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New Products and Brand Extensions New Products and Brand Extensions
Three branding choices for new products Seven general strategies for establishing a category
– New brand 1. Introduce same product in a different form
2. Introduce products with brand’s distinctive ingredients,
– Existing brand taste or component
– Combination of new and existing brand 3. Introduce companion products for the brand
4. Introduce products relevant to the customer franchise of
the brand
Brand extension general categories 5. Introduce products capitalize on the firm’s perceived
– Line extensions expertise
– Category extensions 6. Introduce product that reflect the brand’s distinctive
benefits, attributes or features
7. Introduce products that capitalize on the distinctive
image, prestige of the brand
1
Advantages of Extensions Advantages of Extensions
Facilitate New Product Acceptance Provide Feedback Benefits to the Parent Brand
– Nine main reasons for product failure
– Clarify brand meaning
– Improve brand Image
– Enhance the parent brand image
– Reduce risk perceived by customers
– Bring new customers into the brand franchise and increase
– Increase the probability of gaining distribution and trial market coverage
– Increase efficiency of promotional expenditures – Revitalize the brand
– Reduce costs of introductory and follow-up marketing – Permit subsequent extensions
programs
– Avoid cost of developing a new brand
– Allow for packaging and labeling efficiencies
– Permit consumer variety-seeking
2
Understanding How Consumers Evaluating Brand Extension Opportunities
Evaluate Brand Extensions
Brand Extension and Brand Equity
– Creating extension equity
• How Salient
• How Favorable
• How Unique
– Contributing to parent brand equity
• How Compelling
• How Relevant
• How Consistent
• How Strong