8 – Sustaining Brand Equity II: Extending Brands Flashcards
Brand Extension
When a firm uses an established brand name to introduce a new product. Same brand name used in multiple categories
Virgin
Brand portfolio. Row of brand product matrix. Degree of fit.
Line Extension
Adds a different variety, a different form or size, or a different application for the brand
Head and Shoulders
Brand portfolio. Row of brand product matrix. Building brand equity by brand performance and imagery. Understanding brand positioning.
Category Extension
Marketers apply parent brand to enter a different product category from one it currently serves. When a brand moves away from category completely. Brand stretch, how far can product category use stretch to a new category. The brand should make sense and become a worthy competitor. Brand lends name to another product category.
Dove, Swatch, Virgin
Brand portfolio. Row of brand product matrix. Brand positioning. Brand performance and imagery. Degree of fit. Brand stretch.
Advantages - Facilitate New Product Acceptance
• Improve brand image – making brand more credible, likeable, and favourable. Improving branding of the whole organisation.
• Reduce risk perceived by customers – may communicate longevity and sustainability.
• Increase probability of gaining distribution and trial – people are more willing to try a new product if it comes from a well established product, retailers also more willing to stock/store the product when connected to a well known brand.
• Increase efficiency of promotional expenditures – more bang for the buck
• Reduce cost of introductory and follow up marketing programs – less expensive to extend brands than develop new brands
• Avoid cost of developing a new brand – new brands take up a lot of money, brand extensions save this.
• Allow for packaging & labelling efficiencies – lower production costs and can create a billboard effect in stores.
• Permit consumer variety seeking – allow them to try other things without moving to a competitor. Consumers more wiling to try.
Sony Bravia, Head and Shoulders
Builds on brand equity through salience, performance, imagery, consumer judgements, feelings, and resonance. Marketing philosophies – marketing creates value and is about the consumer. Easier to implement brand elements, IMC and leveraging secondary associations. Strong, favourable, and unique associations.
Advantages - benefits to the parent brand
• Clarify brand meaning and define the kinds of markets in which it competes.
• Enhance parent brand image – by strengthening existing brand association, improving favourability/ adding new brand association.
• Bring new customers into brand franchise and increase market coverage. This is by offering a product benefit whose absence may have prevented customers from trying the brand
• Revitalise the brand – modernising aging brand, making it more contemporary.
• Permit subsequent extensions – brands can extend further later
Weight watchers, Crayola, Cadillac, Nivea
Improves brand meaning (performance and imagery). Can improve brands that are in commodity/erosion phase of BAV power grid. Brand positioning, target market and competitors. Leveraging associations from the parent brand.
Disadvantages of Extension
• Can confuse/ frustrate consumers – in trying to find out which product is for them, could cause customers to buy less, insufficient shelf space.
• Can encounter retailer resistance – stores cannot offer all types of products
• Can fail and hurt parent brand image – can tarnish the image of some/all remaining products
• Can succeed but cannibalise sales of parent brand
• Can succeed but diminish identification with any one category – brand may not be strongly identified to any one product.
• Can succeed but hurt image of parent brand – can cause consumers to change perception of parent brand
• Can dilute brand meaning – when there is a lack of identification to one category and weakened brand image
• Can cause company to forgo the chance to develop a new brand – opportunity cost. It could prevent a new consumer base by introducing a new brand, questioning what if
Colgate. Coke introducing Diet Coke. Pepperidge Farm. Campbell Soup. Gucci.
Could cause damage to brand salience, imagery, performance, consumer judgements and feelings. Brand crisis management. Brand positioning, target market and competitors. May damage strong, favourable, and unique associations formed if unsuccessful.
How Consumers Evaluate Brand Extensions
Managerial assumptions – base line conditions, must haves market forces that need to be present to extend a brand. If these are met, organisation can then start to extend the brand
• Consumers are aware and have a positive image of parent brand.
• Some of the positive associations should transfer to extensions.
• Negative associations should not be transferable to brand
• Negative associations should not be created by extension
Brand extensions and brand equity – what is the brand going to do?
• Brand extension should be able to stand through its own equity and be strong, favourable and unique
• The brand extension should improve success of parent brand; it can then be considered a true success. It needs to be compelling, relevant, consistent and strong.
Vertical brand extensions – extending across multiple price points.
• Upward: extending from low to high price. Acceptance from consumers is harder, questioning whether brand has same quality.
• Downward: extending from high to low price. Consumers may start questioning this.
Toyota
Builds brand equity through brand image. Image affected by strong, favourable and unique associations. Brand positioning affected. Improves brand awareness. Low entry product level or high-end prestige brands. Brand portfolio and brand architecture
Academic Findings
• There are many bases of fit: product related attributes and benefits as well as non product related attributes and benefits related to common usage situations/ user types.
• High quality brands stretch farther than average quality ones, although both have boundaries.
• A brand that is seen as prototypical of a product category can be difficult to extend outside its category
• Vertical extensions can be difficult and often require sub branding strategies
• The most effective advertising strategy for an extension is one that emphasises information about the extension (rather than reminders about the parent brand).
• Individual differences can affect how consumers make an extension decision, and will moderate extension effects. Experts vs. novices in a product category cause different evaluations.
• Cultural differences across markers can influence extension success.
Virgin, Rolex, Colgate
Brand extensions can affect brand equity through performance and imagery attributes. Sub branding as a brand portfolio strategy. Related to brand elements and IMC. Degree of fit and relevance to brand positioning.
Tauber’s Brand Extension Strategies
• Same product but change form
• Products that have distinct taste/flavour
• Companion products
• Products relevant to the franchise that brand means
• New products that capitalise on the expertise on brands
• Products that capitalise distinct benefit of the brand
• Products that capitalise on the prestige of the brand
Ocean Spray, Philadelphia, Colgate, Duracell, Visa, Honda, Lysol, Porsche
Brand performance – brand characteristics, product reliability, durability and serviceability, style, design and price. Brand imagery – use profiles, usage situations, personality, history, heritage, and experience. Product needs to be relevant to brand positioning. Degree of fit. Low-end entry level or high-end prestige brands.
Functional Stretch
Dimension concerns credibility of brand’s delivering the functional benefits in the concept. If stretch is not too far, then only add a descriptor to extension.
Special K Breakfast Cereal and Bar.
Brand performance, and consumer judgements affected through brand elements. Degree of fit. Brand positioning.
Emotional Stretch
Occurs when personality, tone and style of extension are different to those of master brand. A sub brand allows more emotional stretch than simple descriptor. How far you stretch impacts naming strategy.
Bacardi Breezer and Rum
Brand imagery, and consumer feelings affected by brand elements, IMC. Degree of fit. Brand positioning.
Key steps of managing brand extensions
• Ascertain what consumers know and like about parent brand – base line conditions to be met
• Identify possible extension products and categories – brainstorming ideas for extensions
• Evaluate proposed extension in terms of advantages and disadvantages: consumer, corporate, competitor, category factors.
o Associations made with extension
o Perceptions of fit with parent brand
o Relevant internal and external factors
• Develop marketing programs - brand elements, leveraging secondary associations
• Measure success & effect on parent brand
Head and Shoulders, Yoplait
Be aware of how to climb pyramid through using brand extensions. New brands can leverage associations made with the parent brand. Brand positioning that includes target market, competitors, POPs and PODs. Develop new programs through brand elements, IMC, and leveraging secondary associations.
