Institute of Management Technology, Hyderabad

Brand Management Case Study :- GoPro: Brand Extension

August 12, 2019.

● Submitted by - Group 6

Anandita sood 18A1HP054

Anil Tanwar 18A1HP087
Sakshi 18A1HP016
Abhishek sharma 18A1HP088
Himanshu shekhar 18A1HP055
Vipin singh gautam 18A1HP015

Submitted to: Prof. Dhananjay Kumar Singh

Question 1.

Should GoPro leverage its brand to enter product categories beyond camera? What are the
opportunities? What are the Risks?

GoPro has built a name for itself and has become synonyms with the tern “action cameras”. It can
leverage its brand to enter product categories beyond cameras. The brand since the beginning has been
using adventure lifestyle as a means of advertisement. The adventure lifestyle can be used and
leveraged to enter a variety of adventure and sports product categories.
There are numerous opportunities that can be explored by GoPro. Some of the very promising
opportunities are:

 Surfboards
Pros
 It would look like a natural extension
 GoPro has its roots in surfing
 It was already sponsoring a renowned surfer “Kelly Slater”.
 Market size of $2.5 Billion with an annual growth rate of 11%
 Lack of presence of dominating brands

 Mountain Bikes
Pros
 Projected sales of whooping $13.4 Billion and a growth rate of 9.2%
 High gross margins of about 40-50%

 Skis and Snow Boards

Pros
 The major benefit was the high gross margins for manufacturers.
 It opened doors to new avenues for manufacturing equipment accessories.
There were many other product category choices available which included bikes, kayaks, skateboards,
jet skis, scuba gear etc.
Entering into a new product category is a great way to increase your footprint and get access to new
segment of audiences, but it should be carried out keeping certain things in minds such as-

 The Brand Extension must reflect the original core value of the parent brand

 There should be a logical balance between the parent brand & the extension; otherwise it might
lead to brand dilution.

The risks involved with the brand extension for Go Pro are:
  Mountain Bikes – Already dominated by three big bike companies – Trek, Giant &
Specialized. There is a possible chance that there would a kind of market saturation in this
sector & customer might already be satisfied by the services of already existing player in this
market. Investments were also required to continue the collaboration with sportspersons & for
further innovation in the products. Also the gross margin for retailers was quite low as
compared to clothing sales & other mountain bike related equipment.
 Skies & Snowboards –With an annual growth of 1.2% over the last 5 years, it was a low
growth market & the snow sports hard goods were getting overshadowed by soft goods such
as outwear ($1.8 billion) and apparel accessories ($732 million)
 Surfboards – Absence of any major brand & with an annual growth rate of 11% for the past
4 years, the amount of risks involved in this case was quite low as compared to the above two
mentioned options.

Question 2.

To what Extent should Go Pro use Partner versus Develop product Extensions in House? What
should partner deals look like if Go Pro choose to Purchase them?
Go Pro should go for Product Extensions in a partnership because it was very difficult to develop
an entire line of product, Since they have to develop the entire Design from Scratch, as mentioned in
the case when Go Pro developed their early line of apparel, Tony Bates Director and Former
president of Go Pro revealed that there were three basic challenges with this approach: First it was
very expensive, second there is limit to their resources, third it was very limiting. Go Pro was also
facing a Dilemma whether they should stay true to their roots or try some other product line. One
more thing we can consider that the Go Pro brand Evaluated itself out of a passion for adventurous
sports it was heavily influenced by its initial, core Demographic, from which content could be
created and subsequent product could be sold and Distributed. Moreover there two important factors
in the Successful implementation of a brand extension for Go Pro which were:
 Recognizing the importance of Intellectual Property (IP)
 Optimizing for High Margin Business.

The partnership model used by Go Pro should be :-

 Partnering :- Go Pro should go for this Model of Partnership since they can establish
Partnership with another interested Party which will help them in Mitigating their Risk,
reduce their cost and resource consumption. Since this was their major concern as Mentioned
by Tony Grates in Case they were going for product extension. One more Advantage they
have that they can Literally Outsource everything to their partner Company, Leaving them to
Focus on their Core Product.

In addition Go Pro can Consider Following Product Extensions :-

  SUFBOARDS :- This was a great option for Go Pro since their roots were also in Surfing
and they sponsored their Product by Renowned professional Surfers like Kelly Slater. One
More advantage in this market was the Growth opportunities since it was $205 billion market
and it was Growing at an annual rate of 11% for the Past 4years.
 Mountain Bikes :- Another Potential extension for the Go Pro Brand Could be in this market
Since their Projected Sales was $13.4 Billion in 2017 and had an expected Growth Rate of
9.2% till 2021. For Go Pro this meant Going back to its roots in action Sports and racing.

Question 3.

What companies, if any, serve as a good brand extension examples for GoPro? Which do not?
As a brand extension
 The company’s business focus was to develop product solutions that enabled consumers to
capture, manage, share, and enjoy some of the most important moments in their lives. In
addition to selling action cameras to capture live events, the company could diversify into
several related businesses, including software and drones.
 The company should continue building the existing capture device business while also
launching complementary new device categories like drones and devices to capture virtual
reality content.
 In addition, company can focus on releasing new content management, editing and sharing
solutions that will provide increased value to new and existing consumers.
 The company can focus on product leadership and innovation in its cameras, and in mounts,
accessories, and batteries as further brand extension.

Partnership

 Though there are several opportunities in partnership with other company like surfboard retail
market, mountain Bikes market, skis & snowboards however this will hamper the brand core
value and the customer- centric roots of company.