Branding strategies and brand extensions

Question 1

What is Brand architecture?

Answer 1

• The structure of brands within an organisation

- It is the way in which the brands within a company’s portfolio are related to, and differentiated from eachother

Question 2

What is the purpose of brand architecture? (CIL)

Answer 2

• to clarify brand awareness
• increase understanding
• leverage brand image across portfolio

Question 3

What is a product line?

Answer 3

group of products in a category that are closely related and function in a similar way
ex; coffee shop selling espresso, cappuccinos, lattes, mochas, café au lait etc.

Question 4

What is a brand line?

Answer 4

All products sold under a particular brand

ex; unilever: gillette, ben and jerry, maybelline etc.

Question 5

What is a brand portfolio? how is it judged?

Answer 5

set of all brands sold in a category (Fairy liquid, ariel etc)
- judged on ability to collectively maximise brand equity

Question 6

What is the branding strategy of the product portfolio?

Answer 6

1. Breadth: number and nature of products linked to the brands sold by a company
2. Depth: number and nature of brands marketed in the product class sold

Question 7

What are some reasons for increasing brand presence in a category? (4 points)

Answer 7

• increase shelf presence and retailer dependence
• cater to variety seeking behaviour (low involvement and perceived significant brand differences)
• increase competition in the firm allow fittest to survive (proactive cannibalisation)
• economies of scale
  ex: P&G brands

Question 8

What are some issues with the brand portfolio?

Answer 8

• balance between market coverage and costs/profitability
• portfolios can be too big (inefficient cost as segments become smaller, profitability can be increased by dropping brands)
• portfolios can be too small (profitability increases by adding brands)
  ex: P&G sheds 100 brands to achieve greater focus

Question 9

What is Hill, Ettenson and Tyson’s (2005) portfolio analysis technique?

Answer 9

1. Understand the portfolio
2. Assess brand contribution
3. Assess market position
4. Assess problems and opportunities
5. Develop the plan

Question 10

According to Kotler, what are the determinant factors of corporate image?

Answer 10

1. How do business
2. Social impact
3. Philanthropic activities
4. Employees
5. Products
6. Services
7. Prices
8. Distribution channels
9. Support
10. Communications
11. Salesforce

Question 11

What is a corporate brand?

Answer 11

Attempt to attach higher credibility to a new product by associating it with a well established company name.
= greater array of associations
e.x. For example, Disney attaches its name to nearly all of its creations to emphasize its long-standing name recognition

Question 12

What is a family brand?

Answer 12

when corporate brand begins to lack meaning family brand takes over that role.
- use of a single brand name for the sale of two or more related products
- associated with attributes, benefits and attitudes
- less about people and relationships, campaigns
ex; apple: computers, phones, accessories, music players and tablets.

Question 13

What is an individual brand?

Answer 13

• A company may use a distinctive logo, name and marketing strategy for each product it sells
• restricted to one product category
• marketing activity targeted to a particular customer group

eg: P&G: Vicks, Ariel, Head and Shoulders, Pampers

Question 14

What is the advantages of incorporating CSR to a brand? e.g. Kenco (Coffee versus gangs) (4 things)

Answer 14

1. Positive response from customers (values of target groups)
2. Increased brand awareness, brand image and credibility
3. Evoke brand feelings, brand community and engagement
4. Establish brand personality = if successful can reach all levels in the CBBE model

Question 15

What is the disadvantages of incorporating CSR to a brand? (5 things)

Answer 15

1. Difficult in linking what customers say they like and what they will do
2. do customers really want causes or do they want a quality product at a good price?
3. Action need to match image
4. differentiating is difficult in a world where companies are doing the same thing
5. ethically loaded dilemmas

Question 16

What is brand extension? line extension and category extension?

Answer 16

brand: launch a new product by using an existing brand name on a new product in a different category (Virgin -> Virgin Blue Australia)

Line: use of parent brand name to target a new market in the same category (Sainsbury’s taste the difference, basics)

Category: use of parent brand to enter a different category (Amazon echo, virgin galactic)

Question 17

What are different vertical brand extension techniques?

Answer 17

1. Downward extension stretch: locate at the top end of the market “stretches” downwards to pre-empt a competitor, respond to an attack. (e.g. Mercedes C-class)
2. Upward extension stretch: companies stretch upward to add prestige to their existing range of products (Toyota with Lexus)
3. Two-way extension stretch: extend product lines upwards and downwards to address different segments of the market (Sainsbury’s basics, taste the difference etc)

Question 18

What are the advantages of brand extensions? (5 and 4 things)

Answer 18

1. enhances new product acceptance
   - increases brand image
   - lowers risk
   - increases distribution
   - efficiency of promotions
   - decreases costs
2. Feedback to parent brand:
   - increases parent brand image
   - increases marketing coverage
   - keeps the brand fresh
   - allows extensions

Question 19

What are the disadvantages of brand extensions?

Answer 19

1. confusion and frustration
2. retailer resistance
3. failure can hurt parent brand image
4. cannibalisation
5. diminished identification with the category
6. dilute brand meaning

Question 20

How do you evaluate brand extension opportunities?

Answer 20

1. Define actual and desired knowledge about the brand
2. Evaluate potential (consumer factors and consumer research, fit with existing campaigns and competitive reaction)
3. Design campaigns to launch extension (choose brand elements, marketing campaign and build secondary associations)
4. evaluate extension success (brand tracking)

Question 21

What is Aaker and Keller’s (1990) model of brand extensions?

Answer 21

Brand extension evaluations based on:

• Quality of original brand
• Fit between parent and extension
• Quality*Fit

Question 22

Brand Extensions and the Ownership Effect?

Answer 22

• Ownership effect: Owners have more favourable responses to brand stretching than non-owners.
• Ownership effect occurs for ↑/↓ stretches of non-prestige brands and upward stretches of prestige brands
• but downward stretches for prestige brands lead to an unfavourable consumer response – owners desire to maintain brand exclusivity
  Sub-branding