Brand Growth Flashcards
Who proposed the Brand Lifecycle and what is it?
Lehu (2008)
Birth, Growth, Maturity, Decline, Death
Asserts that brands will eventually die
What is the purpose of brand growth strategies?
To stay relevant within the market, growing physical and mental availability/developing strong brand salience.
What are the 4 methods of brand growth?
Brand extensions
Brand licensing
Brand alliance
Brand acquision
Define brand extension
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.
What are the two types of brand extensions?
Vertical (line)
Horizontal (category)
What is a vertical (line) brand extension? Provide an example.
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
What is brand equity decay?
The gradual loss or decline in the value and strength of a brand over time
What are 4 factors which contribute to brand decay?
- Ineffective marketing and communications
- Lack of innovation
- Competitive pressure
- Negative publicity
Critique Reis and Reis (2002) statement that “no brand will live forever”
Lots of brands have defied this vp and managed to stay relevant e.g. Coca Cola
What is horizontal (category) brand extension?
Provide an example.
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
What are 4 benefits of brand extensions
- Leverage brand equity of parent brand
- Cost efficiency (compared to creating an entire new brand from scratch)
- Reduced risk (related product categories, familiarity with the market)
- Cross-selling opportunities (complementing products, customers may be more inclined to try new products from brand already familiar with).
What are 3 drawbacks of brand extension?
- Brand Dilution - introducing too many unrelated products or entering unrelated markets can dilute brand identity & weaken brand perceptions & market position e.g. Cologate Lasagne
- Cannibalisation - extensions could end up competing with existing products e.g. Apple iPhone models (Kim et al., 2001)
- Risk of failure - if extensions dont resonate with or match consumer expectations could damage other products
Who introduced the importance of ‘fit’ ? and what does this refer to?
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
What method is seen as the least risky according to Kim et al (2001)?
Vertical (line)
What should companies base their extension method decision on?
How risk adverse the company is - existing level of brand awareness and equity
Define brand alliances
Also known as brand partnerships, involves two or more brands collaborating to create joint products, services, or marketing campaigns.
Why is brand alliance a strategic approach to brand growth?
Allows companies to leverage each others equity, markets, and resources to achieve mutual benefits
What are the two types of brand alliances?
- Co-branding/Product collaborations (most commonly used)
- Cross-marketing
What is Co-branding/product collaborations?
When two brands come together to co-create a new product or line of products which combine their expertise
Give an example of two brands Co-branding
Nike and Apples collaboration to create the Nike Apple Watch
What is cross-marketing?
Collaboration on marketing campaigns or promotions to leverage each others marketing channels, audiences, and brand associations.
Give an example of a brand alliance which uses cross-marketing
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
What factors should brands consider when selecting an ally? (Van der lans et al., 2014)
- Existing brand awareness
- Existing brand equity
- Consumer brand associations and perceived quality
- Ally brands personality - alignment
Provide 2 possible disadvantages of Brand Alliances & provide an example
- 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
- Guilty through association - conflict or scandal with an ally can have negative spill over effects on the other
What is Brand Licensing?
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.
What are 2 benefits of licensing for the licensor?
- Revenue generation - offers additional revenue streams without the requirement of significant investment in manufacturing and distribution
- 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
What are 3 potential risks of brand licensing for the licensor?
- potential loss of control over how the brand is presented, marketed, and positioning - potentially leading to damaged reputation in bad situations
- 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
- 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.
What is a brand acquisition?
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)
What are 3 benefits of acquisition?
- expands market presence
- diversifies portfolio
- strengthens competitive position
Give an example of a successful brand acquisition
Coca Cola acquisition of Thums Up in India
Give an example of a failed brand acquisition
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
Concluding points on brand growth
- 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
