Some of the basic reasons that generally contribute to the brand extension are the following:
Innovations allow brands to remain up to date and demonstrate an unceasing urge to detect and
respond to the profound change in customer tastes and expectations.
Thus if the brand do not follow the developments, then they run the risk of being left behind.
The second factor being the cost of advertising, huge investment is required for product up-gradation.
The cost of advertising makes it difficult to sustain many brands; companies prefer to concentrate on few brands.
Successful companies follow the principles of building global brand to cut cost .
The final benefit is that it enhances the parent brand or the core product also.
It might help in reinforcing the core product’s brand instead of weakening it
Brand extension is a way of defending a brand at risk in the basic market.
Brand extension gives access to an accumulated image capital.
Potential buyers hopes to derive immediate profits from the brands by extending it and earning royalties.
Brand extension helps the firm to move away from being a mono-product.
The advertising of the parent brand can also bring about cross-fertilization .
If a firm is looking for growth by exploiting its assets, then brand extension is a natural strategy for it.
The already strong brand can be penetrated into a new product category or it can be licensed to others for use .
Brand extension can comprise of following areas
• New product
• New customer
• New format
• New channel
• New business
• Brand migration
• Brand recycling.
Thus brand acts as a source of value for the consumers.
The classification made by Nielson and by Darby and Karni shows the clear distinction that consumers have
in their mind with regards to the following types of product characteristics
�� The qualities that are noticed by contract, before buying
�� The qualities that are noticed uniquely by experience, thus after buying
�� Credence qualities which cannot be verified even after consumption and which you have to take on trust.
In the second case the role of brand image plays an important part, it is the collective representation, which
is shaped over time by the accumulated experiences of close relations, word of mouth and advertising .
In the third case the brand needs to add aura of make-believe when it is consumed.
Identifying the brand systems would help us to understand the constraints that are faced by the marketer
when the firm is in the process of brand extension.
Major brands are compared to a pyramid.
The problem is that the consumers look at the pyramid from the bottom up.
They start with what is real and tangible. The wider the pyramid base more the consumers doubt the
authenticity of the concept.
Thus the major challenge of any brand extension is to synchronize the brand concept to the values, types of
communication, brand personality, and brand uniqueness.
The strategic image thus, should feature all the above-mentioned characteristics.
It would generally be the four or five priorities ones Discussion.
Going by the classical concept of branding more and more brands have to be introduced if the company
wants to diversify. But the data shows a different picture.
In today’s fiercely competitive marketplace, brand extensions have become a standard strategy for new
product introductions.
Brand extensions have proliferated over the past decade, escalating to an all-time high, with estimates
ranging from eighty one to ninety five percent by the beginning of this decade.
According to a 1997 US study by Ernst and Young, there is a 28 percent failure rate among line extensions
and an astounding 84 percent failure rate among category extensions.
This shows that, though the introduction of brand extension has become prevalent, but such practise does
not necessarily guarantee success .
The success factors identified (for example, the fit between core brand and brand extension product, quality
associations with the core brand or history of previous extension of the core brand) can be quite useful in
launching a brand extension.
Over the years several critics have emerged to these studies. The study with regards to the fit between
core brand and extension category, suggest that brands cannot be extended beyond perceptually distant
product categories.
However in marketplace condition there are many successful extensions .
The classical concept of branding is very limiting, but with time and through communication, packaging,
advertising, etc the brand have became rich with feature, image and representation which gives it the style .
Classical conception of the brand takes the history of the brand for its long-term reality, but then products
cannot speak for themselves,
it is through the brand that the producer can communicate,
thereby revealing the intention of the marketer.
Brand extension can go beyond the classical concept, the only limiting factor being the ability of the brand
to leave its mark on the consumer mind with regards to the product attributes.
Innovations allow brands to remain up to date and demonstrate an unceasing urge to detect and
respond to the profound change in customer tastes and expectations.
Thus if the brand do not follow the developments, then they run the risk of being left behind.
The second factor being the cost of advertising, huge investment is required for product up-gradation.
The cost of advertising makes it difficult to sustain many brands; companies prefer to concentrate on few brands.
Successful companies follow the principles of building global brand to cut cost .
The final benefit is that it enhances the parent brand or the core product also.
It might help in reinforcing the core product’s brand instead of weakening it
Brand extension is a way of defending a brand at risk in the basic market.
Brand extension gives access to an accumulated image capital.
Potential buyers hopes to derive immediate profits from the brands by extending it and earning royalties.
Brand extension helps the firm to move away from being a mono-product.
The advertising of the parent brand can also bring about cross-fertilization .
If a firm is looking for growth by exploiting its assets, then brand extension is a natural strategy for it.
The already strong brand can be penetrated into a new product category or it can be licensed to others for use .
Brand extension can comprise of following areas
• New product
• New customer
• New format
• New channel
• New business
• Brand migration
• Brand recycling.
Thus brand acts as a source of value for the consumers.
The classification made by Nielson and by Darby and Karni shows the clear distinction that consumers have
in their mind with regards to the following types of product characteristics
�� The qualities that are noticed by contract, before buying
�� The qualities that are noticed uniquely by experience, thus after buying
�� Credence qualities which cannot be verified even after consumption and which you have to take on trust.
In the second case the role of brand image plays an important part, it is the collective representation, which
is shaped over time by the accumulated experiences of close relations, word of mouth and advertising .
In the third case the brand needs to add aura of make-believe when it is consumed.
Identifying the brand systems would help us to understand the constraints that are faced by the marketer
when the firm is in the process of brand extension.
Major brands are compared to a pyramid.
The problem is that the consumers look at the pyramid from the bottom up.
They start with what is real and tangible. The wider the pyramid base more the consumers doubt the
authenticity of the concept.
Thus the major challenge of any brand extension is to synchronize the brand concept to the values, types of
communication, brand personality, and brand uniqueness.
The strategic image thus, should feature all the above-mentioned characteristics.
It would generally be the four or five priorities ones Discussion.
Going by the classical concept of branding more and more brands have to be introduced if the company
wants to diversify. But the data shows a different picture.
In today’s fiercely competitive marketplace, brand extensions have become a standard strategy for new
product introductions.
Brand extensions have proliferated over the past decade, escalating to an all-time high, with estimates
ranging from eighty one to ninety five percent by the beginning of this decade.
According to a 1997 US study by Ernst and Young, there is a 28 percent failure rate among line extensions
and an astounding 84 percent failure rate among category extensions.
This shows that, though the introduction of brand extension has become prevalent, but such practise does
not necessarily guarantee success .
The success factors identified (for example, the fit between core brand and brand extension product, quality
associations with the core brand or history of previous extension of the core brand) can be quite useful in
launching a brand extension.
Over the years several critics have emerged to these studies. The study with regards to the fit between
core brand and extension category, suggest that brands cannot be extended beyond perceptually distant
product categories.
However in marketplace condition there are many successful extensions .
The classical concept of branding is very limiting, but with time and through communication, packaging,
advertising, etc the brand have became rich with feature, image and representation which gives it the style .
Classical conception of the brand takes the history of the brand for its long-term reality, but then products
cannot speak for themselves,
it is through the brand that the producer can communicate,
thereby revealing the intention of the marketer.
Brand extension can go beyond the classical concept, the only limiting factor being the ability of the brand
to leave its mark on the consumer mind with regards to the product attributes.