CHAPTER 12: INTRODUCING AND NAMING NEW
PRODUCTS AND BRAND EXTENSIONS
Lecturer – Md Shahedur Rahman
Leverage the Brand
12.2
Firms are seeking to build “power” or “mega”
brands that establish a broad market footprint
Appealing to multiple customer segments with
multiple products all underneath the brand
umbrella.
Ansoff’s Growth Share Matrix
12.3
Brand Extensions
12.4
When a firm uses an
established brand name to
introduce a new product
Brand extension classification
Line
extension
Using
a sub-brand to target a
new market segment within the
same product category
Category
Using
extension
the parent brand in a
different product category
Advantages of Extensions
12.5
Facilitate new product acceptance
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 marketing
programs
Avoid cost of developing a new brand
Allow for packaging and labeling efficiencies
Permit consumer variety seeking
Advantages of Extensions (Cont.)
12.6
Provide feedback benefits to parent brand
Clarify
brand meaning
Enhance the parent brand image
Bring new customers into brand franchise and increase
market coverage
Revitalize the brand
Permit subsequent extensions
Brand
• Nike
Original Product
• Athletic Shoes
Extension
products
• Sport Clothing,
equipment. etc
New Brand
Meaning
• Athletic
performance.
Disadvantages of Extensions
12.7
Can fail and hurt parent brand
image
The launch of Diet Coke: Are
you telling me that the regular
Coke is not good for health?
Disadvantages of Extensions
12.8
Can confuse or frustrate consumers
Can encounter retailer resistance
Can fail and hurt parent brand image
Can succeed but cannibalize sales of parent brand
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
Understanding How Customers Evaluate
Brand Extensions
12.9
Managerial assumptions
Consumers
have some awareness of and positive
associations about the brand in memory
At least some of these positive associations are evoked
by the brand extension
Negative associations are not transferred from the parent
brand
Negative associations are not created by the brand
extension
Brand Extension Example
12.10
Proctor and Gamble
“Crest”
12
different types of
toothpaste
Floss, Mouthwash and
whitening strips
Successful Extensions
Apple
Imac
Ipod
Iphone
Brand’s Core Values of Superb Cutting Edge Design
and Technology leveraged into first class consumer
products!
Maggi as a Brand
Core
Product = 2
minute Noodles
Extension 1 = Soup
cubes and Sauces/
Ketchup
Extension 2 = Soup
Packets
Extension 3 = Pickles
Pierre Cardin as a Brand
12.13
Core
Product = Designer Apparel.
Extension 1 = Fragrances and Cosmetics
Further Extensions = Watches, Pens, Base ball caps,
cigarettes etc.
Steps in Successfully introducing
brand extensions
12.14
1.
2.
3.
4.
5.
Define actual and desired consumer knowledge
about the brand.
Identify possible extension candidates.
Evaluate the potential of the extension candidate.
Design marketing program to launch extension.
Evaluate extension success and effects on parent
brand equity.
Creating Extension Equity
12.15
1.
2.
3.
Salience of parent brand
associations in the minds of
consumers in the extension
context
Favorability of any
inferred associations in the
extension context
Uniqueness of any inferred
associations in the extension
context
When Brand Extensions Appropriate?
When
Prior Brand Equity exists
Consumers must see some “connection”
between the proposed extension and the
parent brand.
Eg: “Jeep/ Land Rover vehicles extending
to Jeep/ Land Rover Brand outdoor
clothing etc”.
The proposed extension contributes to and
reinforces the overall brand equity of the
parent brand.
Any Question ?
0
