Brand Extension Asst. Prof. Dr. Jusana Techakana 1

Brand Extension and Brand Portfolio

B r a n d M a n a g e m e n t A s s t . P r o f. D r. J u s a n a T e c h a k a n a

Four Brand Strategies Four Brand Strategies

and  

Product Category Product Category 

Unrelated ProductUnrelated Product CategoryCategoryRelated ProductRelated Product CategoryCategory

Bran

d    Nam

e Bran

d    Nam

e 

Same Bra

Bran

d

Line Extensions Line Extensions 

MultibandsMultibands

Brand Extensions Brand Extensions 

New BrandsNew Brands

B r a n d M a n a g e m e n t A s s t . P r o f. D r. J u s a n a T e c h a k a n a

New

 B MultibandsMultibands New Brands New Brands 

Brand Extension Asst. Prof. Dr. Jusana Techakana 2

Line Extensions Line Extensions

Line extensions Line extensions refers to new sizes, styles, or related products for example: Coca-Cola

B r a n d M a n a g e m e n t A s s t . P r o f. D r. J u s a n a T e c h a k a n a

Brand extensionsBrand extensions

Brand extensionBrand extension: application of a popular brand name to a newbrand name to a new product in an unrelated product category.Example: Utility Lighter –A Bic Brand Extension.

B r a n d M a n a g e m e n t A s s t . P r o f. D r. J u s a n a T e c h a k a n a

Brand Extension Asst. Prof. Dr. Jusana Techakana 3

MultibandsMultibands

MultibandsMultibands : two or more similar and competing products by the p g p ysame firm under different and different and unrelated brandsunrelated brands. While these brands eat into each others' sales

B r a n d M a n a g e m e n t A s s t . P r o f. D r. J u s a n a T e c h a k a n a

MultibandsMultibands Multibrands strategy Multibrands strategy does have some advantages•obtaining greater shelf space and l i littl f tit ' d tleaving little for competitors' product.

•saturating a market by filling all priceand quality gaps.

•catering to brand-switchers users wholike to experiment with different brands

B r a n d M a n a g e m e n t A s s t . P r o f. D r. J u s a n a T e c h a k a n a

like to experiment with different brands

•keeping the firm's managers on their toes by generating internal competition.

Brand Extension Asst. Prof. Dr. Jusana Techakana 4

Brand equity and the brand extension

Brand StrengthFit / Credibility

BrandExtensionBrand

VisibilityBrandLoyalty

Brand Equity

Fit / Credibility

Trust & PerceivedQuality

BrandAssociation

7/14Brand  Management

Networked Brands

Employees

Customer

Partners

CustomersRetailers

Competitors

Brand Marketing 8/14

Marketing Communication

Physical Experience

Unplanned Communication

Brand Extension Asst. Prof. Dr. Jusana Techakana 5

Brand extensionPerceived quality of the brand.

Perceived know‐how of the brand.Perceived dissimilarity betweenthe extension and brand’s typicalproduct.Perceived difficulty of manufacturingthe extension.

Perceived value and symbolicmeaning of the brand.Can these values segment theextension product category?Does the extension fit with thebrand’s symbolic meaning.

Consumers’ brand loyalty.Consumers’ involvement inthe extension product category.

Evaluation of the extension.

9/14Brand  Management

When Is Line Extension Suitable?

1. When the proposed extension is in a closely allied product.2. When repertoires are important.

3. When variety is one the clearly defined consumer wants in the market. 

10/14Brand  Management

Brand Extension Asst. Prof. Dr. Jusana Techakana 6

Brand Development Index (BDI)

11/14Brand Marketing

Category Development Index (CDI)

12/14Brand Marketing

Brand Extension Asst. Prof. Dr. Jusana Techakana 7

Brand Development Index (BDI) Category Development Index (CDI)

•Both the BDI and CDI are useful in decision making.•One tell the planner the relative strengths and weaknessesfor the brand .

•The other , the relative strengths and weaknesses  for the category   

13/14Brand Marketing

Brand Development Index (BDI) Category Development Index (CDI)

14/14Brand Marketing

Brand Extension Asst. Prof. Dr. Jusana Techakana 8

Brand Development Index (BDI) Category Development Index (CDI)

15/14Brand Marketing

A few classic mistakes

1. A Restrictive vision of the brand.

Many firm have a limited perception of their brands They consider themMany firm have a limited perception of their brands. They consider them as descriptive names. The brand genetic program therefore has just a few variations of the product bearing name.

2. Shutting out the brand.

The belief that the older brand could not be associated with new, modern products. This only reinforce its antiquated and outmoded Image and to render it even less suitable for extension.

3 Wh h d id h f3. When the past decides the future.

You cannot drive a brand with your eyes glued to the rearview mirror. Admittedly, the brand is a memory bank where its  products are concerned, but this does not mean that the future is an extrapolation of  the past.

16/14Brand  Management

Brand Extension Asst. Prof. Dr. Jusana Techakana 9

A few classic mistakes

4. Extensions can dilute the brand.A wrong extension can contribute to a weakening of the image.g g g

5. Opportunism and Inconsistency of Identity.Having built a powerful brand with an undisputed reputation known to everyone, the firm is naturally tempted to use the precious brand capital to support an unending line of new products. In so doing, it runs the risk of destroying its own credibility and authority within Its original market.

6. The Mundane‐Product Trap.When a brand not only proliferates in every direction, but also makes uses f i i i d t th it l t b d i dof uninspiring product, the capital asset becomes drained.

7. Complementarities are no guarantee.It would be tempting for any trader to try to capture the market with the complementary product. However‐apart from the problem of there being a prototype brand on the market‐it would have been a mistake.

17/14Brand  Management

Advantages and disadvantages ofdifferent portfolio strategies

Brand PortfolioBrand PortfolioMore responsive to market need, but also more complex

Single Brand Single Brand More  efficient, but challenging to achieve optimal market coverage

••Higher market coverage, more differenced Higher market coverage, more differenced in term of consumer (segment)  needs.in term of consumer (segment)  needs.

••“Blocking” of shelf space.. (obstacle to “Blocking” of shelf space.. (obstacle to market entry for competitor)market entry for competitor)

••Risk diversificationRisk diversification

••More degrees of freedom for loyalty More degrees of freedom for loyalty managementmanagement‐‐consumer can switch consumer can switch without changing supplier.without changing supplier.

••MoreMore efficient because efficient because advertising pressure is advertising pressure is concentrated.concentrated.

••Lower complexity.Lower complexity.••No danger of cannibalization.No danger of cannibalization.

•• less efficient becauseless efficient because budget is widelybudget is widely •• less ability to cater to specificless ability to cater to specific

AdvantagesAdvantages+

•• less efficient becauseless efficient because budget is widely budget is widely spread and more brand need to brand spread and more brand need to brand through advertisingthrough advertising

••Danger for cannibalizationDanger for cannibalization

••Higher complexity of brand management Higher complexity of brand management (number of brands; interdependencies)(number of brands; interdependencies)

•• less ability to cater to specific less ability to cater to specific (segment) needs(segment) needs

••Danger of overstretching theDanger of overstretching the brand to brand to capture nichescapture niches

••Less opportunity to retain potential Less opportunity to retain potential switchers.switchers.

DisadvantagesDisadvantages‐

18/14Brand  Management

Brand Extension Asst. Prof. Dr. Jusana Techakana 10

Brand Extension and Brand Portfolio

B r a n d M a n a g e m e n t A s s t . P r o f. D r. J u s a n a T e c h a k a n a

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