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Made by Jackey Zhang
Transcript of Made by Jackey Zhang
(Dacin & Smith 1994; Keller & Aaker 1992) What is Brand extension? Group of products within a product class that are closely related because they perform similar function,
are sold to the same customer groups,
are marketed through the same channels, or
fall within given price range. Product Line Existing New Brand Extension Multibrands New Brand Product Category Line Extension (cc) image by anemoneprojectors on Flickr Brand Name Existing New New Category Extension Multibrands New Brand Product Category Line Extension (cc) image by anemoneprojectors on Flickr Brand Name Existing Existing New Brand Extension When a company uses an established brand to introduce a new product, it is called brand extension. Sub-brand When a new brand is combined with an existing brand, the brand extension can also be called a sub-brand. Parent Brand An existing brand that gives birth to a brand extension is referred to as parent brand. family brand If the parent brand is already associated with multiple products through brand extensions, then it may also be called a family brand. Line Extension Category Extension BRAND EXTENSION 1. Well-known 2. Logical-fit 10 basic principles 3. Leverage 4. Non-confusion 5. Consistencies 6. Reasonably stretched 7. Positive synergy 8. Business sense 9. New category 10. Long or short-term plan A framework of Positive and Negative Reciprocal Effects: Permit Consumer Variety-Seeking. To Facilitate New Product Acceptance Improve Brand Image Reduce Risk Perceived by Customers. Increase the Probability of Gaining Distribution and Trial. Increase Efficiency of Promotional Expenditures. Reduce Costs of Introductory and Follow-up Marketing Programs. Avoid Cost of Developing a New Brand. Allow for Packaging and Labeling Efficiencies. To Provide Feedback Benefits to the Parent Brand Bring New Customers
into the Brand Franchise and Increase Market Coverage Permit Subsequent Extensions Clarify Brand Meaning Enhance the Parent Brand Image (cc) image by nuonsolarteam on Flickr Revitalize the Brand Why Not? Can Confuse or Frustrate Consumers Can Encounter Retailer Resistance Can Fail and Hurt Parent Brand Image Can Succeed but Diminish Identification with Any One Category Can Succeed but Hurt the Image of the Parent Brand Can Dilute Brand Meaning Can Cause the Company to Forgo the Chance to Develop a New Brand What?
Is Category Extension The parent brand is used to enter a different product category from the existing one served by the parent brand.
Is it known as Category Extension Same product brand in
a different form Product that capitalize on the firm’s perceived expertise There is some form of “connection” between existing brand and the product category extended. Category Extension 1950 2011
Flamedisk 1979 Sport 1973 First BIC ballpoint BIC lighter 1975 Shaver 2008
Phone in France Why?
Extension 1. Increases awareness of the brand name 2. Increases profitability from offering in more than one product category as new market segments are targeted. 3. Product innovation to surpass consumer’s expectations 4. Reduce risk perceived by consumers 5. The new category will engulf the existing strong brand image. 6. It is a great way to reinforce a brand, expand to wider market, create a new WAVE. Core value &
may get Category
Extension if category extension
did not turn out well. Able to understand distinctive product that the customers really want.
The “must have” products. What influence the successful of Category Extension How unique are the category products compared with the current competitors The strong
existing parent brand. Have taken into consideration
of the product
under the road. What
Causes Category Extension to Fail Could not link back to the attributes of the parent brand. The parent brand have yet to establish a strong base. Line extension A company introduces a brand line extension by using an established product’s brand to launch a new, slightly different item in the same product category. i.e. Diet cokc Example of Line Extension 1950 First BIC ballpoint 2004
Fountain Pen 1979
Drawing & Colouring Products 1969 BIC Graphic 1992
Correction Products 1997
Luxury Writing Instruments 2006 Adhesive Labels Market relate Factors Forced to react against private label competition Discontinued their weak brands and the weak products New added value based on extensive research and development. Why are brand line extensions important? Keep a brand alive Realize incremental
financial growth Reduce risk associated with new product development Instant recognition of the product name Promotional costs are much lower for a line extension Benefits of line extension 1. Expand company shelf space presence 2. Gain more potential customers 3. Offer customers more variety 4. Greater marketing efficiency 5. Greater production efficiency 6. Lower promotional costs 7. Increased profits Two potential threats Firstly, if the new line extension fails to satisfy, consumers’ attitudes toward other products carrying the same brand name may be damaged. Secondly, there is potential for intra-firm competition between the parent product and the line extension,or between two or more line extensions. Brand Extension Evaluation Consumers evaluate brand extensions by judging how well they fit with the parent brand and how well they fit their personal requirements. Example: 1. Consumers will consider whether the prestige associated with the parent brand could transfer to the extension product category 2. Whether the parent brand has the required expertise to produce a product in the extension category (Keller 2002) Culture Effects in Brand Extension Evaluation Two thinking styles regards to culture Analytical thinking is thinking in a logical, step-by-step way and coming to a conclusion. Holistic thinking is involving an orientation to the context, including external effects to observe behavior in context. (Nisbett et al. 2001) Results from Culture difference in Brand Extension Evaluation No difference between Asian and Western consumers’ extension evaluations when the perceived fit was High. When the perceived fit is high, both Asian and Western consumers are likely to infer the quality of the extension as similar to the quality of the parent brand. Asian evaluated the extension much less favorably than the Westerners under both moderate and low fit conditions. That means Easterners perceive a higher degree of brand extension fit and evaluate brand extension more highly than Westerners. Over branding? Have you ever been hacked off by some huge logos covering the lower part of your TV screen during your favorite TV drama? Over-branding really kills profits
and scares off consumers. Conclusion Identify your exciting brand and the new product or service What elements of your brand that are extendable? Relationship with the parent brand Be cautions of extensions that go off brand Reference: Category Extension
Line Extension HOW Product that reflects the brand distinctive benefit,