Drivers of Brand Extension Success

In: Business and Management

Submitted By wab89
Words 1838
Pages 8
Marketing Analysis IB209 - Individual Assessment 2. Drivers of Brand Extension Success by Franziska Volckner & Henrik Sattler. Student ID: 0706335; Word count: 1837

Before we begin, we must first make a distinction between the concepts of “product” and “brand”. A ‘product’ is defined as a service or a good that can be offered to the market for consumption/purchase. An example of a product would be e.g. a Television set (good) or a Music concert (service). Brands on the other hand, exist to help consumers differentiate and identify between different types of product providers. As such, brands are one of the most enduring aspects of a company. Brand strength (also known as “Brand equity), measures the positive differential effect that knowing the brand name has on the actions of the consumer to the product/service on offer. A strong brand not only creates emotional attachment between the consumers, but also allows for the company to establish barriers to entry, enjoy high profits and undertake a variety of brand strategy decisions to continue increasing their appeal to customers. One of the most commonly used brand development strategies is – brand extension where by an established brand name is used to launch a new product. This strategy is popular because it allows the company to leverage the brands existing strength and customer base and as such spend less on product promotion & introduction campaigns, advertising, price deals etc (Collins – Dodd & Louvierre 1999; Tauber 1988). Since nearly 80% of brand extensions are unsuccessful (Ernst & Young and ACNielsen 1999) it is important to understand what factors influence the outcomes. This article makes a significant contribution to the understanding of marketing because it address two key issues – firstly, it examines the relative importance of each of the success factors in explaining brand extension and secondly…...

Similar Documents

Dewalt Brand Extension Marketing Plan

...Kaplan University Graduate School of Business and Management GB530 Marketing Management: Brand Extension Marketing Plan Dr. Blake Escudier July 15, 2012 1.0 Executive Summary The purpose of this marketing plan is to present a new category-brand extension product designed by DeWALT Power Tools and manufactured by Calloway Golf. The new DeWALT IronDrive Pro category line of golf clubs will embody the brand reputations of quality, power, top of the line features, superior technology and durability that have made both DeWALT and Calloway leaders within their perspective industries. This product is a specialty niche set of golf clubs packaged in a branded walking golf bag and also will include club head covers, a club towel, and balls to complete the perfect golfing experience. Consumers who purchase this product will enjoy the industry leading golf technology of Calloway and combined with the industry leading power tool features and benefits provided by DeWALT. The target market for this product consists of males 20-65 years old, college educated, makes an annual salary of $40,000 or more, and purchases high end products. The ideal customer lives all across the United States, but in particular resides in the industry’s largest regions of the Mid-Atlantic, New England, East North Central, South Central, and West North Central regions. The customer will have some knowledge of around the house DIY projects and tools to complete the task. The......

Words: 6211 - Pages: 25

Brand Extension in the Indian Fm Radio Industry

...insight in the consumer preference. Specifically, the report was an exercise conducted to validate the application of brand extension in service industry. 1 ACKNOWLEDGEMENT I am indebted to Dr. Samar Faten Badar, Faculty Member (Marketing,), for her great support and help all through the project. I am also thankful to Prof. Ramkishen, without whose help and support it would have been difficult to obtain the necessary data for the report. I would also like to thank the staff of the Mumbai University Library and the British Library for being patient and helpful all throughout. I would also like to thank the 120 odd respondents who took out time to help with the market research. 2 TABLE OF CONTENTS Executive Summary Acknowledgement 1 Introduction 1.1 1.2 1.3 1.4 1.5 1.6 2 Background Growth Potential and Actual Conditions Radio Broadcasters in India/Mumbai Aims & Objectives of the Report Brief Description of the Chapters Personal Motivation 5 5 7 10 13 13 14 15 16 18 19 20 21 22 23 24 26 27 27 29 31 33 Literature review 2.1 2.2 2.3 2.4 2.5 2.6 2.7 2.8 2.9 2.10 2.11 2.12 2.13 What is Brand Extension? Extension Innovativeness Brand Equity Reputation of the Brand Perceived Risk External Information of Brand Extension Maximizing brand value A Model of Consumer Attitude Towards Brand Extension Second brand strategy The Effect of Fit on Brand Extension Segmentation Target Marketing Positioning 3 Research Methodology and Limitations 3 3.1 3.2 3.3 3.4......

Words: 14724 - Pages: 59

Brand Extension

... OF PRODUCT & BRAND MANAGEMENT ON SUCCESSFUL AND UNSUCCESSFUL BRAND EXTENSIONS SUBMITTED TO- Mr. Sai Ganesh SUBMITTED BY –Khushbu Roy DSBSPGDM09022 BRAND EXTENSION “Brand extension is using the leverage of a well known brand name in one category to launch a new product in a different category.” Brand Extension is the use of an established brand name in new product categories. This new category to which the brand is extended can be related or unrelated to the existing product categories. A renowned/successful brand helps an organization to launch products in new categories more easily. For instance, Nike’s brand core product is shoes. But it is now extended to sunglasses, soccer balls, basketballs, and golf equipments. An existing brand that gives rise to a brand extension is referred to as parent brand. If the customers of the new business have values and aspirations synchronizing/matching those of the core business, and if these values and aspirations are embodied in the brand, it is likely to be accepted by customers in the new business. Extending a brand outside its core......

Words: 1312 - Pages: 6

Brand Extension

...www.emeraldinsight.com/1355-5855.htm Brand extension: using parent brand personality as leverage Angelina Nhat Hanh Le and Julian Ming Sung Cheng Business Administration Department, National Central University, Chung-Li City, Taiwan, Republic of China Brand extension 599 Yueh Hua Lee Department of Business Administration, Tamkang University, New Taipei City, Taiwan, Republic of China, and Megha Jain Department of International Tourism Management, Tamkang University, Jiaosi Township, Taiwan, Republic of China Abstract Purpose – The purpose of this paper is to investigate the predicting roles of extension naming strategies and categorical fit on the transfer of brand personality from a parent brand to its extension brand. Extension naming strategies include direct and indirect naming, while categorical fit is the similarity between an extended product and its parent brand’s cognitive category. Further, the interaction effect and the relative effectiveness of various combinations of the two predictors when determining brand personality transfer are also explored. Design/methodology/approach – A 2 £ 2 factorial between-subject experimental design with one covariate is used to test the proposed hypotheses. The experiment involves 242 participants from a university in Taiwan. Findings – The findings show that consumers perceive higher brand personality transfer when a direct naming strategy is applied or when the parent brand extends to a high perceived fit......

Words: 9990 - Pages: 40

Brana Equity and Brand Extension

...Brand Name or Brand Umbrella (marjonel and fatima) Customers used to a brand would take the other product under the same of it and the same level of quality and provide similar type of satisfaction to them. Brand It is defined as “a set of images and associations linked to a commercial product”. Brand Special Features * Brand distinguishes the product from similar other products. * Brand creates specific customer needs and expectations of their fulfillment. * Brand can predict buyers’ behaviour of buying the product or just avoiding it. Brand Equity It can be defined as the “stored value built up in a brand for achieving competitive advantage.” Several Ways of Gaining Brand Equity * Resilience of the brand, its intrinsic strength as compared to the competitive brands. * Trials and test marketing of new products as brand extensions. * Premium prices secured by the company for the existing branded product and product extended products. Several Ways of Gaining Brand Equity * Leverage of brands in gaining access to the bets channels of distribution. * Access to the best media required by the target market segment at reasonable rates. Brand Value The company acquiring or buying a brand finds it more relevant than the companies that possess the brand. Brands provide leverage for brand extensions, as several products can be sold under the brand umbrella. Example: Coca Cola offers under......

Words: 2606 - Pages: 11

Brand Extensions

...Brand Extensions and consumers perceptions During the 21st century, globalization has transformed the way businesses operate (Doh, 2003). Competition is tougher than even before and for that reason, companies have to maximize their competitive advantages in order to stay in business. One way to do it is by exploiting their brand name through brand extension, the practice of using a well-known brand name to promote new products in an unrelated field (“Brand Extension”, 2013). Previous studies have shown that the success of a brand extension often depends on certain assumptions about consumer behaviour, such as “beliefs and favorable attitudes toward the original brand” (Aaker & Keller, 1990). Moreover, Aaker & Keller have shown that one of two factors must be respected for a brand extension to be successful: the perceived ability of a manufacturer to extend to a new product class and whether the new product is a complement of the original one or not (1990). They found out that when this factor is guaranteed consumers are likely to transfer the quality associated with the brand to the new product characterized by the same brand. This has to be true whether the brand is perceived as a high quality brand or not. We can find the evidence of this statement in their article when they describe the effects of a brand extension. They argued: “If the brand is associated with high quality, the extension should be benefit; if it is associated with an inferior quality, the......

Words: 2168 - Pages: 9

Consumer Attitude Towards Brand Extensions

...Consumer Attitude Towards Brand Extensions: An Integrative Model and Research Propositions Sandor Czellar1 University of Geneva 1 University of Geneva, Section HEC, 40, boulevard du Pont-d’Arve, 1211 Geneva 4, Switzerland. 00 41 22 705 8114 (tel), 00 41 22 705 8104 (fax), czellars@hec.fr (email). 1 Consumer Attitude Towards Brand Extensions: An Integrative Model and Research Propositions The paper proposes an integrative model of the antecedents and consequences of brand extension attitude based on the dominant cognitive paradigm. The four key processes of the model are: (1) the perception of fit, (2) the formation of primary attitudes towards the extension, (3) the link between extension attitude and marketplace behaviour and (4) the reciprocal effect of brand extension attitude on parent brand/extension category attitude. Moderator and control variables of these processes are identified and classified into three groups: (1) consumer characteristics, (2) marketer-controlled factors and (3) external factors. This integrative model leads to the identification of missing links and variables in past research, resulting in a propositional inventory for future studies. The paper ends with a reflection on the long-term perspectives of scientific inquiry on brand extensions. Keywords: Brand extensions, Consumer Attitudes, Brand Associations, Brand Affect, Cognitive Psychology 2 Introduction Brand extension is the "use of established brand names to......

Words: 11112 - Pages: 45

Brand Extension Marketing Plan

...[pic] Running head: BRAND EXTENSION MARKETING PLAN The Cooler Cooker Unit 6 Final Project Tanya Dabney Marketing Management, GB530.04 Dr. Jerry Haenisch, PhD May 27, 2011 1.0 Executive Summary The “Cooler Cooker” is the most recent innovation that has great potential to generate revenue for Lakeland, “the home of creative kitchenware”. The Cooler Cooker is a product that will be an answer to household families, single parents, chefs, culinary students, and anyone who prepares hot meals whether at home, in restaurants, or in a cafeteria. The cooler cooker will perform and prepare meals as any other cooking pot or pan. The beauty behind this product is although it has the ability to prepare meals on the stovetop or in the oven, to the outside touch, the pot or pan will never get hot. This innovate product is any cook’s dream, especially moms who are always in fear of their children that are always displaying curiosity to get the better of them and makes the decision to touch that hot pot on the stovetop. It is not uncommon, everyone at some point or another, while preparing a meal have mistakenly or unconsciously touched that hot pot and the results of the incident were not good. With the Cooler Cooker you will never receive another burn. Regardless of the temperature in the oven, or the length of time the meal has to be prepared on the stovetop, this safe and user friendly product will never get hot to the outside touch rather it will always......

Words: 5773 - Pages: 24

Brand Extension

...of awareness of the brand 2. Rank of the bra nd in its product category 3. Similarity of the extension to the parent brand 4. Reputation of the firm Brand Associations 1. Quality of the brand 2. Attitude towards the brand 3. Satisfaction from the brand 4. Rate of return from the brand 5. Usage level of the brand 6. Level of stock of the brand. Brand Attributes 1. Packing of the brand 2. Pricing of the brand 3. Advertising of the brand 4. P romotional measures of the brand Attitude towards extension category Attitude towards the Brand Extension Product Fit Brand Fit Brand Pers onality Perception of Fit 1. Level of awareness of the brand 2. Rank of the bra nd in its product category 3. Similarity of the extension to the parent brand 4. Reputation of the firm Brand Associations 1. Quality of the brand 2. Attitude towards the brand 3. Satisfaction from the brand 4. Rate of return from the brand 5. Usage level of the brand 6. Level of stock of the brand. Brand Attributes 1. Packing of the brand 2. Pricing of the brand 3. Advertising of the brand 4. P romotional measures of the brand Attitude towards extension category ......

Words: 4535 - Pages: 19

Body Shop Brand Extension

...Brand extension: the body shop(interesting name, everybody have a body)Emphasis on communication(Think about global customers) Why would the brand extend Beauty with heart What the brand stand for (Armani has got hotel) SWOT Competitors Skin care, body care, Consumer Threats Be more precise Specific what is about Origin things Ethical economics Cosmetics or body care Skincare is something else Forecast tight the belt Value for money Why choose the body shop- How should they position it strongly Market growth Consumer taste, trends Implications of their strengths Summary of every swot How far could you stretch your brand The body shop competitors: Lush/L’occitane/Sephora/Kiehl’s/ Alliance Boots/ Olay/ Nivea Product line: – Bath and body care – Skin care – Fragrances – Make up – Men line Category: Cosmetics Slogan: Nature’s way to beautiful SWOT: S: - Wide range of beauty products: 8 Categories of beauty products with more than 1200 products - Huge franchisee network: Over 2,500 franchised stores in more than 60 countries - Re-designed store layout, not only ambience creates customer attraction, but also story selling to enhance emotional connection. - A high brand value and is viewed as a socially responsible company because of its engagement in many philanthropic activities - Good supplier network. Sources raw materials through Community trade fairs. W: - There is very little advertising of......

Words: 550 - Pages: 3

How to Do Brand Extension

... 16.4.2015 TABLE OF CONTENTS EXECUTIVE SUMMARY…………………………………………………………………….3 INTRODUCTION……………………………………………………………………………...5 LITERATURE REVIEW………………………………………………………………...........6 BRAND EXTESNSION………………………………………………………………………..8 TYPES OF BRAND EXTENSION……………………………………………………............9 HORIZONTAL EXTENSION………………………………………………………………….9 VERTICAL EXTENSION……………………………………………………………………...9 NEED AND ADVANTAGES OF BRAND EXTENSION…………………………………….11 DISADVANTAGES OF BRAND EXTENSION STRATEGY……………………………….12 CRITICAL OBSERVATION…………………………………………………………............14 CONCLUSION…………………………………………………………………………………15 KEY LERATNING…………………………………………………………………………….17 REFERENCE…………………………………………………………………………………..18 EXECUTIVE SUMMARY These days marketing has become more complex and more demanding and research based activities are essential part of the Marketing to move forward. During early days it was considered that marketing is more related to sales activity but eventually it is emerged that it is a kind of multi and complex functions of activities which is infAct not finding the product but finding the customer for right product at right price and place with best services. Branding or brand management is considered in one of the activities such as SWOT Analysis, Marketing Mix Analysis, and Environment Analysis. Brand is a symbol of any product or producer which is identified on the basis of features of product/ services, process of producing product or services and people who involve in whole......

Words: 4951 - Pages: 20

Brand Extension

...knowledge of arts works 4. Positioning There are several types of positioning -Attribute positioning, Benefit Positioning, User Positioning, Use-application Positioning, Competitor Positioning, Product Category Positioning and Quality-price Positioning. The most suitable for our case are Quality-price Positioning and Competitor Positioning. Quality-price Positioning The quality must be linked the price no matter which customer is. However, it always needs to think that the place, time and atmosphere of auction are set to be best for each customer. -B-auction In order to expand customers, positioning as being known far and wide of B-auctions is better way than quality auctions. -Major quality auction It needs to build on reliable brand which we can get high quality arts works there. Competitor Positioning Hörhammer have to know what specialized art works main competitors have and how they manage themselves. It can enhance the differentiation of it with the other auctions....

Words: 462 - Pages: 2

Pepsico: Brand Extension Study

...ALCOHOLIC PREMIX MARKET BRAND EXTENSION STUDY Project by: 1. Kunal Agarwal – B002 2. Anurag Choudhary – B014 3. Vikram Iyer – B022 4. Sneha Jha – B026 5. Ninad Karandikar – B030 6. Smriti Mahajan – B032 7. Varun Verma – B062 Objectives of Today’s Discussion • Provide an analysis of the alcoholic beverage industry (and associated sub-markets, including beer, wine, liquor, and the nascent pre-mixed & energy segment) • Analyze PepsiCo’s operational and strategic advantages as they relate to potential entry into those markets • Identify, test, and address prerequisites for successful market entry • Provide strategic recommendations on whether, and how, PepsiCo should pursue a new product launch in the alcoholic pre-mix beverage space 2 Should PepsiCo Launch an Alcoholic Pre-mix? Hypothesis: Current conditions are favorable for PepsiCo to launch a alcoholic pre-mix beverage. Sub-Hypotheses: 1. Scalability: Growing demand in the alcoholic pre-mix beverage market supports a new entrant. 2. Defensibility: There is a first-mover advantage in this market. 3. Execution test: – PepsiCo’s existing manufacturing, bottling, and distribution infrastructure can be leveraged to minimize costs through economies of scale vis-à-vis its competitors. – Adding an alcoholic pre-mix to PepsiCo’s portfolio would not negatively impact brand equity. 4. Value Proposition: Customers perceive an added value and are willing to pay a price premium for a Pepsi-branded alcoholic pre-mix......

Words: 1701 - Pages: 7

Brand Extension

...NEW PRODUCTS AND BRAND EXTENSIONS To facilitate the discussion, it is useful to establish some terminology. When a firm introduces a new product, it has three main choices as to how to brand it: 1. It can develop a new brand, individually chosen for the new product. 2. It can apply, in some way, one of its existing brands. 3. It can use a combination of a new brand with an existing brand. A brand extension is when a firm uses an established brand name to introduce a new product. When a new brand is combined with an existing brand, the brand extension can also be called a sub-brand. An existing brand that gives birth to a brand extension is referred to as 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. Brand extensions can be broadly classified into two general categories: Line extension: The parent brand is used to brand a new product that targets a new market segment within a product category currently served by the parent brand. A line extension often involves a different flavor or ingredient variety, a different form or size, or a different application for the brand (e.g., Head & Shoulders Dry Scalp shampoo). Category extension: The parent brand is used to enter a different product category from that currently served by the parent brand (e.g.. Swiss Army watches). Most new products are line extensions—typically 80 percent to 90 percent in any one year.......

Words: 4958 - Pages: 20

Brand Extension

...Brand extension, or using a brand that is already set in the market to join a new product category is a method that is often used in order to diminish the risks of introducing a new product. Choosing a right strategy when expanding a product category is primordial for a company. Introducing a new product carries many risks and costs: it is costly because the development of a new product always entails many expenses, such as marketing, and it is dangerous because it is very hard to predict consumer reaction to a new product, especially under a new brand name.  By going ahead with a brand extension a company can partially solve these two issues, by launching the new product under an existing brand name will reduce marketing and distribution costs and might attract consumers towards the good as they will go for a “known” brand. Levi-Strauss although being one of the world’s most known maker and distributor of denim and casual wear should consider a brand extension of larger clothes that target the growing plus size customer segment in the United States. This segment is a growing market, and many stores with incredible brand equity are not taking advantage of this growing segment. In fact, this segment has grown to 34 percent of the population, both male and female of all ages, and continues to grow dramatically every year. Also, this segment is a $27 billion dollar opportunity, and also appears to be increasing every year. Therefore, by this action of not manufacturing larger......

Words: 647 - Pages: 3