Brand Strategies
Professor Rishikesh Mody
Line Extensions
• The product line is far more representative of the
customers varying quantity needs.
• It suggest the presence of usage segmentation.
• Customers differ in terms of their usage quantities.
• The brand has to fill the whole spectrum with
products as per the need of the various segments.
Line Extension strategies
Product sizes
–Shampoos-Sachets to
economy packs. tubes to
jars, bottles to cans: need
to differentiate users
Line Extension strategies
Flavours
–Diet coke , sun silk black ,
parachute lite , Parachute
therapie .. Hair type , skin
type user groups.. Need to
differentiate user needs.
Colgate gel Maggie Chinese
noodles.
Line Extension strategies
Ingredient
–Lux sunscreen , Ponds talc
with SAM: need to upgrade
user needs. Head &
Shoulders-ZPTO &
Menthol… Liryl Menthol.
Halls ginger & regular
Line Extension strategies
Form
Line Extension strategies
Price variants
–Rin Shakti to Rin supreme ,
Taj luxury to Taj Business
hotels: need to differentiate
user groups
Why line extensions ?
• In most of the product categories including
fast moving consumer goods , consumer
durables and services line extensions have
been the name of the game.
• Customer segmentation • Competitive reasons
• Consumer need for variety • Trade demands
• Pricing breadth • Counter competition
• Capacity utilization • Image benefits
• Quick Gains
Marketing Challenges for line
Extensions
Proliferation of meaningless line extensions
• Easy to add on ..since investments are low,able to ride on the lead brand
• Fits well with the brand image..since within the same product category
But
• Low Business potential..Niche markets require sufficient investments to be
developed which the line extension is not capable of..e.g..Close up whitening
tooth brush
• High Competition.. Not differentiated from competition thus low volumes e.g..
Ponds all day deo
• Threat of cannibalization..when line extension is too close to lead brand
• Success criteria Line extension should grow the category .e.g..Colgate gel ,
Bingo Flavors
Brand extensions
• Using an existing brand name to promote a
product in a different category , is Brand
Extension.
• The key difference between the two is the
product category
• In line ext. the product category remains
constant while in brand ext. it is variable
Brand Extension strategies
Extend the brand name to a new product category :
Brand fit in a new business area
• Supplimentary categories : BPL tvs to washing machines to cellular
[Link] soups and [Link] lipstics and [Link] washing
powder to toilet soaps to salt
• Complementary categories : Colgate toothpaste and toothbrush. , Axe deo and
Axe body gel
• Image asseceroies : Benetton t shirts to sun glasses , Nike sport shoes to sport
apparel
• Diverse categories : Similar core values. Brittania biscuts to dairy
products,Dabur lal dant manjan to chawanprash to vatika , cello from
thermoware to seating systems,toothbrushes,pens
Why do we need brand extensions ?
For mature brands
• To generate Growth
– To provide fillip to stagnating sales(parachute
tin to plastic can and oil to therapy )
– Threat of new entrants- protect market
share(Lux vs. Camay)
– Strength existing franchise: Reassure loyal
customers
Why do we need brand extensions ?
For mature brands
• To enhance brand image
– To strength brand Identity and re in force core
brand values ( MTv changing [Link]
from milk whitener to desert ingredient)
– To redifine brand identity & reposition core
brand values
Why do we need brand extensions ?
For mature brands
• To prevent market share erosion by
competition ( Colgate total)
• To prevent repositioning of core brand
values by competition (dettol vs. lifebuoy )
Marketing challenge of brand
Extensions
Poor fit of the ext. with the lead brand
• Brand ext. does not match the identity – Lakme men's Cosmetics
• Brand ext. ties to resolve an existing area of dissatisfaction but the
brand image does not allow for such an ext. to be accepted – Dettol
perfumed soap & Lux shampoo
• Competitive pressures when the bran ext. does not have a competitive
advantage – Amul chocolates
• Niche market ..when the brand name limits the size of the market…
usually linked to the brand image – Burnol , Mercedes Benz Mayback
Success criteria : Brand ext. should build the brand identity & brand
business
Success story : Britannia Milkman – Dairy products
Nivea – Men’s cosmetic , Visage / Vital
New Brand strategies
• New brand name for a same product category
• Required when there is poor brand fit of new
category with existing brand name but there is a
high business potential of the category
– Huggies to Depend
– Thums up to Gold Spot
– Pepsi to Miranda
– Toyota to Lexus
Multiple brand strategy
• New brand names in the same product category –
market saturation
• Expensive strategy....leading companies…often
through acquisitions…to achieve economies of
scale
– HLL soaps : Lux , breeze , Jai , Hamam , Lifebuoy ,
Dove , Pears
– Coca Cola : Thums Up …
– Nescafe & Sunrise
Customer franchise
• A marketer may extend a product range to
meet the needs of a specific consumer group
J & J baby talc ,
oil , cream ,
shampoo , diapers
• A good understanding of the brand may
or may not lead to a successful brand
extension
• But , a poor understanding of a brand
will definitely lead to the failure of the
brand extension and may also damage
the existing brand
Stretching the brand vertically
• Vertical stretch : Technically a line ext. since it is
the introduction of price variants of an existing
brand in the existing product class
• Stretch Up: Extending the brand to a higher priced
segment – Surf Detergent 500g @ Rs. 43 to Surf
Excel Detergent 500g @ Rs 70
• Stretching Down : Extending the brand to a lower
price segment – From wheel washing powder to
wheel bar
Need to stretch - up
• For a market leader – Internal need to climb up the
ladder
– Take advantage of economies of scale
– Attractive market segment to enter
– Need to enhance brand image by premium price ext
• Maruti : 800 to Zen to Esteem to SX4
– Changing competitive scenario
• Mercedes C 180 to SLK to M class
– Threatened by new introductions from competing MNCs having
premium image
• From Surf to Surf Excel
Wisdom of stretching up
• Guard against failure of premium-price ext.
– When the existing brand image is strong & the
premium ext has a credibility problem
• Nirma premium soap
– When the business potential in limited & the
investments to protect the niche segment is high
• Puma soccer shoes in India
– When competition is strong and repositions the brand
image & limits its entry into the premium segment
• Maruti
Success criteria = Market potential + Competitive advantage
The Stretch – Up strategy
• Create a sub brand to cater to the premium segment
• Value engineer the product quality , features , benefits to enhance the
perceived quality of the sub brand
• Gradually cut – off the sub brand from the existing brand .. The sub
brand will start having a set of Image values distinct form the existing
brand
– Cars : Honda to Accura
• Limitations of introducing a new brand to cater to the premium
segment : segment size is limited , difficult to sustain necessary brand
building investments
– Cosmetics : Orchids a premium product from Lakme …difficult to sustain
Need to Stretch Down
Opening up of a lower priced segment – entry for Low priced competitors
• Competitors ken to gain market entry through price promotions – Akai
T.V
• Competitors have a cost advantage , able to offer lower price
– Manufacturing cost advantage : Nirma washing powder
– Distribution cost advantage : Amway , Dell computers
• Competitors having economies of scale advantage – Parle G
• Competitors innovating new technology at lower price points –
Reliance Cellular
Stretch down strategies
• Primary Question : How will it affect the
main brand ?
– Need for price correction if the perceived
quality of the brand is threatened
– Creating a sub brand at a lower price point
having a different set of value perceptions
– Creating a new brand to cater to a lower price
point
Brand extension horizons
Brand extensions horizon 2
Brand extensions horizon 1
Line extensions horizon
Lead brand
Brand extension horizons
Chocolate Drinks , Ice creams , Cakes , Biscuits , deserts
Chocolate Candies …Toffees
Diff shapes: bars , thins , slabs
Diff tastes : white/milky , dark/bitter
Chocolate
Diff forms : soft , hard , crunchy
Choc with other ingredients like
biscuits , ice cream fruits etc
Effect of extension on the lead brand
• When the brand succeeds
– More good : When the ext. enhances the brand name
• Britannia form biscuits to dairy products ( adds a new dimension .. Health ,
Nutrition , Intelligence )
• When the extension succeeds
– The good : When the brand name aids the extension
• Wills lifestyle Clothing ( Premium , casual , togetherness , sporty values of
wills help the ext. )
• When the extension fails
– The bad : When the brand name fails to help the extension
• Dettol perfumed soap ( brand identity disregards brand image of the Dettol –
Smell )
• When the extension hurts the brand
– The ugly : When the brand name is damaged
• Initial launch of diet coke ( questioned the real taste of coke )
– More ugly : When the brand name is forgone
• Rare …..guess everyone wakes up before they reach this stage !!!!!!
Brand Revitalization
Fuelling the engine
• Extension : Giving birth to new products /
brands
• Revitalization : Injecting life to the same
brand , energizing a mature brand
‘ A facelift.. recharging the brand batteries ’
Problems of Old Age
• Fading awareness : High recognition but
Low recall
– Sunmica laminates
• Older “ has been” image : Usage by the
earlier generation…no new users….no
longer contemporary
– Ambassador : the car of the previous generation
Reasons for downturn in sales: Continuous
process of Revitalization
• Technological advancements
• Shift of consumer tastes and preferences
• Increased domestic competition
• Entry of global competitors
Revitalization
starts at an early
stage to prevent
the brand from
Sales growing
old…STAY
YOUNG
Time
How to revitalize the brand
Increased usage Repositioning
New uses Brand Augmenting
product
New Markets Planed obsolescence
Extensions
#1 . Increased usage
• Ensure brand recall. remind the consumer to use the brand consistently
& regularly
• Drive usage preference
• Increase usage frequency : give them a reason to use more of your
product
– Arm and hammer baking soda
– Heinz with all kinds of snacks
– Monaco Biscuits
• Reward & retain loyal customers : prevent switching
– Mutual funds
• Address consumer fears & inhibitions to use the product more
frequently
– Aspirin as Good for the Heart
#1 . Increased usage
• Remind of use : reminder communication to increase recall
– NECC egg campaign …Sunday ho ya Monday …..from a routine diet to a
delightful diet
• Preferred usage : Increased salience / knowledge / understanding
– Bharat petroleum …Pure for sure ..from a generic undifferentiated product where
purchase is driven by convenience of location or availability ..To a competitive
market place.. setting benchmark/standards of Quality & Purity
• Use More : Increased frequency / regular use
– The dettol campaign ..Dettol Suraksha
– Colgate ..driving consumers to brush twice a day to after every meal
• Reward & retain users : Incentives / Promotions
– Air India offering holiday packages to promote Indian tourism
• Remove usage barriers :Address consumer fears of frequent use
– Clinic all clear addressing fears of harmful effects on dandruff shampoos …from
the effective dandruff shampoo ..Dho dala to Treats Dandruff , but also gives you
beautiful hair Get out , Get going
#2 . New Uses
• New occasions to Use : Festive occasions
– Asian paints ..regional festivals of India , bullock horn paints ..from
painting only when required to choice driven by the shade range to
painting as an expression of Joy
• New Reasons to Use :Instigating behavioral shifts
– Bengue ..from Muscle aches to Arthritis relief
– What Iodex did not do MOOV did ..create a new reason to use ..not
sprains but back aches
– Microwave ovens in India …form reheat to Cook and Heat
• Different reasons to use : Multiple functional uses
– Nestle milkmaid condensed milk recipes…from the tastiest milk to a
substitute for fresh milk during the time of short supply . To ..for desert
recipes ..you can do wonders with Milk Maid
#3 . New Markets
• Fight market saturation : Re-define target segment
– Cadbury’s dairy milk chocolate….the Real taste of Life
..from Chocolates for Fun to Special Moments ..from
Young users to Family
• Tap evolving market : Growth in new segments
– Changes in the computer industry …from office use /
office work ( Microsoft office tools ) to House
hold personal use ( Educational / Games for children )
#4 . Re-positioning the Brand
• New Benefit / Offering : Communicate improvement in product
– Surf to combat pressures from Ariel ..from value for money…Surf
ki Samajdari to Product efficiency…Dhoondte rahe Jaonge
– Colgate ..post the entry and threat from Close Up…from fresh
breath & ring of confidence to strong teeth & ring of protection
• New Identity : To change earlier image and build new associations
– Philips ..in the face of global competition….a new corporate
identity Lets make tings better
• New uses / new users : to focus on user benefits / new uses
– From the complete health drink to fight deficiencies in a milk diet
to a health drink specifically for Growing children
#5 . Augmenting the product
• Improved product features and benefits
– Sunsilk …repeated improvement in product ..from shampoo +
conditioner to shampoo + conditioner + beauty capsules to shampoo +
conditioner + herbal extracts…from beautiful , shiny bouncy hair ..to
beautiful & healthy hair .
• Improved packaging
– Sunsilk ..from bottles to bottles with flip tops….from Sachets to capsules
– New look for Crocin , Aspro , Disprin
– Bisleri with tamper proof cap
• Increased customer involvement
– Sunsilk….the expert in hair care service at beauty parlors
– Similarly .. Surf & Laundry service…Asian paints & Painting Interiors
#6 . Planned Obsolescence
• To keep up with the fashion
– Color cosmetic products ….Lakme , Revlon…..introduction of new
fashion collection for every season…coffee collection , spice collection.
• To meet changes in technology
– Music industry ..from long playing records to cassettes to CDs to MP3
– Windows 95..96…XP
– Pentium 3..4…Core2duo
– Mobile phone series
• To meet changing consumer needs
– Ponds : From facial snows ..to vanishing creams ..to Oil Control creams
#7 . Brand extensions
• If the new changes do not suit the existing brand then
consider it an extension
– Britannia : Entry into dairy products to strengthen brand identity
with Britannia Milk maid
– Colgate : Launch of Colgate gel for fresh breath to revitalize brand
equity
– Dabur : Launch of herbal hair oil…Vatika …following new
consumer trends ..an age old brand able to woo back the younger
generation
#7 . Brand extensions
• If the new changes do not suit the existing brand then
consider it an extension
– Britannia : Entry into dairy products to strengthen brand identity
with Britannia Milk maid
– Colgate : Launch of Colgate gel for fresh breath to revitalize brand
equity
– Dabur : Launch of herbal hair oil…Vatika …following new
consumer trends ..an age old brand able to woo back the younger
generation
Remember ..If you don’t , some one
else will !
• What Iodex did not do , Moov did.
• What HMT did not do , Titan did.
• What Indian Airlines did not do , Jet Airways did.
• What Robin Blue did not do , Ujala Supreme did .
Thank you for your time and
attention
