BRAND EXTENSION

Brand extensions are an important brand growth

strategy

Group – 3

NITESH TAUNK

KETAN CHOUBE

SURAJ SINGH THAKUR

PRAVIN UGHADE
 Brand Extension

Brand extension or brand stretching is

a marketing strategy in which a firm
marketing a product with a well-
developed image uses the same brand
name in a different product category.

Ex- TATA- STEEL, TCS , TELECOM, TEA,

WATCHES, HOTELS, POWER, MOTORS.
Caterpillar moved into shoes &
clothing

reliable, resistant, masculine

 Business units

Hair care

Skin care

Food division
 About Brand Extension

In 1990s, 81% of new products used brand

extension to introduce new brands and to create
sales.

Launching a new product, is not only time

consuming but also needs a big budget to create
awareness and to promote a product's benefits.

Brand extension is one of the new product

development strategies which can reduce financial
risk by using the parent brand name to enhance
consumers' perception due to the core brand equity
 Contd.
Poor choices for brand extension may dilute and
deteriorate the core brand and damage the brand
equity. Ex- Xerox

In practical cases, the failures of brand extension

are at higher rate than the successes.

The failures of extension make consumers create

a negative or new association relate to parent
brand even brand family or to disturb and confuse
the original brand identity and meaning.
 Need for Brand Extension

 increasing competition between less & larger players with

global aspirations and ability to communicate globally.

 towards saturation of markets.

 decreasing brand loyalty.

 Why is brand extension important to Nokia?

 For existing and build new competitive advantages

for continued leadership in the mobile
communications market amid increased
competition from rivals.
Ex- Pc’s and Software.

 To regain market share.

Failure No.1:
 In 1975, launched a computer product,

Xerox Data Systems, which had been

researched at Xerox PARC.

 It failed disastrously

 Xerox lost US $85 million.

 Why firms opt for Brand Extension?

 Helps the new brand to acquire instant brand

recognition
 Saves cost
 Helps leverage the strengths of the existing brand
 It also helps build the brand into a ‘Super brand’
Types of Brand
Extensions
A Brand name can be extended in three ways:

1. Extended to other items in the same product line

 E.g. Sunrise Coffee

 This is called Line Extension.

2. Extended to items in a related product line

 E.g. Maggi

 This is called ‘related brand extension’ or ‘category

extension’
3. Extended to items in an unrelated
product line

 e.g. Enfield
 It is a case of ‘unrelated brand extension’ or
‘outside the category extension’

 Let us see some relevant details about each of

these three types of brand extensions
 LINE EXTENSION
 Line Extension is the simplest form of ‘Brand Extension’. The idea
is to make some addition to the line and cater to the different
segments of users of the product. In Line Extension the key
criteria are whether the core strengths of the parent brands can
be leveraged for the new items.

LINE EXTENSION –COLGATE

 Colgate Dental Cream: The mega brand, the category volume driver.
 Colgate Gel: Positioned as giving long-lasting fresh breath
 Colgate Cibaca Top: Positioned on economy
 Colgate Total: With therapeutic, multi-benefits positioning.
Advantages of Line
Extension

 Line Extension helps strengthen brand power

and keep the brand live, modern and
contemporary.
 Changing consumer tastes can be
accommodated through Line Extensions
 Reduces risk associated with new product
introduction
 Line extensions provide a convenient route
for infusing new values into an ongoing brand
and gaining presence in new market
 CATEGORY EXTENSION
 Here, the brand name is extended over
different products, but the products are
related in some way. In other words they
belong to a category. The Maggi example
cited earlier fits this description. Dettol can be
cited as another example.

 DETTOL SOAP-antiseptic soap

 DETTOL PLASTER-antiseptic bandage
 DETTOL HANDWASH-antiseptic wash
Line and Category Extension by
POND’S

 Ponds dreamflower talc

 Ponds dreamflower talc magic
 Ponds sandal talc
 Ponds cold wash
 Ponds face wash
 Ponds cold cream
 Ponds moisturising lotion
 Ponds dreamflower moisturising body
lotion
OUTSIDE CATEGORY
EXTENSION
Here, the brand name is extended across completely
new and unrelated products, falling under altogether
different categories. It is here that brand extension is
put to the severest test and the value of the brand is
leveraged to the maximum.

Advantages of Outside category

extensions:
 As compared to the strategy of introducing a product
with a totally new brand name OCE is viewed as less
expensive and less risky
 Advertising cost will be frequently lower
 Encourage first time consumer trial e.g. (sun feast
pasta)
Success factors for brand
extension

 Characteristics of the parent brand (brand

strength, uniqueness of knowledge structure,
history of previous brand extension)
 Experience with Parent Brand
 Characteristic of Extension Product.
 Characteristics of the firm.
 Relationship between parent brand and
extension.
Problems with brand
extension
 Creates confusion regarding core
values of brand.

 Unsuccessful extension may tarnish

the image of parent brand.

 Brand cannibalism
BRAND RELATIONSHIP SPECTRUM
Brand Relationship
spectrum

Branded Sub Endorsed House of

House Brand Brand Brands
Strong
Same Master
Endorsem Not
Identit Brand
ent Connected
y as
Driver Connected
Co- Name

Differe driver
Token
nt Descript Endorser
Identity or
 Endorser Brand
 Endorsement by a strong brand
gives credibility and support supply.
 Endorser brands usually represents
company more than a single product.

 Token Endorser: Logo, phrase etc.

 Branded House
 The master brand contributes to
supply by adding:
 Value proposition
 Credibility
 Visibility
 House of Brand
 There is strong need for a separate
brand because:

 Own an association
 Represent a new and different
offering
 Retain/capture customer bond.