Summary of an article- Should You Take Your Brand to Where the Action Is?

When markets goes against the brand than managers are desirous to expand their brands
vertically that is to take brands into an attractive market above or below their current position.
Managers should make sure whether the rewards will be worth the risk before making an
extension. The challenge of vertical extensions is to leverage and protect the original brand while
taking advantage of the new opportunity. There is an intrinsic conflict in the concept because brand
equity is built in large part on image and perceived worth, and a vertical move can easily deform
those qualities.

Accessing Downscale Markets

Any product sold through a supermarket gain its value segment and arise an opportunity with in a
brand’s current distribution channel. More often, the opportunity is created by its own low-cost
distribution channel, and companies must sell their products through that channel. Vertical
extension increased volume and economies of scale and also protect from private-label and price-
brand competitors, and from lower-quality, offshore entries. The higher quality brand has a risk of
losing its image while shifting its brand downwards even if the move only represent the slight
change in price or performance. While creating new brand, managers should face various
challenges like creating positive perception regarding brand, distribution barriers etc. Managers
should be aware of the risk they face due to downscale market while repositioning its brand by
dropping its price. Price cuts have enormous financial implications. A price reduction will boost
consumers’ negative perceptions regarding a brand’s quality and damage its image. One way to
reduce the risk of a defame brand image is to provide a justification to a customers for the price
move in a way that indicate the quality of product has not been sacrificed. You can start everyday-
low-price program as part of its strategy to create more efficient product-delivery systems to
retailers and consumers. It is important to recognize that managing a brand on price is different
than managing a brand on an image of quality or style. The ultimate way for a brand to compete in
a downscale market is to create value and differentiation. When high number of a brands
customers are willing to pay high price than manager should consider a sub-brands instead of
moving brand down market. Sub-brands help managers differentiate their new offerings from
parent brands while using the parent’s equity to influence consumers. The idea is both to maintain
the parent’s integrity and status regardless of how the sub-brand performs and to protect the
original brand from cannibalization. There are three types of relationships between parent brands
and sub-brands. When the parent is an endorser, the brands are relatively separate with the sub-
brand establishing its own identity and influencing consumers’ purchase decisions. When the
parent and sub-brand are co-drivers, the influence of each brand on purchase decisions is roughly
equal. When the parent brand is a driver followed by a sub-brand descriptor, the sub-brand does
not develop a unique identity at all; rather, it indicates an upscale variant of the parent brand.

Accessing Upscale Markets

Moving a brand into an upscale markets enjoy much higher margins than middle markets do.
Development of high-end segments modernize exhausted products. There is an issue of
trustworthiness, consumers will question whether inexpensive brand will have the knowledge,
capability, and will to operate an upscale brand and deliver the expected functional and emotional
benefits. One way to access a high-end market is to acquire a new brand. Creating a new brand can
be highly expensive especially when competitors are well-established brands. Repositioning a
brand from a value market into an upscale market is nearly impossible because it lacks the upscale
associations such as user image, brand personality, and perceived quality that are necessary to
assure customers that the product or service should require a premium price. The value-oriented
customers may become uncomfortable with the transformation of the brand, they may be
wondering that weather the new brand image can meet their expectation or not. Sub-brands play
the same role in upscale moves as they do in downscale ventures. Sub-brands used in up-market
moves also differ with respect to the distance they create between the new entry and the parent
brand. It is critical to examine the new offering’s potential customers while observing an upscale
sub-brand. A “value” premium offering can be attractive to independent thinker’s consumers who
did not buy image in order to impress people. Low-end premium brands are attractive to people
who would like to be part of an upscale position but can’t afford the higher end offerings. The
safest bet for an upscale sub-brand is a driver descriptor strategy because it positions the new
offering against the parent brand rather than against its new upscale competitors. 
A single brand can stretch successfully from value to mainstream to premium markets. When you
are considering a vertical extension, evaluate and reevaluate the opportunities and the risks. Study
your brand’s position, its strengths, and its weaknesses.