MODULE 7

Brand Extension

Brand image or prestige

A brand extension may involve a foray in to unrelated product

categories based on brand exclusive image or prestige,brand exclusivity or
prestige betows great extension opportunities. This particularly true of
designers and artist brands.
Though products are different ,they are linked by the appeal they hold
for customers.Namely image fit and and business fit to be ensured in brand
extension.,,most important for image fit is consistency between the brand
personality of the parent and the extension…If there is no business fit the
extention is likely to fail.Even the marketing mix need to properly integrated
Example

Cartier Cartier Cartier Cartier

Jewellery watches purses pens

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Types of Brand Extensions

1.Product Form Extension :

A product launched in a different form usually means line extension rather
than brand extension. But if different product form constitutes entirely a
different product category from customer behaviour perspective, it would be
called as Brand Extension. For instance, liquid milk and dried milk may not
be perceived as same product category. Similarly, the chocolate bars and
chocolate powder belong to different categories.

AMUL AMUL
MILK CONDENSED
MILK

REAL REAL JUICES

JUICES CONCENTRATE

2. Companion Product :
Brand extensions in the form of companion products is perhaps the
most common. The idea perhaps is to capitalise on product
complimentarity. The consumer may view both products jointly and
hence, provide scope for launching Brand extension.

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 COLGATE COLGATE
DENTAL TOOTH BRUSH
CREAM

GILLETE GILLETE GILLETE

RAZORS SHAVING AFTER SHAVE
CREAM

3. Customer Franchise :
A Marketer may extend a product range in order to meet the needs of a
specific customer group. For instance, a company may launch a variety of
products meant for e.g. nursery going school children. The focus here is not
customer base but their diverse needs.

JOHNSON & JOHNSON & JOHNSON & JOHNSON &

JOHNSON JOHNSON JOHNSON JOHNSON
BABY BABTY TALC BABTY OIL BABY
SHAMPOO DIAPERS

4. Company Expertise :
Brand extension often come in the forms of different product category
introducing using common name but emanating from a common expertise
pool. This strategy is particularly true in Japanese companies.

HONDA HONDA HONDA HONDA

CARS GENSETS SCOOTE LAWNMOVE
RS

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Distinctive taste, ingredient or component

A brand may develop equity based on any and/or combination of taste,

ingredient or component.When such a close association develops, a marketer
can make entries into unrelated product categories capitalizing on these
properties for instance, Nescafe enjoys
Proprietary association of distinctive taste .Accordingly, the brand could be
leveraged in other product fields:

Nescafe Nescafe Nescafe Nescafe

Coffee Chocolate Biscuits Supplement cold coffee

Brand distiction
Many brands achieve distinction in the form of unique attribute,
benefit or features which get uniquely associated with the brand .in these
situations, a company can work backwards
To launch different products which essentially cash in on this distinction.
For instance parachute may have expertise of”coconut nourishment
‘in customers mind over time .This would give its company Marico the
opportunity to launch variety products exploiting this distinction

Parachute Parachute
Expertise hair oil Parachute shampoo cream

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 Branding strategies

• Cult Brands : There are many weak brands and Average Joe brands out
there. There are even numerous iconic brands in the world, which most
other companies aspire to.

But few brands ever develop a deep, penetrating relationship with their
customers. Few brands truly win the heart's of their customers, which breeds
authentic customer loyalty. Few brands ever adhere to the rules -- knowingly
or not -- that define a Cult Brand

Speaking of brand, the most interesting topic nowadays is cult branding

or some people call it spiritual branding. Various literatures discuss cult
branding with various definitions:

• Some say that a very well-known brand can be called "cult brand".
• Some people say that if brand has high emotional value can be called
"cult brand".
• Some people say that "cult brand" is brand that could move mass in
big volume of scale doing activities together .

Brands fail for one primary reason: instead of building a brand some people
love, companies build brands no one hates.

Most marketers live in a world where they are constantly searching for the
flashy, the instant—in short, the trivial.

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We must recognize that brands don't belong to marketers. Brands belong to
the customer. The customer's embrace is the only vote that counts, yet it is
constantly ignored by strategies that place our products and services as the
“goal” rather than the means to satisfy our customer’s needs, wishes, and
fantasies.
Successful brands embrace their customers by anticipating basic and
spiritual human needs.
Success creates magnetic brands—Cult Brands.

Why Cult Branding Works

Cult Brands aren't just companies with products or services to sell. To many
of their followers, they are a living, breathing surrogate family filled with
like-minded individuals. They are a support group that just happens to sell
products and services. Picture a Cult Brand in this context, and you'll have a
much better understanding of why these brands all have such high customer
loyalty and devoted followers. That's how Cult Branding works.

A cult brand is not a constant, it's something that requires careful,

thoughtful management. It's not easy to achieve, nor is it easy to maintain.

Which companies have "Cult Brand" status?

There are many weak brands and Average Joe brands out there. There are
even numerous iconic brands in the world, which most other companies
aspire to. But few brands ever develop a deep, penetrating relationship with
their customers. Few brands truly win the heart's of their customers, which
breeds authentic customer loyalty. Few brands ever adhere to the rules --
knowingly or not -- that define a Cult Brand

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Apple iPhone
With enough word-of-mouth to make snakes get off the plane and enough
hype to have many bloggers dub it the Jesus Phone, the iPhone launched to
camped-out crowds nationwide. It didn’t, as one cartoon in the Pittsburgh
Post-Gazette joked, have the ability to cure cancer, end global warming, or
block Paris Hilton from the news, but it did make die hard fans beam like
little kids, and hail it as a revolution.

Harley Davidson
To say that Harley had fallen on hard times by 1981 would be a drastic
understatement. Japanese companies were destroying the company on
pricing and Harley-Davidson’s bikes had lost the quality that made them
famous.

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Ikea

People are camping outside. Traffic jams are so severe that highway exits
must be shut down. Traffic lights are rendered useless requiring police to
direct traffic. Is it a new Star Wars film? No, it’s the opening of a new Ikea
store.

World Wrestling Entertainment

World Wrestling Entertainment’s (WWE) Vince and Linda McMahon are

both masters at challenging and shattering conventional wisdom. They prove
that anyone can build a Cult Brand. Neither Vince nor Linda McMahon
grew up with a silver spoon in their mouths.

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BRAND IDENTITY :

An examination of four all-too-common identity traps (summarized in

Figure 3-1) demonstrates the value of expanding the concept of a brand and
provides substantial insight into what a brand identity is and is not. These
four traps represent approaches to creating an identity that are excessively
limiting or tactical and that can lead to ineffective and often dysfunctional
brand strategies. After these traps have been analyzed, a broader identity
concept will be developed, its scope and structure discussed, and the value
proposit

THE BRAND IMAGE TRAP

Knowledge of the brand image (how customers and others perceive the
brand) provides useful and even necessary background information when
developing a brand identity. In the brand image trap, however, the patience,
resources, or expertise to go beyond the brand image is lacking, and the
brand image becomes the brand identity rather than just one input to be
considered.

The brand image trap does not tend to occur when a brand image is
obviously negative or inappropriate. When there are only subtle image
inadequacies caused by customers' past brand experiences or by changes in
their needs, however, the use of the brand image as an identity statement
often goes unchallenged.

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FIGURE 3-1
Brand Identity Traps

A brand identity is to brand strategy what "strategic intent" is to a

business strategy. Strategic intent involves an obsession with winning, real
innovation, stretching the current strategy, and a forward-looking, dynamic
perspective; it is very different from accepting or even refining past strategy.
Similarly, a brand identity should not accept existing perceptions, but
instead should be willing to consider creating changes flow from it
examined.

THE BRAND POSITION TRAP

A brand position is the part of the brand identity and value proposition that
is to be actively communicated to the target audience and that demonstrates
an advantage over competing brands. Thus the brand position guides the

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current communication programs and is distinct from the more general brand
identity construct. Some elements of brand identity (such as cleanliness for a
restaurant) may not be actively communicated and other elements (such as a
product class)

THE EXTERNAL PERSPECTIVE TRAP

From the perspective of most brand strategists, particularly in the

United States and Europe, a brand identity is something that gets customers
to buy the product or service because of how they perceive the brand. The
orientation is entirely external. The external perspective trap occurs when
firms fail to realize the role that a brand identity can play in helping an
organization understand its basic values and purpose. Because an effective
identity is based in part on a disciplined effort to specify the strengths,
values, and vision of the brand, it can provide a vehicle to communicate
internally what the brand is about. It is hard to expect employees to make a
vision happen if they do not understand and buy into that vision association)
will recede in visibility as the brand matures.

THE PRODUCT-ATTRIBUTE FIXATION TRAP

The most common trap of all is the product-attribute fixation trap, in which
the strategic and tactical management of the brand is focused solely on
product attributes. Based in part on the erroneous assumption that those
attributes are the only relevant bases for customer decisions and competitive
dynamics, the product-attribute fixation trap usually leads to less than
optimal .strategies and sometimes to damaging blunders

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A Brand Is More Than a Product
The failure to distinguish between a product and a brand creates the product-
attribute fixation trap. Consider Hobart, which is the premium, dominant
brand in industrial-grade food preparation equipment (such as mixers,
slicers, dishwashers, and refrigerators). Hobart bases its brand identity and
strategy on its product attributes: high quality, durability, reliability, and a
premium price. In reality, however, the brand also delivers the feeling of
buying and using the best. A baker or cook who has a self-image of being
the best wants first-class equipment in the kitchen. Buying Hobart is one
way for these individuals to express their values, both to themselves and to
others. Understanding that Hobart is more than a product has significant
implications for pricing, segmentation, and communication strategies. One is
that it is unnecessary and probably undesirable for Hobart to compete in
price-sensitive segments. Rather, the goal should be to seek out those
customers that who are interested in having the best and to develop
communication materials that associate the best with Hobart.

ASPIRATION: In our work with clients in a wide range of industries,

we have become aware of the need for a tool or experience set that can
prepare people to create effective, timely strategies. To meet this need,
we have developed a new approach called „Wishes, Weapons, War
Zones“(WWW). WWW is an easy-to-use navigational tool that helps
companies prepare for strategy formation by guiding the search for
insight and facilitating effective dialogue among the many parties whose
input is necessary for successful strategy.

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 Case
Virgin Group
Today virgin is the third most recognized brand in Britain , and has
considerable recognition around the world .Yet the man behind its
success,sir Richard branson, claims no master plan or business
practice.Lets looks at how a small number of key guiding principles have
enabled.VIRGIN to become one of the worlds pre eminent brands, one that
lives its vision throughtout the organization and its relationship with its
customers.
The development of the brand and evolution from a music business to a
multi faceted global empire Virgin is unique. It was the brainchild of
Richard branson who,by the age of 18.had the vision and foresight to realize
it was possible to create a brand that could be applied to many different
products Although other businesses were developed and some went by the
wayside ,music recording,publishing and retailing were the main focus of
VIRGIN for the 14 years of its existence .Virgin music grew to be one of the
three independent record labels in the UK with extensive business in the
world .
Many of the early businesses were associated with music,although by 1983
the company ha d recognized and involved itself with the trend for
computer games and launched VIRGIN interactive. However ,1984 brought
the most radical departure for VIRGIN with t he launch of VIRGIN
ATLANTIC AIRWAYS.This was Richard branson at his most entrepreneurial.
The history of virgin atlantic has been to launch new improvements that
other airlines have to match in flight massage,arrivals lounges and a new
class, Premium Economy .From virgin atlantic the company developed a

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holiday business,invested in a short haul continental airline based in Brussels
,virgin express,and in 2000 launched VIRGIV BLUES in Australia,a low cost
carrier flying 16 routes.

In 1990s were a period of considerable change for the VIRGIN

GROUP.in 1992 Virgin Music was sold to EMI for $1 billion;fouf years later
another record lable and publishing company V2,was launched to leverage
the expertise in the company’s management team.
It was precisely the kind of challenge that appealed to sir Richard branson;
the opportunity to put the consumers first,improve standards to Virgin
criteria and provide a fun travel experience. A less confident management
may have doubled the wisdom of attaching the virgin brand to such a risky
enterprise. VIRGIN RAIL has had a steep learning curve as the extent of the
lack of investment on the infrastructure became apparent,leading to
cancellations and delays. along with other franchise operators,VIRGIN has
struggled to deliver the service it promised,and delays in track upgrades
have put back the introduction of new ,improved rolling stock.

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 However ,by 2003 this should be in place and virgin have the most
modern railway carriages in Europe on its services
Virgin’s latest ventures have taken it into the field of mobile telephony via a
joint venture with one2one in UK,singtel in ASIA anf cable&wireless in
Australia.

The Virgin vision

Virgin is a branded venture capitalist,aiming to leverage the strengths of the

virgin brand in situations where the company can deliver signifant market
impact and enhance shareholder value.the brand key values are;
• Quality
High standards, attention to detail, being honest and delivering on
promises.
e.g. Virgin Atlantic Upper Class Suite – limousine service, lounge,
large flat bed on board, freedom menu etc.
• Value for money
Simple, honest & transparent pricing – not necessarily the cheapest on
the market.
e.g. Virgin Blue Australia – low cost airlines with transparent pricing
• Innovation
Challenging convention with big and little product / service ideas;
innovative, modern and stylish design.
e.g. Virgin Trains new pendolino – fast tilting train with shop, radio,
digital seat reservations & new sleek design

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• Fun Every company in the world takes itself seriously so we think it's
important that we provide the public and our customers with a bit of
entertainment.
e.g. VAA erected a sign over the BA-sponsored, late finishing London
Eye saying: BA Can't Get It Up.
Virgin Cola's launch in USA saw Richard drive a tank down 5th
Avenue and then “blow up” the Coke sign in Times Square, mocking
the “cola wars”.

• Competitive challenge. Sticking two fingers up to the establishment

and fighting the big boys – usually with a bit of humour.
e.g. Virgin Atlantic successfully captured the public spirit by taking
on BA's dirty tricks openly – and winning. Later, advertising
messages such as BA Don't Give A Shiatsu both mocked BA and
delivered a positive message about the airline's service

• Brilliant Customer Service Friendly, human & relaxed;

professional but uncorporate. e.g. Virgin Mobile UK which has
won awards for its customer service, treats its customers as
individuals, and pays out staff bonuses according to
customer satisfaction survey results

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Living the brand within virgin
virgin works hard to retain its culture,ensuring that staff understand the
vision and need for customer focus.the same thread of challenge,irreverence
care for customers and fun run through all its businesses,and this is also
maintained throughout internal coomunications “we embarked on
consciously building virgin into a brand which stood for quality.fun,value
and a sense of challenge.we also developed these ideas in the belief that our
first priority should be the people who work for the companies,then the
customers,than the shareholders.because if the staff are motivated then the
customers will be happy,and the shareholders will then benefit through the
companies success. A recent independent research study has shown that the
UK public vote Virgin as their most admired brand. A sample of 2,000
adults were asked ‘which brands or companies can you think of that you
really admire?” - Virgin received more votes than any other brand with 23%
of votes. Sony came second with 21% of votes, whilst Tesco came third
with 20%.

The Virgin Group has gone on to grow very succesful businesses in sectors
ranging from mobile telephony, to transportation, travel, financial services,
leisure, music, holidays, publishing and retailling. Virgin has created more
than 200 branded companies worldwide, employing approximately 50,000
people, in 29 countries. Revenues around the world in 2006 exceeded £10
billion ($20 billion). In 2002, the combined sales of the different Virgin
holding companies exceeded £4 billion ($8 billion). The equity of Virgin
Music Group -- record labels, music publishing and recording studios -- was
sold to THORN EMI in 1992 in a $1 billion deal.

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NUTSHELL OF VIRGIN BRAND EXTENTION

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