Brand Based business models

Question 1

Name all brand based business models

Answer 1

1. Product Line extension
2. Franchising
3. Brand extension
4. Merchandising
5. Co-branding
6. Brand licensing
7. Brand diversification/multibrands

Question 2

Explain 1. Product Line extension

Answer 2

Same brand, same product category

You apply a new design, ingredient, shape, scent etc

ex. Coca cola, apple, cars

Question 3

Explain 2. Franchising

Answer 3

Same brand, same product category

The owner of a brand concept allows second parties to use the entire concept of the brand.

ex. Mcdonalds

Question 4

Explain 3. Brand extension

Answer 4

Same brand, new product category

Promote/enforce original brand + new produts, full brand experience

ex. Ralph lauren wallpaper, Apple iPhone, Chanel skies

Question 5

Explain 4. Merchandising

Answer 5

Same brand, new category

Brand extension but more focused on creating products around the brand to promote the brand and its identity, rather than using it for other products.

Ex. 1D store, band t-shirts

Question 6

Explain 5. Co-branding

Answer 6

Same brand, new category

Branding collaboration, both parties license each others brand to create something even better.

ex. Lego Star wars, Acer-Ferrari (also ingredient co-branding, ex. Intel-computers)

Question 7

Explain 6. Brand licensing

Answer 7

Same brand, new category

When valuable brand is used on product to increase value.

ex. Gore-tex, Fairtrade, olympic rings

Question 8

Explain 7. Brand diversification/multibrands

Answer 8

New brand, same product category

Using different brands for the same product category, but often with different target groups and markets. Also varying quality and price

ex. Alvedon-panodil-panadol, L’oreal, coca cola zero/light, unilever, nestle

Question 9

Pros with SAME brand, SAME product category

Answer 9

• 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

Question 10

Cons with with SAME brand, SAME product category

Answer 10

• Can confuse the consumer
• Poses a risk to the brand if it fails
• Can cannibalize the head brand
• Can dilute the brand identity

Question 11

Pros with SAME brand, NEW category

Answer 11

• 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

Question 12

Cons with SAME brand, NEW category

Answer 12

• 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

Question 13

Pros NEW brand, SAME product category

Answer 13

• 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

Question 14

Cons NEW brand, SAME product category

Answer 14

• No leveraging of one brand
• Confusing to the informed customer
• Loosing out on the benefits of building one large, strong brand identity

Question 15

What types of franchising can often be found?

Answer 15

• Product or Trade name franchising
• Manufacturing franchising
• Business format franchising