Typology of brand extension
Typology of brand extension is classified Into mainly close extension, also called as continuous extension and discontinuous extension.
Thus there would be brands that are very close to each other and others which eliminate technological synergies and physical links between products that form real diversification.
This would result in having brands with narrow spectrum of presence or called as ‘specialised brands’ and brands with wide spectrum or called ‘generalist brands’ .
The strategy that a company would more or less depend upon is, what consumers’ perceive about the brand. The perception about the brand is built over a period of time.
Aaker views brand extension in a similar way. Here extensions are differentiated on the basic difference of whether the extension is in the same or different product category .
Horizontal Extension
These apply or extend the existing product’s name to a new product in the same product class or to a product category new to the company.
There are two types of horizontal brand extension that differ in terms of their focus . They are termed line extensions and franchise extensions. Line extensions involve a current brand name that is used to enter a new market segment in its product class (example- Perk and Coffee Perk, in India). This is most successful in the case of extensions being in almost the same business as the core product. In contrast, franchise extension uses the current brand name to enter a product category new to the company .
Example: Reliance is into telecom,mobile handsets,consultancy,infrastructure,reliance fresh etc
Extension Distance
Close extensions are in the products in the same category where the distance of the extended product from the core product is less.
Distance extension might be in unrelated product categories and rely on overall quality associations from the parent for success .
Distancing is the purposive increase in the perceptual distance of the extension from the core product.
Authors studied the transfer of these quality perceptions of the core brand as the key in umbrella branding in which
the same brand name is used for several products.
The results showed strong support for the main premises
underlying an information economics view of umbrella branding..
Vertical Extension
In the case of vertical extension, a related brand is introduced in the same category but with a different price and quality balance.
The new products can extend vertically in two directions, upscale, involving a new product with higher price and quality characteristics than the original; or downscale, involving a new product with lower quality and price points.
The vertical upscale extension carries lesser risk and seems more appealing to the management.
In this case functional products are ruled out.
For example, when Gillette came up with a gold tone plated luxury Trac II razor in a hinged prestige gift box, there were few buyers.
Upscale extensions of prestige products are more acceptable, for example, limited luxury editions of automobiles.
The vertical downscale extension, as stated earlier, is more successful in functional products such as a stripped down version of computer software at a lower price.
The new product is inferior to the earlier product but the quality-price balance is appropriate.
Though in the case of prestige oriented product, the core audience is bothered and feels cheated with the ‘prestige’ of their product being tarnished.
For example, with the introduction of Pierre Cardin pens (at the price of Indian rupees seven each), a part of their core audience moved away as their ‘designer’ label was now within reach of everyone.
Typology of brand extension is classified Into mainly close extension, also called as continuous extension and discontinuous extension.
Thus there would be brands that are very close to each other and others which eliminate technological synergies and physical links between products that form real diversification.
This would result in having brands with narrow spectrum of presence or called as ‘specialised brands’ and brands with wide spectrum or called ‘generalist brands’ .
The strategy that a company would more or less depend upon is, what consumers’ perceive about the brand. The perception about the brand is built over a period of time.
Aaker views brand extension in a similar way. Here extensions are differentiated on the basic difference of whether the extension is in the same or different product category .
Horizontal Extension
These apply or extend the existing product’s name to a new product in the same product class or to a product category new to the company.
There are two types of horizontal brand extension that differ in terms of their focus . They are termed line extensions and franchise extensions. Line extensions involve a current brand name that is used to enter a new market segment in its product class (example- Perk and Coffee Perk, in India). This is most successful in the case of extensions being in almost the same business as the core product. In contrast, franchise extension uses the current brand name to enter a product category new to the company .
Example: Reliance is into telecom,mobile handsets,consultancy,infrastructure,reliance fresh etc
Extension Distance
Close extensions are in the products in the same category where the distance of the extended product from the core product is less.
Distance extension might be in unrelated product categories and rely on overall quality associations from the parent for success .
Distancing is the purposive increase in the perceptual distance of the extension from the core product.
Authors studied the transfer of these quality perceptions of the core brand as the key in umbrella branding in which
the same brand name is used for several products.
The results showed strong support for the main premises
underlying an information economics view of umbrella branding..
Vertical Extension
In the case of vertical extension, a related brand is introduced in the same category but with a different price and quality balance.
The new products can extend vertically in two directions, upscale, involving a new product with higher price and quality characteristics than the original; or downscale, involving a new product with lower quality and price points.
The vertical upscale extension carries lesser risk and seems more appealing to the management.
In this case functional products are ruled out.
For example, when Gillette came up with a gold tone plated luxury Trac II razor in a hinged prestige gift box, there were few buyers.
Upscale extensions of prestige products are more acceptable, for example, limited luxury editions of automobiles.
The vertical downscale extension, as stated earlier, is more successful in functional products such as a stripped down version of computer software at a lower price.
The new product is inferior to the earlier product but the quality-price balance is appropriate.
Though in the case of prestige oriented product, the core audience is bothered and feels cheated with the ‘prestige’ of their product being tarnished.
For example, with the introduction of Pierre Cardin pens (at the price of Indian rupees seven each), a part of their core audience moved away as their ‘designer’ label was now within reach of everyone.