CHAPTER12:

INTRODUCINGANDNAMINGNEWPRODUCTSANDBRANDEXTENSIONSKevinLaneKellerTuckSchoolofBusinessDartmouthCollege1LeveragetheBrand

Firmsareseekingtobuild“power”or“mega”brandsthatestablishabroadmarketfootprint,appealingtomultiplecustomersegmentswithmultipleproductsallunderneaththebrandumbrella.2Ansoff’sGrowthShareMatrixCurrentProductsNewProductsCurrentMarketsMarketpenetrationstrategyProductdevelopmentstrategyNewMarketsMarketdevelopmentstrategyDiversificationstrategy3BrandExtensionsWhenafirmusesanestablishedbrandnametointroduceanewproductBrandextensionclassificationLineextensionUsingasub-brandtotargetanewmarketsegmentwithinthesameproductcategoryCategoryextensionUsingtheparentbrandinadifferentproductcategory4GeneralStrategiesforEstablishingaCategory

Tauber’sFranchise—Extension

Introducethesameproductinadifferentform.Example:OceanSprayCranberryJuiceCocktail Introduceproductsthatcontainthebrand’sdistinctivetaste,ingredient,orcomponent.Example:PhiladelphiacreamcheesesaladdressingIntroducecompanionproductsforthebrand.Example:ColemancampingequipmentIntroduceproductsrelevanttothecustomerfranchiseofthebrand.Example:GerberinsuranceIntroduceproductsthatcapitalizeonthefirm’sperceivedexpertise.Example:HondalawnmowersIntroduceproductsthatreflectthebrand’sdistinctivebenefit,attribute,orfeature.Example:Lysol’s“deodorizing”householdcleaningproductsIntroduceproductsthatcapitalizeonthedistinctiveimageorprestigeofthebrand.Example:CalvinKleinclothes5AdvantagesofExtensionsFacilitatenewproductacceptanceImprovebrandimageReduceriskperceivedbycustomersIncreasetheprobabilityofgainingdistributionandtrialIncreaseefficiencyofpromotionalexpendituresReducecostsofintroductoryandfollow-upmarketingprogramsAvoidcostofdevelopinganewbrandAllowforpackagingandlabelingefficienciesPermitconsumervarietyseeking6AdvantagesofExtensions(Cont.)ProvidefeedbackbenefitstoparentbrandClarifybrandmeaningEnhancetheparentbrandimageBringnewcustomersintobrandfranchiseandincreasemarketcoverageRevitalizethebrandPermitsubsequentextensions7DisadvantagesofExtensionsCanconfuseorfrustrateconsumersCanencounterretailerresistanceCanfailandhurtparentbrandimageCansucceedbutcannibalizesalesofparentbrandCansucceedbutdiminishidentificationwithanyonecategoryCansucceedbuthurttheimageoftheparentbrandCandilutebrandmeaningCancausethecompanytoforgothechancetodevelopanewbrand8ManagerialassumptionsConsumershavesomeawarenessofandpositiveassociationsaboutthebrandinmemoryAtleastsomeofthesepositiveassociationsareevokedbythebrandextensionNegativeassociationsarenottransferredfromtheparentbrandNegativeassociationsarenotcreatedbythebrandextensionUnderstandingHowCustomersEvaluateBrandExtensions9CreatingExtensionEquitySalienceofparentbrandassociationsinthemindsofconsumersintheextensioncontextFavorabilityofanyinferredassociationsintheextensioncontextUniquenessofanyinferredassociationsintheextensioncontext10ContributingtoParentBrandEquityHowcompellingtheevidenceisconcerningthecorrespondingattributeorbenefitassociationintheextensioncontext

Howrelevantordiagnostictheextensionevidenceisconcerningtheattributeorbenefitfortheparentbrand

Howconsistenttheextensionevidenceiswiththecorrespondingparentbrandassociations

Howstrongexistingattributeorbenefitassociationsareheldinconsumermemoryfortheparentbrand

11SuccessfulExtensionsMustcreatepoints-of-parityandpoints-of-differenceinextensioncategoryMustrecognizecompetitivereactionsMustenhancepoints-of-parityandpoints-of-differenceofparentbrandMustmaximizetheadvantagesandminimizethedisadvantagesofbrandextensions12SuccessfulCategoryExtensionsIvoryshampooandconditionerVaselineIntensiveCareskinlotionHersheychocolatemilkJell-OpuddingpopsVisatraveler’schecksSunkistorangesodaColgatetoothbrushesMarsicecreambarsArm&HammertoothpasteBicdisposablelightersAuntJemimapancakesyrupHondalawnmowers13UnsuccessfulCategoryExtensionsCampbell’stomatosauceLifeSaverschewinggumCrackerJackcerealHarleyDavidsonwinecoolersHiddenValleyRanchfrozenentreesBicperfumesBen-GayaspirinKleenexdiapersLevi’sTailoredClassicssuitsNautilusathleticshoesDomino’sfruit-flavoredbubblegumSmucker’sketchupFruitoftheLoomlaundrydetergent14EvaluatingBrandExtensionOpportunitiesDefineactualanddesiredconsumerknowledgeaboutthebrandIdentifypossibleextensioncandidatesEvaluatethepotentialoftheextensioncandidateThelikelihoodthattheextensionwillrealizetheadvantagesandavoidthedisadvantagesofbrandextensions.Aswithanynewproduct,analysisofconsumer,corporate,andcompetitivefactorscanbeuseful.15EvaluatingBrandExtensionOpportunitiesDesignmarketingprogramstolaunchextensionBuildingbrandequityforabrandextensionrequireschoosingbrandelements,designingtheoptimalmarketingprogramtolaunchtheextension,andleveragingsecondaryassociations.Evaluateextensionsuccessandeffectsonparentbrandequity16Whenarebrandextensionsappropriate?Iftheyseesomebasisof“fit”orsimilarityb