Franchise extension on the other hand is a strategy of using current brand name for entering a product
category that is new to the company .
If the core brand is extended into related or similar category it is considered as “close extension”.
Extending to unrelated product category is known as “Distance extension”.
In this case overall quality association of core brand is necessary for success
Distancing is a deliberate effort to increase the perception distance of the core brand and extension product .
While using umbrella branding that is using the same brand name for several products the firm must ensure
that the quality perception of the core products has also been transferred to all the extensions
Firms when launches “related brands” in the same product category with
significant difference in price and quality levels they are considered as vertical
extension.
The vertical extension has two directions.
If the new product is of higher quality level with higher pricing it will be called
up-scaling. On the other hand if the extended brand quality is low and is also
of lower pricing it will be known as down scaling .
If a newly launched product has a strong association with a strong brand then
customers would have the comfort of believing that the firm will support its
offering. Extensions are significant in creating awareness of the
strong brands especially to the segment that are not purchasing the product.
The cost of “new launch” is increasing, the market is becoming more
competitive and therefore more firms are deriving benefits from strong brand
equity by brand extension strategies.
In view of the high costs associated at introduction stage, firms leverage the
equity of established brand name to introduce products in a totally different
product category (Category extension). The rationale for this strategy is that
consumer perception of the positive image (equity) tends to carry over to the
extension and hence would be beneficial to new launch .
category that is new to the company .
If the core brand is extended into related or similar category it is considered as “close extension”.
Extending to unrelated product category is known as “Distance extension”.
In this case overall quality association of core brand is necessary for success
Distancing is a deliberate effort to increase the perception distance of the core brand and extension product .
While using umbrella branding that is using the same brand name for several products the firm must ensure
that the quality perception of the core products has also been transferred to all the extensions
Firms when launches “related brands” in the same product category with
significant difference in price and quality levels they are considered as vertical
extension.
The vertical extension has two directions.
If the new product is of higher quality level with higher pricing it will be called
up-scaling. On the other hand if the extended brand quality is low and is also
of lower pricing it will be known as down scaling .
If a newly launched product has a strong association with a strong brand then
customers would have the comfort of believing that the firm will support its
offering. Extensions are significant in creating awareness of the
strong brands especially to the segment that are not purchasing the product.
The cost of “new launch” is increasing, the market is becoming more
competitive and therefore more firms are deriving benefits from strong brand
equity by brand extension strategies.
In view of the high costs associated at introduction stage, firms leverage the
equity of established brand name to introduce products in a totally different
product category (Category extension). The rationale for this strategy is that
consumer perception of the positive image (equity) tends to carry over to the
extension and hence would be beneficial to new launch .