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26.1 BRAND MANAGEMENT

Main requirements for success of Brand Extension
For brand extension to succeed, 3 basic requirements covering the
mother brand & the extensions must be met. These are:
1. In customers perception, there must be consistency between the
parent brand & the extensions: Consumers must perceive the
extended product to be consistent with the mother brand. This is
difficult to achieve when the extension is unrelated/outside the
category products. In the case of Ponds, in consumer perception,
there was no consistency between the mother, Ponds talcum
powder & the extension, Ponds toothpaste, which suffered in the
market.
2. Extension should be in the brands area of expertise, so that there is
scope for leverage: As a rule, extension of brand name has a better
chance of success when it is to a product, which is within the
brands area of expertise. Consumers then find the extension
credible. For ex, Surfs extensions to Surf Ultra & Lifebuoys
extension to Lifebuoy plus were within the area of expertise.
3. Similarly, Lipton had great expertise in tea. But, in the
consumers perception, biscuits needed a different expertise
altogether. On the contrary, Maggis extension of its instant
culinary expertise across food categories from noodles to
ketchup, soup & pickles looked natural to consumer.
4. Benefit transfer: Another principle in brand extensions is that the

mother brands benefit must be transferable & be transferred to

extensions, because consumers expect & desire the benefit offered
by the parent brand in the extensions. Thus, users of 5-Star ice
cream will expect the same kind of gratification as they received
from 5-Star chocolate. In unrelated/outside category extension, all
the 3 conditions are under strain; it is difficult to fulfill these
conditions. And that is why the risk of brand extension is higher
in such cases.
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26.2 BRAND REJUVINATION
Brand rejuvenation involves adding value to an existing brand by
improving product attributes & enhancing its overall appeal. It is
intended to re-focus the attention of consumers on an existing brand.
Brand rejuvenation helps overcome the consumers boredom in seeing
the same product on the shelves year after year. A consumers
psychological desire for change is one key factor behind brand
rejuvenation by companies.
Brand rejuvenation involves adding value to an existing brand by
improving product attributes & enhancing its overall appeal. Quite
often, we see ongoing brands appearing as new, super, special,
premium, deluxe, extra strong & fresh. Basically, what happens
here is an updating of brands. Corn products introduced Rex jam
with pieces of fruit in it & packed them in new containers. Cadburys
5-Star chocolate bar received a fillip through a new creamier &
smoother version.

Brand Rejuvenation: Brands Appear with the tag NEW

New Burnol: Burnol became new & appeared in a new pack
New Horlicks: HMM introduced its New Horlicks; the New
Horlicks claimed more nourishment through additional protein &
calcium, 8 essential vitamins & iron.
New Nescafe: Nestle rejuvenated Nescafe & brought in the New
Nescafe. The New Nescafe was made using the new aggravate coffee
process, instead of the fine powder form & the coffee now came in
small round goblets.
New Bournvita: To give a new push to Bournvita, Cadburys came
out with New Bournvita, with extra glucose & RDA in new packing.
New Vicks Vaporub: P&Gs 100-year old Vicks Vaporub has almost
become a generic name for cold cure. Still, P&G does not keep quite.
New packages appear, new promotion campaigns are launched &
improvements in product formulation are also made. In the late
1990s, the brand received facelift & appeared as New Vicks Vaporub.
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26.3 BRAND REJUVINATION
Rejuvenation & Repositioning Example of HAMAM
When HLL took over Hamam from the Tatas in 1994, the brand had a market
share of 7%. But Hamam at that time was a mere South Indian brand. HLL wanted
to rejuvenate & reposition the brand as a national player.
Hamams initial positioning: When Tomco launched Hamam in 1931, it was
positioned as a mens soap & was later repositioned as a family soap. The main
product attribute that was highlighted in all campaigns was the it was safe on
skin. The brand became popular, but its popularity was mainly in the South, where
Hamam became the most preferred brand for the family. It was strongly
recommended by the older generation.
HLL studying consumer perceptions towards Hamam: Before revamping Hamam,
HLL, with the help of ad agency Clarion, conducted a study on consumer
perceptions towards Hamam. The study revealed the following:
1. Brand loyalty towards Hamam was under attack. Throughout late 1980s &
early 1990s, a flux of modern brands had entered.
2. Hamam suffered resistance from the younger generation. They were now
seeing a variety of brands.
3. Hamam had some strong points too. Hamam was still the 4th largest brand in
the popular segment. There was a high loyalty from the olds.

Rejuvenating & Repositioning of Hamam

Clarion recommended that the relationship with the olds should be made the focus
of the new positioning. The product formula was changed; it now had 4 natural
ingredients tulsi, pudina, neem & lime which have the strongest association with
the skin protection. Hamam was thus positioned as a product, which could be
trusted for skin care.
A new ad-campaign in 1994 relaunched Hamam as a herbal skin care soap, targeting
both housewife & the youth. A trustworthy icon like a parent was used to highlight
the brands core value safe, trustworthy & sensitive.
HLL also altered the shape of the soap to a bevel-shaped tablet, which would roll
more easily in hand. The package was also redesigned, retaining the initial blend of
green & yellow colors. National penetration was ensured through ad-campaign in all
regional languages across all media.

There was a 25% rise in sales after the relaunch.

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26.4 BRAND RELAUNCH
Some brands fail to take off; some others face decline after a spell of profitable life;
and in yet other cases, the rate of growth is not enough for the firm. The firms
having invested money & effort in them, do not want to give it up. They usually like
to give the brand one more trial; some improvements/changes are incorporated &
the brands are relaunched with the support of a new campaign.
SANTOOR: Wipros Santoor soap ended up as an also-ran soon after its launch. The
firm after sometime relaunched it with some changes in the formulation as New
Santoor supported by a new promotion campaign; New Santoor soon became a
major brand in the premium soaps category.
MARVEL: Similarly, Godrejs Marvel launched in 1986 failed to take off. In 1990, it
was relaunched; it came in 2 colors with the support of a new campaign. Marvel
soon picked up & gained a 4% market share.
CLOSE-UP: Though it was launched in mid-70s as the gel toothpaste, it was the
relaunch in 1989 in red & blue variants supported by an extensive product sampling
& promotion campaign that pushed Close-Up to # 2 position in toothpaste market.
ACTION 500: sometimes, as part of the relaunch, the brand is repositioned. P&Gs
Action 500 is a case in point. It was launched in the mid-70s as a multi-symptom cold
tablet. Action 500 was growing @ 7& per annum. P&G was not happy with the
growth. P&G improved the formula & gave it an analgesic + positioning &
relaunched it in 1986. It is today the brand leader with a 30% market share.
DABUR CHYAWANAPRASH: Dabur relaunched its centenarian brand,
Chyawanaprash in 1993. In the 5000 MT market Chyawanaprash market, Daburs
share was 66.5%. Yet, the firm carried out pharma research, introduced some
changes in formulations, modified the packaging & carried out new promotion
campaigns. Its market share went up to 70%.
Often, rejuvenation/relaunches are confined to giving just marginal improvements
to the product. The brands really gain only when efforts go into them for offering
the consumer a better product & more value, which may require new
formulations/better ingredients. This will require the support of R&D. Rejuvenation
efforts succeed when companies identify weak aspects in their brands positioning &
marketing mix & work towards removing them.

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26.5 BRAND EQUITY
Definition: Brand equity is the unique set of brand assets & liabilities
that is linked to a brand. Brand equity is net result of all the investment
& effort that a marketer puts into building a brand. Usership of the
brand, consumer loyalty towards it, its perceived quality, positive symbols
& favorable associations around the brand a bundle of all these
attributes together result in brand equity.
Brand Equity: Financial Concept: Traditionally, firms were not
measuring a brands financial equity or worth; the attempt was only to
identify the consumers disposition towards the brand, which finally
decided the brands market share. Today, there is the need to assess the
monitory worth of the brand. A fee examples:
High prices are paid to acquire strong brands. Coca-Cola paid Rs crore
for buying out Parles brands Thums Up, Limca, Gold Spot & Citra;
Godrej bought over Transelektras Good Knight & Hit for Rs 80 crore;
Heinz took over Glaxos food brands for Rs 110 crore.
Godrej paid Rs 80 crore for good Knight & Hit because the brands
earned an annual net profit of Rs 13 crore & GoodKnight had a market
share of 50%. Godrejs assessment was mainly around the profit
potential of GoodKnight & Hit. In this deal, the tangibles to the
business accounted for just 10%. The brand value of Transelektras
brands was assessed to be around Rs 70 crore, with GoodKnight taking
the lions share.
When a brand can take premium pricing, has extendable properties,
shows positive response to economic cycle & resistance to market
disturbances, these factors together enhance the position of the brand as
an asset. In fact, the recent thinking is that brand equity should reflect
not only the capitalized value of the incremental profits from the
current use of the brand name but also the scope for its potential
extensions to other product categories.

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26.6 BRAND EQUITY

Brand Equity: What is it, What it does, How is it measured?

Brand equity is the outcome of the investment a firm makes in building
a brands franchise. It is made up of:
A bundle of these assets result in brand equity. BE also adds to the
bottom line on a long-term basis. For when a brand has a high BE, it
means that consumers are willing to pay a premium for the brand & its
extensions. BE can be measured & quantified.
The value of brands owned by firms, like, HLL, ITC, Infosys, Wipro,
are many times their total assets.
Criteria such as market share, market ranking, brand stability & track
record, stability of product category, internationality, market trends,
ASPs & legal protection are used for measuring BE.

Brand Equity LAKME

When the new marketing JV between HLL & Lakme, Lakme Lever
Ltd., was set up as a prelude to HLLs takeover of Lakme, Lakme
received Rs 59 crore as a consideration towards transferring Lakme
brands to the new JV. The allocation was:
Rs 20 crore towards price of the brand.
Rs 8.08 crore towards net current assets.
Rs 0.96 crore towards fixed assets AND
Rs 30 crore towards a non-complete agreement.
In fact, a major part of the Rs 30 crore paid for the non-complete
agreement is also attributable to the brand strength of Lakme.
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26.7 BRAND EQUITY
Brand Portfolio Rationalization
HLL knows it cannot create some brands & leave them unto themselves.
The portfolio has to be closely monitored. HLLs sales & profits have
been slowing down during 2000-01. HLL, the firm with nearly 110
brands was naturally facing strong compulsions for taking a re-look at
its brand portfolio.

Keeps 30 Power brands, Plays Down 80 Others

In 2001, HLL initiated plans to prune its brand portfolio to almost
25% of its size. HLL located around 30 brands to be focused upon as
the brands for the future. HLL called them as Power Brands. These 30
brands contribute 75% of HLLs turnover/profit. Of the 30 brands, 18
are international brands of UNILEVER & the rest are India grown.
These are:
Lifebuoy, Lux, Liril, Dove, Breeze, Pears, Fair & Lovely, Rin, Clinic, Axe,
Rexona, Red Label, BB A-1, Lipton Taaza, 3 Roses, Taj Mahal, Wheel,
Comfort, Surf, Vim, Close-Up, Pepsodent, Sunsilk, Bru, Kissan,
Annapurna, Kwality Walls, Ponds, Lakme & Elle-18.

THE LESSON
The HLL described amply illustrates that managing brands involves a
set of complex tasks, such as identifying positioning opportunities,
deciding which opportunities to target, checking out whether this is best
done through existing brands, or new brands, or extensions & keeping
the brands live through augmentations & rejuvenations. Finally,
prioritizing the allocation of marketing resources across brands also
forms part of the exercise. Successful management of a brand portfolio
should lead the firm towards its defined objectives, ensuring value to
consumers & adding value to the business over the long term.
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