Brand Extensions Flashcards
What are brand extensions?
They introduce new products or find new markets in order to grow (market development)
What is a brand portfolio?
Multiple products in the same product category
What is the framework for a brand portfolio?
A graph that looks at columns (products) and rows (brands).
Rows focus on brand product relations, representing the original brand line and category extensions for a given brand
Columns focus on product brand relations, representing the portfolio, set of all the brands the company offers
How do you design a branding strategy (5)
- Which products will be introduced
- How many hierarchy levels will be used (2 max)
- Determine the desired brand awareness and image at each level
- How to combine different brand elements from each level
- How to link any 1 brand element to different levels
What are horizontal brand extensions? (2)
Category extension: Uses the parent brand to enter a different category, using its existing positive brand equity and power (Eg. Swiss)
Line extension: Adds a different variety, form, size, or application for the brand (Eg. Head and Shoulders)
What are vertical brand extensions?
Upwards extension:
-Extend a brand upwards to a more premium market segment, possibly improving the brand image of quality
Downwards extension:
-Extending downwards into a more value-conscious segment, can harm the brand as consumers associate price with quality.
What’s the best way for a brand to add a downwards extension?
Adding a sub-brand name to the parent brand to avoid any negative impacts on its brand equity
What are the pros/cons of vertical brand extensions?
Pro: variety is now available to consumers, it’s often done to revitalise a brand
Neg: it can confuse or frustrate customers
What are the advantages of brand extensions? (2)
- Facilitate new product acceptance: improve brand image, reduce risk perceived, increased probability of distribution and trial, avoid costs of making a new brand and introducing/follow up marketing, it increases the efficiency of promotional expenditures, permit variety seeking for consumers, and packaging/label are efficient
- Provide feedback benefits to the parent brand (strengthen image): It can clarify brand meaning, enhance parent brand image, bring new customers to the brand, increase market coverage, reinstate brand image, and permit subsequent extensions
What are the disadvantages of brand extensions? (7)
- Can confuse/frustrate consumers
- Can encounter retail resistance
- Can hurt/fail parent brand
- Can succeed and cannibalise sales of the parent brand
- Diminish identification with a product category
- Can dilute the brand meaning
- Can cause the company to forgo the chance to develop a new brand
What should a brand extension do? Quote?
Needs to relate to a brand, without being to far from the original parent brand image
“Success increases if there is a level of fit or similarity between the proposed extension and parent brand.”
Name some guidelines for brand extensions (5)
- Successful extensions can not only contribute to the parent brand image but also enable the brand to be extended further
- The most effective advertising strategy for a brand is one that emphasises information about the extension rather than the parent brand
- Cultural differences across international markets can impact extension success
- An unsuccessful extension does not prevent a brand from backtracking and introducing a new extension
- Consumers can transfer associations that are positive in product class but negative in the extension content
What is brand architecture?
It is the structure of brands within an organisational entity. It is the way brands within a company’s portfolio are related to, and differentiated from, one another.
What are some good ways to do brand extension? (7)
- Companion products (Duracell battery to torch)
- Same product in a different form (Ocean spay cranberries)
- Introduce a product that has brands distinctive feature (Kraft cream cheese to salad dressing)
- Introduce relevant products to consumers for usage (Visa cards to checks)
- Capitalise on firm’s perceived experience (Honda cars to motors)
- Extend into benefits, attributes, and features (Scrub daddy utensils)
- Capitalise on distinctive image/prestige (Harley Davidson bikes to apparel)
