Brand extensions

 BE perspective maintains that a brand is a single and long-lasting promise, expressed in different products  Redefine the historical brand benefit by nesting in a higher order value  Line extension or brand extension?

BE Towards diversification  Will itg be able to learn all the new competencies required to meet competition in new market  At what price  With what delays  At what cost  Is it sustainable  Adding risk dimension

Classical vs contemporary concept of brand  1 brand= 1product= 1promise  All can be done is range extension  Does not differentiate the history of brand from reality of brand  Contemporary concept advocates that the brand is different from the product  Instead of product brand they emerge as concept brands

Why brand extension: 5 assumptions  Brand has strong equities  The assets are transferable to new category  Brand values and benefits are relevant to new category  The extension named by parent brand will deliver real perceived advantage over competition  The brand and company will be able to sustain competition in this new category

Reasons for extensions  Higher media costs  Fight against distributors brands  To be contextually relevant  Declining product categories  B2B markets: logic of continually increasing customer value  When co.’s have not the resources to sustain two brands  Advertising constraints for few sectors

Research on brand extensions 1. Assessment of brand equity 2. Assessment of intrinsic attractiveness of likely extension category 3. Of transferability of brand assets in chosen extension category 4. Assessment of relevance of these assets 5. Ability of company to deliver the benefits subsumed in a brand name 6. Assessment of perceived superiority of the extension to existing competition 7. Assessment of the ability of company to sustain competition in long run and acquire leadership 8. Assessment of feedback effects of parent brand in the sales of core product

Brand assets -quality -affect -image Extension -attributes -concept - Tangible -intangible Relevance of These -attributes -concepts Difference from competition X -fit Distance Complement Substitution -difficulty Parent categoryExtension perceptionExtension evaluation Leverage transfer The brand extension model

 1 st research in 1987 Fictitious brand of calculator Stronger correlation when the extension product was perceived to be close  2 nd research compared experts and non experts views of brand extension for tennis shoes to tennis rackets, and other was with deeper extension using same know how such as carbon fibre Experts not satisfied with peripheral cues, needed more rationale

3 rd research  Functional products CD Cassete player Radio Vidoe tape VCR Walkman Car radio Video camera Record-player headphones  Expressive products Perfume Shoe Wallet Shirt Bag Pen Ring Watch Belt Crystal tie

 2 questions asked Traditional question of similarity of each products of each column A question whether the products of each column fit together  Asked 2 questions in two ways Blindly as above Using a brand- Sony for functional products, and Gucci for the second list

The results  For functional products regardless of brand mention there was no difference in perceived similalirity and of fit of products  For symbolic products regardless of brand mention there was no difference in perceived similarity of products, but Gucci brand name created a considerable fit between product which did not seemed fit without brand

Consequences of product and concept fit and misfit based upon research by Mischel 2000 brand prototypical product Extension product Brand concept Concept fit Physical fit Brand dilution Brand expansion Brand reinforcement

(A) (B) (C)(D)(E) Degree of product dissimilarity Type of brand product Know-how Benefit Personality values Type of brand and ability to extend