 NAME: PARIMALCHANDRA PARAMESHWAR GAIN

 ROLL No: -21-1134

 REG No: 21-1134
 SPECIALIZATION: Marketing
 BATCH: 2020-22
 INSTITUTE: Balaji Institute of Telecom & Management
 SEMESTER: 1st
 SUBJECT NAME: Marketing
 ASSIGNMENT NO: 01
 SUBMISSION DATE: 2 October, 2020
 TOTAL NO. OF PAGERS WRITTEN: 14

Q1. Explain the segmentation-targeting-positioning strategy of FMCG companies

during Covid-19.
Answer: - Segmentation, Targeting and Positioning (STP) is a familiar strategic approach in
Modern Marketing. It is one of the most commonly applied marketing models in practice.
The STP model is useful when creating marketing communication plans since it helps
marketers to priorities positions and then develop and deliver personalized and relevant
message to engage with different audience.
FMCG stands for fast moving goods consumer goods. These are those goods that move
through the value chain very quickly-from production, distribution, and marketing to final
consumption. These are relatively low-priced goods and are sold fast as they are always in
demand or because they are perishable. When talking about the effect of covid-19 situation
on FMCG companies, it has affected the situation of these companies also very badly. In the
immediate to medium term there have been a lot of changes in the consumer behaviour due to
which FMCG companies will be forced to adopt their strategy for customer acquisition and
retention. The composition of the consumption basket has changed due tocovid-19 situation
and some of these changes will be more permanent then others. An increased focus on health
and hygiene will become the norm. Demand in the discretionary categories is likely to come
back slowly but not immediately.
Certain strategy changes and effective measures are taken by the FMCG to come out of the
covid-19 drastic situation and grow much faster as they have more opportunities rather than
others for a comeback.
MARKET SEGMENTATION
Market segmentation is the research that determines how your organization divides its
customers or cohort into smaller groups based on characteristics such as, age, income,
personality traits or behaviour. These segments can later be used to optimize products and
advertising to different customers.
 TYPES OF MARKETING SEGMENTATION:

1. Geographic segmentation: It creates different target customer groups based on geographical

boundaries. Because potential customers have needs, preferences, and interests that differ
according to their geographies, understanding the climates and geographic regions of
customer groups can help determine where to sell and advertise, as well as where to expand
the business.
2. Demographic segmentation: It sorts a market by demographic elements such as age,
education, income, family size, race, gender, occupation, nationality, and more. Demographic
segmentation is one of the simplest and most commonly used forms of segmentation because
the products and services we buy, how we use those products, and how much we are willing
to spend on them is most often based on demographic factors.
3. Behavioural segmentation: Behavioural segmentation divides markets by behaviours and
decision-making patterns such as purchase, consumption, lifestyle, and usage. For instance,
younger buyers may tend to purchase body wash, while older consumer groups may lean
towards soap bars. Segmenting markets based off purchase behaviours enables marketers to
develop a more targeted approach.
4. Psychographic segmentation: It takes into account the psychological aspects of consumer
behaviour by dividing markets according to lifestyle, personality traits, values, opinions, and
interests of consumers. Large markets like the fitness market use psychographic segmentation
when they sort their customers into categories of people who care about healthy living and
exercise.

TARGETING

Market targeting is a process of selecting the target market from the entire market. Target
market consists of group/groups of buyers to whom the company wants to satisfy or for
whom product is manufactured, price is set, promotion efforts are made, and distribution
network is prepared.

It involves basically two actions – evaluation of segments and selection of the appropriate
market segments. Basis of target marketing are age, gender, need, occupation, interests, etc.

Types of Targeting:

1. Aggressive competitor - Competitive aggressiveness is the tendency to intensely and

directly challenge competitors rather than trying to avoid them. Aggressive moves can
include price-cutting and increasing spending on marketing, quality, and production capacity.

2. Substitute product - A substitute product is one that serves the same purpose as another
product in the market. Getting more of one commodity allows a consumer to demand less of
the other product.

3. Power of buyers – The capacity to purchase the product by a consumer is known as the
power of buyers.
 POSITIONING

Positioning is the last stage in the Segmentation Targeting Positioning Cycle. The process of
creating an image of a product in the minds of the consumers is called as positioning.
Positioning helps to create first impression of brands in the minds of target audience.
Marketers with the positioning process try to create a unique identity of a product amongst
the customers. Positioning helps organizations to create a perception of the products in the
minds of target audience.

STEPS IN PRODUCT POSITIONING:

I. Know your target audience well.
II. Identify the product features.
III. Unique selling Propositions.
IV. Know your competitors.
V. Ways to promote brands.
VI. Maintain the position of the brand.

EXAMPLE: Hindustan Unilever Ltd. is one of the best examples for FMCG Company.
While other industries were suffering from crises, Covid-19 was proved as the opportunity
for HUL.
The company’s products such as Lifebuoy, Horlicks, And Green tea etc. was promoted as a
way of healthy and hygienic living. The STP strategy of HUL during this lockdown is:
Segmentation: HUL is a giant company, thus its products are available for every person and
at every place. Thus, there was no change in the segmentation.
Targeting: The Company targets to each and every individual with its variety of products.
Positioning: During the pandemic, HUL started promoting all those goods which are related
with health and hygiene. As it was the time for people need to maintain a good immunity as
well as good hygiene. They positioned themselves as the most trusted brand with respect to
the health and hygiene.

Q2. Discuss the significance of branding. What are the different branding strategies
marketing organizations are adopting to establish their product portfolio?
Answer: Branding is a marketing practice in which a company creates a name, symbol or
design that is easily identifiable as belonging to the company. This helps to identify a product
and distinguish it from other products and services. Branding is important because not only is
it what makes a memorable impression on consumers but it allows your customers and clients
to know what to expect from your company. It is a way of distinguishing yourself from the
competitors and clarifying what it is you offer that makes you the better choice. Your brand is
built to be a true representation of who you are as a business, and how you wish to be
perceived.
 Branding is absolutely critical to a business because of the overall impact it makes on your
company. Branding can change how people perceive your brand, it can drive new business
and increase brand awareness.
● Branding Gets Recognition
The most important reason branding is important to a business is because it is how a company
gets recognition and becomes known to the consumers. The logo is the most important
element of branding, especially where this factor is concerned, as it is essentially the face of
the company.
This is why a professional logo design should be powerful and easily memorable, making an
impression on a person at first glance. Printed promotional products are a way of getting this
across.
● Branding Increases Business Value
Branding is important when trying to generate future business, and a strongly established
brand can increase a business’ value by giving the company more leverage in the industry.
This makes it a more appealing investment opportunity because of its firmly established place
in the marketplace.
● Branding Generates New Customers
A good brand will have no trouble drumming up referral business. Strong branding generally
means there is a positive impression of the company amongst consumers, and they are likely
to do business with you because of the familiarity and assumed dependability of using a name
they can trust. Once a brand has been well-established, word of mouth will be the company’s
best and most effective advertising technique.
● Improves Employee Pride and Satisfaction
When an employee works for a strongly branded company and truly stands behind the brand,
they will be more satisfied with their job and have a higher degree of pride in the work that
they do. Working for a brand that is reputable and help in high regard amongst the public
makes working for that company more enjoyable and fulfilling. Having a branded office,
which can often help employees feel more satisfied and have a sense of belonging to the
company, can be achieved through using promotional merchandise for your desktop.
● Creates Trust Within the Marketplace
A professional appearance and well-strategized branding will help the company build trust
with consumers, potential clients and customers. People are more likely to do business with a
company that has a polished and professional portrayal.

Marketing researchers utilize the term “brand portfolio strategy” when discussing how to
optimize and leverage an organization’s brand portfolio. For Devlin and McKechnie (2008),
all firms with multiple product categories must decide whether to use one single brand
covering all categories, a separate distinct stand-alone brand for each category, or some
combination of these two extremes, ranging from corporate branding at one extreme to
individual product brands at the other. There are several strategies that firms can adopt: create
and maintain established local brands, use global concepts and local adaptations to update
their brands or create new ones, acquire brands or develop brand extensions. Regardless the
 strategy adopted, the brand portfolio of the company will be evaluated by its ability to
maximize brand equity.

These are the main brand portfolio strategies adopted by firms:

 Branded House—also called mono-brand portfolio, this strategy is used by firms that use
their corporate brand names on all its products. Benefits associated to this strategy are
incremental brand awareness and brand knowledge, reduced marketing and advertising
expenses due to cost amortization across the brand portfolio, and positive spill-over effect
throughout the products. However, there are also risks associated to this strategy, especially
in terms of reputation risk (if a problem occurs in one of the products, negative spill-over can
happen in the entire brand) and dilution risk (when a brand is positioned too broadly across
several product categories, its meaning can become too diffused).
 House of Brands—this approach is found to be more common than mono-brand strategies.
Individual brands are created for different products or markets. Some firms which use
individual brands may disclose their parent company’s identity on their packs, by either an
address or a small logo. However, some brands decide to not expose the interrelationships
between their brands due to specific strategies based on perceived quality, price, or targeted
customers.
 Sub-Branding—many products were found to use mixed brands, carrying two or more brand
names. It happens when a firm pair a corporate or range brand (the parent brand) with another
brand (the sub-brand), in a combined relationship aiming to create and communicate
meaning.
 Endorsed brands—whereby the brand was endorsed by either the corporate or house name.
This strategy usually brings sentences, such as “brought to you by…”, “by the makers of….”
or are marketed as “Brand X by (parent brand)”. Using a brand for endorsement does not
expose companies to reputation risk and provides a greater variety of positioning alternatives
than if corporate branding were the only option considered.
 Hybrid (or mixed) brands strategy—including some combination of these above. A closer
look at the companies coded as adopting the hybrid strategy reveals a significant role for
mergers and acquisitions: hybrid is more than likely an ad-hoc strategic manifestation rather
than a pro-active strategic branding choice.
 Branding Gets Recognition
The most important reason branding is important to a business is because it is how a company
gets recognition and becomes known to the consumers. The logo is the most important
element of branding, especially where this factor is concerned, as it is essentially the face of
the company.
This is why a professional logo design should be powerful and easily memorable, making an
impression on a person at first glance. Printed promotional products are a way of getting this
across.
 Branding Increases Business Value
Branding is important when trying to generate future business, and a strongly established
brand can increase a business’ value by giving the company more leverage in the industry.
This makes it a more appealing investment opportunity because of its firmly established place
in the marketplace.
 Branding Generates New Customers
A good brand will have no trouble drumming up referral business. Strong branding generally
means there is a positive impression of the company amongst consumers, and they are likely
to do business with you because of the familiarity and assumed dependability of using a name
they can trust. Once a brand has been well-established, word of mouth will be the company’s
best and most effective advertising technique.
 Improves Employee Pride and Satisfaction
When an employee works for a strongly branded company and truly stands behind the brand,
they will be more satisfied with their job and have a higher degree of pride in the work that
they do. Working for a brand that is reputable and help in high regard amongst the public
makes working for that company more enjoyable and fulfilling. Having a branded office,
which can often help employees feel more satisfied and have a sense of belonging to the
company, can be achieved through using promotional merchandise for your desktop.
 Creates Trust Within the Marketplace
A professional appearance and well-strategized branding will help the company build trust
with consumers, potential clients and customers. People are more likely to do business with a
company that has a polished and professional portrayal.

Marketing researchers utilize the term “brand portfolio strategy” when discussing how to
optimize and leverage an organization’s brand portfolio. For Devlin and McKechnie (2008),
all firms with multiple product categories must decide whether to use one single brand
 covering all categories, a separate distinct stand-alone brand for each category, or some
combination of these two extremes, ranging from corporate branding at one extreme to
individual product brands at the other. There are several strategies that firms can adopt: create
and maintain established local brands, use global concepts and local adaptations to update
their brands or create new ones, acquire brands or develop brand extensions. Regardless the
strategy adopted, the brand portfolio of the company will be evaluated by its ability to
maximize brand equity. These are the main brand portfolio strategies adopted by firms:
● Branded House—also called mono-brand portfolio, this strategy is used by firms that use
their corporate brand names on all its products. Benefits associated to this strategy are
incremental brand awareness and brand knowledge, reduced marketing and advertising
expenses due to cost amortization across the brand portfolio, and positive spill-over effect
throughout the products. However, there are also risks associated to this strategy, especially
in terms of reputation risk (if a problem occurs in one of the products, negative spill-over can
happen in the entire brand) and dilution risk (when a brand is positioned too broadly across
several product categories, its meaning can become too diffused).
● House of Brands—this approach is found to be more common than mono-brand strategies.
Individual brands are created for different products or markets. Some firms which use
individual brands may disclose their parent company’s identity on their packs, by either an
address or a small logo. However, some brands decide to not expose the interrelationships
between their brands due to specific strategies based on perceived quality, price, or targeted
customers.
● Sub-Branding—many products were found to use mixed brands, carrying two or more brand
names. It happens when a firm pair a corporate or range brand (the parent brand) with another
brand (the sub-brand), in a combined relationship aiming to create and communicate
meaning.
● Endorsed brands—whereby the brand was endorsed by either the corporate or house name.
This strategy usually brings sentences, such as “brought to you by…”, “by the makers of….”
or are marketed as “Brand X by (parent brand)”. Using a brand for endorsement does not
expose companies to reputation risk and provides a greater variety of positioning alternatives
than if corporate branding were the only option considered.
● Hybrid (or mixed) brands strategy—including some combination of these above. A closer
look at the companies coded as adopting the hybrid strategy reveals a significant role for
mergers and acquisitions: hybrid is more than likely an ad-hoc strategic manifestation rather
than a pro-active strategic branding choice.

Q3. Describe the levels of market competition with suitable examples. Explain a model
of strategy formulation foll4owed by marketing organization.
Answer 3. A market can be defined as a place where two or more parties comes together to
exchange goods or services or any other information in exchange for money. The market can
differ on the basis of products or services sold or on the basis of other factors like
government regulation, taxes, legality of exchange, price ceiling, buyers target, etc.
Identifying the competitor and staying informed about their products and services is the key
to remaining competitive in market and is crucial to the survival of any business.
 A competition is when two or more parties try to gain competitive gain or win over one
another.
The rivalry between companies selling similar or different range of products and services in
the same market and with the aim of achieving revenue, profit, and market share-growth, is
known as Market competition The four levels of market competition that we use to assess our
competitors in the industry are -
1. Generic Competition
2. Form Competition
3. Industry Competition
4. Brand Competition

GENERIC COMPETITION
Competition among products that are different, but solve the same problem or provide the
same benefit or utility, such as audio cassettes and CDs, adhesive tape and glue-sticks,
carpets and tiles. This is a type of market competition that exists between different products
or services that are manufactured and provided by different companies but serve the same
purpose and provide identical benefits or utility for the consumer. To stay competitive in a
generic competition, companies are generally required to cut costs and broaden their
distribution channels.
Example: Competition between tape and glue would be generic competition as both are
solving the same purpose/ have the same benefit/utility but are different.

FORM COMPETITION

Product form Competition is when the firm uses an even broader approach and sees its
competitors as firms manufacturing products that supply the same service or product.
Compete in the same product class, but with products that are different in features, benefits,
and price. Products that are direct competitors provide the same benefits to the customer and
are aimed at similar target markets.

Example: A great example of product form competition is Coke and Pepsi.

Another example could be that there are some companies like Samsung, which have a huge
line of Smartphones, from low cost phones to the high cost. In competition, there is Apple,
which has hand selected models, each of which is designed to impress the customer

INDUSTRY COMPETITION

Industry Competition: the firm uses a broader approach and sees as its competitors all firms
making the same product or class of products. Competitors who make the same products or
class of products but at very different price points/quality level/features, etc.

Example: Car industry, Mobile phone industry, refrigerator industry, steel industry, etc.
 BRAND COMPETITION

Brand Competition can be defined as the rivalry between the companies offering the similar
line of products or services in the same target market and to the same target audience with the
goal to have the higher market share, increased revenues, huge profits, and growth as
compared to the contemporary brand at the marketplace. Knowing and astutely understanding
the competitors of your brand is one of the crucial steps to plan and execute a successful
business strategy.

Example:  Surf Excel of HUL and Ariel of P&G are the examples of brand competition.
These brands not only compete within themselves; they compete at the various levels
of SBU’s that they have, and each individual brand of such umbrella branded companies also
compete within themselves.
STRATEGY FORMULATION
Strategy formulation is the process of determining and establishing the goals, mission and
objectives of an organization, and identifying the appropriate and best courses or plans of
action among all available alternative strategies to achieve them. The main reason that the
strategy formulation is also referred to at times as “strategic planning” is because they
basically follow the same concept. Through strategic planning, management is able to
evaluate its resources and determine the best ways to maximize the company’s return on
investment (ROI).

THE STRATEGY FORMULATION MODEL

The strategic management process consists of three, four, or five steps depending upon how
the different stages are labelled and grouped. But all of the approaches include the same basic
actions in the same order. A brief description of these steps follows:

1. STRATEGIC OBJECTIVES AND ANALYSIS: The first step is to define the

vision, mission, and values statements of the organization. This is done in combination with
the external analysis of the business environment (PESTEL) and internal analysis of the
organization (SWOT). An organization’s statements may evolve as information is discovered
that affects a company’s ability to operate in the external environment.

2. STRATEGIC FORMULATION: The information from PESTEL and SWOT

analyses should be used to set clear and realistic goals and objectives based on the strengths
and weaknesses of the company. Identify if the organization needs to find additional
resources and how to obtain them. Formulate targeted plans to achieve the goals. Prioritize
the tactics most important to achieving the objectives. Continue to scan the external
environment for changes that would affect the chances of achieving the strategic goals.

3. STRATEGIC IMPLEMENTATION: Sometimes referred to as strategic execution,

this stage is when the planning stops and the action begins. The best plans won’t make up for
sloppy implementation. Everyone in the organization should be aware of his or her particular
assignments, responsibilities and authority. Management should provide additional employee
training to meet plan objectives during this stage, as well. It should also allocate resources,
including funding. Success in this stage depends upon employees being given the tools
needed to implement the plan and being motivated to make it work.

Q4. Elaborate the CBBE model of Brand Equity. How can we differentiate between
luxury brands, premium brands, umbrella brands, individual brands and private label
brands?
Answer 4. Customer-based brand equity (CBBE) is built on the concept that to build a strong
brand. Customer-based brand equity shows the power of a customer’s attitude towards a
brand, and how it can lead to the success or failure of a brand. Customer‐based brand equity
(CBBE) is built on five important elements: value, performance, trust, social image, and
commitment.
The most popular CCBE model is the Keller Model, which was designed by Kevin Lane
Keller, Professor of Marketing, and was published in his book, Strategic Brand Management.
The model is based on a pyramid that explains ways to build strong brand equity by focusing
on understanding customers and designing their strategies based on customers. When there is
a strong connection between a brand and its customers, it gives rise to positive brand equity.
The below image is the brand equity pyramid that is divided into four levels:

Level 1: Brand Identity

This is the first stage where we need to create brand awareness. In this stage, people do not
identify the brand and cannot distinguish it from other brands. Hence it is necessary to build a
strong identity by telling people about this brand. Since it is the most significant step, it forms
 the base of the pyramid. Brand identity quantifies the breadth and depth of customer
awareness of a brand. Start to build it when customers are unaware of your products and
values, attracting them with ad campaigns and targeted marketing.

Level 2: Brand Meaning

After a brand has been able to capture the attention of the consumers, it is the next step for
the brand to provide more information about the product to its users. They’ll question its
features, looks and style, reliability, durability, customer experience and value for money, to
find its brand meaning. Brand performance and brand imagery are the two parts of brand
meaning. Brand performance is the most important aspect that can break or build a brand.
Many famous brands, such as Apple, Google, Bosch, etc. have built great brand equity due to
their extraordinary performance. Brand imagery is the image that customers perceive about a
brand. For example, customers expect a car brand to be luxurious and comfortable.

Level 3: Brand Response

Judgment and feelings can be hard to separate and are intensely personal for each individual
customer. One customer may judge the brand irrelevant to them, whereas another will find it
completely relevant. Customers have a certain expectation from a brand, and when it meets
expectations, the customer is happy and shows positive feelings. In case the brand is able to
go beyond the expectations of a customer, the brand will be able to create delight in the mind
of customers. This will lead to recommendations that will spread the word in the market. It is
important to know what factors delight a customer. This will help a brand to work further on
these factors to gain an edge over the competition.

Level 4: Brand Resonance

The final and the most difficult stage is the brand resonance. This is a stage where the brand
the customer has built a strong relationship. This is a stage where customers are highly
engaged with the brand, Customers are ready to recommend the brand to their friends and
family, and they are not ready to accept any other product other than the brand. This is the
most difficult stage to achieve. For example, people who use Apple products do not switch to
any other brand as they feel deeply associated with it.

The difference between these various types of brands can be understood by understanding
what each brand is about, separately.

 Luxury brands- Luxury brands have to satisfy the desire for elevated status. A luxury brand
cannot compromise – either in terms of its own performance or regarding price. Luxury
brands are regarded as images in the minds of consumers that comprise associations about a
high level of price, quality, aesthetics, rarity, extraordinariness and a high degree of non-
functional associations. They are displays of wealth that revolve around strong social cues
 such as social elevation, a sense of timelessness, priceless experiences and a strong hedonistic
drive.
Example of luxury branding- Louis Vuitton, Rolls Royce, Ferrari etc.

 Premium brand- Premium brand are the ones that give the best features at the best value.
They operate with a close to one ratio of functionality and price. So, since they are providing
the best features and quality, consumers pay them high price for that. A brand is considered
premium only when we believe it is worth the price.
Example of premium branding- Zara, Coach, Godiva, Starbucks, Business class booking in
an airplane, etc.
 Umbrella brand- Umbrella branding is a marketing practice which involves selling several
related products under the name of a single brand. Umbrella Branding is also known as
family branding and it involves creating good brand equity for a single brand. All products
use the same means of identification and lack additional brand names or symbols etc.
Example of umbrella branding- Apple. Under this brand name, customers may find the iPad,
iPhone, Apple Watch, Mac Air, Mac Book, etc. The umbrella, thus, further divides into
iPhone, iPads and other products rendering the strategy to be an umbrella strategy.

 Individual branding- Individual Branding is the type of marketing strategy where individual
products of a company have their unique brand name. The process of providing individual
brand name helps in establishing a unique product image in the market. Moreover, it
contributes to the achievement of a distinct position or positioning of the brand over rival
brands. Individual branding is also known by terms like Multi-branding, Individual Product
Branding, and Flanker Brands.
Example of individual branding- Procter & Gamble – Head & shoulders, Pantene, Rejoice,
etc

 Private Label brand-The label branding has a unique strategy. A private label product is
manufactured by a contract or third-party manufacturer and sold under a retailer’s brand
name. The retailer specifies everything about the product. This is in contrast to buying
products from other companies with their brand names on them. Private brand items can
provide retailers, such as supermarkets, with a better margin than the brand-name goods they
also carry.
Example- Restaurants often decide to private label condiments or mixes that have become
popular with customers.

Q5. State the criteria for effective segmentation. Under what circumstances brand
extension can be effective for marketing of product?
Answer. Segmentation is the process of dividing a company’s target market into groups of
potential customers with similar needs and behaviours. Doing so helps the company sell to
each customer group using distinct strategies tailored to their needs.
An effective segmentation strategy ensures that the selected market segment is accessible
through various marketing campaigns and promotional activities.
CRITERIA FOR EFFECTIVE SEGMENTATION:
Homogeneous
Homogeneous means that the consumers within each segment are relatively similar to each
other, in terms of their characteristics. To help determine/prove that the consumers are
similar, the free Excel template provides the central means graph, which can visually
demonstrate the degree of similarity, as well as the sum of squared error (SSE), which
measures the degree of fit to the segment centres.
Heterogeneous
Heterogeneous means that the different segments should be quite distinct and different from
each other. In this case, the template provides a segmentation map that shows the relative
position of each of the segments on the basis of the first two determinant attributes.
Measurable
The cluster analysis template provides clear measures of the segment sizes, based upon the
respondent data. By combining these percentages with total market size, average product
usage levels and average price – then you can develop good measures of each segment – as
shown in the article on segment sizes.
Substantial
Substantial means that the potential market segment/s should be large and attractive enough
for the particular firm (or brand) in question. As we have clear measurements of each
segment (from “measurable” above), we can then consider whether the segment is substantial
enough – remembering that generally large firms prefer large segments, while small firms are
more likely to prefer niche or small market segments.
Accessible
Is the market segment reachable through structural characteristics (such as distribution
channels), as
well as communication and media? While cluster analysis may help determine which
segments may be more responsive (see below), this is one area of segmentation assessment
that probably needs to occur outside of this statistical tool.
Actionable/practical
Is the firm (or brand) able to execute a successful marketing strategy to target the potential
market segment? Like the previous criterion, this is an area of assessment outside the scope
of cluster analysis, as the decision relies upon as assessment of the firm’s/brand’s resources
and capability.
Responsive
The final criterion listed is the segment’s level of responsiveness to a unique marketing
approach. Cluster analysis should be able to assist in this regard. Provided that the “input
data” used in the analysis uses some behavioural segmentation variables – such as advertising
awareness and influence of sales promotion and so on – then the degree of each market
segment’s responsiveness can be built into the overall market segmentation structure.
Many companies try to capitalize on their valuable brands by introducing brand extensions,
which are new products that are introduced under an existing brand name. Brand extensions
come in two different forms:
Line extension – A line extension is a product that is introduced within the same category at
the parent brand, such as Oreo cookies and their many different varieties.
Category extension – A category extension is when a product is introduced in a different
category than the parent brand. Again, using Oreo, and their ice cream products.

Circumstances under which brand extension can be effective for marketing of products
are-
A new line of business - Companies often enter new lines of business, or new markets. When
this happens, it is often necessary to re-brand so that the new line fits into the brand identity.
A brand extension strategy for launching a new product only works if your existing brand has
high enough parent brand penetration.
For example, Apple was once called Apple Computer. They produced desktop and laptop
computers, as well as software. In 2007, Steve Jobs announced they were dropping the
"computer" from their brand, since computers were only one of the many products they sold.
Apple was selling iPods, iPhones, and Apple TVs, and the re-brand was necessary to adapt to
the evolving company.
A new audience - Often a company wants to re-brand in order to appeal to a new audience.
A brand should always speak to the people the business is trying to reach. People (especially
modern consumers) seek to align themselves with brands whose values they share; if they
don't feel personally connected to a brand, they won’t bond with it. If a company is looking to
appeal to a new demographic, whose buying habits and beliefs differ from their previous
target audience, the old brand well may no longer resonate. A rebrand gives a business the
opportunity to redefine itself with the goal of attracting and engaging these new untapped
audiences.
To remain relevant - As technological advances change many of the products and services
in the market, re-branding might be necessary to keep the brand relevant.
Consider The Yellow Pages, and its famous slogan, "Let Your Fingers Do the Walking." That
slogan also was one of the most well-known slogans in the world. However, people
don't use phone books anymore. We use computers and smartphones to find phone numbers
-- physical phone books are now obsolete.
But The Yellow Pages didn't throw in the towel; they just re-branded their product. The
Yellow Pages was re-invented, and the new brand was called "YP." The brand now focused
on finding phone and address information via the Internet. While the size of their business
has decreased, they were able to save it with a proactive re-brand.