Part One: Impact of Brand Extensions on Brand Equity
In today’s competitive marketplace it is vital to have a strong brand name. When a company develops a strong brand name of a certain product category they start thinking about the brand extensions, which will help the firm to capture new and unexplored market segments. According to Kotler (2003) a brand extension occurs when a company uses its well-established core brand name to introduce new products in either similar or different product category. In other words the parent brand gives a birth to extension brand or sub-brand. According to Mitchell et al. (2013) there are two main categories of brand extension strategy. The first one is vertical brand extension strategy which is used to introduce a new product or service with different quality or price, but in the same category as the core brand. The second one is horizontal brand extension strategy which is used to introduce a new product or service in either similar to core brand or completely different product category.
Consumers tend to be more receptive to a newly extended pro...
Thus new products/line extensions will be based on Allround brand, each one with a unique target market, delivering different value proposition to the respective customer.
Sarkar, A. N., & Singh, J. (2005). New paradigm in evolving brand management strategy. Journal of Management Research, 5(2), 80-90. Retrieved from http://search.proquest.com/docview/237238894?accountid=28644
Brand extension is a useful way to introduce promising products that will revive the brand name in hopes of retaining its loyal customers. Take a company of the magnitude as Molson Coors Brewing Company, established in 1873, whereby producing its famously known beer (Coors, 2017). There were several flavor offerings for the bottled sparkling water such as original, lemon-lime, and cherry (Time, 2009).
“Your branding strategy defines what you stand for, a promise you make, and the personality you convey” (“Brand Strategy”, 2015, para. 2). As well, it assists in the presentation of your product or service to stand out from the competition. According to Berkowitz (2011), there are five types of branding strategies: multiproduct, multibrand, reseller, co-branding, and mixed. The multiproduct branding strategy uses one name for all the various products within the company. For example, the hospital I work for includes its name in the off campus imaging centers, surgical outpatient centers, and free-standing emergency departments. As a result, customers are more inclined to associate the name with the good reputation, high standard of quality of care, and patient satisfaction of the brand. The multibrand strategy uses different brand names for each of its products. For example, Johnson & Johnson has various product lines which have their own brand name such as consumer health products, medical devices, and pharmaceutical products (http://www.jnj.com/). The purpose of this type of strategy is to attract and influence diverse market sections (Berkowitz, 2011). The reseller strategy is used when; one company purchases products from other companies and sells the products under their company name because they do not have the ability to manufacture the products themselves. Last, with
Marketing and Brand Management Strategy – Showing the passion and pursuit of innovation to create strong global awareness of the brand.
In order to create a successful brand extension, we have to heuristically decide how to raise the sale of our business and put the right strategies in the right time. As an illustration, Marks & Spencer, the retail sale of clothing, has been auspiciously broadened its new goodies and services such as the retail sale of food, furniture, and financial service. After extended, Marks & Spencer found out that the Financial services now account for 18 percent of the group's total operating profit. Withal, plenty people still believe that brand extension leads a business to a failure. It is not about the brand extension but it is about how we understand and manage
Hence the corporation needs to evaluate and possibly adjust the corporate branding strategy on a regular basis. Obviously, a corporate brand should stay relevant, differentiated and consistent throughout time, so it is a crucial balance. The basic parts of the corporate branding strategy like vision, identity, personality and values are not to be changed often as they are the basic components. The changes are rather small and involve the thousands of daily actions and interpersonal behaviors, which the corporations employ as part of the brand marketing efforts. But make sure complacency does not take root in the organization and affects the goal setting. The strong brands are the ones which are driven forward by owners whom never get tired
Expansion in product line: diversifying its product line will open a new set of opportunities while at the same time it can differentiate itself from the competitors.
We propose a branding strategy which takes into account the brands capabilities and competencies, strategies of competition brands and the outlook of consumers experience in their respective societies. As an international brand there is the challenge of staying connected with local customers. We will overcome this by adapting marketing strategy to local needs using a variance of standardized marketing mix and an adapted marketing mix.
Brand Extensions: A company may use its existing brand name to launch new products in other categories. Brand extension refers to the expansion of the brand itself into new territories or markets. For instance, if a soft drink manufacturer unveils a line of juices or bottled water products under its company name, this would constitute an example of brand extension. Gap stores now feature its name on soap, lotion, shampoo, conditioner, shower gel, bath salts, and perfume spray.
Branding aims to establish a significant and differentiated presence in the market that attracts and retains loyal customers. Branding is important for customers because the customer knows that the company they are buying from if there were two phones at the same price and same product but one was apple and the other were a unknown company, people would buy the apple because it is apple and they have shown their products to be of high quality. Also people would buy from Tesco because their branding is that there groceries are cheap and of high quality. Apple have built their brand up and their position. When people buy an apple product, they know the product will be of a high quality, that is the message that apple are trying to convey. One of the ways they have done this is that they train staff to present a specific image, so when you go to an apple store you will see that the staff carry with them IPads and other apple devices. Tesco have built their brand and positon to have the finest own-labeled products. They have done this buy making more Tesco brands. Brand extension is a common method of launching a new product by using an existing brand name on a new product in a different category. Apple use brand extensions because apple have launched many products under the same brand ‘apple’. Tesco use
The ability of the management in positioning and establishing the product is a success in any company that operates for marketing and profit acquisition. Furthermore, the ability of the company and its management to complete and maintain a competitive edge among its competitor throughout the product differentiation is another basis to say that is successful. Also, innovation and the constant development on the product lines and the growing number of customers also define the corporate standing of a company. Effective branding strategy and strong brand name are an important part of the profitable business. But, all the strategies and all marketing theories can be worth nothing without the compliance of the desires of consumers.
Brand extension means existing brand with new products and coke had not selected this strategy yet.
Differentiation through marketing strategies, this is a form of innovation driven by the need to create a superior brand (Sadler, 2003).
To begin with the benefits, product line extensions meet the different segments’ needs. Products in a certain line sometimes may not attract wide variety of different segments. In these situations, the company could decide to introduce a new product into the market to increase