1. Chapter 12: Brand strategies

2. Contents The concept of brand strategies Naming a brand extension
Brand extension strategies – line and category extension
Brand stretching
Advantages and disadvantages of brand extensions
Launching new brand extensions

3. Need for designing branding strategies
Resources in the form of human effort, time, and money are required in abundance to build a brand from scratch.
Once the brand is established and doing well, the companies realize that to stay competitive and to tap other opportunities in the market they need to come out with other products as well as to attract consumers.
The new product can be branded under the existing brand or the organization can give an entirely new brand name to the same. The decisions pertaining to the same are strategic and have implications for the organization as a whole.
Thus, over a period of time a company can have a number of brands in its basket of offering for consumers in the same or different product categories. This is called brand portfolio and includes all the brands and brand lines that a company has to offer to the market.

4. Product mix and Brand mix
An organization’s product width includes all the different product lines it is offering to the market.
The organization can come out with a number of related products (that form one product line) or a number of unrelated products (that form different product lines, i.e., the product mix).
An organization’s product width denotes the number of product lines it has.
In the product line it can have a single brand or a number of brands.
All the brand lines that an organization has to offer are called the brand mix or brand assortment

5. Product mix width Product mix width Product line length Tiger Good Day
Biscuits
Product line - 2 Cakes
Product line - 3 Dairy Delights
Product line – 4 and so on
Tiger
Good Day
Bourbon
50-50
Marie Gold
Treat
Milk Bikis
Nutri Choice
Time Pass Namkeen
Little Hearts
Nice Time
Bar cakes
Cup cakes
Chunk Cakes
Veg cakes
Cheese
Milk
Dahi
Actimind
Ghee
Butter
Dairy Whitener
Product line length

6. Product Line Depth – Britannia Tiger Biscuits
Banana
Chocolate
Butterscotch
Elaichi
Orange
Pineapple
Strawberry
Chai Biskoot
Brita Energy Pops
Coconut Pops
Rs 10
Rs 4
Rs 2
Similarly can be in different packagings

7. Defining branding strategy
Branding strategy ‘reflects the number and nature of common and distinctive brand elements applied to the different products sold by the firm. In other words, branding strategy involves deciding which brand names, logos, symbols and so forth should be applied to which products and the nature of new and existing brand elements to be applied to new products’
(Keller, 2004)

8. Brand extension
Brand extension is defined as ‘when a firm uses an established brand name to introduce a new product’ (Keller, 2004).
The new brand so launched is called a sub-brand and the existing brand is called the parent brand.
If the parent brand name has already been used in various product lines, it is also called family brand

9. Strategies for choosing a brand name
Corporate brand name combined with individual name
Individual names
Blanket family names
Separate family names for all products

10. Branding strategies and opportunities for growth
Launch a new brand in an existing product category – Flanker brand
Launch a new brand in a new product category – New product
Launch an existing brand in an existing product category – Line extension
Launch an existing brand name in a new product category – Category extension/ Franchise extension/ Brand extension

11. Effect of brand extension
Brand strategy
Brand extension vs. individual brands
Synergies with established brand
Higher probability of success

12. Extensions Extensions can be of the following types Line extension
Brand extension or Category extension

13. Line extension
When a new product is added to an existing brand in the same product category, it is called line extension. The new product can be new flavours, colours, package sizes, etc., that target a different set of customers

14. Why Line extension? Diversity of customers Customers’ need for variety
Pricing breadth
Capacity utilization
Increasing profitability
Competitive reasons
Trade demands
Counter competition
Image benefits

15. Types of line extensions
Horizontal line extension
Vertical line extension
Upscale extension
Downscale extension

16. Category extension
When an existing brand name is used to launch a new product in a different product category, it is called category extension.
Tauber (1988) popularized the notion of category extension by developing a disciplined approach to develop new products by ‘leveraging an established brand name into categories new to that brand and called it brand franchise extension’.
Category extension is also referred to as brand extension by some authors

17. Why category/brand extension
To capitalize on the brand equity that has been built over a period of time
Less money needs to be invested in comparison to an individual brand
To capture opportunities in the market
Enhances appeal of the brand
Fewer brands need to be managed in the portfolio
Advertising efficiencies are increased.

18. Types of category extensions
A category-related extension is when an organization launches a brand related to the same category as the parent brand.
Image-related brand extension is when the company leverages its image to launch new products.
An unrelated extension is when a company launches a brand in a product category that is entirely new.

19. Types of leverages Extension of the product in a different form
Companion/complementary product
Same customer base
Company expertise
Distinct features or benefits of the brand
Brand image or prestige
Distinctive taste / ingredient

20. Brand stretching
The terms stretching and extension are often used interchangeably.
However, some have delineated extension as the addition of product variants or new products under the established brand name in the same product field as the established brand. On the other hand, stretching refers to a brand in a new product field.

21. Factors supporting brand stretch
Awareness and reputation of the parent brand
Applicability of the brand essence
Expertise and know-how
Consumers’ perception of the difficulty to manufacture the new brand
Offering complementary products
Filling a market gap

22. Factors against brand stretch
Inappropriate association between the parent brand and new brand
Wrong associations between parent and new brand
Consumers’ perception of the organization

23. Types of products that can be extended
Products with function-oriented image
Products with prestige-oriented image

24. Brand extension decision: An analysis
A brand is an organizational asset built painstakingly over a period of time.
This calls for a careful evaluation of the brand extension strategy and managers should take a call as to when to protect the brand name and when to exploit it.
This requires a careful understanding of the various advantages and pitfalls associated with using an established brand name to launch a new product in the market.

25. Strategic advantages for the parent brand
Enhance appeal for the parent brand
Reinforce key associations
Strengthen parent brand ‘memory structures’ and ‘facilitate retrieval processes’
Maximize comparative advantage
Lead to fewer brands that need to be managed
Increase advertising efficiencies
Defend a brand
Enhance the life cycle of the brand
Help target a particular segment of customers

26. Strategic advantages for the sub-brand
Positioning a brand
Introducing from a position of strength
Minimizing introduction expense
Minimizing marketing expenses
Quality association
Encouraging trial purchase
Satisfying variety seeking behavior
Increasing advertising efficiencies
Clarifying what the brand means to customers
Increasing market coverage
Permitting subsequent extensions

27. Potential pitfalls of brand extensions
Failure of brand name to add value
Negative association
Problem of fit
Cannibalization of parent brand’s sales
Perception of poor quality
Creation of undesirable associations
Weakening of existing associations
Dilution of the parent brand image resulting in confusion
Reduced identification with any one category
Effect of a brand crisis
Foregoing opportunity to create a new brand
Encounter retailer resistance

28. Critical factors for Brand extension success
Relationship between Parent and extended brand
Perceptual Fit
Benefit transfer
Parent Brand characteristics
Quality of product
Conviction of parent brand
Experience with parent brand
Brand extension success
Extended brand
Marketing support
Competitive leverage
Retailer acceptance of the extended brand

29. Launching a brand extension
Brand to be extended by the organization
For example Amul
Stage 1
Identify the associations with the brand name
(example Amul – associated with quality milk products)
Stage 2
Definitions for each association*
Butter Milk drinks Fresh milk Powdered milk Cheese
Pizza Curd Ice-cream Sweets
Stage 3
Related categories are identified for each definition*
For example, cheese: processed cheese, cottage cheese, cheese spreads, mozzarella cheese etc.
Stage 4
Selecting the ‘candidate product’
Stage 5
Launching the brand extension
Stage 6

30. Quick Recapitulation The concept of brand strategies
Naming a brand extension
Brand extension strategies – line and category extension
Brand stretching
Advantages and disadvantages of brand extensions
Launching new brand extensions

31. Questions?