Brand Extensions

BRAND EXTENSIONSBRAND EXTENSIONS

BRANDS - BRAND EXTENSION AND STRETCHINGBRANDS - BRAND EXTENSION AND STRETCHING

Marketers have long recognized Marketers have long recognized that that strong brand names that strong brand names that deliver higher sales and profitsdeliver higher sales and profits (i.e. those that have brand (i.e. those that have brand equity) have the potential to work equity) have the potential to work their magic on other products. their magic on other products. The two options for doing this The two options for doing this are usually called are usually called “Brand “Brand extension” & “Brand stretching”.extension” & “Brand stretching”.


Brand extensionBrand extensionBrand extension refers to the use of a Brand extension refers to the use of a successful brand name successful brand name to launch a to launch a new or new or modified modified product in a product in a samesame broad market. broad market. A successful brand helps a company enter A successful brand helps a company enter new product categories more easily.new product categories more easily.For example, Fairy (owned by Unilever) was For example, Fairy (owned by Unilever) was extended from a washing up liquid brand to extended from a washing up liquid brand to become a washing powder brand too.become a washing powder brand too.The Lucozade brand has undergone a very The Lucozade brand has undergone a very successful brand extension from children’s successful brand extension from children’s health drink to an energy drink and sports health drink to an energy drink and sports drink.drink.


Brand stretchingBrand stretchingBrand stretching refers to the Brand stretching refers to the use of an use of an established brand established brand name for products in name for products in unrelated unrelated marketsmarkets.. E.g. Virgin E.g. VirginFor example the move by For example the move by Yamaha (originally a Japanese Yamaha (originally a Japanese manufacturer of motorbikes) manufacturer of motorbikes) into branded hi-fi equipment, into branded hi-fi equipment, pianos and sports equipment.pianos and sports equipment.

ADVANTAGES ADVANTAGES OF BRAND OF BRAND EXTENSIONEXTENSION


When done successfully, brand When done successfully, brand extension can have several extension can have several advantages:advantages:

Distributors may perceive there Distributors may perceive there is less risk with a new product if is less risk with a new product if it carries a familiar brand name. it carries a familiar brand name. If a new food product carries If a new food product carries the Heinz brand, it is likely that the Heinz brand, it is likely that customers will buy itcustomers will buy it



Customers will Customers will associate associate the qualitythe quality of the of the established brand name established brand name with the new product. with the new product. They will be more likely They will be more likely to to trust the new product.trust the new product.


The new product will The new product will attract quicker attract quicker customer awareness customer awareness and willingness to trial and willingness to trial or sample the product.or sample the product.


Promotional launch Promotional launch costs (particularly costs (particularly advertising) are likely advertising) are likely to be substantially to be substantially lower.lower.

• Parent brand (Cinthol) • Different product (Cinthol talcum powder) • Comparable benefit (both cosmetic)

BRAND EXTENSIONBRAND EXTENSION

• Parent brand (Cinthol) • Same product (toilet soaps) • New variant (Cinthol cologne)

• Extension different (Tata steel) • Product different (Tata Tea) • Benefit (products unrelated

TYPES OF BRAND EXTENSIONS TYPES OF BRAND EXTENSIONS AA brand name can be extended in three ways: brand name can be extended in three ways:

1)Extended to other items in the same product line 1)Extended to other items in the same product line

(LINE EXTENSION )(LINE EXTENSION ): :

Sunrise Sunrise coffee coffee was extended to otherwas extended to other

offers offers Sunrise PremiumSunrise Premium & & Sunrise Sunrise

Extra Extra coffee, catering to coffee, catering to different different

segmentssegments..

All are products in the All are products in the same line Coffeesame line Coffee..

TYPES OF BRAND EXTENSIONS TYPES OF BRAND EXTENSIONS A brand name can be extended in three ways: A brand name can be extended in three ways:

2) Extended to items in a related product line2) Extended to items in a related product line((RELATED BRAND EXTENSION OR CATEGORY EXTENSIONRELATED BRAND EXTENSION OR CATEGORY EXTENSION.) .)

Maggi initially was a brand of noodles. Maggi initially was a brand of noodles.

Later, the brand name was extended to Later, the brand name was extended to

other product lines in the related other product lines in the related

category food-Maggi Ketchup, Maggi category food-Maggi Ketchup, Maggi

Soup, etc. It is a case of Soup, etc. It is a case of related brand related brand

Extension.Extension.

TYPES OF BRAND EXTENSIONS TYPES OF BRAND EXTENSIONS A brand name can be extended in three ways: A brand name can be extended in three ways:

2)Extended to items in a related product line 2)Extended to items in a related product line

Maggi's 'instant culinary' Maggi's 'instant culinary'

expertise was extended to expertise was extended to

related food items. related food items.

This is called This is called

related brand extension related brand extension or or

category extension.category extension.

TYPES OF BRAND EXTENSIONS TYPES OF BRAND EXTENSIONS 3) Extended to items in an unrelated product line3) Extended to items in an unrelated product line

((unrelated brand extensionunrelated brand extension, , or or outside the outside the

category extensioncategory extension.) .)

The brand name Enfield, initially used The brand name Enfield, initially used

for motorcycles, was later extended to for motorcycles, was later extended to

television and gen sets. television and gen sets. Here, the Here, the

products belong to different & products belong to different & unrelated unrelated

categories,categories, It is a case of It is a case of unrelated unrelated

brand extensionbrand extension, , or or outside the outside the

category extensioncategory extension. .

NEED FORNEED FORTHREE FOLD THREE FOLD

CLASSIFICATIONCLASSIFICATION

NEED FOR THREE FOLD CLASSIFICATIONNEED FOR THREE FOLD CLASSIFICATION

One problem that necessitated One problem that necessitated

the classification of extensions the classification of extensions

into into category-relatedcategory-related, , image-image-

RelatedRelated & & unrelated extensions unrelated extensions

is the lack of clarity in theis the lack of clarity in the

definitions available. definitions available.

NEED FORTHREE FOLD CLASSIFICATIONNEED FORTHREE FOLD CLASSIFICATION

Jean-Noel Kapferer does not Jean-Noel Kapferer does not

include the following as include the following as brand brand

extensions: extensions:

(i) (i) AA brand prescribed differently brand prescribed differently

(e.g. a shoe polish with a sponge (e.g. a shoe polish with a sponge

applicator is a more modernapplicator is a more modern

version of its normal tin)version of its normal tin)


(ii) (ii) Different sizes Different sizes

(iii) (iii) Different tastes or flavoursDifferent tastes or flavours. .

According to him, there will be noAccording to him, there will be no

category-related extensions category-related extensions

because he would not accept because he would not accept

Cinthol Cologne Fresh as a brand Cinthol Cologne Fresh as a brand

extension of Cinthol (Old).extension of Cinthol (Old).

He prefers to call them variants.He prefers to call them variants.


Even by our classification, Even by our classification,

the following will not bethe following will not be

brand extensions: brand extensions:

(i) (i) Different sizes Different sizes

(ii) (ii) Different packagingDifferent packaging. .


Differences in sizes Differences in sizes

cannot be considered as cannot be considered as

Extension of brands Extension of brands

because the because the brand name brand name

remains the sameremains the same..


Eg. Eg. Velvette sachet shampoo Velvette sachet shampoo

cannot be considered cannot be considered as an as an

extension of extension of Velvette bottle Velvette bottle

because because neither the neither the brand brand

namename nor nor the contents the contents have have

changedchanged..

NEED FORTHREE FOLD CLASSIFICATIONNEED FORTHREE FOLD CLASSIFICATION

Therefore, Therefore, variants of flavours variants of flavours & &

ttastesastes are considered as are considered as

category- related extensions category- related extensions

While While changeschanges in in packaging & packaging &

sizessizes are are not according not according to our to our

scheme of scheme of classificationclassification..

The relationship between the parent & the three The relationship between the parent & the three types of brand extensions are as follows:types of brand extensions are as follows:

SUCCESS SUCCESS OF BRAND OF BRAND

EXTENSIONSEXTENSIONS

SUCCESS OF BRAND EXTENSIONSSUCCESS OF BRAND EXTENSIONSThe most important thing for The most important thing for

the the success of a brand success of a brand

extension extension is that the is that the

consumer should see consumer should see

Something good in it and Something good in it and

something commonsomething common with its with its

parent.parent.

SUCCESS OF BRAND EXTENSIONSSUCCESS OF BRAND EXTENSIONS

Edward M. Tauber studied Edward M. Tauber studied

276 brand extensions 276 brand extensions andand

concluded that most of concluded that most of

them fit into one of the them fit into one of the

following following 7 categories 7 categories . .

SUCCESS OF BRAND EXTENSIONSSUCCESS OF BRAND EXTENSIONS

Even in totally unrelated businesses, Even in totally unrelated businesses,

Brand Extensions Brand Extensions can be can be

successful if the organisation issuccessful if the organisation is

committedcommitted to the to the success of the success of the extensionextension. .

Unrelated brand extensions Unrelated brand extensions will will

build image for the brand name build image for the brand name

e.g. e.g. WiproWipro & & 'Tata.''Tata.'

Brand Extensions

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