Great question.

Companies tend to leverage strong brand awareness by extending it to
product variants in the same product line (e.g.:- a different size, flavor or
color) or different product categories, as long as the essence of the brand
you are leveraging fits the new product.

So when adding new products to your portfolio of offerings, you will need to
consider both the fit of the product and the brand. The brand extension
should be logical from a customer perspective

In technology products you will need to consider that the promise of quality
carries over to your brand extension. You might want to consider how brand
extensions work with other products in the portfolio or other products
marketed by the company.

The product’s brand is not established before the first purchase of the new
product. Thus the brand concept extended well can provide immediate
customer attention, help associate existing brand strengths to the new
product and eventually help the new product to be sold briskly, & thus
gaining market share.

There are certain risks associated with brand extensions. The new product
may be perceived significantly different from the original product and would
eventually cause confusion in the market place. If the new product fails,
there could be negative impact on to the core brand.

So before you develop a brand extension, you might want to consider how
far a brand can be extended before it dilutes its identity with customers.
What market segment are you targeting the brand extension to? You might
want to consider a flanker branding strategy instead. If there are
significantly different value propositions, you might want to use a separate
branding strategy.

posted 5 months ago

From a Christian perspective...the Bible states to always,"count the cost".Agreeing with previous posting that, there are no guarantees for brand extensions, I believe that dotting the i's & crossing the t's , and sticking with what " brung us here" heightens the success module...regardless of all the market variables........

posted 5 months ago

Whether a brand extension is “good” or “bad” depends on the fit between the quality, positioning, value and target audience of the core brand’s product and the extension. If those things are relatively closely aligned, or represent a rational extension from the old to the new, then a brand extension will always have the higher ROI. Creating a new brand in today’s crowded marketplace is very expensive; leveraging an existing brand is quite profitable. Where things go awry is when the extension undermines the core brand by failing to live up to its promise -- for example, a cheap, shoddy “entry level” vehicle added to a luxury car brand can diminish the aura of all the vehicles in the lineup. Then you not only fail with the new product, but diminish the value of the entire brand. That is very bad indeed!

posted 5 months ago

Brand extensions are almost always bad. Line extensions can be good.

A brand is a piece of protectable intellectual property. You can not protect "Portable Computer Providing Internet and Phone" but you can protect "Blackberry". Anyone can manufacture a product in this class, but only Blackberry gets the benefit of their years of being at the top of the market.

The classic branding error was in the US in the 1950s. Packard was famous for making big cars. They started to make small cars and were driven out of business. Kellogg's made a similar error by introducing Kellogg's Clothing. The clothing failed miserably. Coca Cola had clothing also, but Coke is more of a lifestyle thing, and while this was an incredibly dangerous abuse of the brand, I think they got away with it.

In your case, if you have a telecommunications billing system under the Intec brand and you can build an automated provisioning system and an automated audit system, then they would only be brandable as Intec if they were as comprehensive and reliable as your billing system.

You would not use Intec as a brand for a calling card business because it would damage your main product's reputation.

Interestingly, you could conceivably use Intec for banking or manufacturing applications because Telecom customers would never see the brand. There would be no benefit, so kit would be foolish to reuse a brand like that.

Give me specifics in private and I'll give you my opinion.

posted 5 months ago

I disagree with the statement that they are always bad. I strongly agree with Clement and Kathryn that there is not an absolute answer. It depends on how the extension is planned and executed.

Apple is an example of brilliant brand extension: iMac, iPod, iPhone although they set the wrong step when trying the TV sets. American automakers are a good example of bad brand extensions that don't bring value to the portfolio and erode the business. Virgin, Starbucks have developed incredible successful brand extensions.

posted 5 months ago

I agree with many of the views expressed here. There is no good or bad options. It just depends on the way the brand extension is planned and executed and the extent to which two totally opposing products or services are included within a same brand umbrella.

posted 5 months ago

My viewpoint is in line with most of the answers to your question. There is no universal or over-arching formula for Brand extensions. It depends on a three-way fit between your product / service offer (its perception, percieved benefits, emotional connect to the target market, acceptance in trade and last but not the least the brand equity), the degree of similarity with new product / service offer and perceived need of the target market. If the new product has additional features that appeal to a wider market, addresses a distinctive need, provides a solution in the same area than brand extension is advisable to increase the share of the category.

Brand extensions are less expansive to launch, could be launched sooner than a new brand and levearge the existing brand equity. However, if the proposed benefits and appeal are not distinctive enough the extension can confuse the buyers. Similarly, if the benefits are too distinctive from the original brand, it will not be perceived as an extension of brand and may fail.

In my experience, an extension that has canibalized some share of the existing brand, however, the combined sales were incremental, the extension did well in mid to long term. If the extension had no effect on the sales of existing brand than I could not increased the total sales as much or rate of increase was slower.

Links:

• http://marketingmirror.wordpress.com

posted 5 months ago

Hi Amit,
You improve your market share through line extension. You move on to new markets through category extension. The difference is substantial: line extension basically falls in a market penetration strategy within your existing product base development. Adding a new category is probably more risky: even if you know what you are doing, the impact on your corporate's organization might nor be trivial to handle (think of shifting towards a divisional approach). In any case, adding products or categories implies adding sub-brands, which certainly adds a bit of complexity to the management of the parent-brand.
In general, when you implement a brand extension, there is an implicit re-positioning: by addressing new market areas, either horizontally or even vertically, you are probably modifying the overall psychographics and demographics components in your targeting strategy. This has to be addressed: if the changes are non-trivial, you may consider a positioning-centric promotional campaign. Furthermore, an extension can be so successful that it cannibalizes the parent brand's market, which is yet one more reason to keep positioning under control.
As a post-scriptum note: if you sell to retail, please consider eventual trading issues (eg, refusal to provide further shelf room).
Now to the controversial question: is it generally good or bad? Although products launches are somewhat "sweetier" when done within an extension, New Products are generally bad, this is well documented in literature: 1 or 2 products out of 10 are successful, the rest is failure (McMath, New Products Showcase and Learning Center, Ithaca NY).

posted 5 months ago

It simply depends on your market and the strategy

Consumer goods: with brand extensions you may create more narrowly targeted products with higher value - it often helps to increase the value of the market [demand is growing]

You may though risk diluting your brand

There's no general 'golden rule' I'm afraid

posted 5 months ago

I would have to add my voice to those who have stated that brand extensions can be sometimes successful and sometimes can hurt a brand. Dell, for example has largely been a success in building equity in its brand. However, consider the damage to the brand that occurred when it went up against Apple with its own MP3 player. I think the greatest harm that occurred was not the failure to capture market share from Apple, but their quick departure from the category. Microsoft's Zune MP3 continues in the market despite iPod's dominance. Dell also has not been too successful with their efforts in the home theater market but at least products remain.

From another perspective brands that have done quite well with extensions are Coca-Cola and Pepsi. Harley Davidson is another interesting brand extending from their core product into apparel and merchandise. I would also argue that Harley is a good example of a company that improved its market share using brand extensions. Not only were they profitable, but they were able to fund R&D which improved their motorcycles.

posted 5 months ago

Hello Amit.

Completly depends on the product line and parent brand usage ! This also depends at what point of time is the PLC...The strategy for a better PLC is one of the biggest influences to get brand extensions.

While some brand managers save their jobs with this amazing brand plan WHILE some of the real marketing managers bring in these elements to ensure that the brand holds and becomes a unique top of the mind recall and has the right extensions in the different demos and TAs...

One thing most people miss out in the marketing mix is the intervention of sales teams.I feel the sales teams are pivotal to consult as they are ones who go and push market vibes for the product lines...

Rest is luck and the ******** media plan !!!!!!

Cheers
Amit

posted 5 months ago

I remember when Sara Lee tried to do microwavable dinners... utter failure because no one thought steak, chicken or fish would be anything but sweet coming from Sara Lee. Brand extensions can be good if it is in line with the rest of your business, but don't go out and do something different under the same banner... or you'll Sara Lee.

posted 5 months ago

Amit-

I have to agree with Clement. The answer is not as black and white as most would like it to be. As another person mentioned before me, new products fail, and when they do, they can sometimes hurt the parent brand. (when a brand extension.)

I have been part of many research studies to evaluate the implications of launching a new product (line extension or new category) as an extension of the existing parent brand. As it is sometimes easier to leverage the existing equity of the established brand the pitfalls most often outway the benefits. And sometimes vice-versa.

So, I suggest conducting some research around the existing brand equity, and brand extendibility as well as the potential of success for the new product. If it makes sense to put it under the parent umbrella, do it - if not - don't.

Cheers-

posted 5 months ago

Hi Amit,

The offer of a supplier of products and/or services may be
enriched in order to increase the turnover and the profit by
attracting more customers or selling more to existing
ones.Nevertheless, you have to be very careful when doing that
because, if you don't do, you may obtain the opposite result of
the one you expect. To enrich your offer, you may simply add
new products and/or services or imagine a bundle
including components being complementary in consideration of

- their use
- their place of consumption, working up or acquisition
- their link to a common application
- the benefit of a coordination of fulfilments in space and/or time
- the advantage of matching several items

On the contrary, the offer may be pruned by taking off some
products and/or services which seem not enough or no more
profit-earning or in which only a few customers are interested so
that they cost more than they yield. But one has to be very
careful in operating suppression namely concerning low-margin
products for they may play the role of enticement or simply and
solely be useful to customers that, if they no longer find them at a
supplier, will shift elsewhere.

Thus when you consider modifying an offer, in any case, you will
have to take into account the possible repercussions on the brand
(in some cases, brand is a kind of umbrella which shields other
brands). So you must do whatever is necessary to have your
brand known but at the same time preserve it in being blameless.
Indeed, each time your company is liable to bad practices, this is
a more or less great part of its brand asset which is destroyed;
the more your brand is known, the more the damages are
important and long to rub out. At the beginning of a brand, you
start from something rather popular and then enlarge it, keeping
the same spirit for this is an emotional seed. Generally,the brand
does not represent a specific product but a company, its values
and ideal; it suggests something like a model or an icon which
lies inside the minds: that is why the best success driver of a
brand is the reputation of the company it belongs to.

Offer of products and services has to fall in with some consistency
to be credible. But its attractiveness is not only the consequence
of its components themselves but depends on the firm's
reputation. The reputation results from the opinion of the
stakeholders echoed by various media. It is true that the firm's
offer attracts more or less customers and that not only products
but associated services attract them.

Services include installation, spare parts delivery, hotline,
maintenance, training, consulting, end-of-life disposal,
refurbishment, renting, returns and warranty. They may be
extended to a genuine collaboration especially in the design field
which often takes place in high-tech industry.

Reputation isgenerally associated with a brand.
Indeed, brand is a short-cut of what the firm represents in the
mind of customers so that its power may be used for licensing.

A first trend is the transition from a pure product considered as a
tool or a simple commodity to a more complex prestation
including other products and services creating value for the
customer -and, of course, simultaneously for the provider-.

Another trend is the adjunction of a proposal of products to an
offer of services implying the use of tangible goods either as tools
or material.

Hoping these 2 cents will help you along your reflection, in combination with the numerous advices and axamples which were submitted to you

All the best

Guy

posted 5 months ago

posted 5 months ago

Hi Amit, Of course a brand can extend its marketshare, but it can also destroy it (think what Harley Davidson Perfume did to their brand for a short while). There is a good book illustrating multiple global brands that push their extensions too far. Very light, easy read.

Brand Failures.

http://www.amazon.com/Brand-Failures-Biggest-Branding-Mistakes/dp/0749439270

posted 5 months ago

The best brands are simple and clear to understand and represent one idea in the mind of the Customer. Brand X equals Meaning A

Anything that confuses by adding other thoughts will weaken the brand. Brand X now equals Meaning A and Meaning B - this must weaken it.

Its a seductive idea, BUT although often done is SELDOM, very seldom a good idea.

posted 5 months ago