Brand Extensions in the Contemporary Arena

 | August 30,2011 03:04 pm IST

It is difficult for brands to survive as a solitary product in today’s dynamic marketing environment. Brand repositioning is definitely required at suitable intervals but apart from that there needs to be proliferation of a brand within a product category or among various product categories.

There are various reasons why companies should attempt at extending brands. First and foremost, by extending a brand, visibility of the brand gets enhanced. A larger cross section of the population not only becomes aware of the brand but there is every possibility that by extending, the number of brand users can also increase. By extending, the core promise of a brand can be extended to new users.

 

Any sort of an altered avatar of a brand can witness the increment in the number of new users.
The extensibility of a brand depends upon the connection it enjoys in the minds of customers. Certain brands are perceived by customers as too product oriented. There is very little about the brand that is beyond the periphery of the product. In such a situation, it is a problem for companies to extend the brand. The more broad based a brand core essence is, the more wholesome is the set of mental associations related to the brand, greater is the possibility of success in the context of brand extensions.


Understanding Brand Extensions
The concept of brand extension deals with introducing a new product in a different product category bearing the same name as the parent brand. Let’s say Horlicks as a brand of beverage launches ready-to-eat foods bearing the Horlicks name, it is an example of brand extension. There are basically two types of brand extensions:
• Related brand extensions
• Unrelated brand extensions


Related brand extensions can further be classified into two sub-types viz. category related brand extensions and image related brand extensions (Exhibit-I). When a brand is extended to a related product category meaning a category that has similar purpose to serve, it is called category related brand extension. Lux has been known as a premium bathing soap. When it was launched as a body wash, it had a similar purpose to serve in a related product category. EverYuth orange peel off is known to impart glow to the face and is a product used by young ladies. When it was extended to face wash, the objective of the newly launched product was the same and that was to offer freshness and glow to the face even after exposure to sunlight. This was another instance of category related brand extension.


Exhibit-I
Types of Brand Extensions

Types of Brand extension used by companies for promotionWhen a brand is extended into a new product category with an identity similar to that of the original brand so that it is perceived similarly by the target segment, it is called image related brand extensions. Let’s take the case of Lifebuoy. When Lifebuoy was launched as a hand wash, it was an example of image related brand extension. The original brand was a bathing soap with germ fighting abilities. The newly launched product (hand wash) was perceived as a germ fighter similar to the original brand but then it was a different product altogether having different set of functional attributes.


When a brand is extended such that it is neither category related nor image related, it is called unrelated brand extension. Tata as a brand was primarily a manufacturer of steel. When the TATA brand name was extended to FMCG items like salt and tea, it was an example of unrelated brand extension. There was no similarity in product category or in image attributes.


When a brand is extended up into more premium market segments or down into more value-conscious segments to attract new groups of consumers, it is called vertical brand extensions. The basic tenet of vertical brand extensions is that the equity of the parent brand gets transferred in either direction in order to appeal to those consumers who would otherwise have not considered the parent brand.

 

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Comments


arun kumar on 12/23/11 at 12:02 pm

brand extension should be done keeping the value of existing brand otherwise it will hamper the brand image that is the essence of this article.what about those brands suffering with poor brand image or poor distribution image.how they can revive their lost image.whether they should go for brand extension or is there any example for it that brand has rejuvenated itself by extending brands to other products?