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8/6/2019 Blackboard Lecture 10 - Chapters 11 and 12 - Sem 1 2010 Mh
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Week 10Chapter 11
Designing and Implementing
Branding Strategies
8/6/2019 Blackboard Lecture 10 - Chapters 11 and 12 - Sem 1 2010 Mh
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OverviewDesigning & Implementing
Brand Strategies
Preview BrandArchitecture
Brand HierarchyDesigning a
Branding Strategy
Using Cause Marketingto
Build Brand Equity
The Brand-ProductMatrix
Breadth of aBranding Strategy
Depth of aBranding Strategy
Building Equityat Different
Hierarchy Levels
Corporate ImageDimensions
No. of Levels ofthe Brand Hierarchy
Desired Awareness &Image at Each
Hierarchy Levels
CombiningBrand Elements
from Different Levels
Linking BrandElements
to Multiple Products
Developing aBrand Architecture
Adjustments to theMarketing Program
Advantages ofCause Marketing
DesigningCause Marketing
Programs
Green Marketing
8/6/2019 Blackboard Lecture 10 - Chapters 11 and 12 - Sem 1 2010 Mh
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OverviewDesigning & Implementing
Brand Strategies
Preview BrandArchitecture
Brand HierarchyDesigning a
Branding Strategy
Using Cause Marketingto
Build Brand Equity
The Brand-ProductMatrix
Breadth of aBranding Strategy
Depth of aBranding Strategy
Building Equityat Different
Hierarchy Levels
Corporate ImageDimensions
No. of Levels ofthe Brand Hierarchy
Desired Awareness &Image at Each
Hierarchy Levels
CombiningBrand Elements
from Different Levels
Linking BrandElements
to Multiple Products
Developing aBrand Architecture
Adjustments to theMarketing Program
Advantages ofCause Marketing
DesigningCause Marketing
Programs
Green Marketing
8/6/2019 Blackboard Lecture 10 - Chapters 11 and 12 - Sem 1 2010 Mh
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Branding Strategy
Branding strategy is critical because it isthe means by which the firm can helpconsumers understand its products and
services and organize them in their minds.Two important strategic tools: The brand-product matrix and the brand hierarchy
help to characterize and formulatebranding strategies by defining variousrelationships among brands and products.
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Branding Strategy orBrand
Architecture
The branding strategy for a firm reflectsthe number and nature of common ordistinctive brand elements applied to thedifferent products sold by the firm.
Which brand elements can be applied towhich products and the nature of new andexisting brand elements to be applied to newproducts
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The Role of Brand
Architecture
Clarify: brand awareness
Improve consumer understanding andcommunicate similarity and differencesbetween individual products
Motivate: brand image
Maximize transfer of equity to/from the brandto individual products to improve trial andrepeat purchase
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Brand Architecture: Brand-Product
Matrix
Must define:B
rand-Product relationships (rows)Line and category extensions
Product-Brand relationships (columns)Brand portfolio
1 2 3 4
A
B
C
Products
Brands
Brand linesB PR O
A RN TD F
OLI
O
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Brand Product MatrixDental health (= Product category)
Product lines
Electrictoothbrush
Manualtoothbrush
..
..
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Important Definitions
Brand LineConsists of all products in the same brand. Includesoriginal and extension
Product line
A group of products within a product category thatare closely related
Product mix (product assortment)The set of all product lines and items that a particular
seller makes available to buyers (regardless of brand)Brand mix (brand assortment)The set of all brand lines that a particular seller makesavailable to buyers
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Important Definitions (Example)
Brand Line (Oral B)
Consists of all products in the same brand.Includes original and extension(s)
Product category (Dental health)A group of products within a productcategory that are closely related
Product line(Floss, Toothpaste, Toothbrush)
A group of products within a productcategory that are closely related
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Product mix (product assortment)The set of all product lines and items that a particularseller makes available to buyers
Floss (Floss picks, Essential floss, Satin floss)
Toothpaste (Sensitive)Toothbrush (Advantage 123, Advantage BreathRefresh, Advantage Glide Gum Care)
Brand mix (brand assortment)The set of all brand lines that a particular seller makesavailable to buyers
All P&G brands such as OralB, Crest, Covergirl, Tide,Gillette, Head and Shoulders, Pampers, Vicks, etc.
Important Definitions (Example)
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Brand Architecture: Brand-Product
Matrix
Must define:B
rand-Product relationships (rows)Line and category extensions
Product-Brand relationships (columns)Brand portfolio
1 2 3 4
A
B
C
Products
Brands
Brand linesB PR O
A RN TD F
OLI
O
Breadth of a Branding
Strategy
Depth of a
Branding
Strategy
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Breadth of a Branding Strategy
A) Breadth of product mix how manyproduct lines should be offered?
Aggregate market factors
Market sizeMarket growthStage in product life cycleSales cyclicitySeasonalityProfits
Category and line
attractiveness:Criteria to determine attractivenessof a product category and howmany lines should be offeredin that category
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Breadth of a Branding Strategy
A) Breadth of product mix how manyproduct lines should be offered?
Category factorsThreat of new entrantsBargaining power of buyers/ suppliersCurrent category rivalryPressures from substitutes
Category capacity Category and lineattractiveness:Criteria to determine attractivenessof a product category and howmany lines should be offeredin that category
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Breadth of a Branding Strategy
A) Breadth of product mix how manyproduct lines should be offered?
Environmental factorsTechnological
PoliticalEconomicRegulatorySocial
Category and lineattractiveness:Criteria to determine attractiveness
of a product category and howmany lines should be offeredin that category
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Breadth of a Branding Strategy
B) Depth of product mix how manyvariants to offer in each product
line?
Examining the percentage of sales and profitscontributed by each item in the product line
Deciding to increase the length of the product lineby adding new variants or items typically expandsmarket coverage and therefore market share but also
increases costs Products within product line:Toothpaste: Sensitive, now alsochildren, seniors, gum care,whitening? Is there a need?
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Depth of a Branding StrategyThe number and nature of differentbrands marketed in the product classsold by a firm
Referred to as brand portfolioThe reason is to pursue different marketsegments, different channels ofdistribution, or different geographic
boundariesMaximize marketcoverageand minimize brand overlap
Brand portfolio:How many brands makesense in one productcategory?
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Upscale
Traditional
Holiday Inn Worldwide
Budget
Business-oriented
Family-oriented
Brand portfolio:Different brands
in one productcategory
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Reasons for introducing multiple
brands in a categoryTo increase shelf presence and retailerdependence in the store
To attract consumers seeking variety whomay otherwise switch to another brand
To increase internal competition with the firm
To yield economies of scale in advertising,
sales, merchandising, and physical distribution
Brand portfolio:Different brandsin one product
category
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Designing aB
rand PortfolioBasic principles:
Maximize market coverage so that no
potential customers are being ignored
Minimize brand overlap so that brands arentcompeting among themselves to gain the
same customers approval
Brand portfolio:Different brandsin one productcategory
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Brand Roles in the Portfolio
Flankers (Fighter)
Create a strong POP with competitorsbrands so that the flagship (more
profitable/important) brands can retain theirdesired positioning
Luvs diaper brand to serve as a price fighteragainst private labels and store brands to
protect the premium-positioned Pampersbrand
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Brand Roles in the Portfolio
Flankers (Fighter)
Australian example
Jetstar serves as a fighter brand for Qantasversus Virgin Blue
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Brand Roles in the Portfolio
(Cont)Cash cows
Kept around despite dwindling sales because
still manage to hold on to a sufficient numberof customers and maintain their profitabilitywithout marketing support
Discontinue Gillette Trac II may not
necessarily result incustomers switching toanotherGillette Brand
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Brand Roles in the Portfolio
(Cont)Cash cows
Australian Examples
Is Kelloggs Corn Flakes a Cash Cow?Slow growth category
Rarely, if ever, advertised
Large market share and profitable
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Brand Roles in the Portfolio (Cont)
Low-end entry-levelA low-priced brand in the brand portfolio to attractcustomers to the brand franchise
A traffic builder
Retailers may able to trade-up customers to a higher-priced brand
BMW introduced 1-series (start from US$23,800) whichsame production line as 3-series on 2004, which hopescustomer will trade-up to higher-priced models when they
traded their cars in
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Brand Roles in the Portfolio
(Cont)High-end prestige brands
A traffic builder by adding prestige and
credibility to the entire brand portfolio andrelatively high-priced brand in the brandfamily
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OverviewDesigning & Implementing
Brand Strategies
Preview BrandArchitecture
Brand HierarchyDesigning a
Branding Strategy
Using Cause Marketingto
Build Brand Equity
The Brand-ProductMatrix
Breadth of aBranding Strategy
Depth of aBranding Strategy
Building Equityat Different
Hierarchy Levels
Corporate ImageDimensions
No. of Levels ofthe Brand Hierarchy
Desired Awareness &Image at Each
Hierarchy Levels
CombiningBrand Elements
from Different Levels
Linking BrandElementsto Multiple Products
Developing aBrand Architecture
Adjustments to theMarketing Program
Advantages ofCause Marketing
DesigningCause Marketing
Programs
Green Marketing
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Brand Hierarchy
A means of summarizing the brandingstrategy by displaying the number and
nature of common and distinctive brandelements across the firms products,revealing the explicit ordering of brandelements
A useful means of graphicallyportraying a firms branding strategy
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Brand Hierarchy Tree
ToyotaCorporation
Toyota(Trucks)
Toyota(SUV/vans)
LexusToyotaFinancial
Services
Toyota(Cars)
Corolla PriusAvalon Celica Yaris MatrixMR2
SpyderCamry
CES
LE
SELE
XLE
PlatinumEdition
XLXLS
SESLE Aurion
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Brand Hierarchy Levels
Corporate Brand
Family Brand
Individual Brand
Individual Item or Model (Modifier)
A brand hierarchy can involve multiplelevels:
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Brand Hierarchy Levels (cont.)
Corporate or company brandAlmost always present for legal reasons In some cases virtually the only brand used, e.gXeroxCan be used with modifier, e.g. Siemenstransportation systems, GE finance
Sometimes hidden, e.g. De Walt power tools(manufactured by Black and Decker)
Family BrandBrand used in more than one product category butnot necessarily the company brand. An efficientmeans to link common associations to multiple butdistinct products, e.g. E.g. Uncle Tobys
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Individual Brands
Restricted to essentially one productcategory
There may be multiple product typesoffered on the basis of different models,package sizes, flavors, etc.
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Modifiers
Signals refinements or differences in thebrand related to factors such as qualitylevels, attributes, functions, etc.
Plays an important organizing role incommunicating how different productswithin a category that share the same
brand name are
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Corporate Brand Equity
Occurs when relevant constituents holdstrong, favorable, and uniqueassociations about the corporate brandin memory
Encompasses a much wider range ofassociations than a product brand
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Corporate Image Dimensions -
AssociationsCorporate product attributes, benefits or attitudes
Quality
Innovativeness
People and relationshipsCustomer orientation
Values and programs
Concern with the environment
Social responsibilityCorporate credibility
Expertise
Trustworthiness
Likability
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OverviewDesigning & Implementing
Brand Strategies
Preview BrandArchitecture Brand Hierarchy Designing aBranding Strategy
Using Cause Marketing
toBuild Brand Equity
The Brand-ProductMatrix
Breadth of aBranding Strategy
Depth of aBranding Strategy
Building Equityat Different
Hierarchy Levels
Corporate ImageDimensions
No. of Levels ofthe Brand Hierarchy
Desired Awareness &
Image at EachHierarchy Levels
CombiningBrand Elements
from Different Levels
Linking Brand
Elementsto Multiple Products
Developing aBrand Architecture
Adjustments to theMarketing Program
Advantages ofCause Marketing
DesigningCause MarketingPrograms
Green Marketing
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Brand Hierarchy Decisions
The number of levels of the hierarchy touse in general
How brand elements from differentlevels of the hierarchy are combined, ifat all, for any one particular product
How many one brand element is linked,
if at all, to multiple productsDesired brand awareness and imageat each level
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Number of Hierarchy Levels
Principle of simplicityEmploy as few levels as possible
Principle of clarityLogic and relationship of all brand elementsemployed must be obvious and transparent
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Levels of Awareness and
Associations
Principle of relevanceCreate global associations that are relevantacross as many individual items as possible
Principle of differentiationDifferentiate individual items and brands
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Linking Brands at DifferentLevels
Principle of prominence
The relative prominence of brand elementsaffects perceptions of product distance andthe type of image created for new products
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Linking Brands Across Products
Principle of commonality
The more common elements shared byproducts, the stronger the linkages
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Brand Architecture
GuidelinesAdopt a strong customer focus
Avoid over-branding
Establish rules and conventions and bedisciplined
Create broad, robust brand platforms
Selectively employ sub-brands as means of
complementing and strengthening brandsSelectively extend brands to establish newbrand equity and enhance existing brandequity
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Corporate Brand CampaignDifferent objectives are possible,
contd:
Build awareness of the company and
the nature of its businessCreate favorable attitudes andperceptions of company credibility
Link beliefs that can be leveraged byproduct-specific marketing
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Corporate Brand CampaignDifferent objectives are possible:
Make a favorable impression on thefinancial community
Motivate present employees andattract better recruits
Influence public opinion on issues
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OverviewDesigning & Implementing
Brand Strategies
Preview BrandArchitecture
Brand HierarchyDesigning a
Branding Strategy
Using Cause Marketingto
Build Brand Equity
The Brand-ProductMatrix
Breadth of aBranding Strategy
Depth of aBranding Strategy
Building Equityat Different
Hierarchy Levels
Corporate ImageDimensions
No. of Levels ofthe Brand Hierarchy
Desired Awareness &Image at Each
Hierarchy Levels
CombiningBrand Elements
from Different Levels
Linking BrandElementsto Multiple Products
Developing aBrand Architecture
Adjustments to theMarketing Program
Advantages ofCause Marketing
DesigningCause MarketingPrograms
Green Marketing
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Cause Marketing
MacDonalds example-Ronald Macdonald Househttp://www.rmhc.org.au/
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Using Cause Marketing to Build
Brand Equity
The process of formulating andimplementing marketing activities thatare characterized by an offer from thefirm to contribute a specified amount to adesignated cause when customers
engage in revenue-providing exchangesthat satisfy organizational and individualobjectives
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Advantages of Cause Marketing
Building brand awareness
Enhancing brand image
Establishing brand credibilityEvoking brand feelings
Creating a sense of brand community
Eliciting brand engagement
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Green Marketing
A special case of cause marketing thatis particularly concerned with theenvironment
Explosion ofenvironmentally friendlyproducts and marketingprograms
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A little wake up for you before we talk
about serious things...Watch out on the road!
http://www.youtube.com/watch?v=Hb2Yb9ciJWA
SuperBowl award winning ad.
http://www.youtube.com/watch?v=hpjaOUjUPUc
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Crisis Marketing Guidelines
The two keys to effectively managing a crisis are thatthe firms response should be swift and that it shouldbe sincere.
Communicate early and often.Show compassion, and be sure the company isdoing everything possible to improve the situation.
Be honest and open.
Be consistent in the message.
Monitor public opinion using new technology (chatrooms, message boards, discussion groups, surveys).
Follow up with public opinion surveys and employeequestionnaires to learn from mistakes
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Tylenol Incident7 murders- October,1982
Tampered product24 hour toll free line
Immediate recall- 31
million bottles!Stopped advertising
Madeannouncements in
media
Coupons- 60 million-$2.50 free offer
New ads- aiming tore-building trust
Tamper proofpackaging
Sales back to normalby 1983
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Tylenol ad -1984
http://www.youtube.com/watch?v=EQrAD_InXHk
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Tylenol ad-1986
http://www.youtube.com/watch?v=i6EBNti7Vo0&NR=1
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Chapter 12
Introducing and Naming New
Products and Brand Extensions
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Overview
Introducing & NamingNew Products &
Brand Extensions
New Products &Brand Extensions
Advantages of Extension
Provide FeedbackBenefits to theParent Brand
Disadvantages ofBrand Extensions
Understanding HowConsumers Evaluate
Brand Extensions
EvaluatingBrand Extension
Opportunities
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Leverage the Brand
Firms are seeking to build power ormega brands that establish a broad
market footprint, appealing to multiplecustomer segments with multipleproducts all underneath the brand
umbrella.
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DefinitionsBrand extension
Use an established brand name to introduce anew product
Sub-brand
New brand combined with an existing brand
Parent brand
Existing brand that gives birth to a brand extension
Family brandParent brand already associated with multipleproducts through brand extensions
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Brand extensionLine extensionParent brand is used to brand a new product thattargets a new market segment with a productcategory currently served by the parent brand
Involves different flavour or ingredient variety,different form, size or application
Category extension
Parent brand is used to enter different productcategory from that currently served by the parentbrand
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McDonald's2000s, McDonalds faced a challenging environment
Market saturation
Global health concerns
Market Penetration Strategy
Negative publicity of Fast food poor health & obesityOffer better choices and healthier options
Launched Bag a McMeal website for customers to calculatethe nutritional content of McDonalds menu
New marketing campaign for global markets Im livin it
Result
2004 recorded incremental visitor of 2.3m customer per day &continuing grow
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Market Development Strategy
Closed slow demand restaurants in UK and Japan
Pursued overseas expansion by opening 1200 newrestaurantsRecorded 30,000 restaurants in 119 countries in 2003-2004, 65% revenues came from outside USAFastest growing marketing in mid-2000 was China.
Target to open 1,000 locations by 2008 BeijingOlympics2006, strengthen global present by launched a globalpromotion reality packaging (global casting call)and tied to the Im Lovin it campaign
Develop a new market and target 20-30s female tothe brand with premium salads served withNewmanss Own dressing and other light menuoptions
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Product Development Strategy
2001, extended its brand and opened 1st
McCafe, agourmet coffee shop and McTreat an ice cream anddessert shop
Start to offer specialized menu items in differentcountries ie, Teriyaki Burger in Japan, Vegetable
McNuggets in EnglishRemoved Super Size options and added healthieroptions, such as fresh salads and Happy Meals adultversions and included salad and bottled water andencourage exercise and healthier Happy Meals for
child version
McDonald
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Product Development Strategy
Result, recorded No.1 salad brand in UKEmphasized McDonalds recasting of RonaldMcDonald as its Chief Happiness Officer asa sports enthusiast
Launched premium roast coffee & McGriddle
breakfast sandwich
McDonald
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McDonaldDiversification StrategyDiversifies its product offering according toregional tastes when it enters new markets.
India introduced Maharaja Mac made frommutton (no beef in India) and spicy sauces ofMcMasala & Mclmli
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Brand Extensions
When a firm uses an established brand name to introduce anew product
Brand extension=existing brand + new product
Brand extension classificationLine extension
Using a sub-brand to target a new market segment within thesame product category
Sub-brand=new brand + existing brand
Involves different flavour or ingredient variety, different form,
size or application
Category extension
Using the parent brand in a different product category
Example: Iams pet food & pet insurance
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General Strategies for Establishing a
CategoryTaubers FranchiseExtensionIntroduce the same product in a different form. Example: OceanSpray Cranberry Juice Cocktail, Jello-O
Introduce products that contain the brands distinctive taste,ingredient, or component.
Example: Haagen-Dazs cream liqueur
Introduce companion products for the brand. Example: DuracellDurabeam flashlights
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General Strategies for Establishing aCategoryTaubers FranchiseExtensionIntroduce products relevant to the customerfranchise of the brand. Example: Visa travelerschecksIntroduce products that capitalize on the firmsperceived expertise. Example: Canon photocopymachine
Introduce products that reflect the brandsdistinctive benefit, attribute, or feature. Example:
Dettol
Introduce products that capitalize on the distinctiveimage or prestige of the brand. Example: Porschesunglasses
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Advantages of Extensions
Facilitate new product acceptanceImprove brand image
Reduce risk perceived by customers
Increase the probability of gaining distribution and trial
Increase efficiency of promotional expenditures
Reduce costs of introductory and follow-up marketingprograms
Avoid cost of developing a new brand
Allow for packaging and labeling efficiencies
Permit consumer variety seeking
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Advantages of Extensions (Cont.)
Provide feedback benefits to parent
brand
Clarify brand meaning
Enhance the parent brand imageParent brand = existing brand gives a birth to a brandextension
Bring new customers into brand franchise and
increase market coverage
Revitalize the brand
Permit subsequent extensions
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Disadvantages Extensions can
confuse or frustrate consumersencounter retailer resistance
fail and hurt parent brand image
succeed but cannibalize sales of parent brand
succeed but diminish identification with anyone category
succeed but hurt the image of the parentbrand
dilute brand meaning
cause the company to forgo the chance todevelop a new brand
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Managerial assumptionsConsumers have some awareness of and positive
associations about the brand in memoryAt least some of these positive associations areevoked by the brand extension
Negative associations are not transferred from the
parent brandNegative associations are not created by the brandextension
Understanding How Customers
Evaluate Brand Extensions
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Creating Extension Equity
1.Salience of parent brand associations inthe minds of consumers in the extension
context2.Favourability of any inferredassociations in the extension context
3.
Uniqueness of any inferred associationsin the extension context
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Contributing to Parent Brand
EquityHow compelling the evidence is concerning thecorresponding attribute or benefit association in theextension context
Howrelevant or diagnostic the extension evidence is
concerning the attribute or benefit for the parent brandHow consistent the extension evidence is with thecorresponding parent brand associations
Howstrong existing attribute or benefit associations are
held in consumer memory for the parent brand
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Successful Extensions mustcreate points-of-parity and points-of-difference in extension category
recognize competitive reactions
enhance points-of-parity and points-of-difference of parent brand
maximize the advantages andminimize the disadvantages of brandextensions
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Successful Extensions
Ivory shampoo andconditioner
Vaseline Intensive careskin lotion
Visa Travelers cheques
Colgate toothbrushes
Nutri- Grain snack bars
Bic disposable lighters
Honda lawn mowers
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Unsuccessful Category
ExtensionsCampbells tomato sauceLifeSavers chewing gumHarley Davidson wine coolersBic perfumesKleenex nappies/diapersLevis Tailored Classics suitsDominos fruit-flavored bubble
gum
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Evaluating Brand Extension
OpportunitiesDefine actual and desired consumerknowledge about the brand
Identify possible extension candidates
Evaluate the potential of the extensioncandidate
The likelihood that the extension will realize theadvantages and avoid the disadvantages of brandextensions. As with any new product, analysis ofconsumer, corporate, and competitive factors can beuseful.
8/6/2019 Blackboard Lecture 10 - Chapters 11 and 12 - Sem 1 2010 Mh
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8/6/2019 Blackboard Lecture 10 - Chapters 11 and 12 - Sem 1 2010 Mh
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When are brand extensions
appropriate?If they see some basis of fit or similaritybetween the proposed extension and parentbrand
The major mistake in evaluating extensionopportunities is failing to take all of consumersbrand knowledge structures into account.
Often, marketers mistakenly focus on only one
brand association and ignore other potentiallyimportant brand associations in the process.
8/6/2019 Blackboard Lecture 10 - Chapters 11 and 12 - Sem 1 2010 Mh
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