Brand Extension

Topics: Brand, Brand management, Branding Pages: 11 (3265 words) Published: November 19, 2013


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INTRODUCTION………………………………………………………………... IMPORTANCE AND NEED OF BRAND EXTENSION……………………... ANSOFF’S GROWTH SHARE MATRIX……………………………………... TYPES OF BRAND EXTENSION……………………………………………… ADVANTAGES & DISADVATAGES OF BRAND EXTENSION……………

EXAMPLES FROM CORPORATE……………………………………………. CONCLUSION…………………………………………….................................. REFRENCES………………………………………………………………………

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INTRODUCTION

Definition: Brand extension is a marketing strategy in which a firm marketing a product with a well-developed image uses the same brand name in a different product category. Brand extension is a part of brand management to diversify and leveraging the existing brand by entering into new product category by new product development. There have been a number of brands that have used either a line (Diet Pepsi, Caffeine Free Diet Pepsi, etc) or brand extension (Ford and GM credit cards, Oral-B toothpaste, etc) to improve company wide sales and/or to enter new markets. Organizations use this strategy to increase and leverage brand equity Brand Equity:- Net worth and long-term sustainability just from the renowned name A brand's "extendibility" depends on how strong consumer's associations are to the brand's values and goals. Ralph Lauren's Polo brand successfully extended from clothing to home furnishings such as bedding and towels. Both clothing and bedding are made of linen and fulfill a similar consumer function of comfort and hominess For brand extension to be successful, there usually must be some logical association between the original product and the new one. A weak or nonexistent association can result in brand dilution. Also, if a brand extension is unsuccessful, it can harm the parent brand. Brand characteristics

When a brand is being considered for extension into another product class (brand extension) or in the same product class (line extension), it is important to understand how consumers perceive that brand. Brand associations have been suggested as one method for finding out the characteristics that consumers associate with the brand. Brand associations have been defined as the thoughts that are linked to the brand in the consumers memory and a set of associations may represent the underlying value of the brand. It may be possible to use the underlying set of brand associations as a basis to evaluate and select brands for different types of extensions (both brand and line). Brand Extension is one of most effective tools of the marketing, and powerful instrument for marketing strategy of company. However the efficiency of the strategy depends on how accurately the managers use this tool. IMPORTANCE & NEED OF BRAND EXTENSION

New product introductions have inherent risks in terms of cost and other lost opportunities. Brand extension is increasingly used by companies as a part of strategy for product developments. Positive images and strengths of existing brand / parent brand are leveraged to bring another success story for new product. It is viewed as one of means to attain integrated brand architecture. The use of same brand on existing product (parent brand) for a new product in different category (extension brand) increases rate of new acceptance and purchase intention to consumer. Company is not in position to allocate marketing expenses at the same level as spent by the parent brand, yet may gain similar level of success. A strong reputation of parent brand can minimize risk of new product launch by taking advantages on consumers’ knowledge and experiences of the established brand. Organizations use this strategy to increase and leverage brand equity. A company using brand extension hopes to leverage its existing customer base and brand loyalty to increase its profits with a new product offering. Using successful brand names may ensure that a competitive advantage is gained for the new...
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