Brand strategies Presented By: Pooja Singh (20061) Sushmita Rani (20087) Vishwanath Angam (20096) Farjendra Kumar (20017) Arvind Sai Prasad (20089)

the FASCINATING world of brands

What Is A “Brand” A BRAND is symbolic embodiment of all the information connected to a Company, Product or Service. It serves to create associations and expectations from products made by a producer, in the mind of the consumer. The key objective being “to create a Relationship of TRUST with its consumers”.

Product mix and Brand mix An organization’s product width includes all the different product lines it is offering to the market. The organization can come out with a number of related products (that form one product line) or a number of unrelated products (that form different product lines, i.e., the product mix). An organization’s product width denotes the number of product lines it has. In the product line it can have a single brand or a number of brands. All the brand lines that an organization has to offer are called the brand mix or brand assortment

Product mix width Product mix width Product line length Tiger Good Day Biscuits Product line - 2 Cakes Product line - 3 Dairy Delights Product line – 4 and so on Tiger Good Day Bourbon 50-50 Marie Gold Treat Milk Bikis Nutri Choice Time Pass Namkeen Little Hearts Nice Time Bar cakes Cup cakes Chunk Cakes Veg cakes Cheese Milk Dahi Actimind Ghee Butter Dairy Whitener Product line length

Product Line Depth – Britannia Tiger Biscuits Banana Chocolate Butterscotch Elaichi Orange Pineapple Strawberry Chai Biskoot Brita Energy Pops Coconut Pops Rs 10 Rs 4 Rs 2 Similarly can be in different packagings

Branding strategy Branding strategy ‘reflects the number and nature of common and distinctive brand elements applied to the different products sold by the firm. In other words, branding strategy involves deciding which brand names, logos, symbols and so forth should be applied to which products and the nature of new and existing brand elements to be applied to new products’

Need for designing branding strategies Resources in the form of human effort, time, and money are required in abundance to build a brand from scratch. Once the brand is established and doing well, the companies realize that to stay competitive and to tap other opportunities in the market they need to come out with other products as well as to attract consumers. The new product can be branded under the existing brand or the organization can give an entirely new brand name to the same. The decisions pertaining to the same are strategic and have implications for the organization as a whole. Thus, over a period of time a company can have a number of brands in its basket of offering for consumers in the same or different product categories. This is called brand portfolio and includes all the brands and brand lines that a company has to offer to the market.

Strategies for choosing a brand name Corporate brand name combined with individual name Individual names Blanket family names Separate family names for all products

New Product –Branding Decisions A new brand – individually chosen for the new product. An existing brand name applied in some way. A combination of a new brand with an existing brand.

Branding Strategies and opportunities for growth Launch a new brand in an existing product category-Flanker Brand Launch a new brand in a new product category- New Product Launch an existing brand in an existing product category-Line Extension Launch an existing brand name in a new product category-Category Extension

Extensions Extensions can be of the following types Line extension Brand extension or Category extension

LINE EXTENSION The parent brand is used to brand a new product that targets a new market segment with in a product category currently served by the parent brand. A line extension often adds a different flavor or ingredient variety, a different form or size, or a different application for the brand.

Why Line extension? Diversity of customers Customers’ need for variety Pricing breadth Capacity utilization Increasing profitability Competitive reasons Trade demands Counter competition Image benefits

Types of line extensions Horizontal line extension Vertical line extension Upscale extension Downscale extension

Coke’s Horizontal Line Extension

Britannia Vertical Extension

CATEGORY EXTENSION The parent brand is used to enter a different product category from that currently served by the parent brand.

ITC’s Category Extension

Types of category extensions A category-related extension is when an organization launches a brand related to the same category as the parent brand. Image-related brand extension is when the company leverages its image to launch new products. An unrelated extension is when a company launches a brand in a product category that is entirely new.

Why Brand Extensions? Leveraging brand equity/value by introduction of logical & complementary new product categories E.g HP Product Innovation to surpass consumer expectations It increases awareness of the brand name Increases profitability from offerings in more than one product category.(widening the net to catch new consumers.) It’s a great way to reinforce a brand, reach out to new customers, create a BUZZ

Advantages Of Brand Extensions Improve brand image Reduce risk perceived by Customers Permit consume variety-seeking

Advantages Of Brand Extensions Clarify brand meaning Brand Original Product Extension Products New Brand Meaning Weight Watchers Fitness Centre Low-calorie foods Weight loss & maintenance Sunkist Oranges Vitamins, juices Good health Kellogg’s Cereal Nutri-grain bars, Special K bars Health snacking Aunt Jemima Pancake mixes Syrups, frozen waffles Breakfast foods

Advantages Of Brand Extensions Increase the probability of gaining distribution and trial Increase efficiency of promotional expenditures Reduce costs of introductory & follow-up marketing programs (save 40-80%) E.g. Apple iPods Avoid costs of developing a new brand Allow for packaging & labeling efficiencies

Advantages Of Brand Extensions Enhance the parent brand image Bring new customers into brand franchise and increase market coverage Revitalize the brand Permit subsequent extensions

Disadvantages Of Brand Extensions Can fail & hurt parent brand image Xerox Computers-synonymous with copiers & no one believed they could make computers Can succeed but cannibalize sales of parent brand Amul Butter-”reduced salt butter” is slowly eating up Amul normal butter

Disadvantages Of Brand Extensions Can succeed but diminish identification with any one category Can succeed but hurt the image of parent brand

Disadvantages Of Brand Extensions Can confuse or frustrate consumers Can encounter retailer resistance Can dilute brand meaning Can cause the company to forgo the chance to develop a new brand

Brand extension decision: An analysis A brand is an organizational asset built painstakingly over a period of time. This calls for a careful evaluation of the brand extension strategy and managers should take a call as to when to protect the brand name and when to exploit it. This requires a careful understanding of the various advantages and pitfalls associated with using an established brand name to launch a new product in the market.

When are Brand Extensions Appropriate? When Prior Brand equity exists Consumer must see some “connection” between the proposed extension and the parent brand. The proposed extension contributes to and reinforces the overall brand equity of the parent brand.

How Consumers Evaluate Extensions

Conditions For Evaluating Consumer’s Brand Extension Consumers have some awareness & positive associations about the parent brand At least some of these positive associations will be evoked by the brand extension Negative association are not transferred from the parent brand Negative associations are not created by the brand extension

Evaluating Brand Extension Opportunities Define actual & desired consumer knowledge Identify possible extension candidates Evaluate potential of the extension candidate Evaluate potential candidate feedback effects Consider possible competitive advantages & reactions Design marketing campaign Evaluate extension success & effects on parent brand equity

Potential pitfalls of brand extensions Failure of brand name to add value Negative association Problem of fit Cannibalization of parent brand’s sales Perception of poor quality Creation of undesirable associations Weakening of existing associations Dilution of the parent brand image resulting in confusion Reduced identification with any one category Effect of a brand crisis Foregoing opportunity to create a new brand Encounter retailer resistance

Critical factors for Brand extension success Relationship between Parent and extended brand Perceptual Fit Benefit transfer Parent Brand characteristics Quality of product Conviction of parent brand Experience with parent brand Brand extension success Extended brand Marketing support Competitive leverage Retailer acceptance of the extended brand

Launching a brand extension Brand to be extended by the organization For example Amul Stage 1 Identify the associations with the brand name (example Amul – associated with quality milk products) Stage 2 Definitions for each association* Butter Milk drinks Fresh milk Powdered milk Cheese Pizza Curd Ice-cream Sweets Stage 3 Related categories are identified for each definition* For example, cheese: processed cheese, cottage cheese, cheese spreads, mozzarella cheese etc. Stage 4 Selecting the ‘candidate product’ Stage 5 Launching the brand extension Stage 6

Brand stretching The terms stretching and extension are often used interchangeably. However, some have delineated extension as the addition of product variants or new products under the established brand name in the same product field as the established brand. On the other hand, stretching refers to a brand in a new product field.

Factors supporting brand stretch Awareness and reputation of the parent brand Applicability of the brand essence Expertise and know-how Consumers’ perception of the difficulty to manufacture the new brand Offering complementary products Filling a market gap

Factors against brand stretch Inappropriate association between the parent brand and new brand Wrong associations between parent and new brand Consumers’ perception of the organization

Types of products that can be extended Products with function-oriented image Products with prestige-oriented image

Strategic advantages for the parent brand Enhance appeal for the parent brand Reinforce key associations Strengthen parent brand ‘memory structures’ and ‘facilitate retrieval processes’ Maximize comparative advantage Lead to fewer brands that need to be managed Increase advertising efficiencies Defend a brand Enhance the life cycle of the brand Help target a particular segment of customers

Strategic advantages for the sub-brand Positioning a brand Introducing from a position of strength Minimizing introduction expense Minimizing marketing expenses Quality association Encouraging trial purchase Satisfying variety seeking behavior Increasing advertising efficiencies Clarifying what the brand means to customers Increasing market coverage Permitting subsequent extensions

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