Brand based business models Flashcards
Brand based business models
refers to business models where the brand has a central role as a value driver and the starting point is either an existing brand or and existing product.
Product line extension
(sometimes just product extension or line extension) Same brand, same product category
E.g. Coca cola zero, light.
E.g. Volvo models
Franchising
Same brand, same product category
• The brand concept, but also distribution channels
• Essentially all brand elements- to capture the concept
• IPRs, primarily trademarks, copyright and design rights
• But also other unprotected elements
• Both entitles and obligates the franchisee to apply the whole concept
E.g. Mc Donalds
Why franchising (franchisor)
• Expanding without investments • Expanding without employees • Efficient entrepreneurs • Controlled distribution • Benefits of scale
Why franchising (franchisee)
Proven concept Turn-key business Instructions in manuals Support Brand Benefits of scale
Franchise laws
Disclosure laws
• Marketing laws
• Contract laws
Relationship laws
• Contract laws
• Competition laws
• Consumer laws
Brand extension
(also known as category extension) Same brand, new product category
E.g. Skiis from Chanel, wall paper from Raphl Laureen, Apple enter phone market
Merchandising
(sometimes called “logo-slapping”) Same brand, new product category
E.g. Harley davidson store for clothes
Co-branding
Same brand, new product category, or same product category for one brand
E.g. Intell computer with Ferrari brand or Lego starwars movies
Brand licensing
Same brand, new product category
E.g. Goretex in outdoor brands
Brand diversification / Multi brands
New brand, same product category
Using different brands for the same product category for different target groups with varying quality and price.
E.g. Nasin or Nezeril nostrils.
E.g. Kellogs different cereals
Pros and cons with same
brand, same product category
PROS • Leveraging, enforcing and improving the brand • Easier to launch new product • Brand and product infrastructure in place • Efficient in promotion • Developing the brand and offering consumers variety • Attracting new consumers to the brand
CONS
- Can confuse the consumer
- Poses a risk to the brand if it fails
- Can cannibalize the head brand
- Can dilute the brand identity
Pros and cons with same
brand, new product category
PROS • Leveraging, enforcing and improving the brand • Easier to launch new product • Brand and product infrastructure in place • Efficient in promotion • Developing the brand and offering consumers variety • Attracting new consumers to the brand • Increasing the market
CONS • Can confuse the consumer even more • Poses an even greater risk to the brand if it fails • Can cannibalize the head brand • Can dilute the brand identity
Pros and cons with new
brand, same product category
PRO
• Chance to diversify to different target groups and target markets
• Chance to leverage already existing product/service.
Benefits of scale
• Little confusion — separate brands in the average consumer’s view
• Less risk to the original brand
• Chance to start with a clean slate
CONS • No leveraging of one brand • Confusing to the informed customer • Loosing out on the benefits of building one large, strong brand identity
