Scope

New Products and Brand Extensions

INTRODUCING AND NAMING NEW Advantages of Brand Extensions
PRODUCTS AND BRAND Disadvantages of Brand Extensions
EXTENSIONS Understanding How Consumers Evaluate Brand
Extensions
Evaluating Brand Extensions Opportunities
Extension Guidelines

Preview Ansoff’s Growth Share Matrix

• Role of product strategy in creating, maintaining and
enhancing brand equity
• Guidelines to facilitate the introduction and naming
of new products and brand extensions
• Re-thinking one-product one-brand strategy
• Emerging rules for brand extensions
• Advantages and disadvantages of brand extensions

New Products and Brand Extensions New Products and Brand Extensions
Three branding choices for new products Seven general strategies for establishing a category
– New brand 1. Introduce same product in a different form
2. Introduce products with brand’s distinctive ingredients,
– Existing brand taste or component
– Combination of new and existing brand 3. Introduce companion products for the brand
4. Introduce products relevant to the customer franchise of
the brand
Brand extension general categories 5. Introduce products capitalize on the firm’s perceived
– Line extensions expertise
– Category extensions 6. Introduce product that reflect the brand’s distinctive
benefits, attributes or features
7. Introduce products that capitalize on the distinctive
image, prestige of the brand

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 Advantages of Extensions
Facilitate New Product Acceptance
– Nine main reasons for product failure
– Improve brand Image
– Reduce risk perceived by customers
– Increase the probability of gaining distribution and trial
– Increase efficiency of promotional expenditures
– Reduce costs of introductory and follow-up marketing
programs
– Avoid cost of developing a new brand
– Allow for packaging and labeling efficiencies
– Permit consumer variety-seeking
Disadvantages of Brand Extensions
• Can confuse & frustrate consumers
• Can encounter retailer resistance
• Can fail & hurt parent brand image
• Can succeed & cannibalize parent brand sales
• Can succeed but diminish identification with any one category
• Can succeed but hurt the image of the parent brand
• Can dilute brand meaning
• Can cause the company to forgo the chance to develop a new
brand
Simplicity Marketing
Four R’s:
– Replace
– Repackage
– Reposition
– Replenish
Advantages of Extensions
Provide Feedback Benefits to the Parent Brand
– Clarify brand meaning
– Enhance the parent brand image
– Bring new customers into the brand franchise and increase
market coverage
– Revitalize the brand
– Permit subsequent extensions
Nine Major Reasons for Brand Failure
• Insufficient demand
• Poor match product for company
• Inadequate or inaccurate market research
• Bad timing
• Insufficient returns on investments
• Product was not new or different
• Product did not go with familiarity
• Lack of credibility
• Consumers could not recognize the product
Understanding How Consumers
Evaluate Brand Extensions
Managerial assumptions
– Consumers have some awareness of and positive
associations about the parent brand in memory
– At least some of these positive associations will be evoked
by the brand extension
– Negative associations are not transferred from the parent
brand
– Negative associations are not created by the brand
extension
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 Understanding How Consumers Evaluating Brand Extension Opportunities
Evaluate Brand Extensions
Brand Extension and Brand Equity
– Creating extension equity
• How Salient
• How Favorable
• How Unique
– Contributing to parent brand equity
• How Compelling
• How Relevant
• How Consistent
• How Strong

Brand Extension of Vaseline Extension Guidelines Based On Academic Research