Brand Growth

Question 1

Who proposed the Brand Lifecycle and what is it?

Answer 1

Lehu (2008)

Birth, Growth, Maturity, Decline, Death

Asserts that brands will eventually die

Question 2

What is the purpose of brand growth strategies?

Answer 2

To stay relevant within the market, growing physical and mental availability/developing strong brand salience.

Question 3

What are the 4 methods of brand growth?

Answer 3

Brand extensions
Brand licensing
Brand alliance
Brand acquision

Question 4

Define brand extension

Answer 4

Involve the application of an established brand name to new products or services in order to capitalise on the equity of the original brand name.

Question 5

What are the two types of brand extensions?

Answer 5

Vertical (line)
Horizontal (category)

Question 6

What is a vertical (line) brand extension? Provide an example.

Answer 6

Introducing new products or variations of the same product category or line as the existing brand.

e.g. Coca Colas introduction of Coca Cola Cherry and Vanilla

Question 7

What is brand equity decay?

Answer 7

The gradual loss or decline in the value and strength of a brand over time

Question 8

What are 4 factors which contribute to brand decay?

Answer 8

1. Ineffective marketing and communications
2. Lack of innovation
3. Competitive pressure
4. Negative publicity

Question 9

Critique Reis and Reis (2002) statement that “no brand will live forever”

Answer 9

Lots of brands have defied this vp and managed to stay relevant e.g. Coca Cola

Question 10

What is horizontal (category) brand extension?
Provide an example.

Answer 10

Expansion in to an entirely new product category or market, that is related to the core brand but can be distinct from existing offerings.

e.g. Zara Home - offering customers a cohesive lifestyle experience in combination with their fashion offerings

Question 11

What are 4 benefits of brand extensions

Answer 11

1. Leverage brand equity of parent brand
2. Cost efficiency (compared to creating an entire new brand from scratch)
3. Reduced risk (related product categories, familiarity with the market)
4. Cross-selling opportunities (complementing products, customers may be more inclined to try new products from brand already familiar with).

Question 12

What are 3 drawbacks of brand extension?

Answer 12

1. Brand Dilution - introducing too many unrelated products or entering unrelated markets can dilute brand identity & weaken brand perceptions & market position e.g. Cologate Lasagne
2. Cannibalisation - extensions could end up competing with existing products e.g. Apple iPhone models (Kim et al., 2001)
3. Risk of failure - if extensions dont resonate with or match consumer expectations could damage other products

Question 13

Who introduced the importance of ‘fit’ ? and what does this refer to?

Answer 13

Lahiri and Gupta (2005)

Asserts that consumers are more likely to embrace a new product if there is deemed to be some degree of compatibility between the brand and the new category

Question 14

What method is seen as the least risky according to Kim et al (2001)?

Answer 14

Vertical (line)

Question 15

What should companies base their extension method decision on?

Answer 15

How risk adverse the company is - existing level of brand awareness and equity

Question 16

Define brand alliances

Answer 16

Also known as brand partnerships, involves two or more brands collaborating to create joint products, services, or marketing campaigns.

Question 17

Why is brand alliance a strategic approach to brand growth?

Answer 17

Allows companies to leverage each others equity, markets, and resources to achieve mutual benefits

Question 18

What are the two types of brand alliances?

Answer 18

1. Co-branding/Product collaborations (most commonly used)
2. Cross-marketing

Question 19

What is Co-branding/product collaborations?

Answer 19

When two brands come together to co-create a new product or line of products which combine their expertise

Question 20

Give an example of two brands Co-branding

Answer 20

Nike and Apples collaboration to create the Nike Apple Watch

Question 21

What is cross-marketing?

Answer 21

Collaboration on marketing campaigns or promotions to leverage each others marketing channels, audiences, and brand associations.

Question 22

Give an example of a brand alliance which uses cross-marketing

Answer 22

Starbucks and Spotify

Starbucks integrated Spotify in to their app allowing customers to save music playing in stores.

Spotify curated tailored playlist catered for Starbucks customers

= Enhanced customer experience and leveraged brand strengths to reach wide audiences

Question 23

What factors should brands consider when selecting an ally? (Van der lans et al., 2014)

Answer 23

1. Existing brand awareness
2. Existing brand equity
3. Consumer brand associations and perceived quality
4. Ally brands personality - alignment

Question 24

Provide 2 possible disadvantages of Brand Alliances & provide an example

Answer 24

1. Unequal benefit distribution - it cannot always be guaranteed that each ally will equally benefit from the deal

e.g. Kanye West Yeezy & Gap - Yeezy gained access to Gap’s extensive market and retail networks whereas Gap brand did not capitalise on Kanye’s celebrity status as expected - failed to revitalise the brand

2. Guilty through association - conflict or scandal with an ally can have negative spill over effects on the other

Question 25

What is Brand Licensing?

Answer 25

When the brand owner (licensor) grants another firm (the licensee) the rights to use the brand name, logo, trademarks and/or other IP in exchange for a royalty fee.

This allows the licensee to manufacture, market, and sell products/services under the licensed brand name.

Question 26

What are 2 benefits of licensing for the licensor?

Answer 26

1. Revenue generation - offers additional revenue streams without the requirement of significant investment in manufacturing and distribution
2. Extension in to new product categories/markets where the licensee has established distribution channels and experience
   - allows licensor brand to reach new audiences, increasing visibility and reach

Question 27

What are 3 potential risks of brand licensing for the licensor?

Answer 27

1. potential loss of control over how the brand is presented, marketed, and positioning - potentially leading to damaged reputation in bad situations
2. Brand dilution - the brands core values and purpose could be diluted by the licensee - particularly if the pair do not align. Could result in diminished brand value, quality, and authenticity
3. Conflicts of interest can arise if the pair clash or compete with one another for example if they operate in competing markets - could result in internal competition and cannibalisation.

Question 28

What is a brand acquisition?

Answer 28

When a company purchases a brand for purposes such as: expanding market presence, diversifying portfolio, and/or strengthening competitive positioning (for example by acquiring competitors or threatening new entrants)

Question 29

What are 3 benefits of acquisition?

Answer 29

1. expands market presence
2. diversifies portfolio
3. strengthens competitive position

Question 30

Give an example of a successful brand acquisition

Answer 30

Coca Cola acquisition of Thums Up in India

Question 31

Give an example of a failed brand acquisition

Answer 31

Quaker’s acquisition of Snapple

Aimed to diversify their portfolio and enter in to the tea and juice market segment - aiming to capitalise on snapples strong presence in this market

Quaker failed to adapt their strategies and operations to align with Snapples well established brand and customer base - trying to replicate the same successful methods used for Gatoraid acquisition & failed miserably

Question 32

Concluding points on brand growth

Answer 32

• critical for brands to react quickly to signs of brand decay
• identification of strategic growth strategies will allow exploitation of market opportunity and equity building
• brand equity plays pivotal role in brand growth as main enabler of successful brand growth