MNM3710 Brand Management

Assignment 02

Bio-Strath Brand extensions

Kefiloe Moatshe 42360854

Unique number:605824

Date of submission
08.05.2020

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DECLARATION BY STATEMENT
I Kefiloe Gladys Nanisi Moatshe, student number 42360854 understand the
consequences of plagiarism and collusion and hereby declare that the work submitted for
this report for MNM3710 is my own work.

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 TABLE OF CONTENTS Commented [h1]: To update the table of content, right
click it and select “update field” and “entire table”

1 INTRODUCTION ......................................................................................................4
2 BRAND EXTENSION ...............................................................................................5
2.1 TYPES OF BRAND EXTENSION STRATEGIES ...............................................6
2.1.1Line Extensions .............................................................................................. 6-7

2.1.2 Brand Extensions……………………………………………………………………… 7-8

2.1.3 Concept Extension…………………………………………………………………….8
2.1.4 Co-branding ……………………………………………………………………………9-10
3 CONCLUSION ........................................................................................................10
4 LIST OF REFERENCES .........................................................................................11

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 Introduction
Bio-strath a swiss nutritional supplement was produced 60 years ago by a German biochemist
Walter Strathmeyer. The nutritional supplement was invented over a two-month period by feeding
“friendly yeast cells with a mixture of other herbs” Bio-Strath is made from saccharomyces
circuses myen a good yeast harvested from fresh fruits as it ripens. Dr Walter Strathmayer
formulated the supplement to serve each organ and body system providing a 100% natural source
of nutrition for people.
According to Drotsky (2018)“Dr Walter Strathmayer gave the marketing rights and product
formulation to his Swiss friend ,Fred Pestalozzi” who sold it to 67 countries around the word and
still owns the original formula which has been preserved by his family .Clinical trials were
undertaken by Bio-Strath over the years which indicated that Bio-Strath is good for memory ,focus
and concentration in young and old people it can also build up resistance to colds and infections.
Bio-Strath was introduced and sold in South Africa in the early 70s, but because no marketing
activity took place only a few pharmacists sold the product. Bio-Strath Marketing and distribution
were only given to SA Natural Products (Pty) Ltd in 2002 that’s when Bio-Strath made its presence
felt into South African customers. The company immediately identified the numerous benefits the
product can offer to its unrealized market with the local complementary health market.
In 2011 Bio-Strath marked its 50th year since it was made commercially available in some
countries this milestone was incorporated by SA Natural products (SANP) as part of the
marketing campaign which could be used to increase penetration into the market by targeting
new consumers with in the core target market was women aged 25-49 in the LSM groups of 7-10
with emphasis on white ,colored and Indian customers .
The company’s objective was to increase average monthly sales by 40% during and immediately
after the campaign, with a realistic settling to new monthly average 25-30%higher than the 12
month prior to the campaign .The Bio-Strath campaign was viewed as a brand building exercise
that would deliver a return on investment over the longer term because more people would be
aware of the product .
The purpose of this assignment is to review the ways that Bio-Strath can improve the chances of
success while extending their brand. we need to identify the elements which are key success
while extending Bio-Strath brand. With the present markets, where life span of variants products
is very short, a strong brand is essential to retain customer confidence and recognition.

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2.Brand Extension as a marketing strategy
Companies like Bio-Strath adopt brand extensions as a strategy with the aim of benefiting from
the brand knowledge achieved in the current market. When a company like Bio-Strath launches
a new product and market it under the Bio-Strath umbrella, failure rates and marketing costs are
reduced (Aaker&Keller,1990). According to Keller (1993) more than 80% of companies resort to
brand extensions as a way of marketing its products and services. Competition forces companies
like Bio-Strath to adopt strategies that create a competitive advantage for the company. Creating
a brand name with well-established company (SANP) is one way that Bio-Strath can achieve its
aim. Companies invest heavily in developing a brand and it’s a very expensive process but has
good returns once success is achieved (Keller,2008). Brand extension as a marketing strategy
has become even more attractive in todays market where developing a new product cost a lot of
money and can be time consuming. Brand extension strategies grant data that grant a way to
consider the attitudes of customers about extended manufacturers and to know about their
preferences. Brand extension techniques shape an important perception which can influence the
success of a brand extension (Delvecchio,2000). Brand extension can also enlarge the probability
that company come to idea and create easiness to understand the brand. It enhances and
facilitate a brand’s attention to ease the recall, expand the cost perceived by means of consumer
(Keller,2003). there are two benefits of extensions that Bio-Strath desires to examine
(speed,1998:521)

• Transferability: The transfer of customer attitudes, preferences and understanding from

the authentic product to the new product is termed “transferability ‘. Consumers’ prior
expertise of and attitudes towards manufacturers from the groundwork of company equity.
the ability to switch manufacturer equity to new product introductions provides a skill to
leverage the equity and create in addition income.
• Reciprocity. the transfer of client attitudes, preferences and know-how from the new
product to the authentic product is termed ‘reciprocity’. If reciprocity is present, perceptions
of the original brand and changed after publicity to the proposed extension.
During the planning of the extension Bio-Strath wishes to center of attention on grasp the buyers
be aware of about the core manufacturer and product class associated with the extension. It’s
vital because customers response in such instances offers beneficial impute for decisions made
by means of the corporation on whether to proceed with the extension and if so how to enhance
the specific extension (Keller & Aaker,1992:36). The extendibility of the brand depends on the
value that it has for customers as , we know Bio-Strath marketed its product as an immune
booster that can be used by the young and older generation and with brand extension its
consumers needs to now that the product will provide the same benefits and tangible attributes
(Rangaswamy,Burke & olivia,1993:61). According to Klopper (2016:223) Owing to lack of
familiarity and subsequent high degree of uncertainty regarding the performance, the capacity of
a company to limit hazard is relevant when customers reflect on consideration on the purchasing
of a new products. For this reason, Bio-Strath must capitalize on company danger – lowering
abilities by means of introducing myriad extensions (DelVecchio,2000). We will be looking at 3
types of extension strategies mainly line extension, brand extension and concept extensions

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2.1Types of Brand Extension Strategies
2.1.1 Line extension
is when an organization exploits only one brand in the market, it can decide to launch different
products variants within the same product class under an already -existing brand name. Byline
extension the product will be a slight variation to the existing product for example Bio-Strath
launched the Bio-Strath Elixer tablets which was an extension of Bio-Strath Elixer syrup. in line
with Cravens(1997) Most practitioners agree that products have a far better chance of survival
when counting on line extension than after they are launched under a replacement product
.Through line extension Bio-Strath are going to be able to market the new product within the same
category which might be orientated towards a replacement market segment or be directed at the
present target market presenting minor modifications, which would mean that the main product
and the extended product will belong to the same product class.

As line extensions are characterized by the close relationship with their parent brand’s products
and process technology, they're particularly easy to imitate, and thus susceptible to competitor
attacks. Competitors often react just by offering a more robust price /performance ratio for his or
her old products, using deduction. For example Turbovite offers similar products as Bio-Strath
that same benefits at a lesser price which students can afford a bottle of Bio-Strath is R229 that
boost memory and gives energy while Turbovite Focus bottle is R79 it also boost memory and
physical energy on top of that Turbovite also offer sachets at a reasonable price of R5. The
modern customer wants choice, which has increased the chance for line extension involving new
flavors and sizes, but it's also made consumers harder to achieve. Line extension can be
extended in many ways, line extension may be done either in the same product category or
different product category. Thus, it can be either vertical or horizontal extension.

• Horizontal line Extensions: A line extension when there is no or hardly any difference
between price of the different product variants is labelled as horizontal line extension An
example is the price of Bio-Strath Elixer 200ml is R209 and Bio-Strath 100 Elixer is
R229, Bio-Strath does not have a large number of flavors when it comes to its products
as they offer natural raw ingredients free of colorants and artificial flavorings.
• Vertical line Extensions: A line extension when there is a difference between prices of
the different product variants is labelled as vertical line extension .Bio-Strath introduced
a much more affordable product Bio-Strath Bare Necessities for children priced at R 70
per 100ml bottle by introducing this product Bio-Strath was able to fence off the market
by offering a cheaper product variations .

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 • Family Brand names: Family branding can also be associated with line extensions, as
it uses an existing brand name on all products in a product line. Even though SA Natural
products bought the distribution rights Bio-Strath formulation is still owned by the
Pestalozzi family.
2.1.2 Brand extensions
Brand extensions are flagship products and the extended product belong to one-of-a-kind
product classes, but the identical type of product. A company extension provides an extra
opportunity for customers to experience a appreciated brand in a new product category
(Fournier,1998:343:Park&Kim,2002:190) Brand extension involves making use of and
applying the installed core company name to new merchandise to reap the fairness of the
original core company and also to seize new and unexplored market phase .Extended
company both some distance and near with core brand are regarded recommended for core
brand due to extra profitability . According to Barone (2005), Its commonly assumed that
recognized brands require low fee and costs of introduction such as advertising value and
income promotions. A distinction can be drawn between the following types of brand extension
(Keller&Aaker,1998:356):

• A product brand extension: In a product brand extension, an existing brand name is

used to introduce a new product. This is when organizations use existing brand name
that is distinct from corporate name to introduce a new product outside its current
offerings. Bio-Strath products where mainly produced for the human immune system
but Bio-Strath then decided to produce products for animals as well called Anima-
Strath, Anima-Strath is a good example of product brand extension as most of Bio-
Strath are completely unaware that that Bio-Strath also produces immune boosters for
animals as well.
• A corporate brand extension: A corporate brand extension occurs when
organizations relies on the corporate brand name to launch a new product. A corporate
brand extension clearly identifies an organization with the product and evokes different
reactions from consumers than brand extension. When Bio-Strath was launched it
came in syrup form as time went on SA Natural products (Pty)Ltd launched more
products like Bio-Strath Bare necessities which is good for infants, they also introduced
tablets for those customers that didn’t like the taste of the syrup .Customers bought
the products because they could identify with the brand as Bio-Strath kept the name
and the branding of the package the same.
In addition to this brand extensions we will also draw distinction between the following primary
forms of brand extension

• Horizontal brand extensions: These involves the application of an existing brand

name to a new product introduction , this could be either in a similar product class or
in a product category completely new to the organization .Horizontal brand extension
is almost similar to a product brand extension when Walter Strathmeyer developed Bio-
Strath it was mainly for human consumption as a source of nutrition that could provide
people with 100% natural source of nutrition ,but as time went on Anima-Strath was
also developed as Bio-Strath Horizontal product .Bio-Strath realized that Animals need

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 nutrition too to live longer as they can also suffer from stress and low immune systems
just like humans too.(Chen and Liu 2004)

• Vertical brand extensions: These involves the introduction of similar brand in the
same product category, but usually at a different price or quality. this could mean that
the brand extension is introduced at a lower price and lower quality level than the core
brand. The price of Bio-Strath Elixer is higher than the price of Bio-Strath Bare
Necessities this could be because Bio-Strath Elixer is manly to boost the immune
system of Adults there for the essential nutrients contents are higher than the Bio-
Strath Bare Necessities as its mainly created for infants. Vertical brand extension is
common practice among various industries like pharmaceutical, soft drinks. (Kim et
al:2001)
Brand extension strategy is normally based on the idea that the brand name has a certain value
for customers and that an organization can capitalize on that value organizations can also
introduce products through brand extensions for the following reasons:

• Capitalizing on the ready known brand name :Brand extensions are attentive to
organizations that face the reality of high new product failure rates because they provide
a way of taking advantage of brand name recognition and image to enter new markets
.When Bio-Strath passed the marketing and distribution rights to SA Nutritional products
(Pty) Ltd in 2002 ,the company quickly Identified the numerous benefits that Bio-Strath
could offer young and old people they managed to capitalize on the failure of Bio-Strath
by educating south African customers ,pharmacy’s and health shops about the unique
manufacturing process ,products and benefits and managed to outperform Bio-Strath
home country and 65 countries around the world in which Bio-Strath is available.
• Minimizing marketing cost: According to Doyle (1998:930) brand extension strategy
may create scale economies in advertising and promotion, and therefore save marketing
cost. SANP decided to use a well-known tv soapie 7de Laan to campaign the Bio-Strath
products in that way cost were minimized and the products were bought because
customers saw their favorite actors and actresses use the Bio-Strath product on TV.
• Building high visibility in the Market :By using a brand extension strategy ,customers
are confronted with the brand on several products .With 7de Laan having more than 2.7
million viewers SANP was able to build Bio-Strath visibility in the market as most of 7de
Laan viewers identified the product with their favorite actors on 7de Laan.
• Easier access to distribution channels: Brand extensions can decrease the cost of
gaining distribution or increase the efficiency of promotional expenditures .Because
customers responded and supported the Bio-Strath campaign -SANP customers
pharmacies and health shops performed outstandingly customers through out South
Africa and Namibia understood the benefits of the campaign which gave Bio-Strath good
store positioning and maximized its sales .
2.1.3 Concept extensions
Concept extension is defined as an existing brand name used for new product that can
be classified as belonging to another product type than the flagship product. According
to Riezebos el al (2003:223) Concept extension therefore refers to the stretching of the
brand to different types of product, than the original flagship or parent product. If go

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 back to a product brand extension and the horizontal brand extension Bio-Strath moved
from their existing product which was mainly developed for human nutrition and
designed a new product Anima -Strath which is basically introduced as the fur -version
for the four -legged kids of south Africa. This is a perfect example of concept extension
as Anima-Strath is licensed under The Natural Food Supplements for Animals.

2.1.4 Co-branding
According to Simonin & Ruth (1998:30) co-branding is defined as company alliance
which entails manufacturers from one-of-a-kind organizations that mix to have
interaction in fine, strategic or tactical brand-building programs, or to create co-
branded market choices. For example, Bio-Strath has co-branded its product with A
Vogel, Organ, Threshhold and Thursday Plantation which are all brands of SA Natural
Products (Pty)Ltd. Brand alliances can be represented physically by using two or more
brands on a product or symbolically by associating brand names logos or other brand
assets in marketing communication efforts.

The aggregate of two excessive -reputation brands on the equal product is likely to be perceived
via clients as a warranty of quality. The presence of a second brand on a product reinforces the
appreciation of high product quality, leading to higher product contrast and increased market
share. When two partners are well-known, the new product will benefit from high brand recognition
(Spethman&Benezra,1994:24). Co-branding different forms can be distinguished as follows:

• Co-branding on the product level: This is when a new product with two brand
names is introduced for example Bio-Strath and A Vogel. In this type of co-
branding, one can distinguish between a header and a modifier brand. The
product class of the co-branded product determines what can be defined as the
header brand.

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 • Co-branding on distribution level: This involves two brands that are sold together
or distributed together .this can be distinguished between branded articles sold
in combination with other branded article and organization distribute each
other’s branded articles this could range from Bio-Strath being sold in a combo
pack with A Vogel product like Molcosen or packed together in the same shelves
because they are being distributed by the same company this could mean that
they not in competition .
• Co-branding on the communication level: This type of co-branding exists when
two independent brands merely recommend each other’s products. In line with
Park el al (1996) co-branding as a strategy also carries so risk as the association
between the two brands may create confusion among customers which could
affect the image of both brands.

3.Conclusion
Brand extension helps companies like Bio-Strath in many ways like minimizing the risk of
introducing a new product, reducing the cost of promotion and increasing the acceptability of the
new products by customers. This Assignment has highlighted various strategies that Bio-Strath
has implemented on their brand. These strategies are believed to have had an influence in the
Bio-Strath brand extension success. When SANP got distribution and marketing rights for Bio-
Strath their co-branding allowed Bio-Strath to succeed in South Africa this clearly confirms that
brand strategies are relevant to brand extension success and a strong and tested product will
enable marketing managers an opportunity to develop a strategy incorporating success
strategies that reduce risks of brand extension failures .

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4.References
[1] Aaker, D.A and K.L. Keller .1990. “Consumer evaluations of brand extension” The journal of
Marketing :27-41
[2] Chen Kuang-Jung, and Liu Chu-Mei .2004, “Positive Brand Extension Trail and Choice of
Parent Brand”, Journal of Product and Brand Management, Vol13(1), pp 25-36
[3] DelVecchio Devon .2000,” Moving Beyond fit: The Role of Brand Portfolio Characteristics in
Customer Evaluations of Brand Reliability”, Journal of Product and Brand Management, Vol. 9(7)
pp.457-471
[4] Desai KapleshKaushik; and Keller Kevin Lane .2002,” The Effects of Ingredient Branding
Strategies on Host Brand Extendibility”, Journal of Marketing, Vol.66(1) pp.73-93
[5] Kapferer, J.N. .2012. The New Strategic Brand Management: Advanced Insights and Strategic
Thinking, Kogan Page Publishers
[6] Keller, K.L. .2000.” The Brand Report Card” Harvard Business Review: 147-158.
[7] Keller, K.L. .2003.” Brand Synthesis: The Multidimensionality of Brand Knowledge”. Journal of
Consumer Research 29(4):595-600
[8] Kim, C.K.M Lavack, et al.2001.” Consumer evaluation of Vertical brand extensions and core
brands” Journal of Business Research: pp 211-222
[9] Klopper, H.B and North, E. 2016” Brand Management “Fifth Edition of Brand Management,
Pearson Education of South Africa: pp223-236
[10] Nijssen, J.E.1999.Success factors of line extensions of fast-moving-consumers goods.
Pp450-469

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