3. Overview
 New Product & Brand Extension
 Brand Extension
 Types of Brand Extension
 Advantages
 Disadvantages
 How Consumers Evaluate Extensions?

4. What Is A “Brand”
 Brand is a name, term, sign, symbol, design, or a
combination of them, intended to identify the goods
or services of one seller or group of sellers and to
differentiate them from those of competitors.
 A BRAND is symbolic embodiment of all the
information connected to a Company, Product or
Service.
 It serves to create associations and expectations from
products made by a producer, in the mind of the
consumer.
 The key objective being “to create a Relationship of
TRUST with its consumers”.

5. New Product & Brand Extensions
Ansoff’s Growth Share Matrix

6. Cont……
Product
Existing New
Existing
Line Brand
Extension Extension
Brand Name
Multi
New
New Brands
Brands

7. Introduction of new products
The three choices of a firm when they are
introducing a new product
• New brand for new product
• Use of existing brand for the new product
• Combination of the new brand with the existing
brand
(Second and the third options are related to brand
extension)

8. BRAND EXTENSIONS
 A Brand Extension occurs when a firm uses an
established brand name to introduce a new product
(approaches 2 or 3)
 When a new brand is combined with an existing brand
(approach 3), the brand extension can also be called a
sub-brand.
 An existing brand that gives birth to a brand extension
is the parent brand.
 If the parent brand is already associated with multiple
products through brand extensions, then it may also
be called a family brand.

10. LINE EXTENSION
 The parent brand is used to brand a new
product that targets a new market segment
with in a product category currently served
by the parent brand.
 A line extension often adds a different flavor
or ingredient variety, a different form or size,
or a different application for the brand.
Eg: Head & Shoulders

11. Head
&
Shoulder’s
Extension

12. Coke’s Line Extension

13. CATEGORY EXTENSION
 The parent brand is used to enter a different
product category from that currently served
by the parent brand.
 Eg: ITC

14. ITC’s Category Extension

15. Strategies For Establishing a Category
1. Introduce the same product in a different form
2. Introduce product that contain the brand’s
distinctive taste, ingredient or component.
3. Introduce companion product for the brand.
4. Introduce products relevant to the customer
franchise of the brand.
5. Introduce products that capitalize on the firm’s
perceived expertise.
6. Introduce products that reflect the brands
distinctive benefit, attribute or feature.
7. Introduce products that capitalize on distinctive
image or prestige of the brand.

16. Why Brand Extensions?
 Leveraging brand equity/value by introduction of
logical & complementary new product categories
E.g HP
 Product Innovation to surpass consumer
expectations
 It increases awareness of the brand name
 Increases profitability from offerings in more
than one product category.
 It’s a great way to reinforce a brand, reach out to
new customers, create a BUZZ

18. Reasons For Product Failure
Products Showcase and Learning Center in Ithaca, New
York identifies this.
 The market was too small (insufficient demand for
type of product).
 The product was a poor match for the company.
 The product was justified on inadequate or
inaccurate marketing research, or the company
ignore research result.
 The company was too early or too late in
researching the market.
 The product provided insufficient return on
investment.

19. Reasons For Product Failure
 The product was not new or different (a poor idea that
really offered nothing new).
 The Product did not go hand in hand with familiarity.
 Credibility was not confirmed on delivery
 Consumers could not recognize the product

20. Advantages Of Brand Extensions
Facilitate New Product Acceptance
 Improve brand image
 Reduce risk perceived by Customers
 Permit consume variety-seeking

21. Advantages Of Brand Extensions
 Increase the probability of gaining distribution and
trial
 Increase efficiency of promotional expenditures
 Reduce costs of introductory & follow-up marketing
programs (save 40-80%)
E.g. Apple iPods
 Avoid costs of developing a new brand
 Allow for packaging & labeling efficiencies

22. Advantages Of Brand Extensions
Provide Feedback Benefits to the Parent Brand
and Company
 Clarify brand meaning
 Enhance the parent brand image
 Bring new customers into brand franchise and
increase market coverage
 Revitalize the brand
 Permit subsequent extensions

23. Advantages Of Brand Extensions
 Clarify brand meaning
Brand Original Extension New Brand
Product Products Meaning
Weight Fitness Low-calorie Weight loss
Watchers Centre foods &
maintenance
Sunkist Oranges Vitamins, Good health
juices
Kellogg’s Cereal Nutri-grain Health
bars, Special snacking
K bars
Aunt Jemima Pancake Syrups, Breakfast
mixes frozen foods

25. Disadvantages Of Brand Extensions
 Can confuse or frustrate consumers
 Can encounter retailer resistance
 Can fail & hurt parent brand image
 Xerox Computers-synonymous with copiers & no
one believed they could make computers
 Can succeed but cannibalize sales of parent
brand
 Amul Butter-”reduced salt butter” is slowly
eating up Amul normal butter

26. Disadvantages Of Brand Extensions
 Can succeed but diminish identification with any
one category
 Can succeed but hurt the image of parent brand
 Can dilute brand meaning
 Can cause the company to forgo the chance to
develop a new brand

27. When are Brand Extensions
Appropriate?
 When Prior Brand equity exists
 Consumer must see some “connection”
between the proposed extension and the
parent brand.
 The proposed extension contributes to and
reinforces the overall brand equity of the
parent brand.

29. Conditions For Evaluating Consumer’s
Brand Extension
 Consumers have some awareness & positive
associations about the parent brand
 At least some of these positive associations will be
evoked by the brand extension
 Negative association are not transferred from the
parent brand
 Negative associations are not created by the brand
extension

30. Evaluating Brand Extension
Opportunities
Define actual & desired consumer knowledge
Identify possible extension candidates
Evaluate potential of the extension candidate
Evaluate potential candidate feedback effects
Consider possible competitive advantages & reactions
Design marketing campaign
Evaluate extension success & effects on parent brand
equity

31. Reference
 Strategic Brand Management by
Kelvin Lane Keller
 Marketing Management by
Philip Kotler
Kelvin Lane Keller
Abraham Koshy
Mathileshwar Jha