Marketers are now finding it extremely difficult to create new brands. The brand building costs tend to be very high. At the same time the developments at the demand side are creating pressures on marketers to fine tune their offerings as per unique needs of target customs. In order to cope with demand side pressures and cost constraints the firms are adopting extension route to growth. That is when they extend a successful brand name to promote a product in an unrelated category. Such a move is based on the logic that a brand can stand for two things. In reality, if a brand stands for something, it is difficult for to acquire a second meaning at the same time. This goes against the fundamentals of positioning and perception.
Brand extension strategy is pursued by the marketers very vigorously these days. It involves using an existing brand name to launch a product in a different category. Here the brand remains constant but product category tends to be variable. Brand extensions are justified on the basis of promotional efficiency, savings on product launches, consumer benefits and returns. Various types of extensions could be identified such as product form, companion product, expertise, customer franchise, and brand image type. An extension can be good when extended product succeeds and parent brand benefits. A bad extension is one which fails to lift off while an ugly extension not only fails to lift off; it also damages the parent brand.
Extensions involve transfer of parent brand associations to the extensions. The nature of parent brand is crucial determinant of extension success. Therefore, before embarking upon extension program, brand's extendibility must be judged. A brand's extendibility depends upon its character whether the brand is a product brand, formula brand, know-how brand or an interest brand. Brands which are symbolic and philosophical are easier to extend into unrelated product categories. The product or know-how brands have narrow zone of extension. The parent brand and the extension must enjoy a good relevance. In the absence of relevance, the brand beliefs and attitudes are unlikely to be successfully transferred to the extension candidate.
[...] Although these different brands were limited to a few specific products at one time, they have broadened their meaning through brand extensions to represent "complete oral care." Similarly, many specific-purpose cleaning products have broadened their meaning to become seen as multipurpose (e.g., Lysol, Comet). Enhance the Parent Brand Image According to the customer-based brand equity model, one desirable outcome of a successful brand extension is that it may enhance the parent brand image by strengthening an existing brand association, improving the favorability of an existing brand association, adding a new brand association, or a combination of these. [...]
[...] New Management is more than a mere re-engineering of Samsung but rather an entire revolution dedicated to making world-class products to ensure market leadership and build premium brand recognition to establish Samsung Electronics as flagship brand in the world, providing total customer satisfaction, and being a good corporate citizen. In retrospect, New Management was a decisive turning point for Samsung, the moment when the entire company was repositioned on the basis of "Quality first." During this period different extensions - from semiconductors to computer monitors, TFT-LCD screens to color picture tubes - leaped into the ranks of the top five products for global market share in their respective areas others achieved top market ranking in their areas. [...]
[...] A brand can use their “ingredient/component” heritage to launch products in a more (or sometimes less) finished form. Vim Bar Vim Liquid Vim Powder The Good, Bad and Ugly Extensions: The primary lure of using a well established brand name to promote a product belonging to a different category is to exploit/leverage what the brand name stands for in the mind of the customer. A brand is nothing but a network of associations, which drive consumer buying. The logic of brand extension is to transfer these associations in the extension context so that desired brand equity outcomes result. [...]
[...] Key brand and category associations Association Description Brand X (Currently) Cuisine The types of food most Comfort foods; Family often associated with favorites the category (prepared convenience food) and the brand Eating occasions The meal and snack Primarily dinner occasions that we most closely associate with the category and the brand Preparation mode The methods of food Heat & eat preparation most often associated with the category and the brand Temperature state The temperature state Frozen the product is sold in that is most closely associated with the category and the brand Functional benefits The types of Convenient (First cook functional benefits time) that we inherently associate with the category and the brand Emotional benefits The types of emotional know my family is benefits that we eating nutritious” inherently associate with the category and the brand Even if relatively current brand research exists for the brand and competitive brands, it pays to conduct at least some additional research to supplement those insights. [...]
[...] In other words, a high profile part of the Virgin brand is now controlled by a company that has nothing to do with Virgin at all, a situation that could leave Virgin open to difficulties down the road. Virgin isn't a leading brand in any of its businesses. Whether it is flights, electricity or music, Virgin is simply one of the market players but never the market leader. Virgin may be an internationally recognized brand, but Virgin Cosmetics isn't, nor is Virgin Cola, Virgin Active or Virgin Cars. [...]
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