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Advantages of Extensions

Facilitate New Product Acceptance

Nine main reasons for product failure

Improve brand Image

Reduce risk perceived by customers Increase the probability of gaining distribution and trial

Increase efficiency of promotional expenditures

Reduce costs of introductory and follow-up marketingprograms

Avoid cost of developing a new brand

Allow for packaging and labeling efficiencies

Permit consumer variety-seeking

Advantages of Extensions

Provide Feedback Benefits to the Parent Brand

Clarify brand meaning

Enhance the parent brand image

Bring new customers into the brand franchise and increasemarket coverage

Revitalize the brand

Permit subsequent extensions

Disadvantages of Brand Extensions

Can confuse & frustrate consumers

Can encounter retailer resistance

Can fail & hurt parent brand image

Can succeed & cannibalize parent brand sales

Can succeed but diminish identification with any one category

Can succeed but hurt the image of the parent brand

Can dilute brand meaning

Can cause the company to forgo the chance to develop a new

brand

Nine Major Reasons for Brand Failure

Insufficient demand

Poor match product for company

Inadequate or inaccurate market research

Bad timing

Insufficient returns on investments

Product was not new or different

Product did not go with familiarity

Lack of credibility

Consumers could not recognize the product

Simplicity Marketing

Four Rs:

Replace

Repackage

Reposition

Replenish

Understanding How Consumers

Evaluate Brand Extensions

Managerial assumptions

Consumers have some awareness of and positive

associations about the parent brand in memoryAt least some of these positive associations will be evoked

by the brand extension

Negative associations are not transferred from the parentbrand

Negative associations are not created by the brandextension

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Understanding How Consumers

Evaluate Brand Extensions

Brand Extension and Brand EquityCreating extension equity

How Salient

How Favorable

How Unique

Contributing to parent brand equity How Compelling

How Relevant

How Consistent

How Strong

Evaluating Brand Extension Opportunities

Brand Extension of Vaseline Extension Guidelines Based On Academic Research