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BRAND EXTENSION

BRAND MANAGEMENT

Topic: Brand Extension

Hypothesis: Brand extensions are an important brand growth strategy.

Submitted by:
CAPRISRULZ

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BRAND EXTENSION

Hypothesis: Brand extensions are an important brand growth strategy.

Introduction:

“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 a marketing strategy in which a firm that markets a product with a well-
developed image uses the same brand name but in a different product category. Brands use this
as a strategy to increase and leverage equity.
• It is a new product.
• It should use a well known brand.
• The brand should have leverage with customers of the new category.
A successful brand helps a company enter new product categories more easily.

10 Principles of Brand Extensions:

1. Brands should not be extended unless they are well-known, have high awareness and a
good reputation among the new target market.
2. Brand extensions must be a logical fit with consumers’ expectations.
3. Brand extensions must have leverage in the new category – a transfer to the new product
of a distinctive property associated with the parent brand that gives the brand extension
an edge in the new category. The test: “Just knowing the brand name, customers of the
new category should be able to identify a reason why they might prefer the new brand
extension to existing competition.”
4. Brand extensions that could create confusion or a negative image for the parent should
not be undertaken.
5. Brands that consumers use synonymously with a category (generic) should not be
extended to other categories
6. Brands should not be stretched to too many diverse categories risking dilution in the long
run.
7. Brand extensions that will not create positive synergy for the parent brand should not be
pursued. (Ask consumers whether their opinion of the parent would be lowered if the new
brand extension were available.)
8. Brand extensions must make business sense.
9. Every brand extension should open a category for the firm. The whole point of brand
extension is to efficiently and successfully enter a new category.
10. A critical part of every brand extension research study is developing a brand plan. Short
and long term possibilities should be identified up-front.

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8 Types of Brand Extensions:

1. Similar product in a different form from the original parent product:

This is where a company changes the form of the product from the original parent product.
An example is (frozen) Snickers Ice Cream Bars. The original Snickers bar is a shelf stable
candy. The brand extension is a similar product, but in a different form. Jell-O Portable Pudding
and Pudding Cups is Jell-O pudding in a different form and section of the store.

2. Distinctive flavor/ingredient/component in the new item:

When a brand “owns” a flavor, ingredient or component, there may be other categories where
consumers want that property.
Peanut butter is a characteristic ingredient in Reese’s Peanut Butter Cups candy. Chocolate is a
characteristic ingredient of Hershey. Brand Extension Research identified Reese’s Peanut Butter
as a logical extension that capitalizes on this association. Research also suggested Hershey
chocolate milk.

3. Benefit/attribute/feature owned:

Many brands “own” a benefit, attribute or feature that can be extended.


Brand Extension Research showed Armor All that that brand was defined by automotive surface
protection – which can go beyond vinyl dressing. Paint needs protecting also. Arm & Hammer
“owns” a benefit of deodorizing. Their baking soda product has claimed that it removes odors
from refrigerators, etc. As a result, they extended the brand into other products such as Arm &
Hammer underarm deodorant and cat litter deodorizer.

4. Expertise:

Over time, certain brands may gain a reputation for having an expertise in a given area. Leverage
can be achieved when extending into areas where this special expertise is deemed important.
Honda’s expertise in reliable engines led to lawn mowers, gas powered generators and a variety
of other gasoline engine powered devices.

5. Companion product:

Some brand extensions are a “natural” companion to the products the company already makes.
 Colgate Dental Cream and Colgate Tooth Brush.
 Gillette Razors, Shave Foams, after shaves.

6. Vertical extension:

Some brand extensions are vertical extensions of what they currently offer. A brand can use their
“ingredient/component” heritage to launch products in a more (or sometimes less) finished form.
The introduction of Pierre Cardin pens (at the price of Indian rupees seven each), a part of their
core audience moved away as their ‘designer’ label was now within reach of everyone. Upscale

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extensions of prestige products are more acceptable, for example, limited luxury editions of
automobiles.
7. Same customer base:

Many brand extensions represent a marketer’s effort to sell something else to its customer base.
This works particularly well when that customer base is large and to some extent captive. VISA
launched travelers checks directed to its credit card customers.

8. Designer image/status:

Certain brands convey status and hence create an image for the user.
A notable success is Harley Davidson. Their extensive collection of licensed
lifestyle items goes way beyond any expertise inherent in the brand.

BRAND EXTENSION BENEFITS:

 Brand extensions let a marketer take a brand with well-known quality perceptions and
associations and put it on a brand in a new category.

 Consumers who favorably evaluate a parent brand are more willing to try and adopt
the brand extension than an unfamiliar brand in the same category.

 Identify logical new product possibilities.

 Capitalize on the paid-for equity in established brand names.

 Enable a company to enter new categories at significantly lower cost.

 Reduce the risk of failure given the already established awareness and trust

 Create a positive synergistic effect with the efficiencies of umbrella branding and
advertising.

 Reinforce the consumers’ perceptions of the parent brand name.

 Bring news to existing brands when there is otherwise nothing new to say about them.

 Brand extensions can also help consumers understand the core meaning of the brand
name.

One of the principal dangers of brand extension is that the parent brand equity may be diluted. If
there is a misunderstanding of consumer’s perception of the brand, it could be moved into a
sector that consumers view as inappropriate. Quite often the parent brand will have been
available for some time, enabling it to build a level of equity and trust with consumers. It will
have strong credentials. Over time, its marketing has sought to build and secure these credentials
within its target market. An irrelevant positioning has the ability to undermine the parent’s
credentials.

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To test and support the hypothesis various examples of brand extension are:

1. Godrej Sara Lee’s Good Knight:

In less than two decades, Good Knight has become the most preferred mosquito repellent
solution in the country. Before its entry, mosquito repellents had low penetration in a market
ruled by herbal coils, creams and mosquito nets. What made Good Knight different from the rest
was its hardware add-on, the Electronic Mosquito Destroyer (EMD), a device that came bundled
with the mats. Not only did the product promise a bite-free, good night’s sleep, it also offered
protection from malaria, dengue and other mosquito related afflictions.
Today, Good Knight is synonymous with mats and coils. But in the mid 1990s, the brand
suffered a minor jolt when mats – its primary product – began losing their hold to coils from
rival brands. Good Knight worked on a long term strategy that would capitalize on its long-
established equity. The first answer to the challenge came in the form of Supermat, which was
more powerful than the earlier offering. Then in the late 1990s, Good Knight entered the coil
segment, the biggest category in the Household Insecticide (HI) arena. It quickly captured a large
part of the market then dominated by the brand called Tortoise. Its vaporizer which was a
response to the challenge posed by All Out, today, owns one- third of the market.
Good Knight has grown into a powerful brand on the strength of these benefits. Ever since it was
launched in 1984 Good Knight mats have altered the HI market landscape. In the mid 1990s,
Good Knight faced growing competition from new coil and vaporizer products. To counter this
thrust, Good Knight re-launched its mat first as super mat and finally as Good Knight Silver mat
in 2003, with contemporary packing, superior technology and using a high decibel campaign.
Today Good Knight Silver mat is a market leader with 62% market share (Source: ACNielsen
ORG-MARG, February 2004).
Towards the late 1990s, Good Knight also created a new product category – the ten- hour coil –
which till then was seen as a down market niche in the HI universe. The red coil category created
by Good Knight is growing and has cornered 50% of the coil market (Source: ACNielsen ORG-
MARG, February 2004).
Good Knight entered the vaporizer segment in 1995 by launching Good Knight liquidator and
Liquid Mosquito Destroyer (LMD) machine, together as a combi-pack. In a short span of three
years, Good Knight liquidator managed a share of 24% of the vaporizer market and 32% of
LMD market (Source: ACNielsen ORG-MARG, 1998), based on the strength of the Good
Knight equity.
Other brands like Jet and Banish were also acquired in 1995. This was followed by the strategic
alliance with Sara Lee, a Fortune 500 consumer product giant.
By 1999, Good Knight also joined the battle for the coil honours by launching its red coil
variant. Since Good Knight was seen to be a hi-tech brand and coils were regarded as an entry-
level product, the company made sure that it did not suffer a downgrade in consumer
perception. It branded its version as a value-added product, which lasted ten hours (compared
to eight hours in the case of most others). The colour red was meant to convey power. A new
product category was born. It led to a shift in the paradigm, as red now became the aspiration
colour for the other coils. Currently the red coil category has grown to own almost 50% of the
total coil market, with Good Knight as an image leader in this category In 2002, to get a
foothold in the ‘non-red’ territory, Good Knight also launched Champion coil as a green
variant. Good Knight’s entry into the vaporizer segment came in 1995. The communication

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was generic and conveyed the convenience of the form. Good Knight had moved to the higher
order emotional benefit of ‘Total Protection’.

2. EMAMI:
Understanding the human needs and fulfilling them by dint of technical research is a positive
feature of Emami. This is being made possible by Himani Ayurveda Science Foundation
(HASF) that generates the very best of ayurvedic formulations. The foundation’s unique range of
healthcare products aptly caters to consumer needs. Boroplus brand is the market leader in the
antiseptic cream segment; the Navratna Oil is also in the pole position in the cool oil segment.
Fair and Handsome is the pioneer in the fairness cream for men segment. Emami’s products in
different categories like cool oil, antiseptic cream, fairness cream for men, and the crème herbal
hair pack have carved a niche for themselves in their respective segments. Boroplus has been
selected as among the top 100 brands by the Brand Equity of The Economic Times. In 2006
and 2007, Navratna has been ranked the 6th Most Energized Indian Brand by the DY&R Brand
Asset Valuator. Sona Chandi Chyawanprash, Himani Fast Relief, (ayurvedic pain relief
ointment) Mentho plus (pain balm), Hairlife (crème herbal hair pack) and Emami Malai
Kesar (cold cream) are also major players in their respective categories. Brand extensions have
helped Emami consolidate its position in the market and also cater to varied consumer needs.
Emami has recently entered the glycerin soap category with Emami Pure Skin and petroleum
jelly category with Emami Vasocare. Emami has successfully established its brands through
strong celebrity endorsements.

3. MAGGI:

Nestle India Ltd. (NIL) is the Indian subsidiary of the global FMCG major, Nestle SA. Maggi
Brand was introduced to the Indian consumers by NIL with the launch of Maggi 2 Minute
Noodles, an instant food product, in 1982. With the launch of Maggi noodles, NIL created an
entirely new food category - instant noodles - in the Indian packaged food market. Initially
Nestle tried to position the Noodles in the platform of convenience targeting the working
women. At that time, Indian consumers were rather conservative in their food habits, preferring
to eat traditional Indian dishes rather than canned or packaged food. But it found that the sales
are not picking up despite heavy promotion .Research then showed that Kids were the largest
consumers of the brand. Realizing this, NIL shifted its focus from working women to children
and their mothers and repositioned the brand towards the kids using sales promotions and smart
advertising. NIL aggressively promoted Maggi with taglines such as “Mummy Bhook Lagi”,
“Bas 2Minute”, “Fast to cook, good to eat” and through several schemes of free samples, gifts on
return of empty packs, etc. Later was observed that people of all age group started liking Maggi.
Over the years, NIL has successfully extended the Maggi brand to a variety of culinary products
like soups, sauces and ketchups, and cooking aids among others. In 2005, NIL started offering a
range of new 'healthy' products under the Maggi brand, in a bid to attract health-conscious
consumers. The culinary brand comprising of nine instant noodle products, eight variants of
sauces and twelve variants of soups has grown at 33.2 per cent, almost six per cent faster than the
company’s other rapidly growing category, chocolates, during the third quarter ending
September 30, 2007. Based on a recent analyst meet, the prepared dishes and cooking aids
segment, in which Maggie is the premium brand, has reported the highest growth of 24.1% in
sales at Rs290 crore during Q1, 2009, as against Rs240 crore in the first quarter of 2008.

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Nestlé's Maggi is the classic examples, which extended the brands Maggi to sauces, noodles,
seasonings and pickles. They wanted to cash the image of the mother brand to make their new
products successful and acceptable in the market. Customer’s had a relationship and emotional
feeling with brand Maggi which Nestle used.

4. GODREJ CONSUMER PRODUCTS:

GCPL is a seven-year old company with a 111-year old heritage – an offshoot of the US$ 2.10
billion (Rs. 8400 crore) Godrej Group. In the early 1900s Ardeshir Godrej, spurred by the
Swadeshi spirit to make indigenous products, created India's first toilet soap from locally
available vegetable oil. Till then soap was made from imported animal fats. Fired by an
irrepressible zeal, the company launched a series of products. It first ventured into soaps and
toiletries in 1918 with Chavi Bar. Next it launched the highly successful brand called No. 2 in
1919, with the popular No.1 brand hitting the stores in 1922. Its first liquid hair dye would not be
launched till 1974. By 2001, Godrej was manufacturing several products and the name Godrej
Soaps Limited was no longer adequate to describe the company’s produce. In April of that year,
Godrej Consumer Products Limited came into existence when the consumer products business of
Godrej Soaps was transferred to the present name following a de-merger.
The company's product range is impressively wide – with numerous variants and product sizes.
The best known brand of soap in the company’s Personal Care and Hygiene Solutions group is
the 56-year old Cinthol –the flagship brand. Cinthol’s presence spans across three categories –
soaps, talcs and deo sprays. The original Cinthol, which was launched in 1952 – called Cinthol
Deodorant and Complexion Soap – has a strong loyal base. It has stayed unchanged in design,
perfume, shape and packaging since its launch. The prominent mass offering from the Cinthol
stables is Cinthol Fresh. With its invigorating lime fragrance, it is one of the most salient brands
in the freshness segment. During March 2008, Godrej revamped its entire portfolio of soaps, talc
and deo with the objective of re-energizing its offering. It unleashed a new strategy – 24 hour
Confidence – with a completely new range of products, under the Cinthol brand. At the same
time it developed sporty, attractive, youth-driven packaging for its Cinthol Regular, Deo and
Fresh soaps. Cinthol Deo soap was launched in three variants and talc in four fragrances. To
underline its new youthfulness it signed up Hrithik Roshan as its brand ambassador. A new film
featuring him, in an action-packed day, was aired in April 2008. It tied up with the brands’ new
24 hour Confidence strategy. The two other power brands in the soap category are Fair Glow,
launched in 1999 and Godrej No. 1, the popular offering which provides the functional attributes
of a premium soap at an affordable price. This 86-year old soap is supported by seven variants:
Rose, Sandal, Natural, Ayurvedic, Jasmine, Lavender and Papaya-Lotus. The hugely popular
Godrej Powder Hair Dye is India's largest selling hair colour, available in Natural Black and
Natural Brown in convenient single-use sachets. In a move to consolidate its leadership in the
hair colour category, Godrej Powder Hair dye was relaunched as Godrej Expert Powder Hair
Dye. The brands in the Godrej hair colour category include a host of natural brands like Nupur,
Kali Mehendi, and Godrej Kesh Kala – a ready-for application oil-based hair dye with herbal
extracts – and Anoop hair oil, the widely acclaimed Ayurvedic hair tonic from Kerala. In the
premium segment, the company operates through two brands: Renew and Colour Soft. The latter
is no ammonia offering in five shades while Renew’s 50 ml packs come in six shades and its 20
ml packaging in four. In the fabric care segment, Ezee liquid detergent, best suited for woolens
and delicate garments, continues to be the market leader with a share of 81% (source:

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ACNielsen). One of the company’s most recent introductions is Godrej Dish wash Liquid – a
special, concentrated formula that works effortlessly on the toughest grease.
In addition, the brands offered by Keyline include Adorn, Aapri, Cuticura, Endocil, Erasmic,
Inecto (hair care), Inecto (pure coconut), Nulon and Skyhydra. In April 2007, the company
launched its first Keyline brand in India – Erasmic Shave Gel to complement the range of Godrej
shaving creams. GCPL entered the face wash and shampoo categories during the second quarter
of 2007, with the introduction of FairGlow Fairness Face Wash and GCPL No. 1 Almond
Shampoo. Vigil, the only Grade 1 health soap in India was launched in February 2007.
All GCPL’s sub-categories have maintained steady growth. In 2007/08, overall sales grew 16%
on a consolidated basis and standalone GCPL sales grew at about 17%. Hair colour grew 13%
and retained its 35.2% market share primacy of the Indian hair colour market while soaps
notched up a very impressive 9.7% market share.
The Godrej brand has always stood for unparalleled quality, trust and integrity. GCPL
assimilated these values along with the key elements of its brand vision: delivering superior
stakeholder value, enduring trust, relentless innovation, passion and an entrepreneurial spirit.
Trust is the company's watchword. The company exults in being part of the Godrej Group and
promotes its rich heritage and reputation of honesty, unmatched quality and reliability. Change is
a perpetual challenge. The spirit of entrepreneurship powers the company to seek change for
greater opportunities, for strengthening the business in newer territories and in having a global,
futuristic and a competitive outlook.

5. COLGATE-PALMOLIVE:

Colgate-Palmolive Company's growth from a small candle and soap manufacturer to one of the
most powerful consumer products giants in the world is the result of aggressive acquisition of
other companies, persistent attempts to overtake its major U.S. competition, and an early
emphasis on building a global presence overseas where little competition existed. The company
is organized around four core segments--oral care, personal care, home care, and pet nutrition--
that market such well-known brands as Colgate toothpaste, Irish Spring soap, Soft-soap liquid
soap, Mennen deodorant, Palmolive and Ajax dishwashing liquid, Ajax cleanser, Murphy's oil
soap, Fab laundry detergent, Soup line and Suavitel fabric softeners, and Hill's Science Diet
and Hill's Prescription Diet pet foods. Colgate-Palmolive has operations in more than 200
countries and generates about 70 percent of its revenue outside the United States.
Today, with sales surpassing $13 billion, Colgate focuses on four core businesses: Oral Care,
Personal Care, Home Care and From the Dentist. Colgate now sells its products in over 200
countries and territories worldwide.
Colgate-Palmolive (India) Limited is India’s leading provider of scientifically proven oral care
products with multiple benefits at various price points. The range includes toothpastes,
toothpowder and toothbrushes under the “Colgate” brand, as well as a specialized range of dental
therapies under the banner of Colgate Oral Pharmaceuticals. These have become an essential part
of daily oral hygiene and therapeutic oral care in India.

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Colgate-Palmolive in its oral care segment has extended their products in the following
categories:

 Colgate Toothpastes
 Colgate Toothbrushes
 Colgate Toothpowder
 Colgate Whitening Products
 Colgate Mouthwash

During the quarter for year 2008-2009, the Company continued to build momentum in Oral Care
by achieving a volume growth of 14.9%, with a strong 15.2% volume growth in the toothpaste
category. The Company increased its leadership position to a 52.2% market share (Jan09-Mar09)
in the toothpaste category. Its flagship brands “Colgate Dental Cream”, “Active Salt”, and
“Cibaca” continue to contribute to this consistent growth. During the year, the Company’s
market shares have also increased significantly in the Toothbrush category to 37.6% and in the
Toothpowder category to 48.9%.
Today, Colgate is a household name in India with one out of every two consumers using a
modern dentifrice. Consistently superior quality, innovation and value for money products
emerging out of advanced technology employed, has enabled Colgate to be voted ‘The Most
Trusted Brand’ in India across all brands and categories for four consecutive years in the Brand
Equity AC Nielson ORG-MARG survey. Colgate has been the only brand to be ranked in the top
three for all the six surveys and to hold the premier position for four consecutive years. This is a
true measure of the trust and confidence that generations of consumers have placed in Colgate
for their oral care needs.

6. Reckitt Benckiser – Dettol:

Reckitt Benckiser (India) Limited, formerly known as Reckitt & Colman (India) Ltd is one of
the fastest growing consumer goods companies in South Asia. In India, it has many brands
namely - Dettol, Harpic, Mortein, Lizol, Cherry Blossom, Vanish, Easy Off Bang, Veet, Colin,
Disprin, Strepsils, Clearasil and others. It has major presence in home and personal care,
surface care, fabric care, pest control and healthcare.
Dettol as a brand has immense trust and loyalty from the consumers. Since the 1930s when
Dettol was introduced in India, it has occupied a distinct position in the mind of its consumers.
To achieve fast growth and leverage the strong brand equity of Dettol, Reckitt Benckiser India
Limited (RBIL) rolled out a number of brand extensions. When its competitors like HUL
(Lifebuoy and Lux) have been losing their market share, Dettol has managed to maintain a
steady growth amidst the competition. This can be mainly attributed to its focused brand
positioning of germ protections. Smart strategic moves involve its stable pricing, well thought
brand extensions and accessibility through smaller packs. Although Dettol has added a wide
array of products like liquid hand wash, body washes, soaps, shaving cream it still has managed
to make the brand distinct. The consumers have associated Dettol to be the bodyguard against
germs and infections. The brand’s endorsement from the Indian Medical Association has only
added to their advantage. Dettol has successfully extended germ protection -- the USP of its
flagship product, the antiseptic liquid -- to soaps, hand washes and shaving cream, too. The
packaging of all its products is distinct in their own way. The green and white colours and the

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sword have become symbols for fighting germs and infections, reinforcing the brand’s
positioning as a bodyguard which protects people from the unhygienic world outside.
Dettol in its personal care segment has extended their products in the following categories:
 Antiseptic Liquid
 Soaps
 Liquid Hand wash
 Body Wash
 Shaving Cream
 Plaster
Soaps, launched in 1981, have been the biggest growth driver accounting for around 75 per
cent of the total revenue. Soaps have seen a growth of 100-basis points in less than a year (from
a market share of 6.5 per cent, it has inched up to 7.7 per cent) in a Rs 7,500 crore market that
is growing 8 to 9 per cent in value and 2 to 3 per cent in volumes.
The health platform has worked in other brand extensions as well. For example, liquid hands
wash. Despite retailing at a higher price than competitors such as Fem and Lifebuoy, Dettol has
maintained a lead in this segment with a 60 per cent market share in the Rs 100 crore market.
In shaving cream, it has 30 per cent share in a Rs 200 crore market. Meanwhile, its original
product, Dettol liquid antiseptics, is logging 20 per cent growth in a Rs 150-crore market. The
brand is the leader (85 per cent share) with its nearest competitor, Johnson & Johnson's Savlon,
not being able to make much headway.
Up next could be herbal soaps from Dettol, which it is testing in Tamil Nadu. Its range of body
washes, which is presently retailed through modern trade and large format stores, could also
undergo a rejig and launched on a larger scale. The brand’s revenues were pegged at Rs 900
crore in July 2009, according to A C Nielsen data. Dettol, the 76-year old iconic brand from
Reckitt Benckiser, is well on its way to achieving a turnover of Rs 1,000 crore .

7. Proctor & Gamble – Gillette:

Procter & Gamble Co. (P&G) is an American company based in Cincinnati, Ohio that
manufactures a wide range of consumer goods. In India Proctor & Gamble has two
subsidiaries: P&G Hygiene and Health Care Ltd. and P&G Home Products Ltd. P&G Hygiene
and Health Care Limited is one of India's fastest growing Fast Moving Consumer Goods
Companies with a turnover of more than Rs. 500 crores. It has in its portfolio famous brands
like Vicks & Whisper. P&G Home Products Limited deals in Fabric Care segment and Hair
Care segment. It has in its kitty global brands such as Ariel and Tide in the Fabric Care
segment, and Head & Shoulders, Pantene, and Rejoice in the Hair Care segment. Today,
Proctor & Gamble is the second largest FMCG Company in India after Hindustan Lever
Limited.
Gillette is a brand of Procter & Gamble currently used for safety razors, among other personal
hygiene products. Based in Boston, Massachusetts, it is one of several brands originally owned
by The Gillette Company, a leading global supplier of products under various brands, which was
acquired by P&G in 2005. Their slogan is, "The Best a Man Can Get". The original Gillette
Company was founded by King Camp Gillette in 1895 as a safety razor manufacturer. Gillette
India Limited (GIL) is one of the premier FMCG (Fast Moving Consumer Goods) companies in
India. It has crafted its name in the Indian business market with its popular products like
GILLETTE MACH 3, TURBO, ORAL-B and DURACELL. Gillette India Limited constantly

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works towards bringing forward high quality, value-added products for the consumers, especially
for the men. Its products always speak for themselves.
Gillette India Limited offers a range of products for the consumers, especially for the men, under
its brand name. These include

 Shaving Razors
 Shave Foam
 Shave Gel
 After Shave Splashes
 Deodorants
 Conditioners

In 1990-91, the company came up with two products – 7 O’clock EJTEK PII Shaving System
and Shaving Cream with three variants. Gillette was also the first company to launch shaving
cream with special features in Indian market. The very next year, the company came up with
new technology products. The first advanced shaving product came into the market under the
brand name Gillette Presto Ready Shaver across the country. In 1995-96, Gillette India
launched 7 O’clock Ready II and again re-launched the saving cream in two variants. The
brand name was further strengthened by its success. In 1995-96, Gillette launched 'Gillette
Sensor Excel Shaving System' that shook the market with its high-tech technologies.
Overwhelming response from the consumer made it an immediate hit. The portfolio of the
brand Gillette went up significantly. In the following year, the company came up with the
successful Gillette Series products like Shave Foam, Shave Gel, After Shave Splashes,
Deodorants, and Conditioners, which all became big success. The year 2000 saw the launch of
Gillette Sensor Excel for women. In 2001, Gillette launched the products like Gillette Series
arctic Ice Line products, Gillette Series Satin Care for Women Wild Berry Line, Gillette
Centennial Packs and the Cool Blue Mach 3. In 2006, the Gillette Fusion a five-bladed razor
was released. There were two different versions of the Fusion available: the Gillette Fusion,
and the Gillette Fusion Power. All share the characteristic five blades on the front, and a single
sixth blade on the rear that Gillette claims acts as a "precision trimmer". In 1999 Gillette, as a
company, was worth US$43 billion and it was estimated that the brand value of Gillette was
worth US$16 billion. This equated to 37% of the company’s value, which was the same
as DaimlerChrysler, one of the world's largest car manufacturers at the time.
Gillette India Limited achieved total sales of Rs.171.78 crores, which grew by 21.69% over the
corresponding period last year (Rs.141.16 crores), the growth has been broad based driven by
grooming & oral care. In the nine-month period ended March 31, 2009, the Company's sales at
Rs.477.47 crores represent a growth of 12.7% over the same period last year. Sales growth of
Gillette India Ltd during the June 2009 quarter was a modest 10.8%, but significant
improvement in its profitability led to net profit rising by 31%. Gillette’s overall sales grew by
10.8% to Rs 184 crore. Grooming contributes to nearly three-fourths of revenue.
Consumers are generally loyal to their razors and don’t switch brands easily. Gillette also
follows a very sensible strategy of affordable pricing for its razors, knowing that customers will
come back to buy blades, on which it can get higher margins. That gives it an annuity income
that is the envy of any consumer company.

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8. JOHNSON & JOHNSON:

Operating in over 50 countries with more than 100,000 people, Johnson & Johnson USA has
been ranked 4 times in the “Fortune Top 10” list of the most admired companies in the US.
Johnson & Johnson (J&J) India, a subsidiary of Johnson & Johnson USA, is one of the leading
players in the Indian pharmaceutical and consumer products business. It has employee strength
of over 1,800. It started business in India in 1947 in Bombay with Johnson’s Baby Powder, and,
over time, introduced other products like toothbrushes, Johnson’s Baby Cream and Prickly Heat
Powder.

J&J in INDIA
• Spread its roots in India during 1947.
• It was Mr. Patrick Whaley who set the foundation.
• Launched Johnson’s Baby cream and Prickly Powder.
• Product like bellodomma, pharmaceutical tapes were imported from the parent company.
• In Sep. 1957, a new company Johnson & Johnson India Ltd. was created and registered.
• Recently this company celebrated its 50 years in India.
Products from Johnson & Johnson consumer companies stand at the ready to improve the
quality of everyday life. Johnson & Johnson offer products and information targeting baby
care, skin and hair care, oral care, nutritionals, pain relief, topical care and much more. Some of
them include:

 Baby and Child Care


 Baby Bath Products
 Cotton Products
 Diaper Rash Care
 Baby Lotions and Creams
 Baby Oils
 Baby Powders
 Baby Hair Care
 Baby Specialty Products
 Baby Gift Sets & Baby Travel Sets
 Sleep care
 Natural care
 Newborn care essentials
 Toddler care essentials

 Skin Care
 Clean & Clear

 Wound Care
 Band-Aid
 Savlon
 Johnson Plast

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BRAND EXTENSION

The vision of Johnson's Baby is to partner with every mother around the world to provide her
baby with a happy, healthy start in life. Johnson's Baby is the trusted brand of skin care
products for mothers the world over. It owes its strength to the trust of mothers, the long
heritage of safe and pure superior quality products. Being specially designed for babies, it has
earned the trust the trust of professionals who continue to endorse these products. Johnson's
Baby Care products helps build the special loving bond between a mother and her baby through
the unique set of values that Johnson's Baby stands for.
Band-Aid is the well-known brand of Adhesive Bandages from the stable of Johnson &
Johnson in the Wound Care portfolio. Band-Aid enjoys the market leadership in this category,
and is internationally known as an innovative brand. Together with Savlon, they comprise the
Wound Care Franchise.
In 2008, J&J sales increased to 4.3% and profits increased to 22%. J&J has done the brand
extension in the products like Hair Oil, Soap, Cream, Massage Oil, and Powder & Shampoo by
launching these products in various fragrance & colours. In today’s changing times, where
people have become more conscious towards their health & thus moving towards natural
products, they prefer using J&J products over other Brands. J&J has captured the customers by
positioning itself as a Company providing Natural products devoid of chemicals. Thus its graph
of Customer Confidence Index is high as compared to other Brands.

9. DABUR:

Dabur India Limited is the fourth largest FMCG Company in India with Revenues of US$600
Million (Rs 2834 crore) & Market Capitalization of over US$2.2 Billion (Rs 10,000 Crore).
Building on a legacy of quality and experience for 125 years, Dabur operates in key consumer
products categories like Hair Care, Oral Care, Health Care, Skin Care, Home Care & Foods.
Dabur India Limited has marked its presence with significant achievements and today commands
a market leadership status. Dabur’s story of success is based on dedication to nature, corporate
and process hygiene, dynamic leadership and commitment to our partners and stakeholders. The
results of Dabur’s policies and initiatives speak for themselves.

 Leading consumer goods company in India with a turnover of Rs. 2834.11 Crore (FY09)
 3 major strategic business units (SBU) - Consumer Care Division (CCD), Consumer
Health Division (CHD) and International Business Division (IBD)
 3 Subsidiary Group companies - Dabur International, Fem Care Pharma and newu and 8
step down subsidiaries: Dabur Nepal Pvt Ltd (Nepal), Dabur Egypt Ltd (Egypt), Asian
Consumer Care (Bangladesh), Asian Consumer Care (Pakistan), African Consumer
Care (Nigeria), Naturelle LLC (Ras Al Khaimah-UAE), Weikfield International (UAE)
and Jaquline Inc. (USA).
 17 ultra-modern manufacturing units spread around the globe
 Products marketed in over 60 countries
 Wide and deep market penetration with 50 C&F agents, more than 5000 distributors and
over2.8 million retail outlets all over India

Consumer Care Division (CCD) addresses consumer needs across the entire FMCG spectrum
through four distinct business portfolios of Personal Care, Health Care, Home Care & Foods

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BRAND EXTENSION

• Master brands:

 Dabur - Ayurvedic healthcare products


 Vatika - Premium hair care
 Hajmola - Tasty digestives
 Réal - Fruit juices & beverages
 Fem - Fairness bleaches & skin care products

 9 Billion-Rupee brands: Dabur Amla, Dabur Chyawanprash, Vatika, Réal, Dabur Red
Toothpaste, Dabur Lal Dant Manjan, Babool, Hajmola and Dabur Honey
 Strategic positioning of Honey as food product, leading to market leadership (over 75%)
in branded honey market
 Dabur Chyawanprash the largest selling Ayurvedic medicine with over 65% market
share.
 Vatika Shampoo has been the fastest selling shampoo brand in India for three years in a
row
 Hajmola tablets in command with 60% market share of digestive tablets category.
About 2.5 crore Hajmola tablets are consumed in India every day
 Leader in herbal digestives with 90% market share

Dabur India Ltd ended the third quarter of the 2009-10 financial year with a robust 18.6% jump
in Consolidated Revenue at Rs 932.56 Crores as against Rs 786.21 Crores a year earlier. The
Skin Care business grew by 32.5% during the quarter led by increased demand for the Gulabari
range of skin care products. The Digestives & Baby Care category reported a 12.4% growth
during the quarter, while the Health Supplements business – riding on strong demand for its
flagship product Dabur Chyawanprash -- ended the quarter with an over 10% growth.
With growth like this, Dabur has truly developed into a successful brand; which has a superior
understanding of consumer needs and develops products to fulfill them better.

10. AMUL:

AMUL means "priceless" in Sanskrit. The brand name "Amul," from the Sanskrit "Amoolya,"
was suggested by a quality control expert in Anand. Variants, all meaning "priceless", are
found in several Indian languages. Amul products have been in use in millions of homes since
1946. Amul Butter, Amul Milk Powder, Amul Ghee, Amul spray, Amul Cheese, Amul
Chocolates, Amul Shrikhand, Amul Ice cream, Nutramul, Amul Milk and Amulya have made
Amul a leading food brand in India. (Turnover: Rs. 67.11 billion in 2008-09). Today Amul is a
symbol of many things: of high-quality products sold at reasonable prices, of the genesis of a
vast co-operative network, of the triumph of indigenous technology, of the marketing savvy of
a farmers' organization and of a proven model for dairy development.

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BRAND EXTENSION

List of Products Marketed:


 Bread Spreads
 Milk Range
 Cheese
 Desserts
 Health Drink
 Chocolate & Confectionery

During the year 2008-2009, sales of Amul registered a quantum growth of 27.7 per cent to
reach Rs.6711.31 crores (Rs.67.11 billion). Turnover was Rs. 5255.41 crores (Rs. 52.55
billion). This is an extremely impressive growth, when viewed from the perspective of 22.9 per
cent growth that Amul had achieved in 2007-08.

Sales Turnover Rs (million) US $ (in million)


1994-95 11140 355
1995-96 13790 400
1996-97 15540 450
1997-98 18840 455
1998-99 22192 493
1999-00 22185 493
2000-01 22588 500
2001-02 23365 500
2002-03 27457 575
2003-04 28941 616
2004-05 29225 672
2005-06 37736 850
2006-07 42778 1050
2007-08 52554 1325
2008-09 67113 1504

From the above table of sales turnover it is very much clear how Amul has successful extended
its brand to grow from strength to strength. In the process Amul has become one of the most
trusted brands of India.

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BRAND EXTENSION

11. LG Electronics :

Established in 1997, LG Electronics India Pvt. Ltd., is a wholly owned subsidiary of LG


Electronics, South Korea. In India for a decade now, LG is the market leader in consumer
durables and recognized as a leading technology innovator in the information technology and
mobile communications business. LG is the acknowledged trendsetter for the consumer durable
industry in India with the fastest ever nationwide reach, latest global technology and product
innovation. One of the most formidable brands, LGEIL has an impressive portfolio of
Consumer Electronics, Home Appliances, GSM mobile phones and IT products. LG has been
able to craft out in ten years, a premium brand positioning in the Indian market and is today the
most preferred brand in the segment.

LG has got host of products under its belt, namely:

 TELEVISION
 COMPUTER PRODUCTS
 REFRIGERATOR
 VACUUM CLEANER
 ROOM AIR CONDITIONER
 AIR PURIFIER
 COMPRESSOR
 COMMERCIAL AC
 MICROWAVE OVEN
 WASHING MACHINE
 MOBILE PHONE
 DIGITAL AUDIO VIDEO

LG India achieved Rs 10,730 crore turnovers in 2008. LG India achieved a sales growth
upwards of 22% since January 2009. In April and May ‘09, the company saw a near 50% sales
growth. The Company reported a 40% rise in sales in July-December 2009 from a year ago that
helped total revenue for 2009 grow 21%, aided by robust sales of home appliances and LCD
TVs. LG, whose total sales hit Rs 13,000 crore in 2009. Consumer durables maker LG
Electronics India is expecting over 40 per cent growth in the home appliances business this
year after increasing offerings in various segments.

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BRAND EXTENSION

CONCLUSION:
A brand can be, cannot be, can do and cannot do things against its identity.
While extensions are the most popular method of growth, extending them wisely with a proper
market analysis is very important. Especially today, when the most important agenda for any
business is growth -- not just organic growth, but leapfrog growth. Globally, brand extensions
and expansions are the most used strategy for growth. Extensions are when a brand or business
extends its equity within the same category; while expansion happens when a brand or business
ventures outside its core category by extending its core values.

Why is it so tempting to stretch your brand?

 It is extremely expensive to build brands, coupled with a high failure rate of new
brand launches
 Research says that consumers are more open to the familiar. So, extending an
existing brand is a better option to launching a new brand and spending huge
money on familiarizing the consumer with it.
 Self construal theory states that markets where consumers are more
interdependent accept extensions better. This is said to be true of Eastern
cultures, which are high context cultures. So, countries such as Japan and India
are more 'open' to brand extensions
 Extensions help to convey a broader brand meaning to consumers
 Research tools are available to plan and test acceptance of extensions

Extending and expanding can be hugely profitable, if done right. Generally when the rule of
affinity is followed -- that is, when the consumer reacts, "I thought that they already made it" --
it means that the consumer's mental shelf was already set up even before the shelf at the
supermarket displayed the product. A stretch that achieves this is likely to be the most
successful. So, the next time the management says, "Let's have a new baby," do give in to the
temptation. But do ensure that the approach is like a marathon not a race; and you have preset
the goals and the path forward clearly. Remind yourself continuously that the stakes are high;
and use brand relevance as an important filter.

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BRAND EXTENSION

If I said “shaving system”, “after-shave” and “shaving gel” and asked someone to name a rand,
which is common across these categories, Gillette might come readily to mind. On the other
and, if I asked the same question after mentioning “airline”, “cola” and “records”, Virgin might
not be recalled so readily. And yet, both brands have been extended successfully. Both have a
shared quality that provides ‘agglomerating glue’ which determines the success of brand
extensions. The ‘agglomerating glue’ of Gillette is ‘Shaving products’, for Virgin, it is ‘Richard
Branson’.

In closing, I’d like to state that brand extensions are certainly a valid strategic option for
a brand manager as seen from the examples discussed above. Brand extensions are
flourishing for a number of reasons. Companies are finding that in many cases, their most
valuable asset is not their technology or other tangible assets, but rather their brands,
including all the loyalty, emotion, and associative power that they command in the market
place. With the right basis of extension, they can offer advantages in terms of getting
trade support, reducing barriers to trial, improved media-spend multiplier effects, and so
on.

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BRAND EXTENSION

REFERENCE:
Good knight:

 http://www.superbrandsindia.com/images/superbrands_book_2004/good-
knight/index.htm

Maggi:

 http://www.thehindubusinessline.com/catalyst/2007/12/06/stories/2007120650010100.ht
m
 http://livemint.com/2009/05/18152546/Nestle-India-records-growth-in.html

Colgate:

 http://www.colgate.co.in/app/Colgate/IN/Corp/PressRoom/Earning.cvsp?newsArticle=N
ews_290509

Dettol:

 http://www.business-standard.com/india/news/dettol-finds-wealth-in-health/369236/

Gillette:

 http://en.wikipedia.org/wiki/Gillette_(brand)
 http://www.livemint.com/2009/08/27223209/Gillette-India-profits-up-sa.html

Dabur:

 http://www.dabur.com/About%20Dabur-Dabur%20At-a-Glance

Amul:

 http://www.amul.com/index1.html

LG:

 http://www.in.lge.com/
 http://economictimes.indiatimes.com/news/news-by-company/earnings/LG-Electronics-
India-revises-upwards-revenue-targets/articleshow/4569300.cms

BRAND MANAGEMENT Page 19

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