Brand Extension and Brand Portfolio
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M an a g e m e n t
A s s t . P r o f. D r. J u s a n a T e c h a k a n a
Four Brand Strategies
Product Category B r a n d
Brand Extension
Asst. Prof. Dr. Jusana Techakana
Same Braand Unrelated Product Category
Line Extensions Brand Extensions New B
Brand
Brand Name Related Product Category
Multibands
New Brands
New Brands M an a g e m e n t
A s s t . P r o f. D r. J u s a n a T e c h a k a n a
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Line Extensions
Line extensions refers to
new sizes, styles, or related
products for example:
Coca-Cola
B r a n d
M an a g e m e n t
A s s t . P r o f. D r. J u s a n a T e c h a k a n a
Brand extensions
Brand extension:
extension
application of a popular
brand name to a new
product in an unrelated
product category.
Example: Utility Lighter –
A Bic Brand Extension.
B r a n d
Brand Extension
Asst. Prof. Dr. Jusana Techakana
M an a g e m e n t
A s s t . P r o f. D r. J u s a n a T e c h a k a n a
2
Multibands
Multibands : two or more similar
p
gp
products by
y the
and competing
same firm under different and
unrelated brands.
brands While these
brands eat into each others' sales
B r a n d
Multibands
M an a g e m e n t
A s s t . P r o f. D r. J u s a n a T e c h a k a n a
Multibrands strategy does
have some advantages
•obtaining greater shelf space and
l
leaving
i littl
little ffor competitors'
tit ' product.
d t
•saturating a market by filling all price
and quality gaps.
•catering to brand-switchers users who
like to experiment with different brands
•keeping the firm's managers on their
toes by generating internal competition.
B r a n d
Brand Extension
Asst. Prof. Dr. Jusana Techakana
M an a g e m e n t
A s s t . P r o f. D r. J u s a n a T e c h a k a n a
3
Brand equity and the brand extension
¾ Brand Strength
¾ Fit / Credibility
Fit / Credibility
Brand Equity
Brand
Extension
Brand
Visibility
Brand
Loyalty
Trust & Perceived
Quality
Brand
Association
Brand Management
7/14
Networked Brands
Employees
Competitors
Retailers
Partners
Customer
Unplanned Communication
Customers
Marketing Communication
Physical Experience
Brand Marketing
Brand Extension
Asst. Prof. Dr. Jusana Techakana
8/14
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Brand extension
Perceived quality of the brand.
¾ Perceived know‐how of the brand.
¾ Perceived dissimilarity between
the extension and brand’s typical
product.
¾ Perceived difficulty of manufacturing
the extension.
¾ Perceived value and symbolic
meaning of the brand.
¾ Can these values segment the
extension product category?
¾ Does the extension fit with the
brand’s symbolic meaning.
¾ Consumers’ brand loyalty.
¾ Consumers’ involvement in
the extension product category.
Evaluation of the extension.
Brand Management
9/14
When Is Line Extension Suitable?
1. When the proposed extension is in a closely allied product.
2. When repertoires are important.
3. When variety is one the clearly defined consumer wants in the market. Brand Management
Brand Extension
Asst. Prof. Dr. Jusana Techakana
10/14
5
Brand Development Index (BDI)
Brand Marketing
11/14
Category Development Index (CDI)
Brand Marketing
Brand Extension
Asst. Prof. Dr. Jusana Techakana
12/14
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Brand Development Index (BDI) Category Development Index (CDI)
•Both the BDI and CDI are useful in decision making.
•One tell the planner the relative strengths and weaknesses
for the brand .
•The other , the relative strengths and weaknesses for the category Brand Marketing
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Brand Development Index (BDI) Category Development Index (CDI)
Brand Marketing
Brand Extension
Asst. Prof. Dr. Jusana Techakana
14/14
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Brand Development Index (BDI) Category Development Index (CDI)
Brand Marketing
15/14
A few classic mistakes
1. A Restrictive vision of the brand.
Many firm have a limited perception of their brands They consider them
Many firm have a limited perception of their brands. They consider them as descriptive names. The brand genetic program therefore has just a few variations of the product bearing name.
2. Shutting out the brand.
The belief that the older brand could not be associated with new, modern products. This only reinforce its antiquated and outmoded Image and to render it even less suitable for extension.
3 When the past decides the future.
3.
Wh
h
d id h f
You cannot drive a brand with your eyes glued to the rearview mirror. Admittedly, the brand is a memory bank where its products are concerned, but this does not mean that the future is an extrapolation of the past.
Brand Management
Brand Extension
Asst. Prof. Dr. Jusana Techakana
16/14
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A few classic mistakes
4. Extensions can dilute the brand.
A wrong extension can contribute to a
g
weakeningg of the image.
g
5. Opportunism and Inconsistency of Identity.
Having built a powerful brand with an undisputed reputation known to everyone, the firm is naturally tempted to use the precious brand capital to support an unending line of new products. In so doing, it runs the risk of destroying its own credibility and authority within Its original market.
6. The Mundane‐Product Trap.
When a brand not only proliferates in every direction, but also makes uses of uninspiring product, the capital asset becomes drained.
f i ii
d t th
it l
tb
d i d
7. Complementarities are no guarantee.
It would be tempting for any trader to try to capture the market with the complementary product. However‐apart from the problem of there being
a prototype brand on the market‐it would have been a mistake.
Brand Management
17/14
Advantages and disadvantages of
different portfolio strategies
Brand Portfolio
More responsive to market need, but also more complex
Advantages
+
Disadvantages
‐
Single Brand More efficient, but challenging to achieve optimal market coverage
• Higher market coverage, more differenced • More efficient because in term of consumer (segment) needs.
advertising pressure is • “Blocking” of shelf space.. (obstacle to concentrated.
market entry for competitor)
• Lower complexity.
• Risk diversification
• No danger of cannibalization.
• More degrees of freedom for loyalty management‐‐consumer can switch management
without changing supplier.
• less efficient because
less efficient because budget is widely budget is widely
spread and more brand need to brand through advertising
• less
less ability to cater to specific ability to cater to specific
(segment) needs
• Danger of overstretching the brand to capture niches
• Danger for cannibalization
• Higher complexity of brand management • Less opportunity to retain potential switchers.
(number of brands; interdependencies)
Brand Management
Brand Extension
Asst. Prof. Dr. Jusana Techakana
18/14
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Brand Extension and Brand Portfolio
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M an a g e m e n t
Brand Extension
Asst. Prof. Dr. Jusana Techakana
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A s s t . P r o f. D r. J u s a n a T e c h a k a n a
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