Brand extension-advantages and disadvantages line and category extension

1. NEW PRODUCTS AND BRAND EXTENSIONS By NavneetAgrawal

2. Overview New Product & Brand Extension Advantages Disadvantages How Consumers Evaluate Extensions?

3. the FASCINATING world of brands

4. What Is A “Brand” 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

7. An existing brand name applied in some way.

9. BRAND EXTENSIONS 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. Types of Brand Extension

11. 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.

12. Coke’s Line Extension

13. Head & Shoulder’s Extension

14. CATEGORY EXTENSION The parent brand is used to enter a different product category from that currently served by the parent brand.

15. ITC’s Category Extension

17. E.g HP

18. Product Innovation to surpass consumer expectations

19. It increases awareness of the brand name

20. Increases profitability from offerings in more than one product category.(widening the net to catch new consumers.)

25. Increase efficiency of promotional expenditures

26. Reduce costs of introductory & follow-up marketing programs (save 40-80%)

27. E.g. Apple iPods

28. Avoid costs of developing a new brand

30. Bring new customers into brand franchise and increase market coverage

31. Revitalize the brand

34. Xerox Computers-synonymous with copiers & no one believed they could make computers

35. Can succeed but cannibalize sales of parent brand

36. Amul Butter-”reduced salt butter” is slowly eating up Amul normal butter

39. Can encounter retailer resistance

40. Can dilute brand meaning

42. How Consumers Evaluate Extensions

43. 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

44. 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 Evaluating Brand Extension Opportunities

45. Thank You