Brand leveraging

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BRAND LEVERAGING
Subject:
BRAND BUILDING
Faculty Name:
Vishal Desai
Batch
(BMM class of 2015)
Year (TY)
India’s premier M-school
Deviprasad Goenka Management College of Media Studies (dgmcms.org.in)

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Brand Leveraging
 A brand leveraging strategy uses the power of an existing brand
to expand the product class or to support a company’s entry into a
new product category
 Brand leveraging is an important form of new product introduction
because it provides consumers with a sense of familiarity by
carrying positive brand characteristics and attitudes into a new
product category.
 Instant recognition of the brand is established, and consumers
with a favorable brand opinion are likely to try a new product they
perceive to have similar quality level and attributes as their
original favorite

Co-branding
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Leveraging Strategy
Leveraging
the brand
Line
Extension
Stretching the
brand
vertically
Stretching
Up
Stretching
Down
Brand
Extension
Ad-hoc brand
extension
Creating a
range brand

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Line Extension Strategies
0.5
liter 1 liter 2 ltrs 5 ltrs 10 ltrs
Product
Size
(Bisleri)
Ingredient
(Pepsodent)
Pink Black Purple Gold
Flavors
(Tropicana)
Orange Apple
Mixed
Fruit Grapes Guava Cranberry
Colour
(Sunsilk)
Form
(Vim)
Germi check Whitening 2 in 1
Pro
Sensitive
Bar Liquid Powder

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Line Extension
 When a variant is added to an existing brand it is called Line
Extension.
 The variant could be in terms of flavor, package size, colour,
form,nutritional content or special additives which targets a sub-set
of consumers
 The objective is to satisfy different consumer needs or market
segments by providing more variety.
Eg:-Nestle Maggi is available in different flavors like masala,
chicken, tomato,curry and cuppa mania
Eg: Pril Bar’s Mango-vinegar variant in Uttar Pradesh
Nestle has also launched Atta noodles and Maggi Cuppa
Mania

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Why Line Extension
 To fulfill customer’s need for variety
 To cater to sub-segments with in a larger segment
 To capture customers with different paying capacity
 Increase Capacity Utilization
 Increase Profitability
 To capture more shelf space
 To fight competition

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Stretching the brand vertically
• S Class
• E Class
• C Class
• A Class
• 7 Series
• 5 Series
• 3 Series
• 1 Series
BMW
Mercedez
Benz

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Advantages of stretching the brand
vertically
 Offers a premium version of existing brand to quality conscious consumers.
Eg: Nano Twist with loaded features, Alto K 10
Eg: Credit Card - Silver, Gold, Titanium, Signature
Eg: Cadbury’s Dairy Milk Silk
 Helps target value conscious consumers by trading down.
Eg: Stripped down version of Mr. Muscle and Evian water
Eg: Stripped down version of Original DVD without bonus content (show pack)
 To counter competition during maturity stage of the brand when price is the
only deciding factor in consumer’s purchase decision
 To expand market opportunities in other countries where per capita income is low

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Disadvantages of stretching the
brand vertically
• Damage to the core brand as consumers may feel that
premium charged to them was not justified
• Increase in volume may not justify the reduction in price
• Reduction in margins of trade channel partners

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Brand Extension
 When an existing brand name is used to introduce a new
product in a different product category.
Eg: Ponds => Talc, Cold Cream, Facewash, Moisturising lotion,etc
Eg: Horlicks=> Nutribar, Foodles
Eg: Catch => Table Salt, Black Salt, Pepper,etc
Eg: Kingfisher => Beer, Airlines, Mineral water, Training Academy
Eg: Dabur=> Amla Hair Oil, Chawyanprash,Pudin Hara
Note: Ponds Toothpaste was a failure

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Types of Brand Extensions
 Image related extension
Eg: Britannia has an image of confectionary brand or food products
brand and hence has launched cakes, biscuits and breads. OR Amul
is known for milk products and hence has launched
butter,ghee,cheese,milk,etc
 Un related Extension: Extension to unrelated product category
Eg: Wills Cigarettes to Wills lifestyle apparels
 Complementary Product Extension
Eg: Colgate Tooth paste and Colgate tooth brush
Eg: Eveready Battery and Eveready Torches

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 Expertise related extension:
Eg: Maruti venturing into 2 wheelers
Hero venturing into 4 wheelers
Inox venturing into multiplexes
 Distinct feature related extension
Eg: Himani Navratna Hair Oil & Navratna Cool Talc
Class Exercise (Group) – Name a brand
that has been extended and the type of
extension

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Brand Extension
 Range Brands
A range brand is one that creates an identity that works across
product classes. A range brand is some times called a mega-brand.
Eg: Colgate , Gillette, Adidas /Nike/Reebok

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Brand Extension
 Ad-Hoc Brand Extension
This kind of extension is used as a strategy for response to a
short term event. It is not planned to last. Ad Hoc brands are
generally built on internal goal based strategy. They are based
on either monetary value or sentimental value that the
company gains by introducing a new brand extension.
Eg: Pepsi launched Pepsi Blue during Cricket World Cup
2003,Pepsi Gold during World Cup 2007, and Pepsi Atom
during IPL 2013

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Limitation of brand extension
 At times the brand cannot be stretched to unrelated categories
Eg: Amul could not be stretched to Edible Oil
Eg: Britannia cannot be stretched to Shoes

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Disadvantages of brand extension
 Failure of brand to add value
Eg: Vanilla Coke failed in 2004
 Problem of fit
Eg: Ponds tooth paste was a failure
 Failure to carry association of parent brand
Eg: Lux Shampoo was a failure as Lux soap was strongly positioned as a beauty soap
where as Lux Shampoo did not carry that association
 Creation of Undesirable associations
Eg: Reliance mobile phones when launched had lot of hidden charges and
negative association was created

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Disadvantages of brand extension
 Effect of a brand crisis
Eg: Cadbury’s worm infestation incident had negative effect on all
Cadbury’s products
 Failure of new brand
If the new brand which is launched encounters adverse association
with the consumer the original parent brand’s image may also be
diluted.

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Co-Branding
 Co-Branding also called-Brand Bundling or Brand Alliance; is
when two or more existing brands are combined into a joint
product or are marketed together in some way.
 It can be termed as marketing partnership between two brands.
 The objective is to combine the strength of two brands , in
order to increase the premium consumers are willing to pay.
 It makes the co-branded product more resistant to copying.
 It combines the different perceived properties associated with
these brands to make a single product

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Types of Co-branding
 Ingredient branding:
- A branded ingredient or component, that has its own brand
identity, is used to produce another renowned brand/product.
- This ingredient or constituent brand is sub-ordinate to the
primary brand.
- Usually the ingredient brand is the biggest supplier to the
primary brand
- The ingredient brand should be unique and should be a major
brand or should be protected by a patent

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Primary Brand Ingredient Brand
PCs Intel Inside
Stereos Dolby
Sunsilk Keratin Micro Technology
Orient Fans PSPO
Maruti Suzuki K Series Engine
Bajaj Pulsar DTSI
Hyundai CRDi
Good Night Active +
Pantene Pro-V
Saffola LoSorb Technology
Kent Water Purifier Mineral RO Technology
Fiama Di Wills Derma Revitalizers

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Advantages of Ingredient Branding
 Branded ingredients are often seen as a signal of quality.
 There is uniformity in quality of ingredient brand which helps
maintain consistency in quality of primary brand.
 Ingredient brands can become industry standards and
consumers would not buy a product that does not contain the
ingredient brand.

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Composite Branding
 The bundling of two brands to provide an enhanced customer benefit
or reduced cost.
 Composite co-branding refers to use of two or more renowned brand
names in a way that can collectively offer a distinct product/service
that could not be possible individually
Egs:
Reliance CDMAS with LG handset
Nokia with Vodafone
Airtel with iPhone
Coca-Cola with McDonalds
Audi Cars with Bang & Olufsen Sound System
Channel V Racing Pack & AXN Action Pack

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Advantages of Co-branding
 Cost effective way of marketing a product
 Boost to the brand image of both the companies while
increasing sales volumes and profits
 If one of the brand is a service brand and the other is a tangible
product brand , the service brand gets a tangible extension.
 Increased width of distribution due to distribution strength of
both the companies
 Advantageous for a new brand to tie-up with an existing brand
as it helps the new brand to understand the market dynamics
with the help of the existing brand

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Disadvantages of co-branding
 If the two brands involved do not show consistent brand values,
identity and personality there are chances of dilution of brand
image
 Co-branding can fail when the two brands have entirely
different markets and are entirely different
 If the vision and mission of the two brands involved are
different then composite branding may fail
 If the customers encounter any adverse experience the brand
image of both the brands may suffer

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Advantages of brand leveraging
 It increase advertising efficiencies
 It increases life cycle of a brand
 Minimises introductory expenses
 Minimises marketing & distribution expenses
 Encourages trial purchase
 Satisfies variety seeking consumers

Line Extension
(Variants)
Sunsilk
Silk & Shine
Smooth & Soft
Long & Black
Brand Extension
Sunsilk Conditioner
Lifebuoy
(Soap to Hand wash)
Fastrack
(Watches to Sunglasses)
Multi Brands
HUL- Shampoo Brands
Sunsilk
Dove
Clinic Plus
All Clear
Diversification
HUL- FMCG to
Water Purifiers
(Pure-it )
Glaxo Smithkline
launching Foodles
Existing
New
Existing New
Brand
Product

Line Extension
(Variants)
Economic Times
ET (English)
Economic Times
ET (Gujarati)
Brand Extension
ET NOW
Multi Brands
TOI
Maharashtra Times
Navbharat Times
Economic Times
Diversification
Zoom
Radio Mirchi
Indiatimes.com
Mirchi Movies
Existing
New
Existing New
Brand
Product

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Multi Brand Strategy
 A company launches multiple brands for the same product
category
 Each brand caters to a distinct market segment
 Each brand has a distinct brand identity and personality

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Advantages of multi brand strategy
 A company can target the entire market with different brands
catering to each separate market segment
 A company can enjoy economies of scale because key
ingredients / raw materials are the same for each product
 A consumer gets wide range of options to choose from
 A company is able to capture larger shelf space at retail end

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Disadvantages of multi brand
strategy
 All brands may not be successful thus leading to wastage of
marketing and advertising expenses.
 The company may spread it self very thin if it launches too
many brands with small market share for each brand
 If there is no difference between two brands, one may
cannibalize the other.

Brand leveraging

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