The document discusses different strategies for brand extensions, including line extensions, category extensions, sub-branding, and co-branding. It provides examples of each strategy and highlights key considerations for successfully extending brands, such as evaluating the fit between the parent brand and extension, designing marketing campaigns, and assessing the impact on brand equity. Research findings indicate that the appropriateness of using a brand extension versus a new brand depends on factors like consumer knowledge and the perceived fit with the parent brand.

3. Managerial Questions When considering entering a new product category, two important questions: 1. Should the firm use a brand extension strategy or a new brand strategy? 2. If the firm chooses to use a brand extension strategy, under what conditions will extensions be successful in capturing sufficient market share?

4. Why Extensions? Managers use extension strategies under the assumption that brand associations (e.g., quality, reliability, status) and affect (attitudes) will transfer to the extension.

8. Line Extensions Price Quality Downward Stretch Upward Stretch Two - way stretch

17. Brand Knowledge 01/03/11 BRAND KNOWLEDGE Brand Awareness Brand Image Types of brand association Favorability of brand association Strength of brand association Uniqueness of brand association Brand Recognition Brand Recall Attribute Benefits Attitudes Functional Experiential Symbolic Non-product related Product related Price Packaging User Imagery Usage Imagery

19. Hypothetical Brand Extensions Nikon film Nestle beer Disney daycare centers Haagen-Dazs chocolate syrup Milo sports clothes Colgate chewing gum Fisher-Price baby shampoo Bacardi chocolates

20. Possible Extensions for the Lubriderm Brand Nivea Cream BRAND DEFINITIONS RELATED CATEGORIES moisturizer lotion medicinal purity body care pump bottle fragrance Soap - face cream - skin cream sunburn - after-shave - baby antiseptic - first-aid - hemorrhoid cream cotton - gauze - sterile pads emery boards - muscle toner - cotton swabs liquid hair net - mustard - glass cleaner perfume - room deodorizer - deodorant

21. Category Extension Strategies 1. Introduce the same product in a different form examples: Jello Pudding Pops, Starbucks coffee ice-cream 2. Introduce products containing the brand’s distinctive taste, etc. examples: Haagen-Dazs Cream liqueur, Philadelphia Cream Cheese salad dressing 3. Introduce companion products for the brand examples: Nikon Film, Duracell Durabeam flashlights, Colgate toothbrush 4. Introduce products relevant to customer franchise of the brand examples: Visa Traveler’s Checks, Gerber baby bottles

22. Category Extension Strategies 5. Introduce products capitalizing on the firm’s perceived expertise examples: Honda motorcycles, Canon photocopy machines, Canon Scanner 6. Introduce products that reflect the brand’s distinctive benefit, attribute or feature owned: examples: Nestle chocolates, Nestle chocolate milk Dove cream, Dove deodorant (Mild and Pure) 7. Introduce products capitalizing on image or prestige of the brand examples: Calvin Klein clothes, Porsche sunglasses

24. Consumer Evaluations of Brand Extensions Timex Watch Rolex Watch Timex Kitchen Timer Timex Calculator Rolex Bracelet Wallet

25. Consumer Evaluations of Brand Extensions Evaluation of Brand Extension Perceived fit of Brand Extension Product-level Similarity Perception Concept Consistency Perception Existing “ Brand X” product Brand Extension Products “ Brand X” concept Brand Extension Products comparison comparison

31. Managerial Question ... Under what conditions will extensions be successful?

33. Examples of Category Extensions “ SUCCESSFUL” Ivory shampoo & conditioner Nestle Chocolate Milk Bic disposable lighters Jell-O Pudding Pops Sunkist Orange Soda Colgate Toothbrushes Honda lawnmowers “ UNSUCCESSFUL” Campbell’s tomato sauce LifeSavers chewing gum Dunkin’ Donuts cereal Bic perfumes Harley Davidson wine coolers Xerox computers Kleenex Diapers

44. Market Positions A B Q <- P <- . . . . . . . 1 3 4 5 P 1-2 P A P 3-4 P 5 P B Q 2 Q 1 Q A Q 3 Q 4 Q 5 Q B 2

47. Expanding Brand Meaning Through Extensions Nesquik Flavoring Cereals, yogurt, Fun Food for milk chocolate sauce, for Kids (children) postre de leche. Crayola Crayons Markers, pens Colorful Crafts paints, pencils for Kids clay, etc. Nestlé Condensed Baby food, Nutritious and and powered cereales, choco- High Quality milk lates, ice-cream, etc. Food. Gillette Razor Blades Shaving Set, Personal Care deodorant. For Men and Women Brand Original Product Extension Products New Brand Meaning

60. Managerial Question … To enter a new product category, when should the firm use a brand extension strategy or a new brand strategy?