Brand strategy

- Another important decision that the marketer must take while taking Branding
decisions is how he must leverage or not leverage his existing brands. There are
four ways to look at the product brand matrix and each of these has different
implications for the brand and the product. So if we see the matrix below we will see
that there are four quadrants which are made of a combination of the brand name
and product being new or existing.
- These four combinations are: – Line extensions – Brand extensions – New brands –
Multiple brands
- A line extension is when we extend an existing brand name to a new form, size,
flavour, etc of an existing product category using an existing brand name. For
example many years ago the shampoo companies introduced small sachet for a
shampoo to allow rural customers to use their product. This has now become a tool
to get 114 new customers to use their product even in Urban areas. Recently Kissan
has taken out its ketchup in a plastic bottle and they have also taken out a
metallised pack as a refill to a bottle – plastic or glass. This is a line extension of the
Kissan Ketchup In this the major cost is that of the development of a new packing
because the product is well known and it has its own set of dedicated customers
who will definitely use the product but in addition there will be may other customers
who may find the usefulness of the product and so increase the total customer base.
Virtually no additional advertising is needed except some at the retail outlet level
and the use of a good display of the new product extensions at the retail outlet.
- A brand extension is when an existing brand name is extended to new product
categories. This has been done very successfully by Reliance which has extended its
name to brand name ―BIG‖ to radio – BIG FM 92.7; DTH for TV – BIG TV and Film
making; BIG Cinema – Cinema hall screens; BIG Pictures – to film production.
- Each of the product categories has a common thread that it is in entertainment but
each is a new product category in itself. The advantage here is that it becomes
relatively easier for a known brand to bring in new products categories under its
banner. The customers already know the brand and know what it stands for. Hence
for the new product category also the customer begins to expect the same
characteristics. It becomes that much simpler and economical for the company to
get its product accepted by the customer.
- Multiple brands are done when the company introduces new brands in an existing
product category. Let us see the case of Hindustan Unilever Limited which has
introduced several brands of bathing soaps in the market. The objective of doing
this is to try and increase the company‘s overall market share. We all know that it is
not possible to satisfy all customers in the market with one single product. Now to
get the other customers our product must have some distinctive features. A product
with different features cannot be introduced under the same brand. Thus it becomes
imperative to introduce a new brand. This decision is not easy firstly because
 creating a new brand is very expensive. Secondly The distribution channel has a
limited product carrying capacity. If too many products are introduced they begin by
cannibalising each 115 other or only the fast moving products moving and other
products stagnating in the channel. Hence sometimes a new brand needs a different
channel and creating this again is not a simple or cheap task.
- New Brands with a new product category are the most difficult and expensive way
to launch a product. Here the uncertainty is very high since neither is the product
known and neither is the brand known. The company must undertake meticulous
planning in order to ensure the success of the product. A proper market survey
along with a test marketing in a smaller market is usually undertaken when new
products are launched with a new brand.

Branding – How does it help So, how exactly does ‗branding‘ help? Well, most customers
prefer buying only those products and services that they are familiar with. Since branding
helps the target audience become familiar with the brand, it has an important role in
determining customer-buying behaviour - and consequently the success of the business.
Building a brand name is important because it‘s only through a brand name that a business
can hope to communicate the positive attributes of its products or services to consumers.
Quality and prices do affect customer-buying behaviour, but since it‘s the brand name that
brings in most new customer traffic, businesses cannot afford to ignore the merits of
building a proper brand name for their products or services. By building a good brand
name, businesses will also be able to control and reduce their overall marketing budgets,
because once the brand becomes a household name, it will automatically lead to consumer
generated referrals, a method that works better than the standard marketing initiatives and
something that costs virtually nothing as far as the business is concerned. 4. Summary
Decisions about branding are important from the point of view of establishing a long term
presence in the market. Branding helps a company reap the benefits of its efforts over a
long period of time. A brand once established not only benefits the existing product but
many other subsequent activities that the company is likely to undertake in the future. 116
It for this reason that companies that launch future products want to align it with its
business strategy because apart from the immediate objectives of sales and profit
achievement the company also seeks to continue its competitive advantage in future also
by leveraging its spends on brands today. A brand builds a familiarity or relationship with
the customer and as we are comfortable with people we know so is the customer
comfortable with brands he knows. For these brands the customer will be willing to pay a
little premium over those brands he is not familiar with. In order for the company to
sustain its contact and visibility it must therefore make decisions today that it can sustain r
those for which it can get a competitive advantage and so create the structure that will
help in maintaining the relationship with the customer. Thus allowing the company to
increase its sale, while at the same time reducing relatively it budget spends.