand Explosion
Brand Consolidation
Brand variants

2
Brand Extensions:
How does a firm grow?

A firm can:
– Focus on current products and markets
 Market penetration strategy
– Put existing products into new markets
 Market development strategy
– Put new products into existing markets
 Product development strategy
– Put new products into new markets
 Diversification strategy
Brand Extensions

 Brand extension
– Involves using an existing brand name to launch a product
in a different category.

 Category extension
– Parent brand is used to enter a different product category
from that currently served by the parent brand
 Swiss army watches, Porsche bicycles
Ponds

LG

Park
Avenue
Line Extensions

 Line extension
– Parent brand is used to brand a new product that
targets a new market segment within a product category
currently served by the parent brand
 H&S dry scalp shampoo
 Line extension
– Involves making entries in brand’s exiting product
category by using same brand name. These entries can
come in the form of varying product sizes, flavors,
colors, and ingredients and forms
Advantages of Extensions

– Reduce risk perceived by customers & distributors

– Decrease cost of gaining distribution & trial
– Increase efficiency of promotional expenditures
– Avoid cost (and risk) of developing new names
– Allow for packaging and labeling efficiencies
– Variety-seeking
Advantages of Extensions

 Enhance the parent brand image

– Improve strength, favorability, and uniqueness of brand
associations
– Improve perceptions of company credibility

 Convey broader brand meaning to consumers

– Clarify core benefit proposition and business definition of
the company

 Bring new customers into the franchise and

increase market coverage
Disadvantages of Extensions

 Extensions have risks, too.

– They can fail.
 Moreover, extensions can potentially result in
the following costs:
– Cannibalize sales of the parent brand
– Hurt the image of the parent brand

 Forego the chance to develop a new brand

name or market the parent brand differently
(opportunity cost)
Brand Extension
Assumptions
– Consumers have some awareness of and
positive associations about the brand in
memory
– 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
 Product Form Extension

Amul
Amul Milk
Condensed Milk

Real Juices Real

Juice Concentrate
 Companion Product

Colgate Dental Colgate Tooth

Cream Brush

Gillette Razors Gillette Gillette After

Shave Foam Shave
 Customer Franchise

J&J J&J J&J J&J

Baby Baby Baby Baby
Shampoo Talc Oil Diapers
 Company Expertise

Honda Cars Honda Honda Honda

Gensets Scooters Lawnmovers
 Types of Brand
Extensions
 Brand Distinction

Parachute Parachute Parachute Parachute Parachute

Coconut Hair Oil Shampoo Cream Cooking Oil*
Expertise

*hypothetical
 Types of Brand
Extensions

 Distinctive Taste, Ingredient or Component

Cartier Cartier Cartier Cartier

Jewellery Watches Purses Pens
 The Product Brand
 Formula Brand
 Know-how Brand
 Interest Brand
 Philosophy
 Brand Extendibility

Product Brand It is a situation where there is very little difference between the brand and the product.
Brand is a close approximation of the product. Passively, the brand is used to identify
the product, maybe for internal purposes. The brand does not play any role from the
customer’s point of view

Formula Brand Formula means a set procedure (used to make the product). This type of brand may
be find in categories like cooking oil, food, and pickles

Know-how Know-how is an expertise that a firm develops in a specialized area of activity. Sony is
know to have expertise in miniaturization and robotics. Honda has know-how in
Brand engines. Amul has developed expertise in milk processing

Interest Brand It’s the centre of interest or the core spirit of the brand. Gillette brand maintains its
focus on men’s grooming in all its brands. Nike’s focal point is winning. Whirlpool’s
centre of interest is the home (‘homemaker’)

Philosophy The brand at this level acquires more intangible character and orientation. This
generally happens in case of designers and artists. The Armani signature on the
product provides a higher philosophical meaning – a meaning proudly expresses in
Armani’s creatively styled products
 Extendibility of a Brand

Philosophy Brand
Watches
Cartier Jewellery
Bags
Interest Brand Toys
Disney (Entertainment) Theatre Pens
Movies
Know-how Brand OTG Theme
Bajaj (Electronics) Irons Parks
Fans Music
Formula Brand Coolers
Mother’s Recipes Pickles Clothes
Lemon Mixers
Pickles Acces-
Product Brand Mango sories
Toasters
Rose Brand Flour Games
Pickles
Mixed

Product dissimilarity
 Brand Extendibility
“Amulishness”
Drinks?
Amul Symbol Energy Bar?
Personality: Energy Tabs?
Lovable Mil Cakes?
Amul Indianness Biscuits?
Taste
Expertise
Fun
In milk Trustworthy
processing: Value Good
Milk, Ice Cream
Ghee, Cheese
Amul Milk Butter, Mil Additive
Condensed Chocoloate
Type I
Milk
Amul Milk II
III
Time / Brand’s

Product Formula/ Expertise/ Evolution

Brand Recipe Know-how Interest Philosophy

Brands identifies the product Products are manifestations of Brand