LINE & BRAND EXTENSIONS

LINE EXTENSIONS
The

product line is now far more

representative
of
customers
varying
quantity needs.
It
suggests the presence of usage
segmentation.
Customers differs in terms of their usage
quantities.
The brand has to fill the whole spectrum
with products as per the needs of various
segments.

Example
Bisleri is the pioneering brand in the

mineral water category.

Originally, Bisleri used to come in a one
litre bottle.
But recently, Bisleri has exhibited a spate
of innovations.
The brand launched bottles of different
sizes and quantities.
The Bisleri portfolio now includes one litre,
1.2 litre, 1.5 litre and 5 litre bottles.

Line Extension strategies

Product Sizes

Bisleri
1.1 ltr

Bisleri
.5 ltr

Bisleri
1.2 ltr

Bisleri
1.5 ltr

Bisleri
5 ltr

Colour

Pantene
White

Pantene
Black

Pantene
Pink

Flavours

Rasna
Orange

Rasna
Mango

Ingredient

Colgate
gel

Colgate
Herbal

Etc.,

Rasa Rose ,
etc

Colgate
Salt etc.,

Form

Vim
Bar

Vim
Liquid
Vim
Powder

According

to
Gautam
Singhania,
Chairman
and
Managing
Director,
Raymond India: "Raymond aims to
acquire a dominant position in the
apparel sector in the country.
We believe that venturing into exclusive
stores for our apparel brands will make
our brands stronger and give the right
impetus to our growth plans.
We have enhanced our offerings under
all our apparel brands to provide a
complete wardrobe solution."

"Men

today want different solutions for

different occasions - formalwear, relaxed
work wear, evening wear, club wear,
traditional wear, travel wear as well as
sportswear.
Our brands Park Avenue, Parx and Manzoni,
have different categories to cater to this
need.
Thus, all our brands offer a solution to
changing men's fashion needs at different
price points," says Shreyas Joshi, President,
Raymond Apparel.

Why Line Extensions?

In most of the product categories including

fast moving consumer goods, consumer

durables and services, line extension has
been the name of the game.
It is an expansionist move.
The firms seem to seek growth more
vigorously.

Nine prominent reasons

Customer Segmentation
Customer need for variety
Pricing Breadth
Capacity Utilization
Quick gains
Competitive Reasons
Trade Demands
Counter Competition
Image Benefits

Line Extension Risks

There are several dangers associated with

line extensions.
Line Confusion
- Marketers sometimes
add products to their line without sound
logic and reasoning, without any clear role
and goal. This may confuse the customers
and the retailers and will affect the brands
owner company in the long run.

Line Extension Risks

Encourage

Variety seeking Brand

loyalty is every marketers dream. By line
extension, customers practice and become
the habitant of variety seeking. Hence it
influence brand switching behaviours. The
loyalty is thus weakened.

Line Extension Risks

Success Myopia An idea may be a grand

enough to be converted into a full-fledged

independent brand.
But the lure of
extension seems to be so strong that the
ideas are brought into the market as line
extensions. This implies loss of a winning
asset in the long-term.

Line Extension Risks

Strained relations

When the lines

expand, marketers tend to pressurize their
trade partners such as wholesalers and
retailers to carry the complete line in
accordance with their wishes. The pressure
appears to be applied more intensely at the
retail level. The marketers seek adequate
shelf space, promotion and information. But
at the retailers end, it brings confusion and
chaos.
The result is the strained relations
between the marketer and the retailer.

Line Extension Trap

Why do firms jump on to line extension

bandwagon?
When customers prefer a brand, they
would be just as willing to buy a different
product carrying the same name.
What appears to be logical to the managers
performing these adventures tends to be
illogical in the perception of customers.
This is the reason why line extensions do
not create mega successes.

Line Extension Trap.

Line extensions do not work because they

tend to go against the fundamental aspect

of positioning.
The core brand holds a strong position
inside the prospects mind.
Line extensions tend to educate customers
that product and brand are two different
things.
It is a fallacy that a brand is just a name
that can be put on any product.
This is a great mistake. It undermines and
destroys the brand in a prospects mind.

BRAND EXTENSIONS
Using an existing brand name to promote a

product in a different category, is Brand

Extension.
The key difference between line and brand
extension is the product category.
In line extension the pdt. Category remains
constant whereas in brand extensions
product category is a variable.

EXAMPLE
Ponds -

Cold cream, Toilet soap Shampoo,

Tooth paste, Moisturising lotion, Talc & Face
wash.
LG Television, Refridgerators, Computer
monitors, Microwaves, Air Conditioners,
Washing Machines & Mobile phones.
Park Avenue Shirts, Shaving cream, Jeans,
Belts, Perfumes, Soap & Razar.

Why Brand Extension?

Cost of New launches
Promotional Efficiency
Consumer Benefits
Feedback effects
Returns

Types of Extensions
Product

form extension A product

launched in a different form usually means
line extension, but if a different product
form constitutes an entirely different
product category.
Example:
Amul milk
Amul Condensed milk
Real Juices
Real Juice Concentrate

Types of Extensions
Companion Product The idea here is to

capitalise 0n product complementarity. The

consumer may view both the products
jointly.
Example :
Colgate
Tooth Brush

Colgate Dental
Cream
Gillette
Razors

Gillette
Shave forms

Gillette
After Shave

Customer Franchise
A marketer may extend a product range in

order to meet the needs of a specific

customer group.

J&J
Baby
Talc

J&J
Baby
Oil

J&J
Baby
Cream

J&J
Baby
Shampoo

J&J
Baby
Diapers

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. This strategy is
particularly seen in Japanese companies.

Honda
Cars

Honda
scooters

Honda
Lawn
movers

Brand Distinction
Many brands achieve distinction in the form of a

unique attribute, benefit or feature which gets

uniquely associated with the brand.
For instance, Parachute may have expertise of
coconut nourishment in customers minds over
time. This would give Marico Industries, the brand
owner, the opportunity to launch a variety of
products exploiting this distinction.

Parachute
Hair
Oil

Shampoo

Cream

Cooking
Oil

Baby
Soap

Baby
Oil

Brand Image or Prestige

A brand extension may involve a foray into

unrelated product categories based on a

brands exclusive image or prestige value.

Steel, Automobile, Heavy Vehicles, Watches, S/W devpt. Training etc .,

Distinctive Taste, Ingredient or

Component
A brand may develop equity based on any

and / or combination of taste, ingredient or

component. Then the marketers can make
entries into unrelated product categories
capitalising on these properties.

Nescafe
Coffee

Nescafe
Chocolate

Nescafe
Biscuits

Nescafe
Milk
Supplement

Nescafe
Cold
Coffee

Brand Extentability

Extensions involve transfer of associations

from the parent brand to the extension.

The brand extendability depends on its
character.
The brands can be classified into 5 types
through extendability.

Five forms of brands

The Product Brand - it is a situation where

there is very little difference between the

brand and the product.
The brand is used as an identity of the
product.
Example : vicks,

Form 2 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.
Example : cooking oil, pickles etc.,

Form 3 Know how brand

Know how is an expertise that a firm

develops in a specialized area of activity.

Example : nokia is known for user friendly.
Amul

has developed its brand

expertise in milk processing.

as

an

Form 4 Interest brand

A brand may be defined by its centre of

interest. It may reflect its core spirit.

Example Gillette maintains its focus on
mens grooming in all its brands.
Logo is the best a man can get which
creates the interest among the target
audience.
Whirlpool home maker
Nike winning to be on the cutting edge.

Form 5 - Philosophy
The

brand at this level acquires more

intangible character and orientation.
The philosophy transforms its products in a
realm altogether different from its physical
reality.
Example : Parker pen, De beers diamond

Forms of brand extendability

Product
Brand
Pillsburry
Atta

Formula
Brands
Mothers
Recipes
Pickles lime,
mango,
mixed

Know how
brand
Bajaj
Irons, Fans,
coolers,
mixers etc.,

Interest
Brand
Disney
Toys,
Theatre,
Theme park,
movies, etc

Philosophy
Brand
Cartier
Watches,
jewellery,
Bags, pens

Extensions.
Extensions are not simple as they appear

to a layman.
Consumers reject extensions when they do
not make sense.
Brand extension is not a physical act of
merging two products.
It is a tough process involving marrying two
cognitive or perceptual concepts in order to
create a consistent entity.
Therefore, it must begin with exploring the
brand in a prospects mind.

Exploring the brand involves seeking

answers to the following questions.
What is a brands awareness level?
What are its recall and recognition levels?
What are different attributes associated with a

brand?
What benefit associations are connected with a
brand?
What are a brands personality associations?
What are the symbols associated with the brand?
What are a brands user associations?
What is the perceived essence of the brand?
What is a brands philosophy?

Strength of Associations - Ponds

PONDS

Talc

-Body Talc
-Talc for
Special
occasions

Feminine

Floral

Body
care

Nail
enamels
Lip colours
etc

Room
Freshner,
soaps,
Fragrance,
shampoo,
etc

Body
lotion,
Body oil,
creams

Cream

Beauty cream,
Conditioning
cream,
cleansing
cream, etc

Making an Extension
successful

Aaker & Keller proposed certain assumptions about

consumer behaviour which are fundamentally

responsible for the success of a brand extension.

The

parent brand enjoys positive beliefs and

favourable attitude in customers memory.
It is these pre-existing beliefs and attitudes which
help in the formation of positive beliefs and
favourable attitude toward the brand extension.
The negative associations are not transferred to the
brand extensions, also these are not created by the
brand extension.

Questions for Assignment

Highlight atleast

five brands of various

product category and find out the
extension opportunities of those brands.

Find out which brand can be extended far

from its present product, and which can

move just above the extension boundary.