Executive Summary Marketers are now finding it extremely difficult to create new brands.

The brand building costs tend to be very high. At the same time the developments at the demand side are creating pressures on marketers to fine tune their offerings as per unique needs of target customs. In order to cope with demand side pressures and cost constraints the firms are adopting extension route to growth. That is when they extend a successful brand name to promote a product in an unrelated category. Such a move is based on the logic that a brand can stand for two things. In reality, if a brand stands for something, it is difficult for to acquire a second meaning at the same time. This goes against the fundamentals of positioning and perception. Brand extension strategy is pursued by the marketers very vigorously these days. It involves using an existing brand name to launch a product in a different category. Here the brand remains constant but product category tends to be variable. Brand extensions are justified on the basis of promotional efficiency, savings on product launches, consumer benefits and returns. Various types of extensions could be identified such as product form, companion product, expertise, customer franchise, and brand image type. An extension can be good when extended product succeeds and parent brand benefits. A bad extension is one which fails to lift off while an ugly extension not only fails to lift off; it also damages the parent brand. Extensions involve transfer of parent brand associations to the extensions. The nature of parent brand is crucial determinant of extension success. Therefore, before embarking upon extension programme, brand's extendibility must be judged. A brand's extendibility depends upon its character whether the brand is a product brand, formula brand, knowhow brand or an interest brand. Brands which are symbolic and philosophical are easier to extend into unrelated product categories. The product or know-how brands have narrow zone of extension. The parent brand and the extension must enjoy a good relevance. In the absence of relevance, the brand beliefs and attitudes are unlikely to be successfully transferred to the extension candidate.


Introduction to Brands
Brand: What is it? A brand is a collection of feelings toward an economic producer; more specifically, it refers to the concrete symbols for those feelings, such as a name and design scheme. Feelings are created by the accumulation of experiences with the specific product or service, both directly relating to its use, and through the influence of advertising, design, and media commentary. A brand is a symbolic embodiment of all the information connected to a company, product or service. A brand serves to create associations and expectations among products made by a producer. Brand expert Dr Nikolaus Eberl defines a brand as "the premium which it demands as compared to similar products or services". A brand often includes an explicit logo, fonts, color schemes, symbols, which are developed to represent implicit values, ideas, and even personality.


History of brands
The word brand comes from the Old Norse brandr, meaning to burn, and from these origins made its way into Anglo-Saxon. It was of course by burning that early man stamped ownership on his livestock, and with the development of trade buyers would use brands as a means of distinguishing between the cattle of one farmer and another. A farmer with a particularly good reputation for the quality of his animals would find his brand much sought after, while the brands of farmers with a lesser reputation were to be avoided or treated with caution. Thus the utility of brands as a guide to choice was established, a role that has remained unchanged to the present day. Brands in the field of marketing originated in the 19th century with the advent of packaged goods. Industrialization moved the production of many household items, such as soap, from local communities to centralized factories. When shipping their items, the factories would literally brand their logo or insignia on the barrels used, which is where the term comes from. These factories, generating mass-produced goods, needed to sell their products to a wider market, to a customer base familiar only with local goods. It quickly became apparent that a generic package of soap had difficulty competing with familiar, local products. The packaged goods manufacturers needed to convince the market that the public could place just as much trust in the non-local product. Campbell soup, Aunt Jemima, and Quaker Oats were among the first products to be 'branded', in an effort to increase the consumer's familiarity with their products. Many brands of that era, such as Uncle Ben's rice and Kellogg's breakfast cereal furnish illustrations of the problem. Around 1900, James Walter Thompson published a house ad explaining trademark advertising. This was an early commercial explanation of what we now know as branding. Companies soon adopted slogans, mascots, and jingles which began to appear on radio and early television. By the 1940s, manufacturers began to recognize the way in which consumers were developing relationships with their brands in a social/psychological/anthropological sense.


From there, manufacturers quickly learned to associate other kinds of brand values, such as youthfulness, fun or luxury, with their products. This began the practice we now know as branding, where it is felt that consumers buy the brand instead of the product. This trend continued to the 1980s, which have been described as "brand equity mania". In 1988, Phillip Morris purchased Kraft for six times what the company was worth on paper; it was felt that what they really purchased was its brand.


6. They heard of it on the radio. Company’s job is to behave as consistently as possible. They see a product in certain shops. if managed correctly. but are nevertheless of paramount importance in the way he views you. 3. Brand management is about finding a group of people you can identify with. The brand logo reminds them of daffodils.What is Branding? 1. they got the name wrong. Somebody told them about an experience they had with the company . so long as you do not try to copy the market leader. They build a story about based on their experience. want to spend time together. more importantly. Branding is about the totality of a customer's experience.actually. Brands last forever. The customer owns a brand . become 5 . This is sometimes referred to as share of mind. A brand is about everything you do which impinges on the consciousness of the customer and. The group of people on whom the brand is focused . The more time you spend with your customers the better. 5. Different messages will appeal most to different groups of people. & becoming committed to each other. spending time together. Brand marketing is about niche marketing.the customers of the brand . Some experiences have been forgotten entirely consciously by a customer. 4. it is about everything he thinks you do. The most exciting brands to have are icon brands that represent a certain moment in history. Be different. and find something special in the relationship. Brands make friends with people in exactly the same way. 2.need not necessarily pay any money directly. There are plenty of branding opportunities in any mass market place. Icon brands grow rapidly. Customers build brands piecemeal.company does not. Brands are people. The company must try to facilitate that experience. Some experiences carry greater weight than others. People make friends with people when they have things in common. Let the customer make the connection. Brands are best communicated implicitly.

The more concentrated the beam. they will probably be drawn to those they recognise the best. More traditional brands may have fewer ups and downs. In an environment where the customers do not have a relationship with any brands in particular. however. brands will tend to endure if invested in consistently. Nevertheless. with one exception. including how it speaks The emotional benefits the brand satisfies The hard benefits the brand delivers to the customer 6 . they can be analysed like people. the weaker may be your claim on any given customer. 7. As brands are people. and deliver it better than anyone else. 8. but there will usually be fluctuations in their fortunes. Brands win when they create a powerful experience that is totally compelling to the customer. like sunlight. even a diffuse beam. and can then bounce back on the next cycle of history. The more people you try to capture with your brand. will shed more light and heat than will darkness. Brands can therefore be analysed along two key dimensions: • • The level of intimacy they have with their customers Their level of stature in the world Elements that will drive these dimensions are: • • • • • • The central organising thought of the brand The personality of the brand The values the brand espouses The tastes/dress of the brand. The fewer the people are targeted with your brand the more compelling to be the claim in a highly competitive market. Consistency is one of the key underlying themes of branding. the more cutting power it will have (as in a laser beam). Brands are therefore a bit like light beams.outdated and decline.

If this reason does not exist. and a 40% premium over the local store brand. the number-one brand in a category can command a 10% price premium over the number-two brand. • Builds pride — Branded. as a result of effective advertising. sale and distribution of those products. promotion. Consumers understand that a strong brand can reduce getting stuck with disappointing or faulty products. • Builds brand loyalty — Brand loyalty is the recurring stream of profit generated by repeat and referral sales of a specific brand. This price premium is known as a brand tax. Consumers identify branded products and. Branding is beneficial for four reasons: • Differentiation — A brand provides a clear and definitive reason for customers to buy a product. 7 . more reliable and a better value than non-branded products. value added businesses cannot compete on price successfully and need to incorporate some form of differentiation. Small. • Conveys value — Consumers perceive branded products as higher quality. Retailers like branded products because they make the store profitable . Repeat sales can be as much as 90% less expensive to a company than new customer development. recognizable products invoke a sense of pride in those associated with production. Generally speaking. a product is a commodity and the only measure of value is price.Why is it important to develop a brand for a product or service? A brand offers instant product recognition and identification.shoppers attracted to branded products spend three to four times more on groceries than do privatelabel shoppers. have confidence in product quality.

An academic research has found that Wall Street attend to brand extension announcements and that whether they like them or not depends on how much they like the parent band. Arm and Hammer means deodorizing—no matter what it is on. In several product categories more than 90% of new product introduction are brand extensions. Brand Extension is leveraging the values of the brand to take the brand into new markets/sectors. shoe inserts. brand extensions truly help to build equity in the brand name itself. they can also leverage of the associations consumers know about the parent brand. When Arm and Hammer extends its name from baking soda to deodorant. For these reasons. Brand extensions can also help consumers understand the core meaning of the brand name. kitty litter. its core "deodorizing" brand concept is enhanced. For firms of branded goods brand extension strategy have become very popular. in this sense. Brand extensions lets a marketer take a brand with well-known quality perceptions and associations and put it in a new category. Not only can marketers capitalize on brand awareness. brand extensions make new product introduction less expensive. So.Brand Extensions During the last two decades the firms are increasingly convinced that a company’s success can be improved by the introduction of new products. Brand extensions can also help a firm’s stock prices. They trust a known brand name. 8 . Consumers who favorably evaluate a parent brand are more willing to try and adopt the brand extension than an unfamiliar brand in the same category. A key factor for the new product success is the used brand strategy. Capitalising on the equity in established brand names has become the guiding strategy of product planners.

The product provided insufficient return on investment (poor profit margins and high costs). identifies nine main reasons for product failure 1. 2. introduced as a brand extension. the question is not whether the brand should be extended. Credibility was not confirmed on delivery. Well-planned and well-implemented extensions offer a number of advantages to marketers. where.Advantages of Brand Extension For most firms.000 once-new consumer products called the New Products Showcase and Learning Center in Ithaca. The product was not new or different (a poor idea that really offered nothing new). New York. The market was too small (insufficient demand for type of product). 5. 4. The company was too early or too late in researching the market (failure to capitalize on its marketing window). new products can fail for a number of reasons. or maybe even as few as 1 of 10. The product did not go hand in hand with familiarity. 7. 9. The product was justified on inadequate or inaccurate marketing research. may be more 9 . 3. Robert McMath. Brand extension strategy has found favours in the modern marketing world because of the advantages it has over the other new product launch options. and how the brand should be extended. The important benefits that it promises to deliver are as follows:Facilitate New Product Acceptance The high failure rate of new products is well documented. 6. who oversees a collection of over 75. but when. Consumers could not recognize the product. The product was a poor match for the company. Nevertheless a new product. or the company ignored research results. Brand extensions can certainly suffer from some of the same shortcomings faced by any new product. Marketing analysts estimate that perhaps only 2 of 10 new products will be successful. As noted previously. 8.

Hewlett-Packard. and Pepperidge Farm may lack specific product meaning. because it offers the advantages described in the following subsections. Motorola. favorability. facilitate the adoption of brand extensions. Del Monte.likely to succeed. perceptions of corporate credibility—in terms of expertise and trust-worthiness—can be valuable associations in introducing brand extensions Similarly. and uniqueness of the extension's brand associations. when Sony introduced a new personal computer tailored for multimedia applications-Vaio. although widely extended supermarket family brands such as Betty Crocker. For example. they may still stand for product quality in the minds of consumers and. by reducing perceived risk. their established reputation for being able to introduce quality products and stand behind them may be an important riskreducer for consumers Thus. Improves Brand Image One of the advantages of a well-known and well-liked brand is that consumers form expectations over time concerning its performance. Extensions from well-known corporate brands such as General Electric. or others may communicate longevity and sustainability. at least to some degree. with a brand extension. Green Giant. 10 . Reduces Risk Perceived by Customers One research study examining factors affecting new product acceptance found that the most important factor for predicting initial trial of a new product was the extent to which a known family brand was involved. consumers can make inferences and form expectations as to the likely composition and performance of a new product based on what they already know about the brand itself and the extent to which they feel this information is relevant to the new product. consumers may have been more likely to feel comfortable with its anticipated performance because of their experience with and knowledge of other Sony products than if the product had been branded by Sony as something completely new. Similarly. Although corporate brands may lack specific product associations because of the breadth of products attached to their name. These inferences may improve the strength.

as the new product became established in the market. and as distribution intensity increased. compared with 19 percent for new brands.. as the new product's relative price compared with that of competitors increased. one obvious advantage of introducing a new product as a brand extension is that the introductory campaign does not have to create awareness of both the brand and the new product but instead can concentrate on only the new product itself. when product quality could be Judged through visual inspection). The difference in advertising efficiency between brand extensions and new brands was shown to increase as the fit with other products affiliated with the parent brand increased.e.Increase Efficiency of Promotional Expenditures From a marketing communications perspective. A comprehensive study by Indiana University's Dan Smith found similar results. indicating that the average advertising to sales ratio for brand extensions was 10 percent. In general. Frosted Cheerios.44 percent market share in the extremely competitive cereal category in its very first week of sales with essentially no advertising or promotion. it should be easier to add a link from a brand already existing in memory to a new product than it is to first establish the brand in memory and then also link the new product to it. the brand was able to achieve a 0. 11 . and as consumers' knowledge of the new product category increased. One study of 98 consumer brands in 11 markets found that successful brand extensions spent less on advertising than did comparable new-name entries. On the other hand. As a dramatic illustration of the marketing communication efficiencies of brand extensions. demand for the sweetened oat cereal was so high that most supermarkets were forced to limit the number of boxes that could be purchased. the difference in advertising efficiency between brand extensions and new brands was shown to decrease when the new product was composed primarily of search attributes (i. when General Mills launched its fourth Cheerios extension. Solely on the basis of its name and product concept. His study identified some underlying factors moderating this extension advantage. Several research studies document this extension benefit.

Despite the fact that it had conducted a trademark search. As one such example. The resulting marketing program. Illinois. advertising can become more cost-effective for the family brand as a whole.Reduce Cost of Introductory and Follow-Up Marketing Programs Because of these push and pull considerations in distribution and promotion. symbols. in 1988. adopting new technology to improve reliability although still retaining the classic Jaguar look. Jaguar introduced its first substantially improved automobile model in 16 years. and slogans can be quite expensive.1 million when a court decided that the name it had chosen to introduce a new green and purple hair dye. if coordinated properly. legal conflicts are more likely to result. other efficiencies can result after the launch. more prominence in the retail store by creating a "billboard" effect. For example. hair-styling salon called ZaZu Designs. and there is no assurance of success. Avoid Cost of Developing a New Brand Developing new brand elements is an art and science. characters. infringed on the name of a line of shampoos sold by a Hinsdale. Allow for Packaging and Labeling Efficiencies Similar or virtually identical packages and labels for extensions can result in lower production costs and. As the number of available and appealing brand names keeps shrinking. increased demand for all new Jaguars. packages. For example. Moreover. logos. it has been estimated that a firm can save 40 percent to 80 percent on the estimated $30 million to $50 million it can cost to launch a new supermarket product nationally in the United States. which included a lavish ad campaign. To conduct the necessary consumer research and employ skilled personnel to design high-quality brand names. Stouffer's offers a variety of frozen entrees with identical orange packaging that increases their visibility when stocked together in 12 . Cosmair's L'Oreal division was successfully sued for $2. Zazu. when a brand becomes associated with multiple products. Even older Jaguars found their resale market value enhanced.

" Gerber means "baby care. as described in the following subsections. it may be necessary to have multiple items that together form a cohesive product line. A similar billboard effect is evident with other supermarket brands. to even effectively compete in some categories." Amul means "healthy. railroads do not necessarily compete with other railroads so much as with other forms of transportation 13 . Permit Consumer Variety-Seeking By offering consumers a portfolio of brand variants within a product category. railroads are not just in the "railroad" business but also the "transportation' business In other words. brand extensions can also provide positive feedback to the parent brand in a number of ways. such as Coca-Cola soft drinks and Campbell soup. satiation. Even without such underlying motivations." Nike means "winning. customers may be encouraged to use the brand to a greater extent or in different ways than otherwise might have been the case. Provide Feedback Benefits to the Parent Brand Besides facilitating acceptance of new products. by offering a complement of line extensions. Broader brand meaning often is necessary so that firms avoid "marketing myopia" and do not mistakenly draw narrow boundaries around their brand and either miss market opportunities or become vulnerable to well-planned competitive strategies. or whatever—can switch to a different product type if they so desire without having to leave the brand family. consumers who need a change—because of boredom. as Harvard's Ted Levitt pointed out in a pioneering article. through brand extensions. Thus. Thus.the freezer. Clarify Brand Meaning Extensions can help to clarify the meaning of a brand to consumers and define the kinds of markets in which it competes. Volvo means "safety." and Chun King means "Chinese food" to consumers. Moreover.

athletic clothing." Similarly. For example. Colgate and Crest) that compete in multiple segments with multiple product offerings. Lysol.. Another type of association that may be improved by successful brand extensions is consumer perceptions of the credibility of the company behind the extension. Comet). Enhance the Parent Brand Image According to the customer-based brand equity model. and credenzas but as "helping to enhance office productivity" For some brands. Core brand values are those attributes and benefits that come to characterize all the products in the brand line and. chairs. Steelcase's one-time slogan. . are those with which consumers often have the strongest associations. strengthening its associations to "peak performance" and "sports" in the process. the $3 billion oral care market is characterized by a number of mega-brands (e. cars and planes) Thinking more broadly about product meaning can easily result in different marketing programs and new product opportunities For example. adding a new brand association.g. creating broader meaning is critical and may be the only way to expand sales In some cases. file cabinets. and athletic equipment. as a result. "A Smarter Way to Work. or a combination of these. it is advantageous to establish a portfolio of related products that completely satisfy consumer needs in a certain area.g." reflected the fact that the company defines its business not as manufacturing desks.(e. One common way that a brand extension affects the parent brand image is by helping to clarify its core brand values and associations. many specific-purpose cleaning products have broadened their meaning to become seen as multipurpose (e. Nike has expanded from running shoes to other athletic shoes.. For 14 . they have broadened their meaning through brand extensions to represent "complete oral care. improving the favorability of an existing brand association.g. Although these different brands were limited to a few specific products at one time. one desirable outcome of a successful brand extension is that it may enhance the parent brand image by strengthening an existing brand association. For example.

By creating "news" and bringing attention to the parent brand. these ventures failed and their capabilities were folded back into the parent organization.. several firms chose to introduce online versions of their services under a separate brand name (e.g. Goodyear's successful introduction of its Aquatred tires subbrand led to the introduction of Eagle Aquatred for performance vehicles with either wider wheels (e. the Ford Mustang) or a luxury image (e. trustworthiness.g. through the skillful introduction of extensions.example.. In the late 1990s. and fabric softener) resulted in market share increases of 2 percent to 4 percent for the flagship Tide parent brand by 1986. Keller and Aaker showed that a successful corporate brand extension led to improved perceptions of the expertise. Bank One chose to launch its online bank as Wingspan). In many cases. For example. the Cadiltdi Seville). such companies also lost the opportunity to modernize the parent brand image and improve its technological credentials. by offering a product benefit whose lack may have heretofore prevented consumers from trying the brand. Bring New Customer into the Brand Franchise and Increase Market Coverage Line extensions can benefit the parent brand by expanding market coverage. 15 .. for example. when Tyienol introduced a capsule form of its acetaminophen pain reliever. For example. it was able to attract consumers who had difficulty swallowing tablets and therefore might have otherwise avoided the brand. Remarkably. its sales may also increase. For example. whitener. although the market share of regular powdered Tide—which once was at 27 percent—had slipped to 21 percent in the early 1980s. Besides increasing the difficulty and expense of launching a new brand. and likeability of the company. Permit Subsequent Extensions One benefit of a successful extension is that it may serve as the basis for subsequent extensions. the introduction of Liquid Tide and Multi-Action Tide (a combined detergent.g. Tide as a family brand has managed to maintain its market leadership and a market share of roughly 50 percent from the 1950s to the present.

Return comparison between focused and diversified brands revealed that focused brands like Dell and Levi's manage to earn merely 0. The companies seem to work through loyalty programmes. These include publishing. the 'convergence' is throwing up new opportunities in many industries. the rising importance of relationship benefits for customers. from being initially mono-product or mono-activity have evolved into a diversified structure.9 per cent above the industry average. Returns: Over time many brands. These figures clearly demonstrate superior returns generating process of diversified brands. Disney etc earn no less than 5 per cent more than the industry average. Walt Disney was focused on children animation during the fifties but now it has branches into highly heterogeneous businesses.9 per cent higher than the industry average while diversified brand like GE. films.Revitalize the Brand Sometimes brand extensions can be a means to renew interest and liking for the brand. Increases the Probability of Gaining Distribution and Trial Because of the potentially increased consumer demand resulting from introducing a new product as an extension. A study exploring the returns connected with the brands found that strong brands are able to generate returns to shareholders which are 1. What are the responsible factors that enhance returns of diversified brands? Three factors probably drive the superior economics of such brands. it may be easier to convince retailers to stock and promote a brand extension. First. better customer understanding and customers. television. Second. Finally. theme parks and cruises. leveraged brands are able to divide their support costs over a number of products. 16 . leveraging brand makes more sense in these conditions. Accordingly. For instance.

brand extensions have a number of disadvantages Can Confuse or Frustrate Consumers Different varieties of line extensions may confuse and perhaps even frustrate consumers as to which version of the product is the "right one" for them. Moreover. they may question the integrity and competence of the brand. If a firm launches extensions that consumers deem inappropriate. a year-long Food Marketing Institute (FMI) study showed that retailers could reduce their SKUs by 5 percent to 25 percent in certain product categories without hurting sales or consumer perceptions of the variety offered by their stores The FMI "product variety" study commended that retailers systematically identify duplicated and slow-moving items eliminate them to maximize 17 . and Ready-to-Serve Classic—and offers more than 100 flavors in all. it has become virtually impossible for a grocery store or supermarket to offer all the different varieties available across all the different brands in any one product category. Chunky. Can Encounter Retailer Resistance On average. some consumers may be disappointed when they are unable to find an advertised brand extension if a retailer is not able to or is unwilling to stock it. Moreover. many retailers do not have enough shelf or display space to stock them all. Simply Home. the number of consumer packaged-goods stock-keeping units (SKUs) grew 16 percent each year from 1985 to 1992. Campbell has introduced a number of different lines of up —including Condensed. Consequently. they may reject new extensions for tried and true favorites or all-purpose versions that claim to supersede more specialized product versions. Home Cookin'. whereas retail shelf space expanded only 15 percent each year during the same period. Many brands now come in a multitude of different forms. For example. As a result. Healthy Request. because of the large number of new products and brands continually being introduced. Select. retailers often feel that many brand extensions are merely "me-too"" products that duplicate existing brands in a product category and should not stocked even if there were space. As a result. Attacking brand proliferation.DISADVANTAGES OF BRAND EXTENSIONS Despite these potential advantages.

but it also harms the parent brand image somehow in the process. by linking the brand to multiple products. The Science of Branding summarizes one perspective on how to reduce brand proliferation and simplify marketing. so any sale would be one that we wouldn't have gotten otherwise. For example. such as the Pontiac 2000 and Chevrolet Cavalier. the Audi 5000 car suffered from a tidal wave of negative publicity and word of mouth because it was alleged to have a "sudden acceleration " problem that resulted in an alarming number of fatal accidents." There was no thinking about brand equity. The target market was less-affluent buyers seeking small luxury car who wanted. Cadillac sales dropped significantly in the mid-1980s. if you will. Even though (here was little concrete evidence to support the claims (resulting in Audi. As a result. Everyone now realizes that using the model to extend the name was a horrible mistake. a full-size Cadillac. They felt it was inconsistent with the large size and prestige image they had expected from Cadillac. in a public relations disaster. Looking back. A typical financial analysis would argue that the Cimarron would rarely steal sales from Cadillac's larger cars. Can Fail and Hurt Parent Brand Image The worst possible scenario with an extension is that not only does it fail. The people who were most concerned with such long-range issues raised serious objections but the bean counters said.profitability. "Oh no. Unfortunately. Even if an extension initially succeeds. one GM executive offered following insights: The decision was made purely on the basis of shortsighted profit and financial analysis. Consider General Motors's experience with the Cadillac Cimarron This model reduced in the early 1980s. we'll get this many dollars for every model sold. starting in 1986. but existing Cadillac owners hated it. the firm increases the risk that an unexpected problem or even tragedy with one product in the brand family can tarnish the image of some or all of the remaining products. equity. but could not really afford. these negative feedback effects can sometimes happen. with no accounting for its effect on long-run customer loyally or. was a "relative" of models in other GM lines. 18 . Nor was the Cadillac Cimarron unsuccessful at generating new sales with this market 'segment. We paid for the Cimarron down the road.

it is possible that this revenue may have merely resulted from consumers switching to the extension from existing product offerings of the parent brand—in effect cannibalizing the parent brand by decreasing its sales.. the damage was most severe for sales of the Audi 5000. Often. consumers might have switched to a competing brand instead of the line extension if it had not been introduced into the category. low-fat versions of foods). Audi's U. 19 .attributing the problem to the clumsy way that Americans drove the car). As might be expected. These types of line extensions may be particularly likely to result in cannibalization. sales declined from 74. such intrabrand shifts in sales are not necessarily undesirable because they can be thought of as a form of "preemptive cannibalization.g. Product failures in which the extension is found to be inadequate in some way on the basis of performance are more likely to negatively affect parent brand perceptions than these "market" failures. to a lesser extent. Brand extensions are often designed to establish points of parity with current offerings competing in the parent brand category. Thus. as well as to create additional points of difference in other areas (e.S.000 in 1985 to 21. Can Succeed but Cannibalize Sales of Parent Brand Even if sales of a brand extension are high and meet targets. however. Understanding when unsuccessful brand extensions may damage the parent brand is important. On a more positive note however. The Quattro might have been relatively more insulated from negative repercussions because it was distanced from the 5000 by virtue of its more distinct branding and advertising strategy. the Quattro model." In other words. the silver lining in the case when a brand extension fails as a result of an inability to secure adequate distribution or to achieve sufficient brand awareness is that the parent brand is more likely to survive relatively unscathed. but the adverse publicity also spilled over to affect the 4000 model and.000 in 1989. it should be recognized that one reason why an unsuccessful brand extension may not necessarily damage the parent brand is for the very reason that the extension may have been unsuccessful in the first place—hardly anyone may have even heard of it.

however. who in 1981 introduced the notion of the “line extension trap”. have popularized this potential drawback. Scott decided to attempt to unify its product line by renaming ScotTowels as Scott Towels and ScotTissue as Scott Tissue. reducing brand awareness. Scott's 20 . which Ries and Trout believe became overextended when its name was expanded to encompass ScotTowels paper towels. In fact. One such example was Scott Paper. and Baby Scot diapers. Scotkins. Scotties facial tissues. Interestingly. They provide a number of examples of brands that. adding a common look and logo (although some distinct colors) on both packages as well as their Scott Napkins. Without the introduction of those extensions. In perhaps a risky move. and uncaffeinated forms of Coke. Can Succeed but Diminish Identification with Any One Category One risk of linking multiple products to a single brand is that the brand may not be strongly identified with any one product. ScotTissue bath tissue." The vociferous business consultants Al Ries and Jack Trout.For example Diet Coke's point of parity of "good taste" and point of difference of "low calories" undoubtedly resulted in some of its sales coming from regular Coke drinkers. For example. although U. they believed had overextended. Cherry Coke. high-quality cookies. some of Coke's sales might have gone to competing Pepsi products or other soft drinks or beverages instead. at the time. sales in 1980 came from Coke alone whereas sales today also receive significant contributions from Diet Coke. Pepperidge Farm is another brand that has been accused by marketing critics of having been extended so much (e.S. Scott also decided to phase out local brand names in 80 foreign countries where Scott garnered almost half its sales including Andrex. marketers of the brand may have run the risk of weakening its association to fine chocolates. Thus. when Cadbury became linked in the United Kingdom to mainstream food products such as Smash instant potatoes. its top-selling British bath tissue.g. in the mid1990s. brand extensions may obscure the identification of the brand with its original categories. sales of Coca-Cola's cola products have held steady since 1980. into soups) that the brand has lost its original meaning as "delicious.

hope was that the advantages of brand consolidation and global branding would offset the disadvantages of losing local brand equity. it seems as if the brand has been able to secure a dominant association to quality in the minds of consumers without strong product identification that might otherwise limit it. Mitsubishi uses its name to brand a bank. and office equipment. Canon has successfully marketed cameras." It has often been argued that the early success of the Miller Lite light beer extension-market share soared from 9. part because of its clear bottle and other factors such as its advertising heritage as the "champagne of bottled beer. whose market share slid from 21 percent to 12 percent during that same eight-year period. and pianos. Can Succeed but Hurt the Image of the Parent Brand If the brand extension has attribute or benefit associations that are seen as inconsistent or perhaps even as conflicting with the corresponding associations for the parent brand. however. As another example described Miller Brewing's difficulty in creating a "hearty" association to its flagship Miller High Life beer brand in. guitars. Some notable—and fascinating—counterexamples to these dilution effects exist. and aircraft. in terms of firms that have branded a heterogeneous set of products and still achieved a reasonable level of perceived quality in the minds of consumers for each product. For example. photocopiers. cars. it ran the risk of creating a "chewiness" association that could negatively affect its flagship pizza products. These unfavorable perceptions were thought to have helped to contribute to the sales decline of Miller High Life. Farquhar notes that when Domino's Pizza entered into a licensing agreement to sell fruitflavored bubble gum a number of years ago. consumers may change their perceptions of the parent brand as a result. For example. Yamaha has developed a strong reputation selling an extremely diverse brand line that includes motorcycles. In all these cases.5 percent in 1978 to 19 percent in 1986—only exacerbated the tendency of consumers to think of Miller High Life as "watery" tasting and not a fullbodied beer. 21 .

the company forgoes the chance to create a new brand with its own unique image and equity. which attracted an audience interested in movies with more adult themes and situations than Disney's traditional family-oriented releases. The positioning of a new brand could be introduced and updated in the most competitive advantageous way possible. 22 . introducing a new product as a brand extension can have significant and potentially hidden costs in terms of lost opportunities of creating a new brand franchise. which attracted a higher-end. Can Cause the Company to Forgo the Chance to Develop a New Brand One easily overlooked disadvantage to brand extensions is that by introducing a new product as a brand extension. there may be a loss of flexibility in the brand positioning for the extension given that it has to live up to the parent brand promise and image. Thus. For example. which attracted consumers weary of "the same old cars sold the same old way". to General Motors of having introduced Saturn. and to Black & Decker from having introduced DeWalt power tools. more skilled market segment. to Levies of having introduced Dockers pants.Can Dilute Brand Meaning The potential drawbacks from a lack of identification with any one category and a weakened image may be especially evident with high quality or prestige brands. Each of these brands created its own associations and image and tapped into markets completely different from those that currently existed for other brands sold by the company. consider the advantages to Disney of having introduced Touchstone films. which attracted a customer segment interested in casual pants. Moreover.

the extension classification would change accordingly. Similarly. The brand must venture into an unrelated category from a customer's behaviour point of view in order to qualify as brand extension. provide scope for launching brand extension. Product Form Extension: A product launched in a different form usually means line extension rather than brand extension. But if different product form constitutes entirely a different product category from customer behaviour perspective. The idea perhaps is to capitalise on product complimentarity. liquid milk and dried milk may not be perceived as same product category. For instance. it would be called brand extension. the chocolate bars and chocolate powder belong to different categories. The product category definition must be customer-perception based. If the extended product is perceived to be part of the existing brand category. Amul Milk Amul Condensed Milk Companion Product: Brand extensions in the form of companion products are perhaps the most common. Some of them are as follows. Gillette Razors Gillette Shaving Foam Gillette After Shave 23 .Types of Brand Extensions Brand extension essentially involves leveraging an existing brand to promote a product into a different category. Brand extension can come in many forms. The consumer may view both products jointly and hence.

For instance. benefit or feature which gets uniquely associated with the brand. a company can work backwards to launch different products which essentially cash in on this distinction. a company may launch a variety of products meant for e. This strategy is particularly true in Japanese companies.Customer Franchise Marketer may extend a product range in order to meet the need of a specific customer group. nursery going school children. This would give its company Marico the opportunity to launch a variety of products exploiting this distinction. Parachute may have expertise of 'coconut nourishment' in customers mind over time.. Parachute Hair Oil Parachute Shampoo Parachute Cream 24 . Johnson & Johnson Baby Shampoo Johnson & Johnson Baby Talc Johnson & Johnson Baby Oil Company Expertise Brand extensions often come in the forms of different product category introductions using a common name but emanating from a common expertise pool. For instance. The focus here is not customer base but their diverse needs. Honda Cars Honda Gensets Honda Scooters Brand Distinction Many brands achieve distinction in the form of a unique attribute. In these situations.g.

When such a close association develops.Brand Image or Prestige A brand extension may involve a foray in to unrelated product categories based on a brand's exclusive image or prestige. Vim Bar Vim Liquid Vim Powder The Good. the brand could be leveraged in other product fields: Nescafe Chocolate Nescafe Biscuits Nescafe Milk Supplement Vertical extensions Some brand extensions are vertical extensions of what they currently offer. Accordingly. Nescafe enjoys proprietary association of distinctive taste. Brand exclusivity or prestige bestows great extension opportunities. This is particularly true of designers and artist brands Cartier Jewellery Cartier Watches Cartier Purses Distinctive Taste. a marketer can make entries into unrelated product categories capitalising on these properties for instance. Bad and Ugly Extensions: 25 . Ingredient or Component: Brand may develop equity based on any and/or combination or taste. ingredient or component. A brand can use their “ingredient/component” heritage to launch products in a more (or sometimes less) finished form.

brand extensions do not always create desired outcomes. The Tata name in India stands for some level of quality. Dettol's extension into toilet soaps illustrates how extension acquired Dettol's associations and became a successful soap. more good. Brand name awareness and recognition plays a very crucial role in marketing under low involvement conditions. 26 . Five possibilities exist: the good. The logic of brand extension is to transfer these associations in the extension context so that desired brand equity outcomes result. the extension may enhance and strengthen the parent brand by increasing the brand visibility and supporting the core associations. However. which drive consumer buying. For instance. associations and recognitions and awareness to the extended brand. That is. More Good Extension Sometimes it is not just that the parent brand helps the extension. it is called good extension. the. core associations of Dettol brand are strengthened by launching products which are antiseptic oriented like plaster. the car successfully got quality rub off. consumer's low involvement and product similarity. rather the extension also aids the parent brand by way of positive feedback. The parent brand may also help extension by providing quality rub off. the bad. the ugly and the more ugly. shaving cream and toilet soap. Making a foray into the toilet soap market is quite difficult because of overcrowding. The parent brand can help the extension by providing brand associations. Nirma gained in terms of these dimensions when it extended its name to toilet soaps. quality. A brand is nothing but a network of associations. By extending the Tata name to its small car. The Good Extensions When the parent brand contributes positively to the extended product. if not exceptionally high quality. Brands can bestow quality perception to extension. A brand extension in such situation builds awareness and recognition much efficiently for the extended product. For instance.The primary lure of using a well established brand name to promote a product belonging to a different category is to exploit/leverage what the brand name stands for in the mind of the customer.

the name passes on negative associations to the extension or instance. Similarly was the fate with Nirma's foray into toothpastes. or Amul's milk products). hurting quality perception. All these indicate negative feedback to the parent brand by an extension which succeeds in the marketplace. An extension would create its own associations. For instance. Tailored classics and Levis strong association with casual clothing conflicted. its core brand association may get weakened. Imagine Amul launching aerated soft drinks. the reverse transfer of associations are less likely if the parent brand associations are strong and there is distinct difference between parent and the extension. Sometimes the name does not help the extension. what would happen if it allows its name to be used by inexpensive. This happened when Levis launched their tailored classic line.The Bad: It is not that the use of a brand or a product belonging to a different category is always beneficiary. For instance..g. The extension damages the brand name by creating undesirable attribute associations. 27 . Bisleri's water. Also. brand extension may hurt the brand by affecting its quality image. Further. if a premium brand like Rolex enters into the mid price clothing line. extension may stimulate negative attribute associations. But some of these associations may damage the brand. The Ugly Sometimes the extension succeeds but its success comes at a cost. when the name does not add value and second. low quality toiletries for men. sometimes may weaken the associations (making associations fuzzy and blurred). However. the Pierre Cardin name does not add value to its range of writing instruments. it creates undesirable associations and hurts the parent brand. This may happen on account of two reasons: first. and altering its existing associations. This problem can particularly arise when the brand's core associations are class related (e. Ponds name also failed to add any value to it toothpaste extension. So when the brand is extended beyond its product class. Brand extensions also. Louis Phillip enjoys a quality image in India. The value addition did not take place because these names do not have any expertise and credibility in the extension context.

Brand extension is a common route followed by the marketers. But commonness does not mean that extension is also a quick short cut to launch new products and services. The above discussion clearly spells out the potential dangers associated with unplanned extensions. By simply putting a successful brand name to any product one cannot be assured of success. Instead, the brand extensions can backfire. This necessitates that the manager while planning for brand extensions, must systematically analyse the possible opportunities.

What's important to consumers?


When considering brand extension fit there are four underlying constructs which consumer’s evaluate individually, to formulate an overall judgment as to whether or not the brand extension fits with the core brand. Relevance: It is the extent to which the core brand attributes are relevant or important to the brand extension category. For example; (1) the core brand attributes of Starbucks are clearly relevant to the sale of coffee grinders, but not relevant to the sale of other kitchen equipment such as microwaves or fridges, (2) the core brand attributes of Coca-Cola are relevant to the sale of other soft drinks and sodas but not the sale of fruit juice such as orange juice. Recognition: It is the extent to which consumers understand the reasoning behind why the brand is conducting the brand extension as well as the logic of the brand extension. For example; (1) the core brand attributes of McDonalds make it easy to understand / logical in the eyes of consumers for McDonald’s to extend its brand into another restaurant concept, however not easy to understand / logical the eyes of consumers for McDonalds to open a chain of grocery stores, (2) the core brand attributes of Nike make it easy to understand / logical in the eyes of consumers for Nike to extend its brand to sell golfing clothing, but not easy to understand / logical in the eyes of consumers for Nike to sell highly fashionable clothing. Credibility: It is the extent to which the core brand has attributes which are credible and acceptable to conduct and sell the brand extension. For example; (1) the core brand attributes of Sony make it credible and acceptable for Sony to extend the Sony brand into laptops and digital cameras however they are not credible and


acceptable to extend the Sony brand into sports clothing, (2) the core attributes of Budweiser make it credible and acceptable for Budweiser to extend the Budweiser into new beers however they are not credible or acceptable to extend the Budweiser brand into wine or spirits. Transfer: It is the perceived ability of a brand to transfer their skills and experience to the brand extension. For example, (1) The skills and experience of British Airways are transferable into other areas of air transportation such as domestic flights and low cost flights, however British Airways’ skills and experience are not transferable into coach transportation, (2) the skills and experience of American Express are transferable into travel insurance and foreign exchange services, but not transferable into car rental. The most crucial component of consumers' brand extension fit judgements is the relevance construct. However all the constructs are important and consumers must perceive all constructs to some degree to perceive a brand extension to fit.


Brand Extendibility Extensions involve transfer of associations from the parent brand to the extension. The nature of the parent brand is, therefore, a critical determinant of extension success. The question that strikes is whether all successful brands lend themselves to brand extensions? For instance, do the brands like 'Cherry', 'Captain Cook', Raymonds', have similar extendibility? Or is it that the nature of the parent brand determine the extendibility. When one thinks of extension, the strategist has to explore as to how 'different' or remote a product the brand can support. An observation of the marketing scene reveals that in some cars the brands are extended within the narrow or immediate proximate brand boundaries whereas in other cases the brands are successfully extended into far off remote product categories. The issue is what makes it possible? Why in some instances a brand is able to support products successfully in cousin categories while in other cases the extension tends to be a hit in even other species categories. A brand's extendibility depends on its character. There are five types of brands. These are product brand, formula brand, know how brand, interest brand, philosophy brand. The Product Brand It is situation when there is very little difference between the brand and the product. Brand is a close approximation of the product. Passively the brand is used to identity the product, may be, for internal purposes. The brand does not play any role from the customer's point of view. Formula Brand: Formula means a set procedure. A brand which comes in the formula category simply implies that a standard procedure has been used to make the product. This type of brand may be found in cooking oil categories. (e.g., K.K. brand of mustard oil once enjoyed its reputation for aroma and purity), food (a set procedure used to cook a particular cuisine), pickles (a pickle formulation used to give it a unique task).


K. Honda has know how in motors. For instance. motor is a key component in a number of products like lawnmowers. Amul has developed expertise m milk processing. The philosophy transforms the product in a realm altogether different from its physical reality. The ultimate extension capability lies with the brands which have the greater depth. The know-how can be appropriate for a variety of applications. Gillette brand maintains its focus on men's grooming in all its brands.an expression that creative style of Armani carries. a formula brand like K. motorcycles. That is to be on the cutting edge. For instance. For instance. It is for these reason designers levels are able to lend credibility and support to a variety of products which apparently do not share 32 . For example. Nike's focal point is winning. Whirlpool's centre of interest is the home ('homemaker'). Brands which are product. It may reflect its core spirit. For instance. Therefore. The philosophy brand can support highly dissimilar products. Armani signature on the product completely changes it to give it a higher philosophical meaning . Interest Brand A brand may be defined by its centre of interest. They all are designed to make the best a man can get'. scooters. This generally happens in case of designers and artists. Philosophy The brand at this level acquires more intangible character and orientation. know how brands have greater territory where they can support extensions.Know how Brand Know how is expertise that one firmly develops in a specialised area of activity. This categorisation of brands has powerful lessons for extensions. mustard oil can be extended to the oil category only where the formula seems appropriate and valuable. Sony is known to have expertise in miniaturization. formula or know how have limited flexibility in supporting dissimilar product. Whereas know how brands still have greater flexibility. cars etc.

anything. 33 . But what may bind them together is the creative style or 'impression' of the artist.

according to Information Resources Inc. much less meet or exceed the expectations of their respective organizations? A significant contributing factor is that most organizations don’t have a comprehensive. and (3) brand relevance.5 million. strategically sound approach to identifying and evaluating high-potential new product or service opportunities for their existing brands. (2) marketplace opportunity.Extending a Brand More than 30.000 new product introductions will be launched into the marketplace this year.” 34 . (IRI). a comprehensive and strategic approach is one that accounts for three important factors: (1) organizational capabilities. Fewer than 25% of those will ever achieve an annual retail sales level of $7. This strategic framework is referred as the “credibility footprint. Why do so many new products and services fail to survive. Specifically. the vast majority of which will represent extensions of existing brands.

(2) develop brand extendibility proxies.. or worse. along with specific tools and techniques for conducting that assessment when combined with the other two components of the credibility footprint.g. it helps ensure that brand extendibility decisions are made in a more objective and less emotional manner (e. will provide a more comprehensive approach for identifying and launching new products and services.Most organizations today are relatively adept at the first two factors. Additionally. detrimental to the current brand equity. The four-step approach for determining brand-relevant extendibility is as follows: (1) determine brand and category associations. This approach enables brand managers to clearly articulate which of countless potential new product or service areas make the most sense with what their brand stands for in the market and the degree to which it stretches its current equities in new directions. The result of this approach is a road map to guide future brand extendibility work and ensure that any new opportunity identified and pursued is not only consistent with organizational capabilities and marketplace opportunity. (3) conduct brand extendibility research. A four step approach for determining the types of new product or service offerings that are a strong fit with the brand. 35 . All too often. the result is brand extensions that are inconsistent with. choosing the president’s “pet” idea). and (4) create brand extendibility guidelines. adhering to pre-defined guidelines vs. but surprisingly few invest the time or resources required to fully understand their brands and truly determine the “brand relevance” component in their brand extendibility efforts. but also with customer perceptions of the brand’s core equities.

will not succeed in the market if it is launched under a brand identity for which it is a poor fit. What are the things you like most about the brand? What benefits does the brand provide you? What are the first three things that come to mind when you think about the brand? How would you describe the brand as though it were a person? What benefits does this brand provide you that others cannot? How does this brand make you feel? These questions should be asked for both the brand and those of a few key competitors. For instance. It is necessary to complete an assessment for each potential new category the brand is considering.Step 1: Determine key associations. satisfying a significant unmet customer need. focus groups and in-depth interviews). These associations represent the most closely held beliefs customers have with the brand and the overall category and provide the basis for thinking logically about extending the brand with future new product or service offerings. The first step in determining brand relevance is to begin with a comprehensive assessment of what a brand and those of key competitors in the category currently stand for in the minds of customers. if the prepared convenience food brand was also considering new product or service offerings in the 36 . as well as the overall category. and personality). The research should focus on uncovering the key associations customers link to the brand and competitive brands in the categories (e.g.. The output clearly delineates how customers define the category where this brand currently resides on each association and therefore provides the basis for how to test the boundaries of future brand extendibility. and self-expressive benefits. The foundation of this assessment is qualitative customer research (e. Even an outstanding new product concept. functional.g. Specific exercises and lines of questioning for this phase of research are fairly similar in nature to the types used during standard brand positioning research. helps define the associations as well as the higher-order benefits that matter most to the brand and the competition. The output of this step is the identification of approximately six to eight key “associations” that define the brand and the category. The figure below illustrates the key associations customers have with a national.. emotional. which provides the richness and depth of response needed to construct an accurate portrait of a brand and the category which it belongs. product or service features. prepared convenience food brand.

the prepared convenience food brand referenced earlier may select the following proxies to complete a “cuisine” continuum: family favorites. It’s imperative that these brand and category associations be determined with an eye toward future brand extendibility. Once the six to eight key associations have been identified for the brand and category. For example. it pays to conduct at least some additional research to supplement those insights. the company would have to assess that category and determine its key customer associations and the degree to which the category and brand are a logical fit. 37 . Americanized ethnic. Key brand and category associations Association Cuisine Description The types of food most often associated with the category (prepared convenience food) and the brand The meal and snack occasions that we most closely associate with the category and the brand The methods of food preparation most often associated with the category and the brand The temperature state the product is sold in that is most closely associated with the category and the brand The types of functional benefits that we inherently associate with the category and the brand The types of emotional benefits that we inherently associate with the category and the brand Brand X (Currently) Comfort foods. turn each association into a continuum of attributes and benefits that range from “close in” to “far out” relative to where customers perceive the brand to be today. To accomplish this. proxies should be carefully chosen for each one. Step 2: Develop proxies. spicy/seasoned. Family favorites Eating occasions Preparation mode Temperature state Primarily dinner Heat & eat Frozen Functional benefits Emotional benefits Convenient (First cook time) “I know my family is eating nutritious” Even if relatively current brand research exists for the brand and competitive brands.food service industry.

e.ethnic.. feature. Indian and Thai). including white paper concepts. A variety of stimuli can be used for the chosen proxies to facilitate brand extendibility research discussions. out of bounds for the brand and. Since it’s difficult for them to articulate these guidelines on an unaided basis. This continuum begins with a proxy that’s relatively close in (family favorites) and ends with one that is a significant stretch from how customers perceive the brand today (exotic).The reason these continuums and proxies are so important is that they will eventually represent the stimuli used in Step 3 research to determine the “guidelines” customers use to judge the boundaries of extendibility. and exotic. During focus groups and in-depth interviews. service.g. it’s imperative to probe deeply into the explanations customers offer relative to fit and understand the thought 38 . It’s important to remember that these proxies were strategically chosen to represent distinct points on a continuum. As is true for Step 1. Once brand and category associations have been determined and representative proxies selected.. brand relevance). representative images. with several points in between. The proxies chosen may or may not represent good new product opportunities for the brand (i. These explanations will help the brand manager develop the guidelines and bounds of the brand’s extendibility in Step 4. it’s important to remember that we are mostly interested in understanding customer rationales for why something does or does not fit with the brand. customer unmet needs). and actual products or prototypes. for any given proxy. or benefit fits with the brand in question. Step 3: Conduct research. two variations on ethnic food were intentionally selected as proxies to differentiate between familiar ethnic food (e.e. Italian and Mexican) and less common ethnic food (e. the reasons why. it is imperative to go back to customers to solicit their input. For example.g. qualitative research formats are ideal for Step 3 research. customers should be systematically presented with the proxies identified in the previous step and asked for their opinion as to how well each product. What’s more important at this point is that they provide the basis for rich conversations with customers as to how the brand can and cannot be extended in the future (i. Once again.. the proxies serve as a basis for in-depth conversations as to what type of extendibility is in bounds vs. As such. more importantly..

Once they’ve done this. have each team present their recommendations to the entire group. For example. As the exhibit demonstrates. and dinner is considered a strong fit with the brand while breakfast is not. It is a complete set of continuums and proxies. those that are only a moderate or slight fit. Another useful technique is to compare and contrast different proxies within a continuum. with boundaries drawn based on how well customers perceive different proxies to fit with their impressions of the brand. The ensuing discussions will shed significant light on how customers think about the bounds of extendibility for your brand. it’s helpful to make distinctions between proxies that are a strong fit with the brand vs. Any proxy outside the latter should be considered inconsistent with the brand’s current identity and therefore off limits for near-term brand extendibility. along with their rationale. One effective technique for this phase of research is to separate focus group participants into teams of two or three people and ask them to divide all proxies within a given continuum into two buckets: fits with brand and does not fit with brand. then it would be important to understand the reasons why dinner works with the brand while breakfast does not. 39 . The figure below illustrates the final output of Step 3 for the prepared convenience food brand. if the prepared convenience food brand has an occasion’s continuum that includes breakfast and dinner as two of its proxies.process they go through to arrive at their conclusions.

which proxies are in. it should be considered favorable.” require minimal preparation and cook time. Once an adequate number of guidelines (i.e.. it should not be considered for marketplace introduction. In addition. The final step of this approach is to take the insights obtained in the previous step’s customer research and develop guidelines detailing how the brand can and cannot be effectively extended. respectively. What this means is that unless a potential new product or service opportunity satisfies these guidelines. As the exhibit demonstrates. First.e. the guidelines will be readily apparent based on customer feedback and your knowledge of the brand and category.Step 4: Create guidelines. Other guidelines would be deemed important but not mandatory. Specifically. The development of guidelines will certainly require that some hypotheses be made where conclusions are less clear cut. and one emotional benefit. In other words. In some cases. one functional benefit.. There are a couple of rules of thumb to get you started down the right path. a potential new product opportunity must receive a “high fit” rating on at least one of three other important attributes: the protein it contains (high fit = chicken). which are out. These guidelines provide an effective screening mechanism for potential new product opportunities.e. more sophisticated interpretation will be required. In other cases. The imperatives in this case were deliberately chosen to represent one product feature. roughly a half dozen) has been established. and help Mom demonstrate she cares about her family. the extent to which it’s a complete meal (high fit = complete meal). The figure below illustrates the guidelines that were developed for the prepared convenience food brand illustrated throughout this article. there are three “imperatives” that any new product opportunity being considered for the brand must satisfy. the customer feedback (i. It must be a “familiar family favorite. It will 40 . if a potential new product or service opportunity satisfies this guideline.. go/no-go screens). and its temperature state (high fit = frozen). it’s crucial to conduct thorough analysis of Step 3 research data. it’s helpful to prioritize them because they won’t all be of equal importance. and the reasons why) needs to be interpreted and translated into guidelines for extendibility. One way to think about this is to establish several guidelines that are imperatives (i.

undoubtedly help management evaluate the extent to which new product opportunities fit with and even enhance the current brand equities. 41 .

To understand the reasons for this we need to look at what made Virgin famous in the first place and then see how the company all too often forgot this when extending. its total group value has been estimated to be over US $ 7. while he holds minority or majority stakes in others. The Virgin Group is a group of separately run companies that each use Virgin brand of British celebrity business tycoon Sir Richard Branson. being honest and delivering on promises. the brand is rated as Britain’s third most admired. the commercial setup of companies using it is varied and complex. honest & transparent pricing – not necessarily the cheapest on the market. Although Branson retains complete ownership and control of the Virgin Brand. The group is sometimes perceived as a conglomerate. which in a lot of cases can be completely meaningless. Operating across 5 continents. Some of these extensions are shining stars. financial services.2 billion. Approximately 70% of Virgin’s value and 75% of our employees are based in the UK. although there are just as many howling dogs. Virgin is a success both in sales and imagery terms. What brand Virgin stands for? Richard Branson set out with these principles in mind in the 1970s these define what Virgin is all about. Virgin Express and Virgin Blue Australia – low cost airlines with transparent pricing . attention to detail. but this is not in fact the case. E. Most companies in the world have a set of brand values. retail. space tourism and music businesses. Here are some examples of the ways that Virgin delivers its brand values:Value for Money Simple. behind Marks & Spencer and Tesco. mobile. with some being wholly owned by Branson. The brand has become a disparate and sprawling mass of more than 200 companies selling everything from lingerie to life insurance across the world. 42 . All the companies operating under the Virgin brand are separate entities.you only pay for the basics Good quality High standards.The Virgin Group of Companies incorporates travel. leisure. Virgin believes that the most important thing is the way those values are delivered and brought to life. Taken as a whole.g.

Brilliant Customer Service: Friendly. human & relaxed. lounge. digital seat reservations & new sleek design rolling out across the network now.g. Competitively challenging Sticking two fingers up to the establishment and fighting the big boys – usually with a bit of humour. innovative. Innovation: Challenging convention with big and little product / service ideas. over 150. Virgin Mobile UK which has won awards for its customer service.000 people enjoy the world's best bands at nice festival sites in Essex and Staffordshire 43 . Fun Every company in the world takes itself seriously so we think it's important that we provide the public and our customers with a bit of entertainment – as well as making Virgin a nice place for our people to work.g. E.:-Virgin Atlantic Upper Class Suite – limousine service. freedom menu etc. radio. Virgin Trains new pendolino – fast tilting train with shop. Virgin Mobile's V Festival – every year.E. large flat bed on board.g. E. Virgin Atlantic successfully captured the public spirit by taking on BA's dirty tricks openly – and winning.g. modern and stylish design.g. E. professional but uncorporate. E.

fun-loving and slightly ‘rock ’n roll’ personality traits. and changed the red dress on the "Scarlet Lady" on 44 . The launch of Virgin Atlantic and Virgin Cargo in 1984 gave an important second set of values: that of a challenger brand fighting for superior value against the big boys like British Airways. Virgin focused on building two businesses that created the core of the brand. whose Tubular Bells album went on to become one of the biggest sellers of all time.How it all Start? It all started with the first issue of student magazine in 1968. The second part of the core is the Virgin Atlantic airline. following British Airways' announcement that it was to remove the Union Jack from its tailfins in favour of world images. Virgin Atlantic jets were painted with the words "No-Way BA/AA" in opposition to the attempted merger between British Airways and American Airlines. The first of many PR coups was hiring the then unknown Mike Oldfield. These roots in the music business are where the brand acquires its youthful. which alone now accounts for about 40 per cent of the brand’s turnover. In 1997. Virgin took advantage of the controversy provoked by introducing a union flag design on the winglets of its aircraft. In the 1990s. Later the first Virgin record store being opened on London’s Oxford Street in 1971. The company subsequently extended into an area with a direct link to this business by creating a record label in 1973. For the first 20 of its 30 years. One half of this core is the brand’s birthplace of music when Richard started selling records by mail-order.

and around 200 hours of television shows. Also featured are video games. specialising in East and West coast USA. with the tag line "Britain's Flag Carrier" to tongue-in-cheek challenge BA's traditional spot in this role. Later Virgin Hotels came into being in 1988 with 3 properties: Norton House Hotel in Edinburgh. It's now one of the UK's largest long-haul tour operations. They needed a break. Crathorn Hall hotel in North Yorkshire. Virgin also pioneered seat-back personal TVs in all classes. There was virginity in almost everything they did from clubhouse lounges to massage services in them. which we have now come to associate with the brand. Australia and the Far East. By 1985 Virgin Communications were distributing film and video in Europe.the nose of its aircraft to the union flag also. The year1990 saw the arrival of Virgin Megastores in Japan. and at their destination. The 1990s saw the launch of Virgin’s many extensions. Virgin Atlantic offered its business class complimentary limousine pick-up and drop-off at the airport. The Virgin Music Group was sold to THORN EMI in 1992 in a US$1billion deal. the USA. and have begun upgrading their aircraft to an Audio/Video on Demand (AVOD) system called V:Port. Later Virgin Books was formed. and Rhinefield House Hotel in Hampshire. The V:Port system offered a choice of approximately 50 full length feature films. In 1994 Virgin Trading Company and William Grant & Sons announced a commercial agreement to market Virgin Vodka in the UK. Virgin Group 45 . some of which can be played against other passengers. 60 audio CDs. so they started Virgin Holidays.

announced the formation of The Virgin Cola Company Ltd. decreasing tariff. The company initially concentrated on the development and sale of premium quality cola beverages. and was the first to introduce free voicemail retrieval and one simple. The company was established to sell financial services by telephone at a significantly lower cost than traditional financial services companies. Virgin Mobile really shook up the telecoms industry. The late 90s saw a number of extensions of the virgin brand into different markets. Virgin Mobile. which later became TMobile. Virgin's first consumer telecommunications venture launched in November 1999 as a joint venture with One2One. It operated InterCity and Express services linking over 130 stations across England. Virgin Cola produced. Virgin Direct Personal Financial Service launched in March 1995. 46 . Scotland and Wales. Virgin Rail Group Ltd was awarded the CrossCountry Trains Ltd passenger rail franchise in 1996. marketed and distributed drinks under the Virgin brand name to a select number of markets around the world.

Franz Ferdinand.com. 47 . Virgin also took its existing businesses to many countries like Nigeria . Virgin Bikes. and the Prodigy. to undertake the challenge of developing space tourism for everybody. Virgin Money launched a new credit card company in 2002. Canada. Virgin Wines. Scissor Sisters. Virgin Money. Virgin Student. Virgin announces the launch of Virgin Galactic in 2004.USA. V Festival line up includes. Chemical Brother's. Virgin Energy and Virgin Travelstore. Fiji. with many more in 2005.The 00s: A new decade in a new century. Virgin launched a series of new businesses including Virgin Cars. Australia.

Virgin is still a strong. visually or culturally. Simply adding the logo to a product will not make people want to buy it. This leads to misplaced complacency about a brand’s ability to stretch profitably into new areas. recognizable brand. Virgin is one of the best examples of this ego tripping. If Branson 48 . Richard Branson has never been shy of launching a new Virgin business in a hot air balloon or a wedding dress. Virgin's brands don’t really make for a comfortable fit. But attaching this great brand icon also has its drawbacks. To avoid falling into the same trap. what helped them deliver differentiation. It seems that simply adding the word “Virgin” to a multitude of businesses doesn’t necessarily make the Virgin brand any stronger. In reality the benefits are less cut and dried. with the majority of extensions dying an early death. A measure of a brand’s strength can lie in answering the question “what do you do?” in as short a sentence as possible. relevance and value. and adds value to. Virgin has fallen in love with oneself and constantly looks for ways to take advantage of their presumably all-powerful brand name. This poor performance is caused by ‘brand ego tripping’: an inward focus on the needs of the business. where a highly aspirational and rich brand world ties together. with each other. For example. rather than an outward focus on the consumer and competition.” the reply for Google could be “they give you great answers. but much of its meaning has been diluted.Brand Ego Tripping of Virgin: Most companies have caught the brand stretching bug. Brand ego tripping has led Virgin to lose sight of what made them famous in the first place. ask someone this question about Ferrari and the answer could be “they make cool and fast cars. a very wide and functionally unrelated 360◦ set of extensions. They ended up focusing internally on the needs of the business and its management rather than externally on the needs of the consumer. As with other consumer brands. This is the domain of brands such as Gucci. seeing it as a cheaper and less risky way of launching innovation than creating new brands. Virgin does have a consistent visual element to its brand—the founder himself. Virgin lacks the ‘badge’ values to achieve this.” Ask the question about Virgin and the answer could run into several paragraphs. one needs a ruthless focus on adding value for consumers.

There have been (and remain) many good targets to attack. is no longer associated with promoting it? The mixed bag of business identities is reflected in the brands’ visual styles of the various sub-brands. Virgin Atlantic’s success is not down to people flying on it because they buy into a philosophy. Branson himself.should want to sell one of his businesses. Where was the challenge? Where was the irreverent fun? The only thing it had going for it was cheapness. Virgin Vodka crashed and burnt because it lacked any brand added value. free ice creams and high-tech video games deliver relevant differentiation. despite a price 15–20 per cent below Coke. Virgin Coke in fact achieved only a 3 per cent share in the UK. Virgin extensions have worked well only when the brand has translated the umbrella concept of being an ‘irreverent. fun. place them side by side and they don’t make sense as a single message anymore. Beyond airlines. But from a strategic perspective. It used to be a brand that catered to young audiences. of siding with the consumer in the face of bureaucracy and monopoly. but with Virgin Trains and the Virgin Credit Card it doesn’t have that image anymore. T-Mobile and 49 . The consistent elements of the color red and the original Virgin hand-drawn text are there. Virgin Vodka is far from being the only failed product extension. it does weaken the consistency of the overall brand message. While this doesn’t make the individual brands less recognizable. and these are still powerful visual devices. many of the sub-brands seem poorly thought out. Virgin has made good inroads into the mobile phone market in the UK and USA. Virgin’s Robin Hood-like mission of taking on the over-charging and under-delivering bully boys has worked much better in services. those living the lifestyle of the young and rebellious. but because it’s a very good product at a competitive price. A multitude of features such as on-board massages. following desperate price cuts. value fighter’ into compelling and competitive products and services. And have you seen many young hipsters chucking out their Levi’s or Diesel jeans in favour of Virgin? As a general rule. In contrast. It used to have the image of being the rebel. what is the business worth if the biggest brand element. but with Virgin Cars and Virgin Atlantic it doesn’t really have that image either. Its irreverent personality is a refreshing contrast to the conservative communications of Vodafone.

This is great business thinking. 50 . nor is Virgin Cola. This problem can work against Virgin as well. but when it is different. and a welcome alternative to the competition when it is done well. therefore.O2. a high profile part of the Virgin brand is now controlled by a company that has nothing to do with Virgin at all. While nobody doubts Virgin’s credentials as a strong global business. Virgin may be an internationally recognized brand. no longer part of the Virgin group. Apple’s I Tunes Music Store was followed by Virgin’s own less expensive version. Virgin is simply one of the market players but never the market leader. Virgin Megastores followed HMV Megastores. A really powerful brand is made not when a business is merely better. what would happen if a scandal were to occur with Virgin Radio that was nothing to do with Virgin as a whole? In other words. While it could be seen as a benefit to have Virgin’s brand retained to promote the rest of the Virgin companies. Take Virgin Records or Britain’s Virgin Radio as examples. a strong business is not the same as a strong brand. a situation that could leave Virgin open to difficulties down the road. but this is not the same thing as good branding. Virgin isn’t a leading brand in any of its businesses. or offers a variation on the business model. Whether it is flights. Virgin Radio was sold to SMG and is. Virgin Active or Virgin Cars. webbased ways of buying more airtime and no long-term contracts. but Virgin Cosmetics isn’t. electricity or music. when it stands for something simple and powerful in people’s minds. The problem is that the company doesn’t innovate the way that Apple or Samsung have been doing. But this is backed up with real service differentiation such as low-frills phones. Instead it takes an existing service or product and undercuts prices.

Armani) and/or strong heritage (e. Virgin had neither of these and was left with only one option: price cutting. Emotional values were underpinned by a strong functional point of difference.g. with cola. he rightly spotted competitors that were over-pricing and under-performing and did us all a favour by delivering something better. Instead.g. cola and vodka also reflects a failure to understand the needs in these markets.’ • Forgetting what made you famous: A considerable part of Virgin’s success is down to Branson’s admirable bravery at taking on the big boys. fashionable badge values (e. However. Virgin actually sold off its record business in 1992 to Thorn EMI to help fund the brand ego trip of the 1990s. consumers mostly want aspirational. • Failing to understand consumers and markets: The lack of real success in jeans. Diesel.Lessons to learn from Virgin’s brand ego trip: • Neglecting the core: One would have to wonder whether Virgin would have been even bigger and stronger if the company had spent more time on developing and nurturing the core areas of travel and entertainment. With airlines and financial services. As discussed earlier. vodka and jeans Virgin failed to develop a product that was faithful to the brand’s promise: these extensions were ‘all sizzle and no sausage’. ‘Only time will tell if Virgin’s cash cows can continue to supply the nourishment for its stable of failures. However. Levi’s). 51 .

” 52 . Conclusion: “Promise something relevant to the consumer and deliver the goods and you will build both brand and business. Fail to do this and no amount of marketing support or brand philosophy will save your bacon. Selective extension into new areas faithful to the Virgin promise could perhaps have delivered a better return on investment. Some consumers even had their electricity accounts charged after signing up for information about cheap Virgin CDs and airline tickets. in that he has no shareholders to please and lots of his own hard-earned cash to play with. • Neglecting execution: This can lead to poor product performance and even brand damage. colas and jeans and still make good profits. • Scatter-gun stretching: This led to a fragmentation of financial and human resources. as it lacked the critical mass needed to achieve economies of scale and so drive down prices. as was the case with the mis-selling scandal at Virgin Energy. me-too vodkas. Retail competitors such as WalMart/Asda were much better positioned to produce low-cost. Branson is of course in a very different position to most people reading this book. The door-to-door salespeople employed by venture partner London Electricity hadn’t read Virgin’s customer service charter. They used dodgy deals and hard selling to flog their wares and watchdog Energy watch received many complaints.even here the brand could not compete effectively.

Such is the long journey from Barbie. to Barbie. When archeologists dig into the ruins of our world they will find the Venus DiMilo of the 20th century: BARBIE’ --. The Barbie has spawned has an unexpected industry. the Barbie doll has firmly established herself as the most popular fashion doll ever. so commonplace that it becomes almost invisible. a doll. a Brand. Mattel. It becomes a part of the collective consciousness. The brand has ossified in the public mind to such an extent that Barbie is called the collective subconscious of America.Kate Moss When an icon carries this much in a society. it becomes so present. taken for granted.9 billion a year industry. There are shelf loads of books and essays about the toy doll. the company which created it claims that approximately three Barbie dolls are sold every second. full of insights. 53 . I can’t think of any other icon that I more widely distributed or so accepted as an image of femininity. Students can enroll in sociology courses in the US with such title as ‘From Barbie to Superman: images of gender in popular culture’. Since her creation in 1959 as a paper doll inspired friend. which deconstructs the meaning of this pint-sized piece of pink plastic. The Barbie doll is now a $ 1.‘Barbie says a lot about the world.

Conceiving Barbie She took the world by storm.as an idea in a visionary's head. both adults and children would collect her in record numbers. so she purchased three of them. In the coming years. were singing her praises. there were no three-dimensional teenage dolls. Handler discovered a German doll called the Bild Lilli doll in a shop window. Ruth confirmed that while there were plenty of baby dolls available. She then resolved to create such a doll through her own company. 54 .why not make a teenage doll that little girls could play and dream about the future with? Ruth recognized the value of helping children realize their dreams and goals through play. This is her story. co-founder of Mattel Toys. 1959 a date that became Barbie's official birthday later. was watching her daughter Barbara play with paper dolls and imagine them in grown-up roles when the idea hit her . yet so sophisticated. After researching the current doll market. Ruth Handler. little girls across America. the concept was revamped. Never before had anyone seen a doll so small. and later. the world. The Lilli doll was based on a popular character appearing in a comic strip drawn by Reinhard Beuthin for the newspaper Die BildZeitung. She gave one to her daughter and took the others back to Mattel. Lilli was a fashionable "society girl" who knew what she wanted and wasn't above using men to get it. and charisma. Initially. Back home Handler reworked the design of the doll (with help from engineer Jack Ryan). and the doll was given a new name: Barbie. she won audiences over in record time. which she co-founded with her husband Elliott Handler. The adult-figured Lilli doll was exactly what Handler had in mind. charm. surprising skeptical toy critics at New York's Toy Fair in 1959. toy buyers were skeptical. During a trip to Germany with her daughter. Her name is Barbie. She began like any other great invention does . Barbara. With her good looks. Today she remains one of the hottest selling toy brands in the world. after Handler's daughter. The doll made its debut at the New York International American Toy Fair on March 9. Soon.

Barbie was completely unlike any of the baby or toddler dolls popular at the time. Critics posed the question . launching an innovative television ad campaign.As a teenager. Mattel stood firmly behind the first Barbie doll. 55 . Barbie quickly caught the attention of little girls across the country. and remains as popular as ever today. She soon became a worldwide sensation.Would anyone buy her? Undaunted by skepticism.

by contrast was a go getting. Kelly (1995). and in varying colors perfect for little girls to brush and style. and "Easter Parade. as fashion and teenage lifestyle trends have shifted. She has been given the full name Barbara Millicent Roberts. Barbie doll's body underwent dramatic changes including a new Twist 'N Turn waist. Barbie did all those things that teenage girls dreamt of.” But its marketing had to fight the ground reality of making inroads in an established market. Barbie became more poseable than ever before. Barbie began wearing her hair long and straight. Over the years. As the 1960s gave way to the "British Invasion".Jackie Kennedy. In the early 1970s. Afro-American Christie and Steven and the ethnically-ambiguous Kayla. and a family and friends have been manufactured for her. elbows. she began wearing designer outfits such as Gay Parisienne. Mattel insisted that it enabled girls to become “anything they want. Barbie has worn many fabulous fashions. with bendable wrists. Other longstanding friends in Barbie's ethnically diverse social circle include Hispanic Teresa. As a teenage fashion model. As the 1960s progressed. and Fashion Luncheon. In addition to wearing the popular mod fashions. Barbie took on the style and sophistication of the decade's most famous trendsetter . independent young woman. Barbie again became a trendsetter.Four decades of Barbie To begin with. Barbie was reunited with her best friend Midge in the early nineties. hair. twins Tutti and Todd. and baby Krissy (1999). Additions to the family tree include Skipper (debut 1964). By creating a doll with adult features. Barbie has often been used to 56 . Stacie (1992)." both modeled after Parisian couture fashions. As hair play became an important aspect of the Barbie doll experience. face sculpting and makeup changed but also she spoke for the first time in 1966. Barbie arrived in a market which was dominated by baby dolls designed for girls to cradle. Barbie has followed style trends as well as blazed her own fashion trail. In the early 1960s. wearing such stunning fashions as Silken Flame. starting with her boyfriend Ken (1961). Barbie's fictional biography has developed with her continued sales. so has Barbie. After a long estrangement. and a more youthful face with rooted eyelashes. and ankles. Not only did she get a fashion makeover. Beginning with her trademark black and white striped swimsuit and swirled ponytail. but her body style.

com dedicated to the adult Barbie doll collector. In the 1980s. Valentina Tereshkova. Barbie fans loved her and she sold out almost instantly at retail (only 300. and engage in numerous exciting interactive activities. Although she was not specifically targeted to the collector market. For many of these women. she was a part of them that was timeless.com. accessories. In 1996. Doctor. Barbie wore fashions that mirrored the funky trends found on dance floors across the country. This event ignited the adult collecting boom and marked a turning point in Barbie doll history. is now a place where girls can play interactive games. and Christian Dior just to name a few. In 1998. fashions. ageless . Barbie. dentist.com. As always. An astronaut suit was sold for Barbie around the same time the first woman to do so. Vera Wang.barbie.Barbiecollector. 2000 and again in 2004. Paleontologist. allowing girls and collectors to decide what their Barbie doll friend would look like by choosing her hair/eye/makeup colors. Barbie ran for President of the United States in 1992. Their intricately designed doll fashions generated a great deal of excitement in the doll collecting community. My Design was introduced on the site. To tap this new group of sophisticated adult collectors. and personality traits. this site features a comprehensive searchable doll showcase that contains all collector dolls back to 1980. In the 1990s.000 were made). entered space. Mattel launched www. In 2000. Barbie had her finger on the pulse of Americana. nurse. make up stories online. She has taken up many occupations over the years some of them like Olympic athlete. some of the world's most famous designers began creating fashions for Barbie including Bob Mackie. dedicated to the play-line Barbie dolls. Barbie collecting began attracting adult women as well as little girls.and they wanted to reconnect with their favorite fashion doll. as well as chic designer looks that came in vogue in the late 1970s. Nolan Miller. the official Barbie website. 57 .promote gender equality as an example that women can "be anything". Firefighter veterinarian and many more. . Then in 1988 came Happy Holidays Barbie doll. Mattel issued Blue Rhapsody Barbie in 1986. Barbie collecting became more than a childhood pastime. With Barbie doll's original fans now in their twenties and thirties. Barbie symbolized the innocence of their youth.

a new line of novels about Barbie appeared. radio. The company has also been employing what is known as 360 marketing. Today. By the late-1990s. magazines. from furniture to make up. guest appearing in the Disney & Pixar film Toy Story 2. and the latest Barbie in the 12 Dancing Princesses all of which were accompanied by small product lines. and collectors’ events. Barbie had two videos. 58 . Barbie in the Nutcracker. internet. In the mid-1990s. Barbie: Fairytopia. Barbie and the Magic of Pegasus. Books about Barbie first emerged in the 1960s. websites. Mattel has also created real life events around here like the Barbie conventions. The Barbie Diaries. surrounded by wallpaper and so-on. Barbie of Swan Lake.” Mattel’s exceptionally innovative strategy was to license Barbie in 30 different product cateogories. Mattel has dedicated itself to promoting Barbie “as a lifestyle not just a toy. The secret of Barbie’s eternal appeal as brand is reinvention. Barbie and the Rockers and Barbie and the Sensations. she has taken the computer animated movie industry by storm. Mattel company is soon going to launch a Barbie car. a girl can sleep in Barbie pyjamas. In recent years. Barbie: Mermaidia (a sequel to the previous Fairytopia video). Barbie as the Princess and the Pauper. danglers. television. and later her own direct-to-video movies. Print. magazines.360 Degree Marketing Mattel employed innovative marketing strategies to retain premier position in the global markets. Barbie as Rapunzel. Mattel had moved to featuring her in interactive 3D video games for both gaming consoles and personal computers. including dolls. under a Barbie duvet-cover. outdoor advertising – you name it and it has been used. In the late 1980s. This new series showcased Barbie's adventurous exploits. her head on a Barbie pillowcase. fan clubs.

Some Extensions of the Barbie Brand The Fragrance Barbie pillow Acrylic tumblers & trays T-shirts DVD Suitcase Gift Wrap Watch Make-up Kit 59 .

It is criticised that Barbie doll promotes style over substance. Each doll was programmed to say four out of 270 possible phrases. Although only about 1. parties and looking pretty gave rise to the accusation that Barbie encourages young girls to focus on shallow trivia. Barbie has problematic measurements: she stands a "too perfect to be real" body shape. A lot of young girls may expect themselves to have the same figure as Barbie's and to push themselves to lose weight in order to be as thin as possible. makeup. It is most often associated with pre-teen and adolescent females but is applicable to any age group. hair. They argue that the images and messages of "beauty" she presents are unrealistic. 2003 for not conforming to the ideals of Islam. Barbie is often looked upon as an icon of Western childhood. Her accessories reflect a lifestyle that is unobtainable for most of the girls who play with her.5% of all the dolls sold said the phrase. 60 . ‘Barbie syndrome’ is a term used to loosely describe the desire to have a physical appearance and a lifestyle representative of the famous Barbie doll. It has changed the paradigm of what can be termed as a plaything and the extent of influence it can have on one’s entire life. so chances were good that no two dolls owned by a girl or her friends would be exactly the same. as evidenced by the song "Barbie Girl". "Barbie" is sometimes used as a derogatory slang term for a person. The Middle Eastern country of Saudi Arabia outlawed the sale of Barbie dolls on September 10. The enormous range of available accessories relating to clothes. particularly a girl or woman. who is considered stupid. The criticisms leveled at her are often based around the idea of children considering Barbie a role model and attempting to emulate her.Erosion of the Brand Image The big brand Barbie is a plaything a toy meant for children. a talking version of the doll. Her popularity ensures that her effect on the play of Western children attracts a high degree of scrutiny. Teen Talk Barbie. thus she was replaced with the Egyptian doll Fulla. it caused public outcry. It spoke a number of phrases. ignorant of the fact that Barbie's proportions are unattainable.

Barbie has been able to topple spider-man and Action-man with one swing of her dainty handbag. 61 . This doll captivates a girls mind by offering a chance of fantasy. role-playing and dressing up. Barbie draws her flock with a heady mix of marketing magic and the colour pink. cult-like. is the holy grail of the toy business. How this lady doll gears up to fight competition only future generations of powerpuff girls will tell. Until now. Creating children’s classics that endure and turning them to profitable franchises.Conclusion Sweeping all the criticism aside.

the Company continues to diversify operations. 68% in 2002. Samsung Electronics has achieved excellent performance results during the past three years. 62 . global operations included 27 production subsidiaries. the amount of tax that Samsung paid to the Korean government in 2003 was KRW 6. KRW 7.8B. Samsung Petrochemicals. KRW 11. €110. At the core of it all. In addition.052 billion (US$ 116. upgrade marketing activities. The Company employs 123.4 trillion in 2003. telecommunications products and displays. In terms of export that directly contributes to the Korean economy. To ensure future growth. Liabilities of Samsung that prove the strong foothold of the company have been continuously dropping from 104% in 2000.7 trillion in 2004. Samsung Group is the number one business group in South Korea edging out Hyundai Group. Samsung took up 18. 2 logistics subsidiaries. and 11 research centers.3% of the national tax.000 overseas.8 trillion taking up 22.7 billion in 2004. elevate brand value and invest in advance.7% with USD 52.000 people. 78% in 2001.000 at Korean operations and 43.4B). showing forth a steady increase. Samsung (meaning "three stars" or "tristar" in Sino-Korean) was founded by Lee ByungChul.5 trillion. the Samsung Group is helmed by its chairman Kun-hee Lee.3 trillion. and KRW 15.Samsung: Another Rising Asian Tiger The Samsung Group is composed of numerous South Korean business sectors including Samsung Electronics. Samsung Life Insurance and many more. Total sales for 2004 were reported at won 146.4% in 2004. including more than 80. and 51% in 2004.1% of the national export amount with USD 31. Samsung Group now produces a full range of items. 56% in 2003. the annual net profit of Samsung marked KRW 5. which took up 6.3% of the Korean market but this figure increased to KRW 90. As of 2004.2 billion in 2000 and 20. The market value of Samsung in 1997 reached KRW 7.8 trillion in 2001. which amounted to 10. 37 sales subsidiaries.7 trillion in 2002. from digital media and digital appliances to semiconductors. Moreover.

the company also took steps to enhance its competitive position in the world's textile industry. began to export its products for the first time during this period. Mr. vegetables. Another significant development was Samsung's 1974 acquisition of a 50 percent stake in Korea Semiconductor. In 1978.The Beginning On March 1. Throughout the 1970s. 1938.000 won. and ultimately become the roots of the modern global corporation that still bears the same brand name today. Lee's little business was primarily in trade export. Samsung only produced semiconductors for the domestic market until the successful development of a 64K DRAM (Dynamic Random Access Memory) VLSI chip in December 1983. already a major manufacturer in the Korean market. many new companies were created including Samsung Heavy Industries Company in 1974. further consolidating Samsung Electronics' reign as a leader in semiconductor manufacturing. But in just over a decade. its own manufacturing and sales operations. At first. As a result. founding chairman Byung-Chull Lee started a business in Taegu. Another burst of growth for Samsung came from the burgeoning home electronics business." announced in August 1973. The late 70s and early 80s represented a time of increasing diversification and global growth for Samsung’s core technology businesses. The company's second "Five-Year Management Plan. Samsung Electronics. chemical. selling dried Korean fish. During this time. when it became a world leader in semiconductor products. targeted these industries and also introduced Samsung to the shipbuilding industry. Samsung had its own flour mills and confectionery machines. and petrochemical industries. integrating its manufacturing processes from raw materials to end products. Korea with 30. and Samsung Shipbuilding Company (created when Samsung acquired Daesung Heavy Industry Company) and Samsung Precision Company (now Samsung Techwin) in 1977. and fruit to Manchuria and Beijing. Samsung Semiconductor and Samsung Electronics became separate entities as new products were introduced to the global market. 63 . Samsung laid the strategic foundations for its future growth by investing in the heavy.

consulting. Samsung has been developing its aerospace capabilities with unprecedented speed ever since. aerospace and new fields of technology innovation from nanotechnology to advanced network architectures. The mid-80s also saw Samsung entering the systems development business. these two pioneering R&D organizations have helped Samsung expand its reach even further into electronics.Samsung Precision Company (established in 1977) laid the foundation in another hightech industry . The merger of Samsung Electronics and Samsung Semiconductor & Telecommunications was undoubtedly a key strategic moment in the progress towards this goal. For the first time in the group's history. directing Samsung’s growth towards becoming a world-class 21st century corporation. Future plans include the development of future space stations . and networking services. Together. Samsung was now in a position to maximize its technological resources and develop value-added products. Renamed Samsung Aerospace Industries in February 1987 (now known as Samsung Techwin). Kun-Hee Lee succeeded him as the new Chairman. he announced the "Second Foundation" of the company. For this "Second Foundation." Samsung challenged itself to restructure old businesses and enter new ones with the aim of becoming one of the world's top five electronics companies. 1987.and even space facilities for the Moon and Mars in the early 21st century. Samsung Economic Research Institute (SERI) in 1986 and Samsung Advanced Institute of Technology (SAIT) in 1987. Samsung’s founding Chairman Byung-Chull Lee passed away after almost fifty years at the helm of the company. On the 50th anniversary of Samsung’s founding in 1988. Samsung's increasing focus on technology led to another key development in the mid-80s with the creation of the company's two Research & Development institutes. systems management. genetic engineering. high polymer chemicals. establishing Samsung Data Systems in 1985 (now known as Samsung SDS) as a leader in Information Technology services including systems integration. On November 19. By the late 80s. Samsung’s efforts to create 64 . The integration of overlapping projects also reduced costs and efficiently utilized capital and labor.aerospace. His son. optical telecommunications. semiconductors.

New Management was a decisive turning point for Samsung.consolidation of its electronics and heavy companies started to pay off with a wellregarded reputation matching the high-tech products the company was now known for. Samsung's construction branch was awarded the contract to build one of the two Petronas Towers in Malaysia in September 1993 and the Hotel Burj Al Arab Dubai in 2004.from semiconductors to computer monitors. Companies were pressed to rethink their technology and services offerings. and being a good corporate citizen. Another example is Samsung Heavy Industries' drill ships that captured 60% of the world market ever since their introduction. In some areas. the moment when the entire company was repositioned on the basis of "Quality first.leaped into the ranks of the top five products for global market share in their respective areas. coalitions. Ever since entering the LCD business in 1993. Samsung has simply been number one from the start. In retrospect. and buy-outs were common while competition and consolidation flourished. TFT-LCD screens to color picture tubes . set to be tallest structure ever created by mankind. 17 different extensions . providing total customer satisfaction. Samsung’s response to these opportunities was its New Management program in 1993. Mergers. 65 . New Management is more than a mere re-engineering of Samsung but rather an entire revolution dedicated to making world-class products to ensure market leadership and build premium brand recognition to establish Samsung Electronics as flagship brand in the world. such as LCD’s. Business began to flow across borders between countries and companies. The early 1990s presented tremendous challenges for high-tech businesses. 12 others achieved top market ranking in their areas. Samsung has been the undisputed world leader." During this period.

Subsidiaries of the Samsung Group 66 .

Ad agency in Korea) S-1 Renault Samsung Motors Chemical industries • • • • • • Samsung Total Petrochemicals Samsung Petrochemicals Samsung BP Chemicals Samsung Fine Chemicals Cheil Industries • • • Financial services • • • • • • Samsung Life Insurance Samsung Fire & Marine Insurance Samsung Card Samsung Securities Samsung Investment Trust Management Samsung Venture Investment Samsung Electronics – Taking Samsung to the World 67 .Electronics industries • • • • • • • Engineering & construction • Samsung Electronics Samsung Electro-Mechanics Samsung SDI Samsung Corning Samsung SDS Samsung Networks Samsung Corning Precision Glass Samsung Engineering & Construction Entertainment • • • • Suwon Samsung Bluewings Samsung Everland Samsung Lions Samsung Khan Machinery and heavy industries • • Samsung Heavy Industries Samsung Techwin Others • Samsung Advanced Institute of Technology Samsung Economic Research Institute Cheil Communications (No 1.

and design. It is Samsung's electronics' arm that is perhaps most visible to the public. Samsung is the world’s top memory chip maker followed by Intel. As South Korea’s top electronics company. building the image of an innovator. Quasar.1 Rank 43 42 34 25 21 20 20 Samsung Electronics’ high ranking at number 20 on the list of top 100 global brands has left behind Sony the position it has basically owned for many years. Less visible to the public.9 16. A performance that is unlikely to be missed by its competitors giving them sleepless nights. Digital Appliance. quality.3 10. and DTV by launching innovative products in a timely manner that far exceed their rivals in cost. Telecommunication Network. Both Sony and Matsushita are Japanese behemoths with over 50 years of experience in the global market. a highly cyclical industry.One brand of the Samsung Group that has done remarkably well in the last 5 years is Samsung Electronics.2 6. Semiconductor.5 14. But Samsung’s upward rise from 43 in 2000 to 34 in 2002 to its present position at 20 indicates that the 68 . Samsung Electronics is the third largest electronics maker in the world behind number one Sony and number two Matsushita – which counts Panasonic.8 12. and JVC in its brand portfolio. Technics. Rising brand value Year 2000 2001 2002 2003 2004 2005 2006 Brand value (in US billions$ ) 5. Samsung Electronics focuses on five business areas: Digital Media. display.4 8. is its manufacture of semiconductor chips. and LCD. but comprising a large part of Samsung’s revenue. Samsung has maintained its market leadership in memory.

Less than a decade ago it was a maker of low end consumer electronics under a handful of brand names like Wisview. Possibly no brand has done a better job of mining the potential of brand building principles than Samsung Electronics. Figuring that its only shot at moving up the value chain was to build a stronger identity the company ditched its other brands to put all its resources behind the Samsung name. It adopted a number of other measures to build Samsung as a global brand. The whole possibility would have seemed unlikely to many observers just five or six years ago. Samsung was seen as a low-quality brand in a tough consumer electronic industry (Korean companies in general were associated with corporate scandal and Asia was in a financial crisis in 1997). Tantus and Yepp none of which meant much to consumers. Organisational structure 69 . At that time.brand has gathered momentum against its competition.

since the key profit centers were the individual country business. Thus. The head office supported them by product teams. As the co. began to consider the development of Samsung as a global brand. which the local business would sell. as they began to develop their new strategy it was very clear that they would have to change their organizational structure. An immediate effect of the need to control their cost base was to reduce their employee numbers without any labour unrest. their organization was based on ‘nation state’ companies. 70 .The Asian economic crisis in 1998 forced a radical reappraisal of the strategy with the Korean won devalued by 40 per cent and with a significant reduction in the volume sales. which managed the business in particular country. They increased their investment in training so that their workforce would be well equipped to face the challenges of the future. However. Samsung simply had to change in order to survive. which developed the products. There was an additional cultural problem for them Asian management giving up control meant loss of authority. so any change would have to managed very carefully. Samsung decided to concentrate on profitable product features and cost. they had developed a high degree of autonomy in all aspects of marketing and selling. Like many international companies. it faced an immediate issue with its organizational structure.

The next year. Having secured this. A global brand with significant and consistent marketing support was economically better for each country than their own isolated efforts. Keeping consumer needs in minds 71 .Single branding strategy One significant side effect of their structure was meek consistency in brand positioning around the world. As they launched the brand they also crated Brand council with representatives not from just head office marketing but from each of their key business units. After long discussion and coordination. Each country developed its own advertising and promotion with the result that no two countries had an identical platform for brand development. particularly given the organizational issues referred to earlier. Global implementation of the strategy was never going to be easy. Local autonomy also led to inconsistency in marketing support levels with regular cuts in planned expenditure to bolster profits. they launched the global brand campaign in 1999. To a certain degree. they appointed as FCB as their global advertising agency to replace around 50 different agencies. this strategy proved to be effective. With this campaign Samsung aimed to build ‘one face’ towards their customers. This process involved high-level meetings with senior management and the ongoing continuous involvement of as many people as possible in the brand development process. they would fail when the first country manager said he was unhappy. Part of this was also the implicit promise that central management would try to maintain consistent brand investment via marketing support even if times got tough. they went about a programme of demonstrating to everyone why they needed a clear global brand with consistent values. The intention here is to that their brand implementation is consistent across the business and that everyone fully understands the true brand essence. Their starting point was to ensure that they had the one hundred per cent backing of the chief executive since if they did not. apparent problems were detected. However.

Active participation in Sporting events and Trade shows All those years they’ve spent much more on advertising and the visibility of Samsung is much bigger now. Samsung was a Worldwide Olympic partner in the wireless equipment sector for the 2000 Sydney Olympics.Samsung has always developed products keeping consumers needs in mind. Samsung Electronics' vision is to lead the digital convergence movement through the continuous development of innovative. These technologies enable the company to create products and provide services that help make people's lives more comfortable while adding greater value to life itself. LPGA Tour). futureoriented technologies. and many other sporting events around the world.S. Samsung Running Festival. 1999 Nagano Winter Olympics and will be a Worldwide Olympic Partner in 2008 Beijing Olympics. Instead of keeping on extending their lines they have extended their brand into a number of different categories of products which are relevant to the customers. Samsung is an active contributor to the Asian Games. Samsung has an ongoing R&D program that is generating innovative technologies that put the company at the forefront of the digital convergence revolution. Samsung signed the second biggest sponsorship deal in English soccer history 72 . Samsung Nations Cup Riding Competition. Samsung World Championship (a U. Samsung intends to concentrate on maximizing sponsorship of the Olympics in Athens 2004 to continue the global association with popular quality events. ultimately becoming a leader of life enhancement for all people.

They tend to be among the most expensive ones you can buy in most cases.” Quality Products In spite of its strong position globally. what’s extraordinary about Samsung Electronics is the way it has managed to reinvent itself as a brand of quality despite decades of consumer perception that it manufactured low-end. Samsung ultimately aims to contribute to society by 73 .a couple of years ago -. Director of Brand Valuation at Interbrand Jan Lindemann observes that Samsung is changing popular perceptions: “In different markets. It has always kept the customers needs in mind. CeBIT is the world’s largest trade fair featuring digital IT and telecommunications solutions for both home and work environments. The five-year deal is estimated to be worth £50 million. Motorola and Sony-Ericsson. Today. They are in the movies like The Fantastic Four in which many of the Samsung gadgets play a part. “All those things help to push the brand forward. IFA (Internationale Funkausstellung) is one of the world’s largest consumer electronic fairs connecting between buyers and sellers. The International Consumer Electronics Show (CES) is the world's largest annual tradeshow for multimedia consumer technology.middle of the range [mobile phones].” Conclusion: Samsung for less than a decade has played a role of a leader and innovator. For instance. now in many markets around the world [they] focus on the premium high-end phones.with Premiership Champions Chelsea FC. consumers appear to take Samsung seriously as a quality brand of VCRs and TVs. and even consider it a superior brand in areas like mobile phones where it competes with Nokia. cheap knockoffs. they used to produce -. Samsung is moving up more on the premium side. Samsung sponsors all these events.

cultivating genuine ways to shape new lifestyles and allowing customers to get more from life – the mantra of their success. 74 .

A well maintained vehicle might never drop in value at all. 75 . Harleys are especially noted for the tradition of heavy customization that gave rise to the chopper-style of motorcycle. Harley-Davidson motorcycles (popularly referred to as "Harleys") are distinctive in design and attract a loyal following.The Harley-Davidson Motor Company is an American manufacturer of motorcycles based in Milwaukee. and hold their resale value very well compared to other vehicles. It also licenses its logo. although regular maintenance is expected.015 million USD in 2004 and employs 9. or almost 5% of net income). The company emphasizes heavy bikes designed for cruising and known for their distinctive exhaust noise. which is a profitable side business ($41 million of revenue in 2004.000 people in America. The company supplies many domestic police forces with their motorcycle fleets. United States. Wisconsin. It is one of the two remaining American mass-producers of motorcycles (along with Victory Motorcycles). The company had revenue of $5.

The engine was designed for use in a regular pedal-bicycle frame. Elder brother William A. the first known appearance of a Harley-Davidson motorcycle. This first "real" HarleyDavidson motorcycle had a bigger engine of 24. Davidson also lent a hand. 76 . In January 1905 small advertisements were placed in the "Automobile and Cycle Trade Journal" that offered bare Harley-Davidson engines to the do-it-yourself trade. The machine's advanced loop-frame was similar to the 1903 Milwaukee Merkel motorcycle. In 1907 William S. Will Harley and the Davidsons quickly wrote off their first motor-bicycle as a valuable learning experiment. age 21. Walter Davidson. That year around 50 motorcycles were produced.Company founding The company considers 1903 to be its year of founding.Over the next two years Harley and his boyhood friend Arthur Davidson labored on their motor-bicycle. That September a milestone was reached when the fledgling company was officially incorporated. Harley graduated from the University of Wisconsin at Madison with a degree in mechanical engineering. In 1906 Harley and the Davidsons built their first factory on Chestnut Street (later Juneau Avenue). They also began selling their motorcycles to police departments around this time. The machine was functional by 8 September 1904 when it was entered in a Milwaukee motorcycle race. Harley. Work was immediately begun on a new and improved machine. drew up plans for a small engine that displaced 7. a tradition that continues today.07 cubic inches (116 cc) and had fourinch flywheels. By April. though the Harley-Davidson enterprise could be considered to have started in 1901 when William S.74 cubic inches (405 cc) with 9-3/4 inch flywheels weighing 28 pounds. With the new facilities production increased to 150 motorcycles in 1907. Upon completion the boys found their power-cycle unable to conquer Milwaukee's modest hills without pedal assistance. It was finished in 1903 with the help of Arthur's brother. They also got help with their new engine from outboard motor pioneer Ole Evinrude. The first Juneau Avenue plant was a modest 40 by 60 foot single-story wooden structure. This location remains the Motor Company's corporate headquarters today. complete motorcycles were in production on a very limited basis.

but gave better performance. the red brick factory with its many additions would take up two blocks along Juneau Avenue and around the corner on 38th Street. In 1911 an improved V-Twin model with mechanically operated intake valves was introduced. Despite the competition. This gave about double the hill-climbing power of the first singles. the United States was drawn into World War I and the military demanded motorcycles for the war effort. Their motorcycles were sold by dealers in 67 countries.284 machines.Production in 1905 and 1906 were all single-cylinder models with 26. Begun in 1910. Production jumped from 450 motorcycles in 1908 to 1. Although shown and advertised.189 machines.149 machines in 1909. By 1913 the yellow brick factory had been demolished and on the site a new 5-storey structure of reinforced concrete and red brick had been built.68 cubic inches (880 cc) and produced about 7 horsepower (5 kW). Production that year swelled to 16. Production was 28. a milestone was reached in 77 . After 1913 the majority of bikes produced by Harley-Davidson would be V-Twin models. Harleys had already been used by the military in border skirmishes with Pancho Villa but World War I was the first time the motorcycle had been adopted for combat service. The success of Harley-Davidson had attracted many imitators. Harley-Davidson provided over 20. Harley-Davidson was already pulling ahead of Indian and would dominate motorcycle racing after 1914.84 cubic inch (440 cc) engines but as early as February of 1907 a prototype model with a 45-degree V-Twin engine was displayed at the Chicago Automobile Show. World War I In 1917. Harley-Davidson was the largest motorcycle manufacturer in the world. Top speed was about 60 mph (97 km/h). By 1920. These first VTwins displaced 53. very few dual cylinder V-Twin models were built between 1907 and 1910. the 1911 V-Twin was actually smaller than earlier twins.48 cubic inches (810 cc). Displacing 49.although just a handful would survive the 1911.000 machines to the military forces during World War I. By 1910 some 150 makes of motorcycles had already been built in the United States -. In 1921.

unusually. It remains the only shaft-driven Harley Davidson ever made. many to be provided to allies. and the gas tank still seen today. (The A in this case stood for "Army". such as a new 74 cubic inch (1.000 military motorcycles. the company.motorcycle racing. Army also asked Harley-Davidson to produce a new motorcycle with many of the features of BMW's sidevalve and shaft-driven R71. Shipments to the Soviet Union under the Lend-Lease program numbered at least 30. A front brake was added in 1928. Harley's XA cylinder heads ran 100° cooler than its V-twins'. shifted to war work.) Upon the outbreak of war. in 1925. though a wonderful motorcycle. on the eve World War II. and the WLA—already in production—was sufficient for its limited police. The XA. never entered full production: the motorcycle by that time had been eclipsed by the Jeep as the Army's general purpose vehicle. Harley largely copied the BMW engine and drive train and produced the shaft-driven 750cc 1942 Harley-Davidson XA. was already supplying the Army with a militaryspecific version of its 45" WLD line. and courier roles. introduced in 1922.S. Production of the WLA stopped at the end of the war.Harley Davidson. several improvements were put in place. Due to the superior cooling of an opposed twin.000 were made and the XA never went into full production. During the 1920s. Over 90. HarleyDavidson again produced large numbers of motorcycles for the US Army in World WarII and resumed civilian production afterwards. mostly WLAs and WLCs (the Canadian version) would be produced. called the WLA. called a "Teardrop" tank. The WLAs produced during all years of war production would. though it would resume production from 1949 to 1952 due to the Korean War. A Harley-Davidson machine was the very first to win a race at an average speed of over 100 mph (160 km/h). Only 1. have 1942 serial numbers. World War II One of only two American cycle manufacturers to survive the Great Depression. escort. The U.000. 78 . producing a range of large V-twin motorcycles that were successful both on racetracks and for private buyers.2 L) V-Twin. along with other manufacturing enterprises.

They can be distinguished from the Softail by the traditional coil-over suspension that connects the swingarm to the frame. suspension. Road Kings are reminiscent of big-twin models from the 1940s and '50s. Dyna Dyna motorcycles feature big-twin engines and traditional styling. and five Glide models offered in various trim. Each family can be distinguished by its engine.Extension of Harley Bikes Since 2001. Glides can be identified by their full front fairings. rear coil-over air suspension and are the only models to offer full fairings with Radios/CBs. they are visibly similar to the "hardtail" choppers popular in the 1960s and '70s. Touring The touring family includes three Road King models. as well as from their own earlier history. and from the Sportster by their larger engines. and other visually-identifiable characteristics. Harley-branded motorcycles have fallen into one of five families: Touring. Sportster. 79 . Softail. and VRSC (or V-Rod). In keeping with that tradition. Softail These big-twin motorcycles capitalize on Harley's strong value on tradition. Harley Davidson touring models are distinguishable by their large luggage. Dyna. Harley offers Softail models with "springer" front ends and "heritage" styling that incorporate design cues from throughout their history. With the rear-wheel suspension invisible on the bottom of the frame. Most Glides sport a unique fairing referred to as the "Batwing" due to its unmistakeable shape. The Road Kings have a "retro cruiser" appearance and most models are equipped with a large clear windshield.

They were conceived as racing motorcycles. Smaller and lighter than the other Harley models. Based on the VR-1000 racing motorcycle. Competing against Japanese and American musclebikes. 80 . and were popular on dirt and flat-track race courses through the 1960s and '70s. It is visually distinctive. it continues to be a platform around which Harley-Davidson builds drag-racing competition machines. for the first time in Harley history. VRSC Introduced in 2001. the Sportster is the longest-running model family in the HarleyDavidson lineup. the VRSC family bears little resemblance to Harley's more traditional lineup. easily identified by the hydroformed frame members that support the round-topped fuel tank. the "V-Rod" makes use of a new Porsche-designed engine that. incorporates fuel injection. though often modified. remain similar in appearance to their racing ancestors. they make use of 883 or 1200cc engines and. overhead cams.Sportster Introduced in 1956. and liquid cooling.

apparel and branded merchandise offers the riders thousands of custom. Harley embodies a way of life or an ideal for how life should be lived. gloves. wallets. key-chains. Sharing the same thoughts is The Harley Owners Group (H. It has a wide range of clothes and accessories like boots. freedom and individualism. lighter. shirts for both men and women.Extensions in Harley Merchandise Harley-Davidson makes more than motorcycles. 81 . eye wear. vests. It is an ideal or philosophy that is unconventional. It is much more than just a motorcycle organization. It's one million people around the world united by a common passion: making the HarleyDavidson dream a way of life. but they know the logo. and most of all. It also has a smaller size for kids in apparels and sells Harley Davidson sticker book and Hog Bank. uncompromising.O. leather collection.G. The Harley merchandise is sold in many cateogories. Harley-Davidson is about something deeper than a product. Surprising for what might otherwise be considered a niche activity.). They may not ride. This intriguing brand character is what makes Harley-Davidson so appealing to such a broad spectrum of society. rain gear. Harley-Davidson Financial Services offers a variety of financing and insurance options to help make the dream of owning a motorcycle a reality. the Harley-Davidson brand reaches far and wide. belts. helmets. plain-spoken. chaps or pants. watches. The Harley-Davidson brand has recognition status rivaled only by the great multi-national brands like Coca-Cola. jackets. Although a major customer segment of the HD products are the HOG a lot of that merchandise is also worn by the vast majority of people in the United States who don't even ride motorcycles. The motorcycle defines Harley-Davidson. A complete line of Genuine Motorcycle Parts & Accessories. It is divided into 3 segments for men women and kids. but a wide range of other products and services is available to increase the enjoyment of the experience or give newcomers a taste of HD world. It also has a line of HD cafes. It is this customer group that HD targets mainly for its brand extensions. personalized options for their bikes and themselves respecting the individuality and freedom of a person. Infused with a sense of adventure.

It's worth noting that HarleyDavidson won kudos the year before for its foray into footwear.even during the lean years . Conclusion . The idea of linking the macho motorcycle brand with the domestic pastime of cake-making and its children's-party associations. this Harley-Davidson icing kit is sold to bakeries and pastry shops to make birthday confections fit for a Hell's Angel. published in December.Harley-Davidson has remained true to itself and its loyal customers.The Best and the Worst Licensed by Bakery Crafts. It is this commitment that makes HarleyDavidson one of the great brands of all time. 2005. The same poll recognized the company's stylish and utilitarian biker boots as the "best brand extension. 82 . proved highly discordant with the brand's core values—at least according to respondents to a survey of branding experts conducted by New York brand consultancy Tipping Sprung. The Harley-Davidson Cake Decorating Kit was voted "worst brand extension" in the firm's latest annual poll.By sticking to its vision ." Harley-Davidson made footwear for men and women distinguished by its buckles and rugged soles. “These intricate details create the spirit of freedom that is the heart and sole of Harley-Davidson footwear” the consumer is told.

com www.google.brandextension.com www.com www.samsung.brandchannel.com www.barbie.com 83 .interbrand.com www.com www.wikipedia.org www.com www.virgin.Bibliography Brand management – Harsh V Verma Marketing Management – Philip Kotler www.harleydavidson.

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